[Federal Register: March 12, 2008 (Volume 73, Number 49)]
[Notices]
[Page 13221]
[DOCID:fr12mr08-71]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

 [Docket No. ER08-335-003]

Florida Power & Light Company; Notice of Filing

March 5, 2008.
    Take notice that on February 29, 2008, Florida Power & Light
Company tendered for filing an amendment to its rate schedule FERC No.
312.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed on or before the comment date.
Anyone filing a motion to intervene or protest must serve a copy of
that document on the Applicant and all the parties in this proceeding.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://
www.ferc.gov. Persons unable to file electronically should submit an
original and 14 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426.
    This filing is accessible on-line at http://www.ferc.gov, using the
``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.
    Comment Date: 5 p.m. Eastern Time on March 12, 2008.

Kimberly D. Bose,
Secretary.
 [FR Doc. E8-4845 Filed 3-11-08; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 85, Number 32 (Tuesday, February 18, 2020)]
[Notices]
[Pages 8964-8968]
[FR Doc No: 2020-03092]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88163; File No. SR-NSCC-2020-002]

Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing of Proposed Rule Change to Enhance the
Calculation of the Family-Issued Securities Charge

February 11, 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 28, 2020, National Securities Clearing Corporation
(``NSCC'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II
and III below, which Items have been prepared by the clearing
agency.\3\ 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.
    \3\ On January 28, 2020, NSCC filed this proposed rule change as
an advance notice (SR-NSCC-2020-801) with the Commission pursuant to
Section 806(e)(1) of Title VIII of the Dodd-Frank Wall Street Reform
and Consumer Protection Act entitled the Payment, Clearing, and
Settlement Supervision Act of 2010, 12 U.S.C. 5465(e)(1), and Rule
19b-4(n)(1)(i) under the Act, 17 CFR 240.19b-4(n)(1)(i). A copy of
the advance notice is available at http://www.dtcc.com/legal/sec-rule-filings.aspx.
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I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change

    The proposed rule change consists of modifications to NSCC's Rules
and Procedures (``Rules'') \4\ in order to enhance the calculation of
NSCC's existing charge applied to long positions in Family-Issued
Securities \5\ (``FIS Charge'') by using the same haircut percentages
for all Members and no longer using Members' ratings on the Credit Risk
Rating Matrix (``CRRM'') \6\ in calculating this charge, as described
below.
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    \4\ Terms not defined herein are defined in the Rules, available
at www.dtcc.com/~/media/Files/Downloads/legal/rules/nscc_rules.pdf.
    \5\ A Family-Issued Security is defined in Rule 1 (Definitions
and Descriptions) of the Rules as ``a security that was issued by a
Member or an affiliate of that Member.'' Supra note 4.
    \6\ See Rule 1 and Section 4 of Rule 2B of the Rules, supra note
4. See also Securities Exchange Act Release Nos. 80734 (May 19,
2017), 82 FR 24177 (May 25, 2017) (SR-DTC-2017-002, SR-FICC-2017-
006, SR-NSCC-2017-002); and 80731 (May 19, 2017), 82 FR 24174 (May
25, 2017) (SR-DTC-2017-801, SR-FICC-2017-804, SR-NSCC-2017-801).
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II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

    In its filing with the Commission, the clearing agency 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 clearing agency has prepared summaries,
set forth in sections A, B, and C below, of the most significant
aspects of such statements.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

1. Purpose
    NSCC is proposing to modify the Rules to enhance the calculation of
the FIS Charge by using the same haircut percentages for all Members
and no longer using Members' ratings on the CRRM in calculating this
charge. By using the same haircut percentages to calculate the FIS
Charge for all Members, NSCC believes this proposed enhancement would
better mitigate the specific wrong-way risk posed by long positions in
Family-Issued Securities that the charge was designed to address, as
described below.
Background
    As a central counterparty, NSCC occupies an important role in the
securities settlement system by interposing itself between
counterparties to financial transactions, thereby reducing the risk
faced by participants and contributing to global financial stability.
The effectiveness of a central counterparty's risk controls and the
adequacy of its financial resources are critical to achieving these
risk-reducing goals. As part of its market risk management strategy,
NSCC manages its credit exposure to Members by determining the
appropriate Required Fund Deposits to the Clearing Fund and monitoring
its sufficiency, as provided for in the Rules.\7\ The Required Fund
Deposit serves as each Member's margin.
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    \7\ See Rule 4 (Clearing Fund) and Procedure XV (Clearing Fund
Formula and Other Matters) of the Rules, supra note 4.

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    The objective of a Member's Required Fund Deposit is to mitigate
potential losses to NSCC associated with liquidating a Member's
portfolio in the event NSCC ceases to act for that Member (hereinafter
referred to as a ``default'').\8\ The aggregate of all Members'
Required Fund Deposits constitutes the Clearing Fund of NSCC.\9\ NSCC
may access its Clearing Fund should a defaulting Member's own Required
Fund Deposit be insufficient to satisfy losses to NSCC caused by the
liquidation of that Member's portfolio.\10\
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    \8\ The Rules identify when NSCC may cease to act for a Member
and the types of actions NSCC may take. For example, NSCC may
suspend a firm's membership with NSCC or prohibit or limit a
Member's access to NSCC's services in the event that Member defaults
on a financial or other obligation to NSCC. See Rule 46
(Restrictions on Access to Services) of the Rules, supra note 4.
    \9\ See Rule 4 (Clearing Fund) of the Rules, supra note 4.
    \10\ Id.
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    Pursuant to the Rules, each Member's Required Fund Deposit amount
consists of a number of applicable components, each of which is
calculated to address specific risks faced by NSCC, as identified
within Procedure XV of the Rules.\11\ NSCC regularly assesses the
market, liquidity and other risks that its margining methodologies are
designed to mitigate to evaluate whether margin levels are commensurate
with the particular risk attributes of each relevant product,
portfolio, and market.
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    \11\ Supra note 4.
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    Among the various risks that NSCC considers when evaluating the
effectiveness of its margining methodology are its counterparty risks,
including wrong-way risk. In particular, NSCC seeks to identify and
mitigate its exposures to specific wrong-way risk, which is defined as
the risk that an exposure to a counterparty is highly likely to
increase when the creditworthiness of that counterparty
deteriorates.\12\ NSCC has identified exposure to specific wrong-way
risk when it acts as central counterparty to a Member with long
positions in Family-Issued Securities. In the event a Member with long
positions in Family-Issued Securities defaults, NSCC would close out
those positions following a likely drop in the creditworthiness of the
issuer, possibly resulting in a loss to NSCC.
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    \12\ See Principles for financial market infrastructures, issued
by the Committee on Payment and Settlement Systems and the Technical
Committee of the International Organization of Securities
Commissions, pg. 47 n.65 (April 2012), available at http://www.bis.org/publ/cpss101a.pdf.
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    In order to address this exposure to specific wrong-way risk, NSCC
implemented the FIS Charge in 2015.\13\ The FIS Charge is applied to a
Member's long positions in Family-Issued Securities, which are the
positions NSCC would need to sell into the market following a Member
default.\14\
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    \13\ See Securities Exchange Act Release No. 76077 (October 5,
2015), 80 FR 61256 (October 9, 2015) (SR-NSCC-2015-003) (``Initial
FIS Filing'').
    \14\ Short positions in Family-Issued Securities are not subject
to the FIS Charge and are subject to the applicable volatility
charge, as provided for under the Rules. See Sections
I.(A)(1)(a)(iv) and I.(A)(2)(a)(iv) of Procedure XV (Clearing Fund
Formula and Other Matters) of the Rules, supra note 4.
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    When the FIS Charge was initially implemented, it was only applied
to Members that were placed on the Watch List based on the CRRM
rating.\15\ As part of its ongoing monitoring of its membership, NSCC
utilizes the internal CRRM to evaluate its credit risk exposures to its
Members based on a scale from strongest to weakest.\16\ Members that
fall within the higher risk rating categories are considered on NSCC's
Watch List and may be subject to enhanced surveillance or additional
margin charges, as permitted under the Rules.\17\ Therefore, the FIS
Charge was applied only to Members on the Watch List based on the
reasoning that these Members present a heightened credit risk to NSCC
or have demonstrated higher risk related to their ability to meet
settlement. However, in the Initial FIS Filing, NSCC proposed to
further evaluate its exposure to wrong-way risk presented by positions
in Family-Issued Securities by reviewing the impact of expanding the
application of the FIS Charge to positions in Family-Issued Securities
of all Members.\18\
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    \15\ See supra note 13.
    \16\ See supra note 6.
    \17\ Id.
    \18\ Supra note 13, at 61257.
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    Following that evaluation, NSCC implemented the current methodology
for calculating the FIS Charge, which expanded the application of the
charge to all Members, but continues to take into account Members'
ratings on the CRRM in calculating the applicable charge.\19\
Therefore, under the current methodology, in calculating its Members'
Required Fund Deposits, NSCC first excludes long positions in Family-
Issued Securities of Members from the applicable volatility charge, and
instead charges an amount calculated by multiplying the absolute value
of the long Net Unsettled Positions (as such term is defined in
Procedure XV of the Rules) in that Member's Family-Issued Securities by
a percentage that is no less than 40 percent.\20\ The percentage that
is used in calculating the FIS Charge depends on a Member's rating on
the CRRM. Under Procedure XV of the Rules, long Net Unsettled Positions
in (1) fixed income securities that are Family-Issued Securities are
charged a haircut rate of no less than 80 percent for Members that are
rated 6 or 7 on the CRRM, and no less than 40 percent for Members that
are rated 1 through 5 on the CRRM; and (2) equity securities that are
Family-Issued Securities are charged a haircut rate of 100 percent for
Members that are rated 6 or 7 on the CRRM, and no less than 50 percent
for Members that are rated 1 through 5 on the CRRM.\21\ The haircut
rates used in the FIS Charge as applied to positions in fixed income
securities were calibrated based on historical corporate issue recovery
rate data and address the risk that the Family-Issued Securities of a
Member would be devalued in the event of that Member's default.
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    \19\ See Securities Exchange Act Release Nos. 81550 (September
7, 2017), 82 FR 43061 (September 13, 2017) (SR-NSCC-2017-010); and
81545 (September 7, 2017), 82 FR 43054 (September 13, 2017) (SR-
NSCC-2017-804).
    \20\ See Sections I.(A)(1)(a)(iv) and I.(A)(2)(a)(iv) of
Procedure XV (Clearing Fund Formula and Other Matters) of the Rules,
supra note 4.
    \21\ Id.
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Proposed Change
    NSCC is now proposing to enhance the methodology for calculating
the FIS Charge by using the higher applicable percentage for all
Members, and no longer using a Member's CRRM rating in the calculation.
    Since implementation of the current calculation, NSCC has continued
to monitor its exposure to specific wrong-way risk and determined that
the risk characteristics to be considered when margining Family-Issued
Securities extend beyond Members' creditworthiness as measured through
the CRRM. More specifically, NSCC believes it may be exposed to
specific wrong-way risk despite a Members' rating on the CRRM, and NSCC
can better mitigate its exposure to this risk by calculating the FIS
Charge without considering Members' CRRM ratings. While the current
methodology appropriately assumes that Members with a higher rating on
the CRRM present a heightened credit risk to NSCC or have demonstrated
higher risk related to their ability to meet settlement, NSCC believes
this approach does not take into account the risk that a firm may
default due to unanticipated causes (referred to as a ``jump-to-
default'' scenario) not captured by the CRRM rating. The CRRM rating
necessarily relies on historical data as a predictor of future risks.
Jump-to-default scenarios

are triggered by unanticipated causes that could not be predicted based
on historical trends or data, for example fraud or other bad acts by
management. The proposed change is designed to improve NSCC's ability
to cover the specific wrong-way risk posed by long positions in Family-
Issued Securities by applying the higher applicable percentage in
calculating the FIS Charge for all Members.
    In order to implement this proposal, NSCC would amend Sections
I.(A)(1)(a)(iv) and I.(A)(2)(a)(iv) of Procedure XV of the Rules, which
describe the methodology for calculating the FIS Charge, and provide
that (1) fixed income securities that are Family-Issued Securities
shall be charged a haircut rate of no less than 80 percent; and (2)
equity securities that are Family-Issued Securities shall be charged a
haircut rate of 100 percent.
2. Statutory Basis
    NSCC believes that the proposed change is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to a covered clearing agency. In particular, NSCC believes
that the proposed change is consistent with Section 17A(b)(3)(F) of the
Act,\22\ and Rules 17Ad-22(e)(4)(i),\23\ and (e)(6)(i) and (v),\24\
each promulgated under the Act, for the reasons described below.
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    \22\ 15 U.S.C. 78q-1(b)(3)(F).
    \23\ 17 CFR 240.17Ad-22(e)(4)(i).
    \24\ 17 CFR 240.17Ad-22(e)(6)(i) and (v).
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    Section 17A(b)(3)(F) of the Act requires, in part, that the Rules
be designed to promote the prompt and accurate clearance and settlement
of securities transactions and to protect investors and the public
interest.\25\ The proposed change would enhance the margin methodology
applied to long positions in Family-Issued Securities by using the
higher applicable percentage for all Members, rather than considering
Members' CRRM ratings in the calculation. The proposal would improve
NSCC's ability to mitigate specific wrong-way risk exposures in a jump-
to-default scenario and, in this way, would assist NSCC in collecting
margin that more accurately reflects NSCC's exposure to a Member that
clears Family-Issued Securities. The proposal would also assist NSCC in
its continuous efforts to improve the reliability and effectiveness of
its risk-based margining methodology by taking into account specific
wrong-way risk. As such, the proposal would help NSCC, as a central
counterparty, promote robust risk management, and thus promote the
prompt and accurate clearance and settlement of securities
transactions, as well as, in general, protect investors and the public
interest, consistent with the requirements of Section 17A(b)(3)(F) of
the Act.\26\
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    \25\ 15 U.S.C. 78q-1(b)(3)(F).
    \26\ Id.
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    Rule 17Ad-22(e)(4)(i) under the Act requires that each covered
clearing agency establish, implement, maintain and enforce written
policies and procedures reasonably designed to effectively identify,
measure, monitor, and manage its credit exposures to participants and
those arising from its payment, clearing, and settlement processes,
including by maintaining sufficient financial resources to cover its
credit exposure to each participant fully with a high degree of
confidence.\27\ The specific wrong-way risk presented by Family-Issued
Securities is the risk that, in the event a Member with unsettled long
positions in Family-Issued Securities defaults, NSCC would close out
those positions following a likely drop in the credit-worthiness of the
issuer, possibly resulting in a loss to NSCC. The haircut rates used in
calculating the FIS Charge as applied to positions in fixed income
securities were calibrated based on historical corporate issue recovery
rate data, and, therefore, address the risk that the Family-Issued
Securities of a Member would be devalued in the event of that Member's
default. The proposal to apply the higher haircuts to all Members would
assist NSCC in addressing specific wrong-way risk exposures in a jump-
to-default scenario. By addressing this additional risk exposure, NSCC
believes the proposal would allow it to calculate the FIS Charge in a
way that more accurately reflects the risk characteristics of Family-
Issued Securities. The proposal would, therefore, permit NSCC to more
accurately identify, measure, monitor and manage its credit exposures
to Members with long positions in Family-Issued Securities, and would
assist NSCC in collecting and maintaining financial resources that
reflect its credit exposures to those Members. Therefore, NSCC believes
the proposed change is consistent with Rule 17Ad-22(e)(4)(i).\28\
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    \27\ 17 CFR 240.17Ad-22(e)(4)(i).
    \28\ Id.
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    Rule 17Ad-22(e)(6)(i) under the Act requires that each covered
clearing agency that provides central counterparty services establish,
implement, maintain and enforce written policies and procedures
reasonably designed to cover its credit exposures to its participants
by establishing a risk-based margin system that, at a minimum,
considers, and produces margin levels commensurate with, the risks and
particular attributes of each relevant product, portfolio, and
market.\29\ Rule 17Ad-22(e)(6)(v) under the Act requires that each
covered clearing agency that provides central counterparty services
establish, implement, maintain and enforce written policies and
procedures reasonably designed to cover its credit exposures to its
participants by establishing a risk-based margin system that, at a
minimum, uses an appropriate method for measuring credit exposure that
accounts for relevant product risk factors and portfolio effects across
products.\30\
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    \29\ 17 CFR 240.17Ad-22(e)(6)(i).
    \30\ 17 CFR 240.17Ad-22(e)(6)(v).
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    As stated above, long positions in Family-Issued Securities present
NSCC with exposure to specific wrong-way risk that, in the event a
Member with these positions defaults, NSCC would close out those
positions following a likely drop in the credit-worthiness of the
issuer, possibly resulting in a loss to NSCC. The haircut rates used in
the current methodology would continue to be used in the proposed
methodology and as applied to positions in fixed income securities were
calibrated based on historical corporate issue recovery rate data and
address the risk that the Family-Issued Securities of a Member would be
devalued in the event of that Member's default. Therefore, the
calculation of the charge would continue to reflect the risk
characteristics of Family-Issued Securities. As described above, the
proposed change to apply the higher haircut rates to all Members would
improve NSCC's ability to mitigate its exposure to specific wrong-way
risk in a jump-to-default scenario. In this way, the proposal would
assist NSCC in maintaining a risk-based margin system that considers,
and produces margin levels commensurate with, the risks and particular
attributes of long positions in Family-Issued Securities. Additionally,
NSCC believes the proposed enhancement to the methodology for
calculating the FIS Charge is an appropriate method for measuring its
credit exposures to its Members, because the FIS Charge would continue
to account for the risk factors presented by these securities, i.e.,
the risk that these securities would be devalued in the event of a
Member default. Therefore, NSCC believes the proposed change is
consistent with Rule 17Ad-22(e)(6)(i) and (v).\31\
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    \31\ 17 CFR 240.17Ad-22(e)(6)(i) and (v).

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(B) Clearing Agency's Statement on Burden on Competition

    By enhancing the methodology for calculating the FIS Charge, and,
therefore, increasing the amount of margin that Members may be charged
under the Rules, the proposed change may impose a burden on
competition. More specifically, those Members that are currently rated
1-5 on the CRRM would be subject to an increased FIS Charge relative to
the current applicable FIS Charge. However, Members' ratings on the
CRRM are re-evaluated periodically and change from time to time.
Therefore, all Members could have become subject to the higher FIS
Charge at any time under the current methodology if their CRRM rating
was increased to a 6 or 7 following a periodic reevaluation of their
rating. Similarly, the volume of Net Unsettled Positions in Family-
Issued Securities in a Member's portfolio could change periodically.
The proposed enhancement to the calculation of the FIS Charge would be
imposed on all Members on an individualized basis, based on the
positions in their cleared portfolio, in an amount reasonably
calculated to mitigate the risks posed to NSCC by those positions.
Therefore, Members that present similar Net Unsettled Positions would
have similar impacts on their Required Fund Deposits, and, as such,
NSCC does not believe any burden on competition imposed by the proposed
change would be significant.
    Further, NSCC believes that any burden on competition imposed by
the proposed change would be both necessary and appropriate in
furtherance of NSCC's efforts to mitigate its risk exposures and meet
the requirements of the Act,\32\ as described in this filing and
further below.
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    \32\ 15 U.S.C. 78q-1(b)(3)(I).
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    NSCC believes that the above described burden on competition that
may be created by the proposed changes would be necessary in
furtherance of the purposes of the Act, specifically Section
17A(b)(3)(F) of the Act,\33\ because, as described above, the Rules
must be designed to promote the prompt and accurate clearance and
settlement of securities transactions and to protect investors and the
public interest.
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    \33\ 15 U.S.C. 78q-1(b)(3)(F).
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    NSCC also believes the proposed change would be necessary in order
to support NSCC's compliance with Rules 17Ad-22(e)(4)(i), and (e)(6)(i)
and (v),\34\ each promulgated under the Act, which require NSCC to
establish, implement, maintain and enforce written policies and
procedures reasonably designed to (x) effectively identify, measure,
monitor, and manage its credit exposures to participants and those
arising from its payment, clearing, and settlement processes, including
by maintaining sufficient financial resources to cover its credit
exposure to each participant fully with a high degree of confidence;
(y) cover its credit exposures to its participants by establishing a
risk-based margin system that, at a minimum, considers, and produces
margin levels commensurate with, the risks and particular attributes of
each relevant product, portfolio, and market; and (z) cover its credit
exposures to its participants by establishing a risk-based margin
system that, at a minimum, uses an appropriate method for measuring
credit exposure that accounts for relevant product risk factors and
portfolio effects across products. As described above, NSCC believes
implementing the proposed enhancements to the FIS Charge would improve
the risk-based methodology that NSCC employs to measure market price
risk and would better limit NSCC's credit exposures to Members,
consistent with these requirements.
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    \34\ 17 CFR 240.17Ad-22(e)(4) and (e)(6).
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    NSCC believes that the above described burden on competition that
could be created by the proposed changes would be appropriate in
furtherance of the purposes of the Act, because such changes have been
designed to promote the prompt and accurate clearance and settlement of
securities transactions and to protect investors and the public
interest, as described in detail above.
    The proposed rule change would use the higher applicable haircut
percentage in calculating the FIS Charge for all Members. These haircut
percentages as applied to positions in fixed income securities were
calibrated to address the risk that the Family-Issued Securities of a
Member would be devalued in the event of that Member's default.
Therefore, the proposed FIS Charge would better address NSCC's
exposures to specific wrong-way risk with respect to all Members'
positions in Family-Issued Securities, particularly in jump-to-default
scenarios. By mitigating specific wrong-way risk for NSCC, the proposed
change would also mitigate risk for Members, because lowering the risk
profile for NSCC would in turn lower the risk exposure that Members may
have with respect to NSCC in its role as a central counterparty.
Further, NSCC believes that any burden on competition that may be
imposed by this proposal would be appropriate in furtherance of the
purposes of the Act, because it is designed to meet NSCC's risk
management goals and its regulatory obligations.

(C) Clearing Agency's Statement on Comments on the Proposed Rule Change
Received From Members, Participants, or Others

    NSCC has not received or solicited any written comments relating to
this proposal. NSCC will notify the Commission of any written comments
received by NSCC.

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 self-regulatory organization 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.
    The proposal shall not take effect until all regulatory actions
required with respect to the proposal are completed.

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-NSCC-2020-002 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NSCC-2020-002. 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 NSCC and on DTCC's website
(http://dtcc.com/legal/sec-rule-filings.aspx). All comments received
will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NSCC-2020-002 and should be submitted on
or before March 10, 2020.
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    \35\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\35\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-03092 Filed 2-14-20; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 201 (Wednesday, October 17, 2018)]
[Notices]
[Pages 52481-52483]
[FR Doc No: 2018-22566]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2017-E-6541]

Determination of Regulatory Review Period for Purposes of Patent
Extension; DUPIXENT

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA or the Agency) has
determined the regulatory review period for DUPIXENT and is publishing
this notice of that determination as required by law. FDA has made the
determination because of the submission of an application to the
Director of the U.S. Patent and Trademark Office (USPTO), Department of
Commerce, for the extension of a patent which claims that human
biological product.

DATES: Anyone with knowledge that any of the dates as published (see
the SUPPLEMENTARY INFORMATION section) are incorrect may submit either
electronic or written comments and ask for a redetermination by
December 17, 2018. Furthermore, any interested person may petition FDA
for a determination regarding whether the applicant for extension acted
with due diligence during the regulatory review period by April 15,
2019. See ``Petitions'' in the SUPPLEMENTARY INFORMATION section for
more information.

ADDRESSES: You may submit comments as follows. Please note that late,
untimely filed comments will not be considered. Electronic comments
must be submitted on or before December 17, 2018. The https://www.regulations.gov electronic filing system will accept comments until
11:59 p.m. Eastern Time at the end of December 17, 2018. Comments
received by mail/hand delivery/courier (for written/paper submissions)
will be considered timely if they are postmarked or the delivery
service acceptance receipt is on or before that date.

Electronic Submissions

    Submit electronic comments in the following way:
     Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments. Comments submitted
electronically, including attachments, to https://www.regulations.gov
will be posted to the docket unchanged. Because your comment will be
made public, you are solely responsible for ensuring that your comment
does not include any confidential information that you or a third party
may not wish to be posted, such as medical information, your or

anyone else's Social Security number, or confidential business
information, such as a manufacturing process. Please note that if you
include your name, contact information, or other information that
identifies you in the body of your comments, that information will be
posted on https://www.regulations.gov.
     If you want to submit a comment with confidential
information that you do not wish to be made available to the public,
submit the comment as a written/paper submission and in the manner
detailed (see ``Written/Paper Submissions'' and ``Instructions'').

Written/Paper Submissions

    Submit written/paper submissions as follows:
     Mail/Hand delivery/Courier (for written/paper
submissions): Dockets Management Staff (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
     For written/paper comments submitted to the Dockets
Management Staff, FDA will post your comment, as well as any
attachments, except for information submitted, marked and identified,
as confidential, if submitted as detailed in ``Instructions.''
    Instructions: All submissions received must include the Docket No.
FDA-2017-E-6541 for ''Determination of Regulatory Review Period for
Purposes of Patent Extension; DUPIXENT.'' Received comments, those
filed in a timely manner (see ADDRESSES), will be placed in the docket
and, except for those submitted as ``Confidential Submissions,''
publicly viewable at https://www.regulations.gov or at the Dockets
Management Staff between 9 a.m. and 4 p.m., Monday through Friday.
     Confidential Submissions--To submit a comment with
confidential information that you do not wish to be made publicly
available, submit your comments only as a written/paper submission. You
should submit two copies total. One copy will include the information
you claim to be confidential with a heading or cover note that states
``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' The Agency will
review this copy, including the claimed confidential information, in
its consideration of comments. The second copy, which will have the
claimed confidential information redacted/blacked out, will be
available for public viewing and posted on https://www.regulations.gov.
Submit both copies to the Dockets Management Staff. If you do not wish
your name and contact information to be made publicly available, you
can provide this information on the cover sheet and not in the body of
your comments and you must identify this information as
``confidential.'' Any information marked as ``confidential'' will not
be disclosed except in accordance with Sec.  10.20 (21 CFR 10.20) and
other applicable disclosure law. For more information about FDA's
posting of comments to public dockets, see 80 FR 56469, September 18,
2015, or access the information at: https://www.gpo.gov/fdsys/pkg/FR-2015-09-18/pdf/2015-23389.pdf.
    Docket: For access to the docket to read background documents or
the electronic and written/paper comments received, go to https://www.regulations.gov and insert the docket number, found in brackets in
the heading of this document, into the ``Search'' box and follow the
prompts and/or go to the Dockets Management Staff, 5630 Fishers Lane,
Rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: Beverly Friedman, Office of Regulatory
Policy, Food and Drug Administration, 10903 New Hampshire Ave. Bldg.
51, Rm. 6250, Silver Spring, MD 20993,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Background

    The Drug Price Competition and Patent Term Restoration Act of 1984
(Pub. L. 98-417) and the Generic Animal Drug and Patent Term
Restoration Act (Pub. L. 100-670) generally provide that a patent may
be extended for a period of up to 5 years so long as the patented item
(human drug product, animal drug product, medical device, food
additive, or color additive) was subject to regulatory review by FDA
before the item was marketed. Under these acts, a product's regulatory
review period forms the basis for determining the amount of extension
an applicant may receive.
    A regulatory review period consists of two periods of time: A
testing phase and an approval phase. For human biological products, the
testing phase begins when the exemption to permit the clinical
investigations of the biological product becomes effective and runs
until the approval phase begins. The approval phase starts with the
initial submission of an application to market the human biological
product and continues until FDA grants permission to market the
biological product. Although only a portion of a regulatory review
period may count toward the actual amount of extension that the
Director of USPTO may award (for example, half the testing phase must
be subtracted as well as any time that may have occurred before the
patent was issued), FDA's determination of the length of a regulatory
review period for a human biological product will include all of the
testing phase and approval phase as specified in 35 U.S.C.
156(g)(1)(B).
    FDA has approved for marketing the human biologic product DUPIXENT
(dupilumab). DUPIXENT is indicated for treatment of adult patients with
moderate-to-severe atopic dermatitis whose disease is not adequately
controlled with topical prescription therapies or when those therapies
are not advisable. Subsequent to this approval, the USPTO received a
patent term restoration application for DUPIXENT (U.S. Patent No.
7,608,693) from Regeneron Pharmaceuticals, Inc., and the USPTO
requested FDA's assistance in determining this patent's eligibility for
patent term restoration. In a letter dated February 2, 2018, FDA
advised the USPTO that this human biological product had undergone a
regulatory review period and that the approval of DUPIXENT represented
the first permitted commercial marketing or use of the product.
Thereafter, the USPTO requested that FDA determine the product's
regulatory review period.

II. Determination of Regulatory Review Period

    FDA has determined that the applicable regulatory review period for
DUPIXENT is 2,728 days. Of this time, 2,485 days occurred during the
testing phase of the regulatory review period, while 243 days occurred
during the approval phase. These periods of time were derived from the
following dates:
    1. The date an exemption under section 505(i) of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 355(i)) became effective: October 10,
2009. FDA has verified the applicant's claim that the date the
investigational new drug application became effective was on October
10, 2009.
    2. The date the application was initially submitted with respect to
the human biological product under section 351 of the Public Health
Service Act (42 U.S.C. 262): July 29, 2016. FDA has verified the
applicant's claim that the biologics license application (BLA) for
DUPIXENT (BLA 761055) was initially submitted on July 29, 2016.
    3. The date the application was approved: March 28, 2017. FDA has
verified the applicant's claim that BLA 761055 was approved on March
28, 2017.
    This determination of the regulatory review period establishes the
maximum potential length of a patent extension. However, the USPTO
applies several

statutory limitations in its calculations of the actual period for
patent extension. In its application for patent extension, this
applicant seeks 1,273 days of patent term extension.

III. Petitions

    Anyone with knowledge that any of the dates as published are
incorrect may submit either electronic or written comments and, under
21 CFR 60.24, ask for a redetermination (see DATES). Furthermore, as
specified in Sec.  60.30 (21 CFR 60.30), any interested person may
petition FDA for a determination regarding whether the applicant for
extension acted with due diligence during the regulatory review period.
To meet its burden, the petition must comply with all the requirements
of Sec.  60.30, including but not limited to: Must be timely (see
DATES), must be filed in accordance with Sec.  10.20, must contain
sufficient facts to merit an FDA investigation, and must certify that a
true and complete copy of the petition has been served upon the patent
applicant. (See H. Rept. 857, part 1, 98th Cong., 2d sess., pp. 41-42,
1984.) Petitions should be in the format specified in 21 CFR 10.30.
    Submit petitions electronically to https://www.regulations.gov at
Docket No. FDA-2013-S-0610. Submit written petitions (two copies are
required) to the Dockets Management Staff (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    Dated: October 11, 2018.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2018-22566 Filed 10-16-18; 8:45 am]
 BILLING CODE 4164-01-P


[Federal Register Volume 75, Number 129 (Wednesday, July 7, 2010)]
[Notices]
[Pages 39086-39089]
[FR Doc No: 2010-16409]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62415; File No. SR-BX-2010-044]

Self-Regulatory Organizations; Notice of Filing of a Proposed
Rule Change by NASDAQ OMX BX, Inc. To Amend IM-4120-3

June 30, 2010.

    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 June 30, 2010, NASDAQ OMX BX, Inc. (the ``Exchange'' or ``BX'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------

    \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

    The Exchange is filing this proposed rule change to amend BX IM-
4120-3 to add securities included in the Russell 1000[supreg] Index
(``Russell 1000'') and specified Exchange Traded Products (``ETP'') to
the definition of Circuit Breaker Securities.
    The text of the proposed rule change is below. Proposed new
language is underlined and proposed deletions are in brackets.
* * * * *
4120. Trading Halts

    (a)-(c) No change.
    IM-4120-1. No change.
    IM-4120-2. No change.
    IM-4120-3. Circuit Breaker Securities Pilot
    The provisions of paragraph (a)(11) of this Rule shall be in effect
during a pilot

set to end on December 10, 2010. During the pilot, the term ``Circuit
Breaker Securities'' shall mean the securities included in the Standard
& Poor's 500 Index, the Russell 1000 Index, as well as a pilot list of
Exchange Traded Products.
* * * * *

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 BX IM-4120-3 to add securities
included in the Russell 1000[supreg] Index (``Russell 1000'') and
specified Exchange Traded Products (``ETPs'') to the definition of
Circuit Breaker Securities. For purposes of this filing, ETPs include
Exchange Traded Funds (``ETFs''),\3\ Exchange Traded Vehicles
(``ETVs''),\4\ and Exchange Traded Notes (``ETNs'').\5\
---------------------------------------------------------------------------

    \3\ An ETF is an open-ended registered investment company under
the Investment Company Act of 1940 that has received certain
exemptive relief from the Commission to allow secondary market
trading in the ETF shares. ETFs are generally index-based products,
in that each ETF holds a portfolio of securities that is intended to
provide investment results that, before fees and expenses, generally
correspond to the price and yield performance of the underlying
benchmark index.
    \4\ An ETV tracks the underlying performance of an asset or
index, allowing investor's exposure to underlying assets such as
futures contracts, commodities, and currency without actually
trading futures or taking physical delivery of the underlying asset.
An ETV is traded intraday like an ETF. An ETV is an open-ended trust
or partnership unit that is registered under the Securities Act of
1933.
    \5\ An ETN is a senior unsecured debt obligation designed to
track the total return of an underlying index, benchmark or
strategy, minus investor fees. ETNs are registered under the
Securities Act of 1933 and are redeemable to the issuer.
---------------------------------------------------------------------------

    The primary listing markets for U.S. stocks recently amended their
rules so that they may, from time to time, issue a trading pause for an
individual security if the price of such security moves 10% or more
from a sale in a preceding five-minute period. In this regard, the
Exchange recently proposed to amend its Rule 4120 to pause trading in
an individual stock when the primary listing market for such stock
issues a trading pause in any Circuit Breaker Securities, as defined in
IM-4120-3 of Rule 4120. The amendment to BX Rule 4120 was approved by
the Commission on June 10, 2010 on a pilot basis set to end on December
10, 2010.\6\
---------------------------------------------------------------------------

    \6\ See BX Rule 4120(a)(11); see also Securities Exchange Act
Release No. 62252 (June 10, 2010), 75 FR 34186 (June 16, 2010) (SR-
BX-2010-037).
---------------------------------------------------------------------------

    Currently, the pilot list of securities is all securities included
in the S&P 500[supreg] Index (``S&P 500''). As noted in comment letters
to the original filing to amend BX Rule 4120 as described above,
concerns were raised that including only securities in the S&P 500 in
the pilot rule was too narrow. In particular, commenter's noted that
securities that experienced volatility on May 6, 2010, including ETFs,
should be included in the pilot. The Exchange agrees with the
commenter's that the pilot list of securities should be expanded.
    In consultation with other markets, the Exchange proposes to add
the securities included in the Russell 1000 and specified ETPs to the
pilot beginning in July 2010, subject to Commission approval. The
Exchange believes that adding these securities would begin to address
concerns that the scope of the pilot may be too narrow, while at the
same time recognizing that during the pilot period, the markets will
continue to review whether and when to add additional securities to the
pilot and whether the parameters of the rule should be adjusted for
different securities.
    In particular, the Exchange proposes to add securities included in
the Russell 1000 because the Exchange believes that the securities
included in that index have similar trading characteristics to
securities included in the S&P 500 (many of which are the same
securities) and therefore the existing 10% price movement applicable
before invoking a trading pause would be appropriate for the Russell
1000 securities. Because the Exchange does not propose to modify the
10% price movement at this time, the Exchange believes that expanding
to the Russell 1000 is an appropriate next step. Based on our analysis,
the number of times that the Trading Pause would be triggered for
Russell 1000 securities would be similar to the instances for the S&P
500 securities.
    In addition, the Exchange, in consultation with other markets,
proposes to add to the pilot a selected list of ETPs. The Exchange
developed the proposed pilot list of ETPs first by identifying all ETPs
across multiple asset classes and issuers, including domestic equity,
international equity, fixed income, currency, and commodities and
futures. The Exchange next excluded the leveraged ETPs and sorted the
list by notional consolidated average daily volume (``CADV'') using
year-to-date CADV ending May 5, 2010, multiplied by the closing price
on May 5, 2010. The Exchange then selected those symbols, including
inverse ETPs, that trade over $2,000,000 CADV year to date through May
5, 2010. To ensure that ETPs that track similar benchmarks but that do
not meet this volume criterion do not become subject to pricing
volatility when a component security is the subject of a trading pause,
the Exchange proposes to include certain non-leveraged ETPs that have
traded below this volume criterion, but that track the same benchmark
as an ETP that does meet the volume criterion.
    The Exchange believes that the proposed list of ETPs is appropriate
because it identifies those ETPs that have component securities that
largely track the securities included in the S&P 500 and Russell 1000.
Accordingly, if an S&P 500 or Russell 1000 security experiences a
trading pause, any resulting price volatility in a related ETP,
regardless of the CADV of the ETP, would also be subject to a trading
pause trigger. As with the proposal to add the Russell 1000 securities,
the Exchange selected the proposed ETPs because it believes that the
existing 10% price movement would be an appropriate price movement
before invoking a trading pause for ETPs with these characteristics.
The Exchange does not believe that the 10% price movement is an
appropriate threshold for leveraged ETPs because by definition,
leveraged ETPs are based on multiples of price movements in the
underlying index. Accordingly, a 10% percent price movement in a
leveraged ETP may not signify extraordinary volatility. Because the
Exchange is not proposing to adopt revised price movement thresholds at
this time, the Exchange is therefore not proposing to include leveraged
ETPs for now.
    As proposed, the list includes broad-based ETPs, which the Exchange
recognizes has raised some debate. In particular, concerns have been
raised about whether halting an index-based ETP may impact an index-
based option or future. However, the Exchange believes that including
broad-based ETPs is appropriate so that ETP investors are protected
should the component securities experience such volatility that trading
in the broad-based

ETP is impacted, as it was on May 6, 2010. Because this is a pilot
rule, the markets can continue to assess whether it is appropriate to
have a trading pause in broad-based ETPs when there is not a similar
trading pause in related index-based options or futures.
    During the pilot, the Exchange will continue to re-assess whether
specific ETPs should be added or removed from the pilot list. The
Exchange will also assess whether the parameters for invoking a trading
pause continue to be the appropriate standard and whether the
parameters should be modified.
    To effect this change, the Exchange proposes to amend IM-4120-3 to
BX Rule 4120 to provide that the pilot applies to securities in the S&P
500, securities in the Russell 1000, as well as specified ETPs. The
pilot list of ETPs are identified in Exhibit 3.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\7\ in general, and with
Sections 6(b)(5) of the Act,\8\ in particular, in that the proposal 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. The proposed
rule change is also designed to support the principles of Section
11A(a)(1) \9\ of the Act in that it seeks to assure fair competition
among brokers and dealers and among exchange markets. The Exchange
believes that the proposed rule meets these requirements in that it
promotes uniformity across markets concerning decisions to pause
trading in a security when there are significant price movements.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ 15 U.S.C. 78k-1(a)(1).
---------------------------------------------------------------------------

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

    The Exchange 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, as amended.

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 35 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 self-regulatory organization consents, the Commission will:
    A. By order approve such proposed rule change, or
    B. Institute proceedings to determine whether the proposed rule
change should be disapproved.\10\
---------------------------------------------------------------------------

    \10\ The Commission notes that the Exchange has requested
accelerated approval of the filing.
---------------------------------------------------------------------------

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.
    The Commission notes that ETF trades constituted a substantial
majority of the trades that were cancelled on May 6, and the proposed
amendments would bring certain ETFs within the scope of the trading
pause pilot for the first time. The Commission solicits comment
regarding the inclusion of ETFs within the trading pause pilot. The
Commission requests comment in particular on the implications of
including in the trading pause pilot ETFs on broad-based indices that
also underlie options and futures products. What are the potential
benefits and risks of including those ETFs in the pilot under
circumstances where other products based on the same index may not be
subject to any trading pause, or may be subject to a different type of
trading pause? Are existing mechanisms available in the markets for
those other products sufficient to address any cross-market linkage
concerns? What are the potential effects on price discovery and trading
behavior in the different markets?
    Similarly, the Commission solicits comments on the potential
benefits and risks of excluding such ETFs from the pilot, particularly
under circumstances where the securities underlying the ETF are
included in the pilot. If there are trading pauses for the component
securities of an index but not for an ETF based on that index, what
consequences might that have for the ETF or for other products based on
that index? If there are trading pauses in an ETF but not in the stocks
that underlie that ETF, what consequences might that have for the
underlying stocks or other products? What are the potential effects on
price discovery for the ETF, the underlying stocks and other products?
    Are there other market-based characteristics or metrics that should
be considered for purposes of determining which ETFs should be included
in the trading pause pilot, or for re-calibrating particular features
of the trading pause?
    In addition, the Commission solicits comments regarding the
operation of the trading pause pilot to date with respect to stocks in
the S&P 500.
    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-BX-2010-044 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BX-2010-044. 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 Web site
viewing and printing in the Commission's Public Reference Room on
official business days between the hours of 10 a.m. and 3 p.m. Copies
of such filing also will be available for inspection and copying at the
principal offices 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-BX-2010-044, and should be
submitted on or before July 19, 2010.\11\
---------------------------------------------------------------------------

    \11\ The Commission believes that a 10-day comment period is
reasonable, given the urgency of the matter. It will provide
adequate time for comment.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

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

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-16409 Filed 7-6-10; 8:45 am]
BILLING CODE 8010-01-P


[Federal Register Volume 84, Number 95 (Thursday, May 16, 2019)]
[Notices]
[Pages 22201-22203]
[FR Doc No: 2019-10103]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33472; 812-14953]

Collaborative Investment Series Trust and Belpointe Asset
Management, LLC

May 10, 2019.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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

    Notice of an application for an order under section 6(c) of the
Investment Company Act of 1940 (the ``Act'') for an exemption from
sections 2(a)(32), 5(a)(1), 22(d), and 22(e) of the Act and rule 22c-1
under the Act, under sections 6(c) and 17(b) of the Act for an
exemption from sections 17(a)(1) and 17(a)(2) of the Act, and under
section 12(d)(1)(J) for an exemption from sections 12(d)(1)(A) and
12(d)(1)(B) of the Act. The requested order would permit (a) actively-
managed series of certain open-end management investment companies
(``Funds'') to issue shares redeemable in large aggregations only
(``Creation Units''); (b) secondary market transactions in Fund shares
to occur at negotiated market prices rather than at net asset value
(``NAV''); (c) certain Funds to pay redemption proceeds, under certain
circumstances, more than seven days after the tender of shares for
redemption; (d) certain affiliated persons of a Fund to deposit
securities into, and receive securities from, the Fund in connection
with the purchase and redemption of Creation Units; (e) certain
registered management investment companies and unit investment trusts
outside of the same group of investment companies as the Funds (``Funds
of Funds'') to acquire shares of the Funds; and (f) certain Funds
(``Feeder Funds'') to create and redeem Creation Units in-kind in a
master-feeder structure.

Applicants: Collaborative Investment Series Trust (``Trust''), a
Delaware statutory trust that is registered under the Act as an open-
end management investment company with multiple series, and Belpointe
Asset Management, LLC (``Initial Adviser''), a Delaware limited
liability company that is registered as an investment adviser under the
Investment Advisers Act of 1940.

Filing Dates: The application was filed on September 14, 2018, and
amended on February 25, 2019 and March 27, 2019.

Hearing or Notification of Hearing: An order granting the requested
relief will

be issued unless the Commission orders a hearing. Interested persons
may request a hearing by writing to the Commission's Secretary and
serving applicants with a copy of the request, personally or by mail.
Hearing requests should be received by the Commission by 5:30 p.m. on
June 4, 2019, and should be accompanied by proof of service on
applicants, in the form of an affidavit, or for lawyers, a certificate
of service. Pursuant to rule 0-5 under the Act, hearing requests should
state the nature of the writer's interest, any facts bearing upon the
desirability of a hearing on the matter, the reason for the request,
and the issues contested. Persons who wish to be notified of a hearing
may request notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street
NE, Washington, DC 20549-1090; Applicants: JoAnn M. Strasser, Thompson
Hine LLP, 41 S. High Street, Suite 1700, Columbus, Ohio 43215; Gregory
Skidmore, Belpointe Asset Management, LLC, 125 Greenwich Ave.,
Greenwich, CT 06830.

FOR FURTHER INFORMATION CONTACT: Deepak T. Pai, Senior Counsel, at
(202) 551-6876, or Trace W. Rakestraw, Branch Chief, at<PHONE_NUMBER>
(Division of Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's website by searching for the file number, or for an
applicant using the Company name box, at http://www.sec.gov/search/search.htm or by calling<PHONE_NUMBER>.

Summary of the Application

    1. Applicants request an order that would allow Funds to operate as
actively-managed exchange traded funds (``ETFs'').\1\ Fund shares will
be purchased and redeemed at their NAV in Creation Units only. All
orders to purchase Creation Units and all redemption requests will be
placed by or through an ``Authorized Participant,'' which will have
signed a participant agreement with a broker-dealer registered under
the Securities Exchange Act of 1934 (``Exchange Act'') (the
``Distributor''). Shares will be listed and traded individually on a
national securities exchange, where share prices will be based on the
current bid/offer market. Certain Funds may operate as Feeder Funds in
a master-feeder structure. Any order granting the requested relief
would be subject to the terms and conditions stated in the application.
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    \1\ Applicants request that the order apply to the Initial Fund,
as well as to future series of the Trust, and any other open-end
management investment companies or series thereof (each, included in
the term ``Fund''), each of which will operate as an actively-
managed ETF. Any Fund will (a) be advised by the Initial Adviser or
an entity controlling, controlled by, or under common control with
the Initial Adviser (the Initial Adviser and each such other entity
and any successor thereto including in the term ``Adviser'') and (b)
comply with the terms and conditions of the application. For
purposes of the requested order, a ``successor'' is limited to an
entity or entities that result from a reorganization into another
jurisdiction or a change in the type of business organization.
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    2. Each Fund will consist of a portfolio of securities and other
assets and investment positions (``Portfolio Instruments''). Each Fund
will disclose on its website the identities and quantities of the
Portfolio Instruments that will form the basis for the Fund's
calculation of NAV at the end of the day.
    3. Shares will be purchased and redeemed in Creation Units and
generally on an in-kind basis. Except where the purchase or redemption
will include cash under the limited circumstances specified in the
application, purchasers will be required to purchase Creation Units by
depositing specified instruments (``Deposit Instruments''), and
shareholders redeeming their shares will receive specified instruments
(``Redemption Instruments''). The Deposit Instruments and the
Redemption Instruments will each correspond pro rata to the positions
in the Fund's portfolio (including cash positions) except as specified
in the application.
    4. Because shares will not be individually redeemable, applicants
request an exemption from section 5(a)(1) and section 2(a)(32) of the
Act that would permit the Funds to register as open-end management
investment companies and issue shares that are redeemable in Creation
Units only.
    5. Applicants also request an exemption from section 22(d) of the
Act and rule 22c-1 under the Act as secondary market trading in shares
will take place at negotiated prices, not at a current offering price
described in a Fund's prospectus, and not at a price based on NAV.
Applicants state that (a) secondary market trading in shares does not
involve a Fund as a party and will not result in dilution of an
investment in shares, and (b) to the extent different prices exist
during a given trading day, or from day to day, such variances occur as
a result of third-party market forces, such as supply and demand.
Therefore, applicants assert that secondary market transactions in
shares will not lead to discrimination or preferential treatment among
purchasers. Finally, applicants represent that share market prices will
be disciplined by arbitrage opportunities, which should prevent shares
from trading at a material discount or premium from NAV.
    6. With respect to Funds that hold non-U.S. Portfolio Instruments
and that effect creations and redemptions of Creation Units in kind,
applicants request relief from the requirement imposed by section 22(e)
in order to allow such Funds to pay redemption proceeds within fifteen
calendar days following the tender of Creation Units for redemption.
Applicants assert that the requested relief would not be inconsistent
with the spirit and intent of section 22(e) to prevent unreasonable,
undisclosed or unforeseen delays in the actual payment of redemption
proceeds.
    7. Applicants request an exemption to permit Funds of Funds to
acquire Fund shares beyond the limits of section 12(d)(1)(A) of the
Act; and the Funds, and any principal underwriter for the Funds, and/or
any broker or dealer registered under the Exchange Act, to sell shares
to Funds of Funds beyond the limits of section 12(d)(1)(B) of the Act.
The application's terms and conditions are designed to, among other
things, help prevent any potential (i) undue influence over a Fund
through control or voting power, or in connection with certain
services, transactions, and underwritings, (ii) excessive layering of
fees, and (iii) overly complex fund structures, which are the concerns
underlying the limits in sections 12(d)(1)(A) and (B) of the Act.
    8. Applicants request an exemption from sections 17(a)(1) and
17(a)(2) of the Act to permit a person who is an affiliated person, as
defined in section 2(a)(3) of the Act (``Affiliated Person''), or an
affiliated person of an Affiliated Person (``Second-Tier Affiliate''),
of the Funds, solely by virtue of certain ownership interests, to
effectuate purchases and redemptions in-kind. The deposit procedures
for in-kind purchases of Creation Units and the redemption procedures
for in-kind redemptions of Creation Units will be the same for all
purchases and redemptions and Deposit Instruments and Redemption
Instruments will be valued in the same manner as those Portfolio
Instruments currently held by the Funds. Applicants also seek relief
from the prohibitions on affiliated transactions in section 17(a) to
permit a Fund to sell its shares to and redeem its shares from a Fund
of Funds, and to engage in the accompanying in-kind

transactions with the Fund of Funds.\2\ The purchase of Creation Units
by a Fund of Funds directly from a Fund will be accomplished in
accordance with the policies of the Fund of Funds and will be based on
the NAVs of the Funds.
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    \2\ The requested relief would apply to direct sales of shares
in Creation Units by a Fund to a Fund of Funds and redemptions of
those shares. Applicants, moreover, are not seeking relief from
section 17(a) for, and the requested relief will not apply to,
transactions where a Fund could be deemed an Affiliated Person, or a
Second-Tier Affiliate, of a Fund of Funds because an Adviser or an
entity controlling, controlled by or under common control with the
Adviser to the Funds is also an investment adviser to a Fund of
Funds.
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    9. Applicants also request relief to permit a Feeder Fund to
acquire shares of another registered investment company managed by the
Adviser having substantially the same investment objectives as the
Feeder Fund (``Master Fund'') beyond the limitations in section
12(d)(1)(A) and permit the Master Fund, and any principal underwriter
for the Master Fund, to sell shares of the Master Fund to the Feeder
Fund beyond the limitations in section 12(d)(1)(B).
    10. Section 6(c) of the Act permits the Commission to exempt any
persons or transactions from any provision of the Act if such exemption
is necessary or appropriate in the public interest and consistent with
the protection of investors and the purposes fairly intended by the
policy and provisions of the Act. Section 12(d)(1)(J) of the Act
provides that the Commission may exempt any person, security, or
transaction, or any class or classes of persons, securities, or
transactions, from any provision of section 12(d)(1) if the exemption
is consistent with the public interest and the protection of investors.
Section 17(b) of the Act authorizes the Commission to grant an order
permitting a transaction otherwise prohibited by section 17(a) if it
finds that (a) the terms of the proposed transaction are fair and
reasonable and do not involve overreaching on the part of any person
concerned; (b) the proposed transaction is consistent with the policies
of each registered investment company involved; and (c) the proposed
transaction is consistent with the general purposes of the Act.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-10103 Filed 5-15-19; 8:45 am]
BILLING CODE 8011-01-P