[Federal Register Volume 84, Number 137 (Wednesday, July 17, 2019)]
[Proposed Rules]
[Pages 34078-34080]
[FR Doc No: 2019-15104]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Docket No. FAA-2019-0476; Airspace Docket No. 19-AGL-7]
RIN 2120-AA66

Proposed Amendment of VOR Federal Airways V-148, V-177, and V-345
in the Vicinity of Ely, MN, and Hayward, WI

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: This action proposes to amend VHF Omnidirectional Range (VOR)
Federal airways V-148 and V-345 in the vicinity of Hayward, WI, and
remove V-177 in the vicinity of Ely, MN, and Hayward, WI. The VOR
Federal airways modifications and removal are necessary due to the
planned decommissioning of the Ely, MN, and Hayward, WI, VOR navigation
aids (NAVAIDs), which provide navigation guidance for portions of the
affected air traffic service (ATS) routes. The Ely and Hayward VORs are
being decommissioned as part of the FAA's VOR Minimum Operational
Network (MON) program.

DATES: Comments must be received on or before September 3, 2019.

ADDRESSES: Send comments on this proposal to the U.S. Department of
Transportation, Docket Operations, 1200 New Jersey Avenue SE, West
Building Ground Floor, Room W12-140, Washington, DC 20590; telephone:
1(800) 647-5527, or<PHONE_NUMBER>. You must identify FAA Docket No.
FAA-2019-0476; Airspace Docket No. 19-AGL-7 at the beginning of your
comments. You may also submit comments through the internet at http://www.regulations.gov.
    FAA Order 7400.11C, Airspace Designations and Reporting Points, and
subsequent amendments can be viewed online at http://www.faa.gov/air_traffic/publications/. For further information, you can contact the
Airspace Policy Group, Federal Aviation Administration, 800
Independence Avenue SW, Washington, DC 20591; telephone: (202) 267-
8783. The Order is also available for inspection at the National
Archives and Records Administration (NARA). For information on the
availability of FAA Order 7400.11C at NARA, call<PHONE_NUMBER>, or go
to https://

www.archives.gov/federal-register/cfr/ibr-locations.html.
    FAA Order 7400.11, Airspace Designations and Reporting Points, is
published yearly and effective on September 15.

FOR FURTHER INFORMATION CONTACT: Colby Abbott, Airspace Policy Group,
Office of Airspace Services, Federal Aviation Administration, 800
Independence Avenue SW, Washington, DC 20591; telephone: (202) 267-
8783.

SUPPLEMENTARY INFORMATION:

Authority for This Rulemaking

    The FAA's authority to issue rules regarding aviation safety is
found in Title 49 of the United States Code. Subtitle I, Section 106
describes the authority of the FAA Administrator. Subtitle VII,
Aviation Programs, describes in more detail the scope of the agency's
authority. This rulemaking is promulgated under the authority described
in Subtitle VII, Part A, Subpart I, Section 40103. Under that section,
the FAA is charged with prescribing regulations to assign the use of
the airspace necessary to ensure the safety of aircraft and the
efficient use of airspace. This regulation is within the scope of that
authority as it would modify the National Airspace System as necessary
to preserve the safe and efficient flow of air traffic.

Comments Invited

    Interested parties are invited to participate in this proposed
rulemaking by submitting such written data, views, or arguments as they
may desire. Comments that provide the factual basis supporting the
views and suggestions presented are particularly helpful in developing
reasoned regulatory decisions on the proposal. Comments are
specifically invited on the overall regulatory, aeronautical, economic,
environmental, and energy-related aspects of the proposal.
    Communications should identify both docket numbers (FAA Docket No.
FAA-2019-0476; Airspace Docket No. 19-AGL-7) and be submitted in
triplicate to the Docket Management Facility (see ADDRESSES section for
address and phone number). You may also submit comments through the
internet at http://www.regulations.gov.
    Commenters wishing the FAA to acknowledge receipt of their comments
on this action must submit with those comments a self-addressed,
stamped postcard on which the following statement is made: ``Comments
to FAA Docket No. FAA-2019-0476; Airspace Docket No. 19-AGL-7.'' The
postcard will be date/time stamped and returned to the commenter.
    All communications received on or before the specified comment
closing date will be considered before taking action on the proposed
rule. The proposal contained in this action may be changed in light of
comments received. All comments submitted will be available for
examination in the public docket both before and after the comment
closing date. A report summarizing each substantive public contact with
FAA personnel concerned with this rulemaking will be filed in the
docket.

Availability of NPRMs

    An electronic copy of this document may be downloaded through the
internet at http://www.regulations.gov. Recently published rulemaking
documents can also be accessed through the FAA's web page at http://www.faa.gov/air_traffic/publications/airspace_amendments/.
    You may review the public docket containing the proposal, any
comments received and any final disposition in person in the Dockets
Office (see ADDRESSES section for address and phone number) between
9:00 a.m. and 5:00 p.m., Monday through Friday, except federal
holidays. An informal docket may also be examined during normal
business hours at the office of the Operations Support Group, Central
Service Center, Federal Aviation Administration, 10101 Hillwood Blvd.,
Fort Worth, TX, 76177.

Availability and Summary of Documents for Incorporation by Reference

    This document proposes to amend FAA Order 7400.11C, Airspace
Designations and Reporting Points, dated August 13, 2018, and effective
September 15, 2018. FAA Order 7400.11C is publicly available as listed
in the ADDRESSES section of this document. FAA Order 7400.11C lists
Class A, B, C, D, and E airspace areas, air traffic service routes, and
reporting points.

Background

    The FAA is planning decommissioning activities for the Ely, MN, and
Hayward, WI, VORs in 2020 as two of the candidate VORs identified for
discontinuance by the FAA's VOR MON program and listed in the final
policy statement notice, ``Provision of Navigation Services for the
Next Generation Air Transportation System (NextGen) Transition to
Performance-Based Navigation (PBN) (Plan for Establishing a VOR Minimum
Operational Network),'' published in the Federal Register of July 26,
2016 (81 FR 48694), Docket No. FAA-2011-1082. Although the VOR portions
of the Ely and Hayward VOR/Distance Measuring Equipment (DME) NAVAIDs
are planned for decommissioning, the DME portions are being retained.
The ATS routes impacted by the Ely and Hayward VORs are VOR Federal
airways V-148, V-177, and V-345.
    With the planned decommissioning of the Ely and Hayward VORs, the
remaining ground-based NAVAID coverage in the Ely, MN, and Hayward, WI,
areas is insufficient to enable the continuity of the affected airways.
As such, the proposed modification to V-148 would result in a gap in
the airway between the next NAVAIDs beyond the Hayward VOR; the
proposed modification to V-345 would result in the airway ending at the
NAVAID prior to the Hayward VOR; and V-177 would be removed entirely.
To overcome the loss of the airway segments proposed to be removed,
instrument flight rules (IFR) traffic could use adjacent VOR Federal
airways V-26 and V-129 between the Wausau, WI, VOR/Tactical Air
Navigation (VORTAC) and the Duluth, MN, VORTAC or VOR Federal airways
V-78 and V-413 between the Gopher, MN, VORTAC and the Ironwood, MI,
VOR/DME to circumnavigate the affected area. Additionally, IFR traffic
could file point to point through the affected area using fixes that
will remain in place, or receive air traffic control (ATC) radar
vectors through the area. Visual flight rules pilots who elect to
navigate via the airways through the affected area could also take
advantage of the adjacent VOR Federal airways or ATC services listed
previously.

The Proposal

    The FAA is proposing an amendment to Title 14 Code of Federal
Regulations (14 CFR) part 71 to modify VOR Federal airways V-148 and V-
144, and remove VOR Federal airway V-177. The planned decommissioning
of the Ely, MN, and Hayward, WI, VORs has made these actions necessary.
The proposed VOR Federal airway changes are outlined below.
    V-148: V-148 currently extends between the Falcon, CO, VORTAC and
the Houghton, MI, VOR/DME. The FAA proposes to remove the airway
segment between the Gopher, MN, VORTAC and the Ironwood, MI, VOR/DME.
The unaffected portions of the existing airway would remain as charted.
    V-177: V-177 currently extends between the Joliet, IL, VOR/DME and
the Ely, MN, VORTAC. The FAA proposes to remove the airway in its
entirety.

    V-345: V-345 currently extends between the Dells, WI, VORTAC and
the Hayward, WI, VOR/DME. The FAA proposes to remove the airway segment
between the Eau Claire, WI, VORTAC and the Hayward, WI, VOR/DME. The
unaffected portions of the existing airway would remain as charted.
    All radials in the route descriptions below are unchanged and
stated in True degrees.
    VOR Federal airways are published in paragraph 6010(a) of FAA Order
7400.11C dated August 13, 2018, and effective September 15, 2018, which
is incorporated by reference in 14 CFR 71.1. The VOR Federal airways
listed in this document would be subsequently published in the Order.

Regulatory Notices and Analyses

    The FAA has determined that this proposed regulation only involves
an established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current.
It, therefore: (1) Is not a ``significant regulatory action'' under
Executive Order 12866; (2) is not a ``significant rule'' under
Department of Transportation (DOT) Regulatory Policies and Procedures
(44 FR 11034; February 26, 1979); and (3) does not warrant preparation
of a regulatory evaluation as the anticipated impact is so minimal.
Since this is a routine matter that will only affect air traffic
procedures and air navigation, it is certified that this proposed rule,
when promulgated, will not have a significant economic impact on a
substantial number of small entities under the criteria of the
Regulatory Flexibility Act.

Environmental Review

    This proposal will be subject to an environmental analysis in
accordance with FAA Order 1050.1F, ``Environmental Impacts: Policies
and Procedures'' prior to any FAA final regulatory action.

List of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

The Proposed Amendment

    In consideration of the foregoing, the Federal Aviation
Administration proposes to amend 14 CFR part 71 as follows:

PART 71--DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND REPORTING POINTS

0
1. The authority citation for part 71 continues to read as follows:

    Authority:  49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O.
10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

Sec.  71.1  [Amended]

0
2. The incorporation by reference in 14 CFR 71.1 of FAA Order 7400.11C,
Airspace Designations and Reporting Points, dated August 13, 2018, and
effective September 15, 2018, is amended as follows:

Paragraph 6010(a) Domestic VOR Federal Airways.

* * * * *

V-148 [Amended]

    From Falcon, CO; Thurman, CO; 65 MSL INT Thurman 067[deg] and
Hayes Center, NE, 246[deg] radials; Hayes Center; North Platte, NE;
O'Neill, NE; Sioux Falls, SD; Redwood Falls, MN; to Gopher, MN. From
Ironwood, MI; to Houghton, MI.
* * * * *

V-177 [Removed]

* * * * *

V-345 [Amended]

    From Dells, WI; INT Dells 321[deg] and Eau Claire, WI, 134[deg]
radials; to Eau Claire.
* * * * *

    Issued in Washington, DC, on July 8, 2019.
Rodger A. Dean Jr.,
Manager, Airspace Policy Group.
[FR Doc. 2019-15104 Filed 7-16-19; 8:45 am]
 BILLING CODE 4910-13-P


[Federal Register Volume 88, Number 211 (Thursday, November 2, 2023)]
[Notices]
[Pages 75338-75342]
[FR Doc No: 2023-24270]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98825; File No. SR-PEARL-2023-58]

Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange
Rules 2614(a)(1)(ix) and 2618(b)(1) To Amend Certain Risk Controls When
Trading Equity Securities on MIAX Pearl Equities

    Pursuant to the provisions of 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 19, 2023, MIAX PEARL, LLC (``MIAX
Pearl'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') a proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend its existing risk controls for
Equity Members \3\ when trading equity securities on the Exchange's
equity trading platform (referred to herein as ``MIAX Pearl
Equities'').
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    \3\ The term ``Equity Member'' is a Member authorized by the
Exchange to transact business on MIAX Pearl Equities. See Exchange
Rule 1901.
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    The text of the proposed rule change is available on the Exchange's
website at https://www.miaxglobal.com/markets/us-equities/pearl-equities/rule-filings, at MIAX Pearl's principal office, and at the
Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to amend certain
existing risk controls when trading equity securities on MIAX Pearl
Equities. To help Equity Members manage their risk, the Exchange
currently offers Limit Order Price Protection and other risk controls
that authorize the Exchange to take automated action if a designated
limit for an Equity Member is breached. Such risk controls provide
Equity Members with enhanced abilities to manage their risk when
trading on the Exchange. The Exchange now proposes to amend Limit Order
Price Protection under Exchange Rule 2614(a)(1)(ix) and Trading Collar
under Exchange Rule 2618(b)(1) to enhance certain existing risk
controls available to Equity Members. Each of these changes are
described below.
Limit Order Price Protection Reference Price
    Limit Order Price Protection is set forth under Exchange Rule
2614(a)(1)(ix) and provides for the cancellation of Limit Orders priced
too far away from a specified reference price at the time the order
first becomes eligible to trade. A Limit Order entered before Regular
Trading Hours \4\ that becomes eligible to trade during Regular Trading
Hours will be subject to Limit Order Price Protection at the time
Regular Trading Hours begins.\5\
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    \4\ The term ``Regular Trading Hours'' means the time between
9:30 a.m. and 4:00 p.m. Eastern Time. See Exchange Rule 1901.
    \5\ Further, a Limit Order in a security that is subject to a
trading halt becomes first eligible to trade when the halt is lifted
and continuous trading has resumed. See Exchange Rule
2614(a)(1)(ix)(C).
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    Exchange Rule 2614(a)(1)(ix)(A) provides that a Limit Order to buy
(sell) will be rejected if it is priced at or above (below) the greater
of a specified dollar value and percentage away from the following: (1)
the PBO for Limit Orders to buy, the PBB for Limit Orders to sell; (2)
if the PBO or PBB is unavailable, the consolidated last sale price
disseminated during the Regular Trading Hours on trade date; (3) if the
PBO, PBB, and a consolidated last sale price are unavailable, the prior
day's Official Closing Price identified as such by the primary listing
exchange, adjusted to account for events such as corporate actions and
news events. Exchange Rule 2614(a)(1)(ix)(C) provides that Limit Order
Price Protection will not be applied if the prices listed above are
unavailable or if

the Official Closing Price listed under paragraph (a)(1)(ix)(A)3. is to
be applied and a regulatory halt has been declared by the primary
listing market during that trading day. The Exchange proposes to
reorganize Exchange Rule 2614(a)(1)(ix)(C) to place these provisions
under subparagraphs 1. and 2., respectively. Equity Members have
requested that Limit Order Price Protection also not be applied when no
consolidated last sale price has been disseminated following the
conclusion of a regulatory halt declared by the primary listing market
during that trading day. The consolidated last sale price disseminated
prior to a regulatory halt likely does not appropriately relate to the
current trading behavior of the security in such a scenario and Equity
Members have informed the Exchange that they would prefer Limit Order
Price Protections not be applied since it may result in their order
being unnecessarily cancelled. The cancellation may be unnecessary
because the specified reference price used to calculate whether the
Limit Order should be cancelled was established prior to the security
being halted and likely stale. A consolidated last sale disseminated
following the conclusion of a regulatory halt would be much more
indicative of the security's trading behavior.
    This proposed change is similar to a recent proposal by the
Exchange to amend Exchange Rule 2614(a)(1)(ix)(C) to provide that Limit
Order Price Protection would not be applied when a regulatory halt has
been declared by the primary listing market during that trading day and
the Exchange would have applied the prior day's Official Closing Price
because the PBO, PBB, and a consolidated last sale price are
unavailable.\6\ Like in this proposal, the prior proposal was also in
response to requests from Equity Members that Limit Order Price
Protection not be applied when a stale reference price may be used. In
the prior proposal, the concern was that the prior day's Official
Closing Price would be used when the PBO, PBB, and a consolidated last
sale price are unavailable and a trading halt has been declared by the
primary listing market during that trading day because the Official
Closing Price would not appropriately relate to the current trading
behavior of the security in such a scenario. In such case, Equity
Members preferred Limit Order Price Protection not be applied since it
may result in their Limit Order being unnecessarily cancelled. The same
is true here.
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    \6\ See Securities Exchange Act Release No. 96205 (November 1,
2022), 87 FR 67080 (November 7, 2022) (SR-PEARL-2022-43).
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    The Exchange, therefore, proposes to amend Exchange Rule
2614(a)(1)(ix)(C) to provide that Limit Order Price Protection would
not be applied when no consolidated last sale price has been
disseminated following the conclusion of a regulatory halt declared by
the primary listing market during that trading day. This provision
would be codified under subparagraph .3 to reorganized Exchange Rule
2614(a)(1)(ix)(C).
Trading Collar
    In addition to the Limit Order Price Protection described above,
the Exchange also prevents all incoming orders, including those marked
ISO, from executing at a price outside the Trading Collar price range
as described in Exchange Rule 2618(b). The Trading Collar prevents buy
orders from trading or routing at prices above the collar and prevents
sell orders from trading or routing at prices below the collar. The
Trading Collar price range is calculated using the greater of numerical
guidelines for clearly erroneous executions under Exchange Rule 2621 or
a specified dollar value established by the Exchange.
    The Exchange proposes two changes to the application of the Trading
Collar. First, the Exchange proposes to expand the times during which
the Trading Collar is applied to include the Exchange's Opening and Re-
Opening Process. Second, the Exchange proposes to not apply the Trading
Collar in an additional case where the reference price that is to be
used may be stale and not relate to current market conditions to avoid
the unnecessary cancellation of orders.
Trading Collar and Opening and Re-Opening Process
    The Exchange proposes to expand the times when the Trading Collar
would be applied to include the Exchange's Opening and Re-Opening
Process. Today, Trading Collars are applied to all orders, except those
orders that are eligible to participate in the Exchange's Opening
Process under Exchange Rule 2615. The Trading Collar is also not
applied to all orders during the Exchange's Re-Opening Process.
    The Exchange proposes to amend Exchange Rule 2618(b)(1) to no
longer exclude orders that are eligible to participate in the
Exchange's Opening Process from the Trading Collar protection. As
proposed, Trading Collars would be applied to orders that are eligible
to participate in the Exchange's Opening and Re-Opening Process. Limit
Up-Limit Down price bands are disseminated by the applicable Securities
Information Processor (``SIP'') during Regular Trading Hours.\7\
However, the SIP may not have begun to disseminate price bands at the
beginning of a trading day or after a halt when the Exchange is to
conduct its Opening or Re-Opening Process, as applicable. In such a
scenario, Equity Members have expressed the need for additional
protections around the opening and re-opening of trading where the
Limit Up-Limit Down price bands are not yet being disseminated by the
applicable SIP. Therefore, the Exchange proposes to remove language
from Exchange Rule 2618(b)(1) that states the Exchange will not apply
the Trading Collar to orders that are eligible to participate in the
Exchange's Opening Process.\8\ Going forward as a result of this
proposal, the Trading Collar would be applied to orders eligible to be
executed in the Exchange's Opening and Re-Opening Process and such
orders would be prevented from executing at a price outside the Trading
Collar price range as described in Exchange Rule 2618(b).
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    \7\ See Sections I(S) and V(A)(1) of the Limit Up-Limit Down
Plan.
    \8\ Exchange Rule 2618(b)(1) does not address the Exchange's
current practice of not applying the Trading Collar during the Re-
Opening Process and, therefore, the Rule will reflect the proposed
functionality once this proposal is implemented.
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Trading Collar Reference Price
    Exchange Rule 2618(b)(1) provides that the Trading Collar price
range is calculated based on a Trading Collar Reference Price and sets
forth a sequence of prices to determine the Trading Collar Reference
Price to be used if a certain reference price is unavailable. The
Exchange first utilizes the consolidated last sale price disseminated
during the Regular Trading Hours on the trade date as the Trading
Collar Reference Price. If not available, the prior day's Official
Closing Price identified as such by the primary listing exchange,
adjusted to account for events such as corporate actions and news
events is used. If neither are available to use as the Trading Collar
Reference Price, the Exchange suspends the Trading Collar function in
the interest of maintaining a fair and orderly market in the impacted
security. The Exchange calculates the Trading Collar price range for a
security by applying the Numerical Guideline and reference price to the
Trading Collar Reference Price. The result is added to the Trading
Collar Reference Price to determine the Trading Collar Price for buy
orders, while the result is

subtracted from the Trading Collar Reference Price to determine the
Trading Collar Price for sell orders. Exchange Rule 2618(b)(1)(A)
provides that the Trading Collar Reference Price is equal to the
following: (i) consolidated last sale price disseminated during the
Regular Trading Hours on trade date; or (ii) if (i) is not available,
the prior day's Official Closing Price identified as such by the
primary listing exchange, adjusted to account for events such as
corporate actions and news events. Exchange Rule 2618(b)(1) further
provides that upon entry, any portion of an order to buy (sell) that
would execute at a price above (below) the Trading Collar Price is
cancelled unless the price listed under paragraph (A)(ii) described
above is to be applied and a regulatory halt has been declared by the
primary listing market during that trading day. The Exchange proposes
to reorganize Exchange Rule 2618(b)(1) to separately place these
provisions under subparagraph (A) and (A)(i) respectively. As a result
of this reorganization of Exchange Rule 2618(b)(1), the Exchange also
proposes to update rule cross references within the rule and renumber
the remainder of Exchange Rule 2618(b)(1) accordingly.
    Like proposed above for Limit Order Price Protection, Equity
Members have requested that the Trading Collar not be applied if no
consolidated last sale price has been disseminated following the
conclusion of a regulatory halt declared by the primary listing market
on that trading day. The consolidated last sale price disseminated
prior to a regulatory halt likely does not appropriately relate to the
current trading behavior of the security in such a scenario and Equity
Members have informed the Exchange that they would prefer the Trading
Collar not be applied since it may result in their order being
unnecessarily cancelled. The cancellation may be unnecessary because
the specified reference price used to calculate whether the order
should be cancelled was established prior to the security being halted
and is likely stale. A consolidated last sale disseminated following
the conclusion of a regulatory halt would be much more indicative of
the security's trading behavior.
    Like with the proposed change to Limit Order Price Protection
discussed above, this proposed change is similar to a recent proposal
by the Exchange to amend Exchange Rule 2618(b)(1) to provide that upon
entry, an order priced outside the Trading Collar would not be canceled
when a trading halt has been declared by the primary listing market
during that trading day and the Exchange would have applied the prior
day's Official Closing Price because the consolidated last sale price
is unavailable.\9\ Like in this proposal, the prior proposal was also
in response to requests from Equity Members that the Trading Collar not
be applied when a stale reference price may be used. In the prior
proposal, the concern was that the prior day's Official Closing Price
would be used when the consolidated last sale price is unavailable and
a trading halt has been declared by the primary listing market during
that trading day because the Official Closing Price would not
appropriately relate to the current trading behavior of the security in
such a scenario. In such case, Equity Members preferred the Trading
Collar not be applied since it may result in their order being
unnecessarily cancelled. Again, the same is true here.
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    \9\ See supra note 6.
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    The Exchange, therefore, proposes to amend Exchange Rule 2618(b)(1)
to provide that upon entry, an order priced outside the Trading Collar
would not be canceled if no consolidated last sale price has been
disseminated following the conclusion of a regulatory halt declared by
the primary listing market on that trading day. In such case, the
Exchange would accept such an order and post it on the MIAX Pearl
Equities Book at its limit price.\10\ This provision would be codified
under subparagraph (ii) of reorganized Exchange Rule 2618(b)(1)(A).
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    \10\ In such case, a Limit Order would continue to be subject to
the Exchange's applicable re-pricing processes. See Exchange Rule
2614(a)(1)(v)-(viii).
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* * * * *
    The Exchange does not guarantee that the risk settings in this
proposal are sufficiently comprehensive to meet all of an Equity
Member's risk management needs. Pursuant to Rule 15c3-5 under the
Act,\11\ a broker-dealer with market access must perform appropriate
due diligence to assure that controls are reasonably designed to be
effective, and otherwise consistent with the rule.\12\ Use of the
Exchange's risk settings included in Exchange Rule 2618 will not
automatically constitute compliance with Exchange or federal rules and
responsibility for compliance with all Exchange and SEC rules remains
with the Equity Member.
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    \11\ 17 CFR 240.15c3-5.
    \12\ See Division of Trading and Markets, Responses to
Frequently Asked Questions Concerning Risk Management Controls for
Brokers or Dealers with Market Access, available at https://www.sec.gov/divisions/marketreg/faq-15c-5-risk-management-controls-bd.htm.
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Implementation
    Due to the technological changes associated with this proposed
change, the Exchange will issue a trading alert publicly announcing the
implementation date of the proposed enhancements to its risk controls
set forth herein. The Exchange anticipates that the implementation date
will be in the fourth quarter of 2023 or first quarter of 2024.
2. Statutory Basis
    The proposed rule change is consistent with section 6(b) of the
Act,\13\ in general, and furthers the objectives of section
6(b)(5),\14\ in particular, because 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 regulating, clearing, settling, processing
information with respect to, and 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. Specifically, the Exchange
believes the proposed amendments will remove impediments to and perfect
the mechanism of a free and open market and a national market system
because the augmented functionality is being proposed in response to
Equity Member feedback as part of their efforts to appropriately manage
their risk.
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    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).
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Trading Collar and Opening and Re-Opening Process
    The Exchange's proposal to amend Exchange Rule 2618(b)(1) to no
longer exclude orders that are eligible to participate in the
Exchange's Opening and Re-Opening Process from the Trading Collar
protection promotes just and equitable principles of trade and protects
investors and the public interest because it would provide Equity
Members with additional protections around the opening of trading where
the Limit Up-Limit Down price bands are not yet being disseminated by
the applicable SIP. Equity Members have expressed the desire for
Trading Collar to be applied to orders eligible to be executed in the
Exchange's Opening and Re-Opening Process and to prevent such orders
from executing at a price outside the Trading Collar price range as
described in Exchange Rule 2618(b). By no longer excluding the Opening
and Re-Opening Process, the proposal expands the time by which the
Trading

Collar would be applied to include all orders entered during Regular
Trading Hours. Doing so should prevent orders from being executed in
the Exchange's Opening and Re-Opening Process at undesirable prices
that would have otherwise been outside of the Trading Collar. The
proposal, therefore, protects investors and the public interest by
preventing orders from executing outside of the Trading Collar price
range and resulting in unwanted executions. The Exchange notes that at
least one other national securities exchange also applies trading
collars in such a scenario.\15\
---------------------------------------------------------------------------

    \15\ See New York Stock Exchange, Inc. (``NYSE'') Rule
7.31(a)(1)(B). NYSE applies trading collars during Core Trading
Hours. Core trading hours are defined under NYSE 7.34(a)(2)
(providing, in sum, that for UTP Securities, the Core Trading
Session will begin for each security at 9:30 a.m. and end at the
conclusion of Core Trading Hours and for Exchange-listed securities,
the Core Trading Session will begin for each security with the Core
Open Auction, which can take place during Core Trading Hours only).
---------------------------------------------------------------------------

Limit Order Price Protection and Trading Collar Reference Price
    The proposal to not apply Limit Order Price Protection and the
Trading Collar if no consolidated last sale price has been disseminated
following the conclusion of a regulatory halt declared by the primary
listing market on that trading day promotes just and equitable
principles of trade because in such a scenario the consolidated last
sale price disseminated prior to a regulatory halt does not likely
appropriately relate to the current trading behavior of the security
and may result in an order being unnecessarily cancelled.\16\ Equity
Members are free to not enter orders during such times and enter such
orders later when Limit Order Price Protection and Trading Collars are
in effect. The Exchange notes that this proposal is an extension of
similar change it recently made in response to feedback from Equity
Members to not apply Limit Order Price Protection or Trading Collars
when the prior day's Official Closing Price is to be used when the PBO,
PBB (for Limit Order Price Protection), and a consolidated last sale
price are unavailable and a trading halt has been declared by the
primary listing market during that trading day.\17\
---------------------------------------------------------------------------

    \16\ The Exchange notes that it will still apply Limit Order
Price Protection where there is a PBB or PBO. See Exchange Rule
2614(a)(1)(ix)(A) (providing that a Limit Order to buy (sell) will
be rejected if it is priced at or above (below) the greater of a
specified dollar value and percentage away from the following: (1)
the PBO for Limit Orders to buy, the PBB for Limit Orders to sell .
. .).
    \17\ See supra note 6.
---------------------------------------------------------------------------

    As described above, the Exchange is expanding the scope of the
Trading Collars to include the entire trading day by no longer
excluding orders eligible to participate in the Exchange's Opening and
Re-Opening Process from the protection. This will result in more orders
being subject to the protection and being prevented from possibly
executing at prices outside of the Trading Collar range. Not applying
Limit Order Price Protection and Trading Collar if no consolidated last
sale price has been disseminated following the conclusion of a
regulatory halt as proposed herein, does not offset the expansion of
time the Trading Collar is applied, nor does it create an inappropriate
gap in the trading day where orders would not be protected. Rather, it
seeks to address a small period of time following a regulatory halt
where no consolidated last sale has been disseminated. This may result
in orders being unnecessarily cancelled due to the Trading Collar or
Limit Order Price Protection ranges being based on a stale reference
price. The Exchange also anticipates that this will be an infrequent
occurrence since it requires a either a first trade and/or two-sided
quotation to perform its Re-Opening Process.\18\ Any potential time
period during which the Trading Collar or Limit Order Price Protection
would not be applied is likely to be rare and very short because the
Re-Opening Process only occurs without a reported trade where the
primary listing exchange did not publish a trade within one second of
publication of its first two-sided quotation.
---------------------------------------------------------------------------

    \18\ See Exchange Rule 2615(e)(1)(ii) (stating that the Re-
Opening Process will occur at the midpoint of the: (i) first NBBO
subsequent to the first reported trade and first two-sided quotation
on the primary listing exchange following the resumption of trading
after a halt, suspension, or pause; or (ii) NBBO when the first two-
sided quotation is published by the primary listing exchange
following the resumption of trading after a halt, suspension, or
pause if no first trade is reported by the listing exchange within
one second of publication of the first two-sided quotation by the
listing exchange (emphasis added).
---------------------------------------------------------------------------

    These proposed changes to Limit Order Price Protection and the
Trading Collar are similar to a recent proposal by the Exchange to not
apply Limit Order Price Protection or the Trading Collar when a trading
halt has been declared by the primary listing market during that
trading day and the Exchange would have applied the prior day's
Official Closing Price as the reference price.\19\ Like in this
proposal, the prior proposal was also in response to requests from
Equity Members that Limit Order Price Protection and the Trading Collar
not be applied when a stale reference price may be used. In the prior
proposal, the concern was that the prior day's Official Closing Price
would be used when the consolidated last sale price is unavailable and
a trading halt has been declared by the primary listing market during
that trading day because the Official Closing Price would not
appropriately relate to the current trading behavior of the security in
such a scenario. In such case, Equity Members preferred Limit Order
Price Protection and the Trading Collar not be applied since it may
result in their order being unnecessarily cancelled. Again, the same is
true for this proposal.
---------------------------------------------------------------------------

    \19\ See supra note 6.
---------------------------------------------------------------------------

Rule Reorganization
    The reorganization of Exchange Rules 2614(a)(1)(ix)(C) and
2618(b)(1) removes impediments to and perfects the mechanism of a free
and open market and a national market system because these changes make
each rule easier to comprehend, reducing the potential for inadvertent
investor confusion.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
Trading Collar and Opening and Re-Opening Process
    The Exchange believes its proposal to expand the application of the
Trading Collar to include the Opening and Re-Opening Process will not
impose any burden on inter-market competition because it could serve to
improve the Exchange's market quality by expanding the application of
this risk protection to include all times during Regular Trading Hours
and preventing executions during the Exchange's Opening and Re-Opening
Process at undesirable prices that would have been outside of the
Trading Collar. The Exchange believes that the proposal may have a
positive effect on competition because it would allow the Exchange to
apply Trading Collar during timeframes similar to at least one other
national securities exchange.\20\ The proposal would impose no burden
on intra-market competition because each risk setting would be applied
to all Equity Members' orders equally.
---------------------------------------------------------------------------

    \20\ See NYSE Rules 7.31(a)(1)(B) and 7.34(a)(2)(B).
---------------------------------------------------------------------------

Limit Order Price Protection and Trading Collar Reference Price
    The Exchange believes its proposal to not apply Limit Order Price
Protection and the Trading Collar if no consolidated last sale price
has been

disseminated following the conclusion of a regulatory halt does not
burden inter-market competition because it could improve confidence in
the Exchange's overall execution quality by preventing orders from
being unnecessarily canceled due to stale reference prices.\21\
Further, this proposed rule change may increase confidence in the
proper functioning of the Exchange and contribute to additional
competition among trading venues. Rather than impede competition, the
proposal is designed to avoid the unwanted cancelation of orders
following a regulatory halt, which, in turn, could enhance the
integrity of trading on the Exchange. These proposals also would not
burden intra-market competition because it would apply to all Equity
Members equally and all Equity Members' orders would not be subject to
the applicable protection where it would be based on a stale reference
price and result in an unnecessary cancelation of the order, as
described here.
---------------------------------------------------------------------------

    \21\ See supra note 16.
---------------------------------------------------------------------------

Rule Reorganization
    The reorganization of Exchange Rules 2614(a)(1)(ix)(C) and
2618(b)(1) would not impact competition because such changes would not
enhance or alter the Exchange's ability to compete, but rather, make
each rule easier to comprehend, reducing the potential for inadvertent
investor confusion.

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

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate, it has become effective
pursuant to 19(b)(3)(A) of the Act \22\ and Rule 19b-4(f)(6) \23\
thereunder.
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78s(b)(3)(A).
    \23\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
file number SR-PEARL-2023-58 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-PEARL-2023-58. 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 (https://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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-PEARL-2023-58 and should be
submitted on or before November 24, 2023.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
---------------------------------------------------------------------------

    \24\ 17 CFR 200.30-3(a)(12).

    Dated: October 30, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-24270 Filed 11-1-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 86, Number 191 (Wednesday, October 6, 2021)]
[Notices]
[Pages 55659-55662]
[FR Doc No: 2021-21769]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93218; File No. SR-CboeBZX-2021-059]

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Exempt
Certain Categories of Investment Companies Registered Under the
Investment Company Act of 1940 From the Requirement To Obtain
Shareholder Approval Prior to the Issuance of Securities in Connection
With Certain Acquisitions of the Stock or Assets of an Affiliated
Registered Investment Company

September 30, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on September 22, 2021, Cboe BZX Exchange, Inc. (the ``Exchange''
or ``BZX'') 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 Exchange. The
Exchange filed the proposal as a ``non-controversial'' proposed rule
change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule
19b-4(f)(6) thereunder.\4\ 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

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 exempt certain categories of investment companies
registered under the Investment Company Act of 1940 (the ``1940 Act'')
from the requirement to obtain shareholder approval prior to the
issuance of securities in connection with certain acquisitions of the
stock or assets of another company. The text of the proposed rule
change is provided in Exhibit 5.
    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 amend Rules 14.10(e)(1)(A) and (E) to
exempt certain categories of investment companies registered under the
1940 Act from the requirement to obtain shareholder approval prior to
the issuance of securities in connection with certain acquisitions of
the stock or assets of another company. The proposal is substantially
similar to a recent rule change made by NYSE Arca, Inc. (``Arca'').\5\
The Exchange also proposes to make structural changes to Rules
14.10(e)(1)(A) and (E).
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act No. 91901 (May 14, 2021) 86 FR
27487 (May 20, 2021) (SR-NYSEArca-2020-54) (Order approving of a
proposed rule change, as modified by amendment no. 2, to amend NYSE
Arca Rule 5.3E to exempt registered investment companies that list
certain categories of securities defined as derivative and special
purpose securities under NYSE Arca Rules from having to obtain
shareholder approval prior to the issuance of securities in
connection with certain acquisitions of the stock or assets of an
affiliated registered investment company (the ``Arca Approval
Order'').
---------------------------------------------------------------------------

    By way of background, Exchange Rule 14.10(i)(1) requires issuers to
obtain shareholder approval in connection with the acquisition of the
stock or assets of another company, in the following circumstances:
    (A) Where, due to the present or potential issuance of common
stock, including shares issued pursuant to an earn-out provision or
similar type of provision, or securities convertible into or
exercisable for common stock, other than a public offering for cash:
    (1) The common stock has or will have upon issuance voting power
equal to or in excess of 20% of the voting power outstanding before the
issuance of stock or securities convertible into or exercisable for
common stock; or
    (2) the number of shares of common stock to be issued is or will be
equal to or in excess of 20% of the number of shares of common stock
outstanding before the issuance of the stock or securities; or
    (B) any director, officer or Substantial Shareholder (as defined by
Rule 14.10(i)(5)(C)) of the Company has a 5% or greater interest (or
such persons collectively have a 10% or greater interest), directly or
indirectly, in the Company or assets to be acquired or in the
consideration to be paid in the transaction or series of related
transactions and the present or potential issuance of common stock, or
securities convertible into or exercisable for common stock, could
result in an increase in outstanding common shares or voting power of
5% or more.
    Exchange Rules 14.10(e)(1)(A) and 14.10(e)(1)(E) exempt certain
categories of issuers from certain corporate governance requirements.
    Now, the Exchange proposes to amend Rules 14.10(e)(1)(A) and
14.10(e)(1)(E) to exempt certain categories of investment companies
registered under the 1940 Act from the requirement to comply with Rule
14.10(i)(1) in connection with the acquisition of the stock or assets
of an affiliated registered investment company in a transaction that
complies with Rule 17a-8 \6\ (Mergers of affiliated companies) (``Rule
17a-8'') under the 1940 Act and does not otherwise require shareholder
approval under the 1940 Act and the rules thereunder or any other
Exchange rule.\7\ Specifically, the

Exchange proposes to exempt from the shareholder approval provision
described herein Portfolio Depository Receipts, as provided under Rule
14.11(b), as well as management investment companies that are Index
Fund Shares, Managed Fund Shares, Managed Portfolio Shares, ETF Shares,
and Tracking Fund Shares as defined in Rules 14.11(c), 14.11(i),
14.11(k), 14.11(l), and 14.11(m), respectively.\8\
---------------------------------------------------------------------------

    \6\ 17 CFR 270.17a-8.
    \7\ The Exchange proposes to exempt both Portfolio Depository
Receipts (Rule 14.11(b)) and certain management investment companies
that are Index Fund Shares (Rule 14.11(c)), Managed Fund Shares
(Rule 14.11(i)), Managed Portfolio Shares (Rule 14.11(k)), ETF
Shares (Rule 14.11(l)), and Tracking Fund Shares (Rule 14.11(m))
(collectively, with Portfolio Depository Receipts, the ``1940 Act
Securities''). Each of the listed categories are issued by an entity
organized under the 1940 Act. In proposing this exemption, the
Exchange notes that the adopting release for Rule 17a-8 specifically
noted that nothing in Rule 17a-8 relieves a fund of its obligation
to obtain shareholder approval as may be required by state law or a
fund's organizational documents. See Investment Company Act Release
No. 25666 at Footnote 18.
    \8\ Index Fund Shares listed pursuant to Rule 14.11(c) are
substantively similar to Investment Company Units listed pursuant to
Arca Rule 5.2-E(j)(3). Similarly, Tracking Fund Shares listed
pursuant Rule 14.11(m) are substantively similar to Active Proxy
Portfolio Shares listed pursuant to Arca Rule 8.601-E.
---------------------------------------------------------------------------

    In general, the requirement to obtain shareholder approval prior to
the issuance of securities in connection with certain acquisitions of
the stock or asset of another company is designed to give existing
shareholders a vote on the issuance of stock that may dilute their
voting or economic rights. The Exchange notes that Exchange Rule
14.10(i)(1) is also intended to give shareholders a vote on
transactions where a director, officer, or substantial shareholder of
the listed company has a significant interest in the company or assets
to be acquired or the consideration to be paid and therefore may
benefit from the transaction. For the reasons described below, as well
as the protections embedded in Rule 17a-8, the Exchange believes that
these concerns are limited with respect to 1940 Act Securities.
Therefore, the Exchange believes it is appropriate to exempt issuers of
1940 Act Securities from having to obtain shareholder approval under
Exchange rules which can be both time consuming and expensive.
    The Exchange believes that the potential economic and voting
dilution concerns sometimes associated with a large share issuance are
unlikely to be present when an issuer of a 1940 Act Security issues
shares in connection with the acquisition of the stock or assets of an
affiliated registered investment company. As described above, the
proposed exemption will only apply to issuers of investment companies
organized under the 1940 Act.\9\ Sections 17(a)(1)-(2) of the 1940 Act
prohibit, among other things, certain transactions between registered
investment companies and affiliated persons.\10\ Rule 17a-8 provides an
exemption from Sections 17(a)(1)-(2) for certain mergers of affiliated
companies provided that the board of directors of each investment
company, including a majority of the directors that are not interested
persons, affirmatively determine that (i) participation in the merger
is in the best interest of their respective investment company, and
(ii) the interests of their shareholders will not be diluted as a
result of the transaction.\11\ Because the shares issued by the
acquiring investment company are issued at a price equal to the fund's
net asset value,\12\ the board of directors is able to make an
affirmative determination that the merger is not dilutive to existing
shareholders.\13\ With respect to potential concerns about voting
dilution, holders of Portfolio Depository Receipts and management
investment companies that are Index Fund Shares, Managed Fund Shares,
Managed Portfolio Shares, ETF Shares, and Tracking Fund Shares either
do not have the right to elect directors at annual meetings or have the
right to elect directors only in very limited circumstances.
---------------------------------------------------------------------------

    \9\ As of June 10, 2021, approximately 97% of securities listed
on the Exchange are issued by investment companies registered under
the 1940 Act.
    \10\ 15 U.S.C. 80a-17(a)(1)-(2). See also the definition of
``affiliated person'' in the 1940 Act at 15 U.S.C 80a-2(a)(3).
    \11\ 17 CFR 270.17a-8.
    \12\ The Exchange notes that the proposing releases for Rule
17a-8 specifically contemplated that, in certain circumstances, the
price paid may deviate from a fund's net asset value due to
adjustments for tax purposes. See Investment Company Act Release No.
25259 at Footnote 26.
    \13\ The Exchange notes that the shares are issued at a fund's
net asset value when the fund is registered. Rule 17a-8 also
includes requirements to protect against dilution when the fund to
be acquired is unregistered. Notwithstanding these requirements
applicable when a fund is unregistered, the Exchange's exemption
will only apply when each fund that is a party to the merger is
registered.
---------------------------------------------------------------------------

    The Exchange believes that the same provisions of Rule 17a-8 that
protect against dilution also provide safeguards for existing
shareholders when the transaction involves a director, officer, or
substantial shareholder of the listed company that has a significant
interest in the company or assets to be acquired or the consideration
to be paid and therefore may benefit from the transaction. Because the
board of each merging company must make an affirmative decision that
the transaction is in the best interest of its respective company and
that the transaction will not result in dilution for existing
shareholders, the Exchange believes there is reduced concern that
existing shareholders will be disenfranchised as a result of the
Exchange's proposed exemption.
    Under Rule 17a-8, an affiliated merger must be approved by a
majority of the outstanding voting securities of the merging company
that is not the surviving company unless certain conditions are met.
However, Rule 17a-8 does not require the surviving company (i.e., the
fund issuing shares in the merger) to obtain the approval of its
shareholders. When the Commission proposed amendments to Rule 17a-8, it
specifically sought comment on whether the outstanding voting
securities of the fund that will survive the merger should also be
required to approve the merger.\14\ Importantly, the Commission
ultimately did not include a requirement of approval of shareholders of
the surviving company in its final rule.
---------------------------------------------------------------------------

    \14\ See Investment Company Act Release No. 25259 at Section
II(A)(2)(a): ``Should the outstanding voting securities of the fund
that will survive the merger also be required to approve the
merger?''
---------------------------------------------------------------------------

    Given that Rule 17a-8 does not require a surviving company issuer
of 1940 Act Securities to obtain shareholder approval in the context of
a merger of affiliated companies, the Exchange believes it is
appropriate to exempt such issuers of 1940 Act Securities from having
to comply with Exchange Rule 14.10(i)(1). As described above, the
Exchange only proposes to exempt issuers of 1940 Act Securities from
having to comply with Exchange Rule 14.10(i)(1) if they are issuing
shares to acquire the stock or assets of an affiliated registered
investment company. Notwithstanding the proposed exemption, the
Exchange notes that other provisions of Exchange rules or the 1940 Act
and the rules thereunder may require shareholder approval and will
still apply. In particular, the Exchange notes that the adopting
release for Rule 17a-8 specifically noted that nothing in Rule 17a-8
relieves a fund of its obligation to obtain shareholder approval as may
be required by state law or a fund's organizational documents.\15\
Thus, an issuer of a 1940 Act Security may still be required to obtain
shareholder approval in connection with the acquisition of the stock or
assets of an affiliated company even if such transaction complies with
Rule 17a-8 if such transaction would require shareholder approval under
other applicable Exchange Rules, another

provision of the 1940 Act or the rules and regulations thereunder,
state law, or a fund's organizational documents.
---------------------------------------------------------------------------

    \15\ See supra footnote 7.
---------------------------------------------------------------------------

    Based on the above proposed changes, the Exchange proposes to
restructure Rules 14.10(e)(1)(A) and (E). Specifically, the Exchange
proposes to split Rule 14.10(e)(1)(A) into subparagraphs (i) and (ii).
Subparagraph (i) will provide the current exemptions for asset-backed
issuers and other passive issuers, while subparagraph (ii) will provide
for the proposed exemption of Rule 14.10(i)(1) applicable to issuers of
Portfolio Depository Receipts, as provided under Rule 14.11(b). The
Exchange also proposes to split existing Rule 14.10(e)(1)(E) into
subparagraphs (i), (ii), and (iii). Subparagraphs (i) and (ii) will
provide the current exemptions for management investment companies,
while subparagraph (iii) will provide for the proposed exemption of
Rule 14.10(i)(1) applicable to certain categories of investment
companies registered under the 1940 Act.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\16\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \17\ requirements that the rules
of an exchange be designed to prevent fraudulent and manipulative acts
and practices, to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
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.
Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \18\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78f(b).
    \17\ 15 U.S.C. 78f(b)(5).
    \18\ Id.
---------------------------------------------------------------------------

    The Exchange believes that the proposed amendment is consistent
with the protection of investors as protections afforded by Rule 17a-8,
mean that (i) there is limited risk of dilution to existing
shareholders as a result of an issuance of shares by an issuer of 1940
Act Securities in connection with the acquisition of the stock or
assets of an affiliated company, and (ii) existing shareholders have a
reduced risk of being disenfranchised as a result of a Rule 17a-8-
compliant transaction that involves a director, officer, or substantial
shareholder of the listed company that has a significant interest in
the company or assets to be acquired or the consideration to be paid.
With respect to potential concerns about voting dilution, holders of
Portfolio Depository Receipts and management investment companies that
are Index Fund Shares, Managed Fund Shares, Managed Portfolio Shares,
ETF Shares, and Tracking Fund Shares either do not have the right to
elect directors at annual meetings or have the right to elect directors
only in very limited circumstances.
    The Exchange further believes its proposal is consistent with the
protection of investors because its proposal is limited to registered
investment companies that are organized under the 1940 Act. In the case
of a merger of affiliated investment companies, the board of directors
of each investment company, including a majority of the directors that
are not interested persons of the respective investment company, must
affirmatively determine that (i) participation in the merger is in the
best interest of their respective investment company, and (ii) the
interests of their shareholders will not be diluted as a result of the
transaction. Where the shares issued by the surviving investment
company are issued at a price equal to the fund's net asset value, the
board of directors is able to conclude that the interests of
shareholders in such a transaction will not be diluted. With respect to
voting dilution, the Exchange notes that holders of 1940 Act Securities
have very limited voting rights, including no right to vote on the
annual election of a board of directors.
    The Exchange believes that the same provisions of Rule 17a-8 that
protect against dilution also provide safeguards for existing
shareholders when the transaction involves a director, officer, or
substantial shareholder of the listed company that has a significant
interest in the company or assets to be acquired or the consideration
to be paid and therefore may benefit from the transaction. Because the
board of each merging company must make an affirmative determination
that the transaction is in the best interest of its investment company
that the transaction will not result in dilution for existing
shareholders, there is reduced concern that existing shareholders will
be disenfranchised as a result of the Exchange's proposed exemption.
    The Exchange notes that while shareholders of the non-surviving
company must approve the merger under certain circumstances, Rule 17a-8
does not require the shareholders of the surviving company to approve
the transaction. Accordingly, the Exchange believes it is appropriate
to exempt issuers of 1940 Act Securities from the requirements of Rule
14.10(i)(1)in this same limited circumstance.
    Notwithstanding the proposed exemption described above, the
Exchange notes that other provisions of Exchange rules or the 1940 Act
and the rules thereunder may require shareholder approval and will
still apply. In particular, the Exchange notes that the adopting
release for Rule 17a-8 specifically noted that nothing in Rule 17a-8
relieves a fund of its obligation to obtain shareholder approval as may
be required by state law or a fund's organizational documents.\19\
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    \19\ See supra footnote 7.
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    The Exchange believes it is not unfairly discriminatory to offer
the exemption only to issuers of 1940 Act Securities completing a
merger with an affiliated registered investment company, as opposed to
all issuers of securities listed pursuant to Exchange Rule 14.11,
because only 1940 Act Securities are subject to the requirements of the
1940 Act which offer the protections against dilution and self-dealing
described herein.
    Lastly, the Exchange believes that the proposal is reasonable as it
is substantially similar to a recent rule amendment made by Arca.\20\
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    \20\ See supra footnote 5.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed amendment will
not impose any burden on competition, as they simply propose to offer
1940 Act Securities a limited exemption for the Exchange's shareholder
approval rule in a specific circumstance where the Exchange believes
there is a low risk of dilution to existing shareholders. Further, the
proposed rule change is substantively similar to Arca Rule 5.3E.

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

    Because the proposed rule change does not: (i) Significantly affect
the protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \21\ and Rule 19b-
4(f)(6) thereunder.\22\
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    \21\ 15 U.S.C. 78s(b)(3)(A).
    \22\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has complied with this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \23\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\24\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. The Exchange states that
waiver of the operative delay will provide certain investment companies
registered under the 1940 Act immediate relief from certain shareholder
approval requirements if the conditions of the rule as described above
are met. The Commission previously approved a substantively similar
rule change on Arca and found it consistent with the Section 6(b)(5) of
the Act.\25\ For these reasons, the Commission believes that the
proposed rule change presents no novel issues and that waiver of the
30-day operative delay is consistent with the protection of investors
and the public interest. Accordingly, the Commission hereby waives the
30-day operative delay and designates the proposal operative upon
filing.\26\
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    \23\ 17 CFR 240.19b-4(f)(6).
    \24\ 17 CFR 240.19b-4(f)(6)(iii).
    \25\ See supra note 5.
    \26\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule change's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \27\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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    \27\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-2021-059 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-2021-059. 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-2021-059, and should be
submitted on or before October 27, 2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\28\
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    \28\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-21769 Filed 10-5-21; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 88, Number 197 (Friday, October 13, 2023)]
[Notices]
[Pages 70975-70976]
[FR Doc No: 2023-22696]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. CP22-491-001]

Natural Gas Pipeline Company of America LLC; Notice of Request
for Extension of Time

    Take notice that on September 29, 2023, Natural Gas Pipeline
Company of America LLC (Natural) requested that the Federal Energy
Regulatory Commission (Commission) grant an extension of time, until
December 31, 2023, to complete construction of the Crawford Line #3
Make Piggable Project (Project) and place the Project facilities into
service.
    On July 19, 2022, Natural filed a prior notice application,
pursuant to 18 CFR

157.205, 157.206. 157.208(b) and 157.216(b) of the Commission's
regulations and its blanket certificate authority granted in Docket No.
CP82-402-000 for Commission authorization of the Project.\1\ On
September 27, 2022, BNSF Railway Company (BNSF) filed a protest seeking
additional information on the Project. Natural resolved the protest
with BNSF on October 17, 2022, and the Project was deemed approved as
of such date. Based on the Project approval date of October 17, 2022,
Natural is required to complete Project-related construction by October
17, 2023. Natural states that its request for an extension of time is
due to construction delays, and adverse weather conditions the Project
has experienced, all as more fully discussed in its request for
extension of time letter.
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    \1\ Natural Gas Pipeline Company of America, 20 FERC ] 62,415
(1982).
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    As of September 29, 2023, Natural's Project construction is
approximately 65 percent complete. However, given the remaining amount
of work and potential for weather or other unforeseen delays, Natural
does not believe it will be able to complete Project construction
activities by October 17, 2023. As such, Natural is respectfully
seeking a limited extension of time in which to complete Project
construction activities. While Natural anticipates achieving mechanical
completion of the Project by November 1, 2023, Natural is requesting an
extension until December 31, 2023, to complete Project construction,
accounting for potential delays.
    This notice establishes a 15-calendar day intervention and comment
period deadline. Any person wishing to comment on Natural's request for
an extension of time may do so. No reply comments or answers will be
considered. If you wish to obtain legal status by becoming a party to
the proceedings for this request, you should, on or before the comment
date stated below, file a motion to intervene in accordance with the
requirements of the Commission's Rules of Practice and Procedure (18
CFR 385.214 or 385.211) and the Regulations under the Natural Gas Act
(18 CFR 157.10).
    As a matter of practice, the Commission itself generally acts on
requests for extensions of time to complete construction for Natural
Gas Act facilities when such requests are contested before order
issuance. For those extension requests that are contested,\2\ the
Commission will aim to issue an order acting on the request within 45
days.\3\ The Commission will address all arguments relating to whether
the applicant has demonstrated there is good cause to grant the
extension.\4\ The Commission will not consider arguments that re-
litigate the issuance of the certificate order, including whether the
Commission properly found the project to be in the public convenience
and necessity and whether the Commission's environmental analysis for
the certificate complied with the National Environmental Policy Act.\5\
At the time a pipeline requests an extension of time, orders on
certificates of public convenience and necessity are final and the
Commission will not re-litigate their issuance.\6\ The OEP Director, or
his or her designee, will act on all of those extension requests that
are uncontested.
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    \2\ Contested proceedings are those where an intervenor disputes
any material issue of the filing. 18 CFR 385.2201(c)(1) (2019).
    \3\ Algonquin Gas Transmission, LLC, 170 FERC ] 61,144, at P 40
(2020).
    \4\ Id. at P 40.
    \5\ Similarly, the Commission will not re-litigate the issuance
of an NGA section 3 authorization, including whether a proposed
project is not inconsistent with the public interest and whether the
Commission's environmental analysis for the permit order complied
with NEPA.
    \6\ Algonquin Gas Transmission, LLC, 170 FERC ] 61,144, at P 40
(2020).
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    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://www.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. For assistance, contact FERC at
[email protected] or call toll free,<PHONE_NUMBER> or TTY
(202) 502-8659.
    The Commission strongly encourages electronic filings of comments
in lieu of paper using the ``eFile'' link at http://www.ferc.gov. In
lieu of electronic filing, you may submit a paper copy. Submissions
sent via the U.S. Postal Service must be addressed to: Kimberly D.
Bose, Secretary, Federal Energy Regulatory Commission, 888 First Street
NE, Room 1A, Washington, DC 20426. Submissions sent via any other
carrier must be addressed to: Kimberly D. Bose, Secretary, Federal
Energy Regulatory Commission, 12225 Wilkins Avenue, Rockville, Maryland
20852.
    The Commission's Office of Public Participation (OPP) supports
meaningful public engagement and participation in Commission
proceedings. OPP can help members of the public, including landowners,
environmental justice communities, Tribal members and others, access
publicly available information and navigate Commission processes. For
public inquiries and assistance with making filings such as
interventions, comments, or requests for rehearing, the public is
encouraged to contact OPP at<PHONE_NUMBER> or [email protected].
    Comment Date: 5 p.m. Eastern Time on October 23, 2023.

    Dated: October 6, 2023.
Kimberly D. Bose,
Secretary.
[FR Doc. 2023-22696 Filed 10-12-23; 8:45 am]
BILLING CODE 6717-01-P