[Federal Register: November 28, 2008 (Volume 73, Number 230)]
[Notices]
[Page 72538-72540]
[DOCID:fr28no08-128]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58985; File No. SR-ISE-2008-86]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Enable the Listing and Trading of Options on Index-Linked
Securities

November 20, 2008.
    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 November 14, 2008, the International Securities Exchange, LLC
(``ISE'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I and II below, which Items have been prepared by the Exchange.
The Exchange filed the proposed rule change as a ``non-controversial''
proposed rule change pursuant to section 19(b)(3)(A) of the Act \3\ and
Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal effective
upon filing with the Commission. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The ISE proposes to amend ISE Rule 502, Criteria for Underlying
Securities, and 503, Withdrawal of Approval of Underlying Securities,
to enable the listing and trading on the Exchange of options on Index-
Linked Securities, as defined below. The text of the proposed rule
change is available from the principal office of the Exchange, at the
Commission's Public Reference Room, and on the Exchange's Web site at
http://www.iseoptions.com.

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

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

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

1. Purpose
    This proposed rule change is based on recent Chicago Board Options
Exchange, Incorporated (``CBOE'') and NASDAQ OMX PHLX, Inc.
(``PHLX'').\5\
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    \5\ See Exchange Act Release Nos. 58204 (July 22, 2008), 73 FR
43807 (July 28, 2008) (SR-CBOE-2008-64) and 58571 (September 17,
2008), 73 FR 55188 (September 24, 2008) (SR-PHLX-2008-60). In
addition, the Exchange is making minor changes to ISE Rule 502(h) to
conform the Exchange's rules to those of CBOE and PHLX.
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    The purpose of the proposed rule change is to revise ISE Rules 502
and 503 to enable the listing and trading of options on equity index-
linked securities (``Equity Index-Linked Securities''), commodity-
linked securities (``Commodity-Linked Securities''), currency-linked
securities (``Currency-Linked Securities''), fixed income index-linked
securities (``Fixed Income Index-Linked Securities''), futures-linked
securities (``Futures-Linked Securities'') and multifactor index-linked
securities (``Multifactor Index-Linked Securities'') (the six types of
index-linked securities are collectively known as ``Index-Linked
Securities'') that are principally traded on a national securities
exchange and are ``NMS Stock'' (as defined in Rule 600 of Regulation
NMS under the Act).
    Index-Linked Securities are designed for investors who desire to
participate in a specific market segment by providing exposure to one
or more identifiable underlying securities, commodities, currencies,
derivative instruments or market indexes of the foregoing (``Underlying
Index'' or ``Underlying Indexes''). Index-Linked Securities are the
non-convertible debt of an issuer that have a term of at least one (1)
year but not greater than thirty (30) years. Despite the fact that
Index-Linked Securities are linked to an underlying index, each trades
as a single, exchange-listed security. Accordingly, rules pertaining to
the listing and trading of standard equity options will apply to Index-
Linked Securities. The Exchange does not propose any changes to rules
pertaining to Index Options.

Listing Criteria

    The Exchange will consider listing and trading options on Index-
Linked Securities provided the Index-Linked Securities meet the
criteria for underlying securities set forth in ISE Rules 502(a) and
(b).
    The Exchange proposes that Index-Linked Securities deemed
appropriate for options trading represent ownership of a security that
provides for the payment at maturity, as described below:

--Equity Index-Linked Securities are securities that provide for the
payment at maturity of a cash amount based on the performance of an
underlying index or indexes of equity securities (``Equity Reference
Asset'');
--Commodity-Linked Securities are securities that provide for the
payment at maturity of a cash amount based on the performance of one or
more physical commodities or commodity futures, options or other
commodity derivatives or Commodity-Based Trust Shares or a basket or
index of any of the foregoing (``Commodity Reference Asset'');
--Currency-Linked Securities are securities that provide for the
payment at maturity of a cash amount based on the performance of one or
more currencies, or options or currency futures or other currency
derivatives or Currency Trust Shares \6\ or a basket or index of any of
the foregoing (``Currency Reference Asset'');
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    \6\ See proposed ISE Rule 502(h). The term ``Currency Trust
Shares'' is defined as a security that (a) holds a specified non-
U.S. currency deposited with the trust or similar entity; (b) when
aggregated in some specified minimum number may be surrendered to
the trust by the beneficial owner to receive the specified non-U.S.
currency or currencies; and (c) pays the beneficial owner interest
and other distributions on deposited non-U.S. currency or
currencies, if any, declared and paid by the trust.
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--Fixed Income Index-Linked Securities are securities that provide for
the payment at maturity of a cash amount based on the performance of
one or more notes, bonds, debentures or evidence of indebtedness that
include, but are not limited to, U.S. Department of Treasury securities
(``Treasury Securities''), government sponsored entity securities
(``GSE Securities''), municipal securities, trust preferred securities,

supranational debt and debt of a foreign country or a subdivision
thereof or a basket or index of any of the foregoing (``Fixed Income
Reference Asset'');
--Futures-Linked Securities are securities that provide for the payment
at maturity of a cash amount based on the performance of an index of
(a) futures on Treasury Securities, GSE Securities, supranational debt
and debt of a foreign country or a subdivision thereof, or options or
other derivatives on any of the foregoing; or (b) interest rate futures
or options or derivatives on the foregoing in this subparagraph (b)
(``Futures Reference Asset''); and
--Multifactor Index-Linked Securities are securities that provide for
the payment at maturity of a cash amount based on the performance of
any combination of two or more Equity Reference Assets, Commodity
Reference Assets, Currency Reference Assets, Fixed Income Reference
Assets or Futures Reference Assets (``Multifactor Reference Asset'').
    For the purposes of proposed ISE Rule 502(k), Equity Reference
Assets, Commodity Reference Assets, Currency Reference Assets, Fixed
Income Reference Assets, Futures Reference Assets and Multifactor
Reference Assets, will be collectively referred to as ``Reference
Assets.''
    Index-Linked Securities must meet the criteria and guidelines for
underlying securities set forth in ISE Rules 502(a) and (b), or the
Index-Linked Securities must be redeemable at the option of the holder
at least on a weekly basis through the issuer at a price related to the
applicable underlying Reference Asset. In addition, the issuing company
is obligated to issue or repurchase the securities in aggregation units
for cash or cash equivalents satisfactory to the issuer of Index-Linked
Securities which underlie the option as described in the Index-Linked
Securities prospectus.
    Continued Listing Requirements
    Options on Index-Linked Securities will be subject to all Exchange
rules governing the trading of equity options. The current continuing
or maintenance listing standards for options traded on the Exchange
will continue to apply.
    The Exchange's proposed new rule 503(k) will include criteria
related to the continued listing of options on Index-Linked Securities.
    Under the applicable continued listing criteria in proposed ISE
Rule 503(k), options on Index Linked Securities initially approved for
trading pursuant to proposed ISE Rule 502(k) may be subject to the
suspension of opening transactions as follows: (1) Non-compliance with
the terms of ISE Rule 502(k); (2) non-compliance with the terms of ISE
Rules 503(a) and (b), except in the case of options covering Index
Linked Securities approved pursuant to proposed ISE Rule 502(k)(3)(ii)
that are redeemable at the option of the holder at least on a weekly
basis, then option contracts of the class covering such Securities may
only continue to be open for trading as long as the Securities are
listed on a national securities exchange and are an ``NMS stock'' as
defined in Rule 600 of Regulation NMS; (3) in the case of any Index-
Linked Security trading pursuant to proposed ISE Rule 502(k), the value
of the Reference Asset is no longer calculated or available; or (4)
such other event shall occur or condition exist that in the opinion of
the Exchange makes further dealing in such options on the Exchange
inadvisable.
    The Exchange represents that the listing and trading of options on
Index-Linked Securities under proposed ISE Rule 502(k) will not have
any effect on the rules pertaining to position and exercise limits \7\
or margin.\8\
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    \7\ See ISE Rules 412 and 414.
    \8\ See ISE Rules 1200 to 1204.
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    The Exchange will implement surveillance procedures for options on
Index-Linked Securities, including adequate comprehensive surveillance
sharing agreements with markets trading in non-U.S. components, as
applicable. The Exchange represents that these procedures will be
adequate to properly monitor Exchange trading of options on these the
securities and to deter and detect violations of Exchange rules.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with section
6(b) of the Act,\9\ in general, and furthers the objectives of section
6(b)(5) of the Act,\10\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest. The Exchange believes that the proposed rules applicable to
trading pursuant to generic listing and trading criteria, together with
the Exchange's surveillance procedures applicable to trading in the
securities covered by the proposed rules, serve to foster investor
protection.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.

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

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.

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 for 30
days after the date of filing (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 \11\ and subparagraph (f)(6)
of Rule 19b-4 thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing. In addition,
Rule 19b-4(f)(6)(iii) requires a self-regulatory organization to
provide the Commission with written notice of its 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. However, Rule 19b-4(f)(6)(iii) permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
requests that the Commission waive the 30-day operative delay as well
as the five business-day pre-filing requirement. The Commission
believes that waiving the 30-day operative delay \13\ is consistent
with the protection of investors and the public interest.\14\

The proposed rule change is substantially similar to those of other
options exchanges that have been previously approved by the Commission
\15\ and does not appear to present any novel regulatory issues.
Therefore, the Commission designates the proposal operative upon filing
to enable the Exchange to list and trade options on index-linked
securities without delay.
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    \13\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
    \14\ The Commission is also waiving the five business-day pre-
filing requirement.
    \15\ See e.g., Exchange Act Release Nos. 58203 (July 22, 2008),
73 FR 43812 (July 28, 2008) (SR-NYSEArca-2008-57); 58204 (July 22,
2008), 73 FR 43807 (July 28, 2008) (SR-CBOE-2008-64); and 58571
(September 17, 2008), 73 FR 55188 (September 24, 2008) (SR-PHLX-
2008-60).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in the furtherance of the purposes of the Act.

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 e-mail to<EMAIL_ADDRESS>Please include
File Number SR-ISE-2008-86 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-ISE-2008-86. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, 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 office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-ISE-2008-86 and should be
submitted on or before December 19, 2008.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-28221 Filed 11-26-08; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 137 (Wednesday, July 17, 2019)]
[Notices]
[Pages 34243-34247]
[FR Doc No: 2019-15139]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86361; File No. SR-CBOE-2019-031]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fees Schedule With Respect to Expiring Fee Waivers and Incentive
Programs

July 11, 2019.
    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 June 28, 2019, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe
Options'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and
II, 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.
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    \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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to amend its Fees Schedule with respect to expiring fee waivers and
incentive programs. 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://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), 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 its Fees Schedule relating to
various fee waivers and incentive programs that are set to expire June
30, 2019. The Exchange proposes to implement these amendments to its
Fees Schedule on July 1, 2019.
Sector Indexes Facilitation Fee
    First, the Exchange proposes to extend the current waiver of fees
for facilitation orders in Sector Index options.\5\ Currently, Footnote
11 of the Fees Schedule provides that for facilitation orders for
Sector Index options executed in open outcry, or electronically via AIM
or as a Qualified Contingent Cross order (``QCC'') or CFLEX
transaction, the Exchange will assess no Clearing Trading Permit Holder
Proprietary transaction fees through June 30, 2019. By way of
background ``facilitation orders'' are defined as any order in which a
Clearing Trading Permit Holder (``F'' origin code) or Non-Trading
Permit Holder Affiliate (``L'' origin code) is contra to any other
origin code order, provided the same executing broker and clearing firm
are on both sides of the transaction (for open outcry) or both sides of
a paired order (for orders executed electronically).\6\ In adopting a
waiver for facilitation fees in Sector Index options, the Exchange
recognized that Clearing Trading Permit Holders can be an important
source of liquidity when they facilitate their own customers' trading
activity and, as such, the Exchange applied a waiver of Clearing
Trading Permit Holder Proprietary transaction fees for facilitation
orders through June 30, 2019.\7\ The Exchange continues to recognize
the important role Clearing Trading Permit Holders play with respect to
facilitating their own customers' trading activity and as such proposes
to extend the waiver through December 31, 2019.
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    \5\ See Cboe Options Fees Schedule, Footnote 47.
    \6\ See Cboe Options Fees Schedule, Footnote 11.
    \7\ See Securities Exchange Act Release No. 85167 (February 20,
2019), 84 FR 6039 (February 25, 2019) (SR-CBOE-2019-011).
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Sector Indexes License Surcharge
    The Exchange next proposes to extend the current waiver of the
Index License Surcharge of $0.10 per contract. In order to promote and
encourage trading of the recently adopted Sector Index options, the
Exchange adopted a waiver of the Index License Surcharge for Sector
Index option transactions.\8\ The current waiver is set to expire on
June 30, 2019. As the volume in these relatively new products is low,
the Exchange does not have enough information to evaluate the impact of
the waiver. However, the Exchange wishes to extend this waiver through
December 31, 2019 in order to continue to encourage the trading of
Sector Index options and grow the product. The proposed waiver would
apply to all non-customer transactions.
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    \8\ See Securities Exchange Act Release No. 82854 (March 12,
2018), 83 FR 11803 (March 16, 2018) (SR-CBOE-2018-012).
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VIX License Index Surcharge
    The Exchange next proposes to extend the current waiver of the
Index License Surcharge of $0.10 per contract for Clearing Trading
Permit Holder Proprietary (``Firm'') (origin codes ``F'' or ``L'') VIX
orders that have a premium of $0.10 or lower and have series with an
expiration of seven (7) calendar days or less. The Exchange wishes to
extend this waiver through December 31, 2019. The Exchange adopted the
waiver to reduce transaction costs on expiring, low-priced VIX options,
which the Exchange believed would encourage Firms to seek to close and/
or roll over

such positions close to expiration at low premium levels, including
facilitating customers to do so, in order to free up capital and
encourage additional trading.\9\ The Exchange had proposed to waive the
surcharge through June 30, 2019, at which time the Exchange had stated
that it would evaluate whether the waiver has in fact prompted Firms to
close and roll over these positions close to expiration as intended.
After a review of Firms' activity, the Exchange believes the waiver has
indeed encouraged Firms to do so and as such, proposes to extend the
waiver of the surcharge through December 31, 2019, at which time the
Exchange will again reevaluate whether the waiver has continued to
prompt Firms to close and roll over positions close to expiration at
low premium levels. Accordingly, the Exchange proposes to delete the
reference to the current waiver period of June 30, 2019 from the Fees
Schedule and replace it with December 31, 2019.
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    \9\ See Securities Exchange Act Release No. 76923 (January 15,
2016), 81 FR 3841 (January 22, 2016) (SR-CBOE-2016-002).
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GTH Fees
    The Exchange proposes to also extend waivers for access fees for
the Global Trading Hours (``GTH'') session. Currently, the Exchange
charges $1,000 per month for each GTH Market-Maker Trading Permit and
$500 per month for each GTH Electronic Access Trading Permit.\10\ The
Exchange also assesses fees for Bandwidth Packets that may be used
during GTH. Particularly, the Exchange charges $500 per month per GTH
Quoting and Order Entry Bandwidth Packet and $250 per month per Order
Entry Bandwidth Packet.\11\ The Exchange further assesses monthly fees
for CMI Login IDs and FIX Login IDs used for GTH, which are currently
$750 per Login ID. In order to promote and encourage trading during the
GTH session, the Exchange currently waives GTH Trading Permit and
Bandwidth Packet fees for one (1) of each initial Trading Permits and
one (1) of each initial Bandwidth Packet, per affiliated Trading Permit
Holder (``TPH'').\12\ The Exchange notes that the waivers are set to
expire June 30, 2019. The Exchange also waives fees through June 30,
2019 for a CMI and FIX login ID if the CMI and/or FIX login ID is
related to a waived GTH Trading Permit and/or waived Bandwidth packet.
In order to continue to promote trading during GTH, the Exchange wishes
to extend these waivers through September 30, 2019.\13\ Based on
experience, the Exchange believes such waivers have encouraged
participation during GTH. Continued participation during GTH results in
potential increased order flow, which provides greater trading
opportunities for all market participants. Additionally, the proposed
waivers apply to all TPHs that wish to participate in the GTH session.
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    \10\ See Cboe Options Fees Schedule, Trading Permit and Tier
Appointment Fees. Each Trading Permit provides bandwidth and three
logins.
    \11\ See Cboe Options Fees Schedule, Bandwidth Packet Fees
Bandwidth Packets provide TPHs with additional bandwidth and logins.
    \12\ See Securities Exchange Act Release No. 74422 (March 4,
2015), 80 FR 12680 (March 10, 2015) (SR-CBOE-2015-020).
    \13\ The Exchange notes that in October 2019, it is migrating
the current Cboe Options trading platform onto new technology and in
connection with such migration, is anticipating a new Trading Permit
and connectivity structure. As such, the Exchange proposes to extend
the GTH related waivers only through September 2019.
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MXEA and MXEF LMM Incentive Program
    The Exchange also proposes to extend the financial program for Lead
Market-Makers (``LMMs'') appointed in MSCI EAFE Index (``MXEA'')
options and MSCI Emerging Markets Index (``MXEF'') options.\14\
Currently, if the appointed LMM in MXEA and MXEF provides continuous
electronic quotes during Regular Trading Hours that meet or exceed the
above heightened quoting standards in at least 90% of the MXEA and MXEF
series 80% of the time in a given month, the LMM will receive a payment
for that month in the amount of $20,000 per class, per month. The Fees
Schedule currently provides that this program will be in place through
June 30, 2019. In order to continue to encourage LMM(s) in MXEA and
MXEF to continue serving as LMMs and provide significant liquidity in
these options, which would provide greater trading opportunities for
all market participants, the Exchange proposes to renew this program
through December 31, 2019.
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    \14\ See Securities Exchange Act Release No. 83585 (July 2,
2018), 83 FR 31825 (July 9, 2018) (SR-CBOE-2018-050).
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RLG, RLV, RUI, AWDE, FTEM, FXTM and UKXM Transaction Fees
    In order to promote and encourage trading of seven FTSE Russell
Index products (i.e., Russell 1000 Growth Index (``RLG''), Russell 1000
Value Index (``RLV''), Russell 1000 Index (``RUI''), FTSE Developed
Europe Index (``AWDE''), FTSE Emerging Markets Index (``FTEM''), China
50 Index ``(FXTM'') and FTSE 100 Index (``UKXM'')), the Exchange waives
all transaction fees (including the Floor Brokerage Fee, Index License
Surcharge and CFLEX Surcharge Fee) for each of these products for all
market participants.\15\ This waiver is set to expire June 30, 2019. As
the volume in these products is low, the Exchange does not have enough
information to evaluate the impact of the waiver. However, the Exchange
wishes to extend this waiver through December 31, 2019 in order to
continue to encourage growth and trading of these products.
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    \15\ See Securities Exchange Act Release No. 76288 (October 28,
2015), 80 FR 67805 (November 3, 2015) (SR-CBOE-2015-096). See also
Securities Exchange Act Release No. 77547 (April 6, 2016), 81 FR
21611 (April 12, 2016) (SR-CBOE-2016-021) and Securities Exchange
Act Release No. 78930 (September 26, 2016), 81 FR 67408 (September
30, 2016) (SR-CBOE-2016-070).
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UKXM
    The Exchange previously offered a compensation plan to the
Designated Primary Market-Maker(s) (``DPM(s)'') appointed in UKXM to
offset its DPM costs.\16\ Specifically, the DPM appointed for an entire
month in UKXM will receive a payment of $5,000 per month through June
30, 2019. The Exchange proposes to extend this plan through December
31, 2019 to continue to incentivize the DPM(s) to continue to serve as
a DPM in this product and provide the necessary liquidity, which
provides greater trading opportunities for all market participants in
this option class.
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    \16\ See Securities Exchange Act Release No. 77547 (April 6,
2016), 81 FR 21611 (April 12, 2016) (SR-CBOE-2016-021).
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Elimination of Obsolete Reference
    Lastly, the Exchange proposes to eliminate references to an
obsolete fee and incentive program. Specifically, on February 11, 2019,
the Exchange filed a rule filing, SR-CBOE-2019-012, which proposed,
among other things, to eliminate the Supplemental VIX Total Firm
Discount program (``Supplemental VIX Discount''), effective February 1,
2019.\17\ The Exchange notes that although it reflected the elimination
of the program in the filing's Exhibit 5, it mistakenly failed to
eliminate references to the program in corresponding Footnote 11 of the
Fees Schedule. Accordingly, the Exchange proposes to update Footnote 11
to eliminate references to the Supplemental VIX Discount. No
substantive change is being made by this deletion.
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    \17\ See Securities Exchange Act Release No. 85169 (February 21,
2019), 84 FR 6445 (February 27, 2019) (SR-CBOE-2019-012).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations

thereunder applicable to the Exchange and, in particular, the
requirements of Section 6(b) of the Act.\18\ Specifically, the Exchange
believes the proposed rule change is consistent with the Section
6(b)(5) \19\ 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 Section 6(b)(4) of
the Act,\20\ which requires that Exchange rules provide for the
equitable allocation of reasonable dues, fees, and other charges among
its Trading Permit Holders and other persons using its facilities.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78f(b).
    \19\ 15 U.S.C. 78f(b)(5).
    \20\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes the proposed waiver extension of the Clearing
Trading Permit Holder Proprietary transaction fee for facilitation
orders in Sector Index options is reasonable because these orders will
not be charged any fee. The Exchange believes that this is equitable
and not unfairly discriminatory because a similar waiver also applies
to other products, including other proprietary index products (e.g.,
MXEA, MXEF, DJX and XSP).\21\ Further, as noted above, Clearing Trading
Permit Holders can be an important source of liquidity when they
facilitate their own customers' trading activity. Moreover, Clearing
Trading Permit Holders have obligations, which normally do not apply to
other market participants (e.g., must have higher capital requirements,
clear trades for other market participants, must be members of OCC).
The Exchange also notes that the waiver of fees for Sector Index
facilitation orders executed in open outcry or electronically in AIM,
QCC or as a CFLEX transaction applies to all such orders.
---------------------------------------------------------------------------

    \21\ See Cboe Fees Schedule, ``Equity Options Rate Table, ``ETF
and ETN Options Rate Table'' and ``Index Options Rate Table--All
Index Products Excluding Underlying Symbol List A and Sector
Indexes'', all of which provide a $0.00 facilitation fee for origin
code ``F'' and ``L'' orders.
---------------------------------------------------------------------------

    The Exchange believes it's appropriate to continue to waive the
Index License Surcharge for Sector Indexes because the Sector Indexes
are still relatively new products and the Exchange wishes to encourage
and promote trading of these products. The Exchange believes waiving
this fee is a reasonable means to encourage trading of these products
as it applies to all market participants and results in lower fees
assessed for Sector Index transactions.
    The Exchange believes it's appropriate to waive the Index License
Surcharge for Clearing Trading Permit Holder Proprietary VIX orders
that have a premium of $0.10 or lower and have series with an
expiration of 7 calendar days or less because the Exchange wants to
continue encouraging Firms to roll and close over positions close to
expiration at low premium levels. Particularly, the Exchange believes
it's reasonable to waive the entire $0.10 per contract surcharge
because without the waiver of the surcharge, firms are less likely to
engage in these transactions, as opposed to other VIX transactions, due
to the associated transaction costs. The Exchange believes it's
equitable and not unfairly discriminatory to limit the waiver to
Clearing Trading Permit Holder Proprietary orders because they
contribute capital to facilitate the execution of VIX customer orders
with a premium of $0.10 or lower and series with an expiration of 7
calendar days or less. Additionally, as noted above, Clearing Trading
Permit Holders have obligations, which normally do not apply to other
market participants (e.g., must have higher capital requirements, clear
trades for other market participants, must be members of OCC).
    The Exchange believes extending the waiver of the GTH fee for the
first Quoting and Order Entry Bandwidth Packet and the first Order
Entry Bandwidth Packet through September 2019 is reasonable, equitable
and not unfairly discriminatory, because waiving those respective fees
promotes and encourages trading during the GTH session. The Exchange
believes it's also reasonable, equitable and not unfairly
discriminatory to waive fees for Login IDs in order to promote and
encourage ongoing participation in GTH and also applies to all GTH
TPHs. The Exchange believes it's also reasonable, equitable and not
unfairly discriminatory to waive GTH access fees through September,
2019 in order to further promote trading. To the extent that this
purpose is achieved, all the Exchange's market participants who
participate in the GTH session should benefit from increased liquidity.
    The Exchange believes it is reasonable, equitable and not unfairly
discriminatory to extend the MXEA and MXEF LMM Incentive Program
because the Exchange wants to ensure it continues incentivizing the
LMM(s) in these products to provide liquid and active markets in these
products to encourage its growth. The Exchange notes that without the
proposed financial incentive, there may not be sufficient incentive for
TPHs to undertake an obligation to quote at heightened levels, which
could result in lower levels of liquidity to the detriment of all
market participants. The Exchange believes it is equitable and not
unfairly discriminatory to only offer this financial incentive to MXEA
and MXEF LMM(s) because it benefits all market participants trading in
these options to encourage the LMM(s) to satisfy the heightened quoting
standard, which may increase liquidity and provide more trading
opportunities and tighter spreads. Indeed, the Exchange notes that LMMs
provides a crucial role in providing quotes and the opportunity for
market participants to trade products, including MXEA and MXEF, which
can lead to increased volume, thereby providing a robust market.
Additionally, if a MSCI LMM does not satisfy the heightened quoting
standard then it simply will not receive the offered per class payment
for that month.
    The Exchange believes it is reasonable, equitable and not unfairly
discriminatory to extend the waiver of all transaction fees for RLG,
RLV, RUI, AWDE, FTEM, FXTM and UKXM transactions, including the Floor
Brokerage fee, the License Index Surcharge and CFLEX Surcharge Fee,
because the respective fees are being waived in their entirety, which
promotes and encourages trading of these products which are still
relatively new. The waiver also would apply to all TPHs.
    The Exchange believes that it is reasonable, equitable and not
unfairly discriminatory to renew the compensation plan to continue to
incentivize the DPM to continue to serve as a DPM in this product.
Particularly, the Exchange notes that there is low volume in UKXM and
as such, the Exchange wishes to ensure the DPM continues to play a
crucial role in providing liquid and active markets in the product to
encourage growth and provide trading opportunities which would benefit
all market participants.
    Lastly, the Exchange believes eliminating references to the
Supplemental VIX Discount program, which no longer exists, alleviates
confusion and maintains clarity in the Fees Schedule, which removes
impediments to and perfects the mechanism of a free and open market and
a national market system, and, in

general, protects investors and the public interest.

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 intramarket or intermarket competition that is not
necessary or appropriate in furtherance of the purposes of the Act.
    First, the Exchange believes the proposed rule change does impose
any burden on intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. Particularly,
the proposed changes extend existing fee waivers and incentive programs
and apply to all similarly situated TPHs uniformly. To the extent
certain market participants receive a benefit others do not these
different market participants have different obligations and
circumstances. For example, DPMs and LMMs play a crucial role in
providing active and liquid markets in their appointed products,
thereby providing a robust market which benefits all market
participants. Additionally, Clearing Trading Permit Holders can be an
important source of liquidity when they facilitate their own customers'
trading activity and also have other obligations, which normally do not
apply to other market participants (e.g., must have higher capital
requirements, clear trades for other market participants, must be
members of OCC). The Exchange also notes that the proposed waivers and
incentive programs are designed to attract additional order flow to the
Exchange. Greater liquidity benefits all market participants on the
Exchange by providing more trading opportunities and tighter spreads
and encourages all TPHs to send orders, thereby contributing to robust
levels of liquidity.
    Next, the Exchange believes the proposed rule change does not
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. First, the
proposed changes only affect trading on Cboe Options. Next, the
Exchange notes it operates in a highly competitive market. In addition
to Cboe Options, TPHs have numerous alternative venues that they may
participate on and director their order flow, including 15 options
exchanges, as well as off-exchange venues. Based on publicly available
information, no single options exchange has more than 23% of the market
share of executed volume of options trades.\22\ Therefore, no exchange
possesses significant pricing power in the execution of option order
flow. Moreover, the Commission has repeatedly expressed its preference
for competition over regulatory intervention in determining prices,
products, and services in the securities markets. Specifically, in
Regulation NMS, the Commission highlighted the importance of market
forces in determining prices and SRO revenues and, also, recognized
that current regulation of the market system ``has been remarkably
successful in promoting market competition in its broader forms that
are most important to investors and listed companies.'' \23\ The fact
that this market is competitive has also long been recognized by the
courts. In NetCoalition v. Securities and Exchange Commission, the D.C.
Circuit stated as follows: ``[n]o one disputes that competition for
order flow is `fierce.' . . . As the SEC explained, `[i]n the U.S.
national market system, buyers and sellers of securities, and the
broker-dealers that act as their order-routing agents, have a wide
range of choices of where to route orders for execution'; [and] `no
exchange can afford to take its market share percentages for granted'
because `no exchange possesses a monopoly, regulatory or otherwise, in
the execution of order flow from broker dealers' . . . .''.\24\
Accordingly, the Exchange does not believe its proposed changes to
extend the above-mentioned fee waivers and incentive programs impose
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \22\ See Cboe Global Markets, U.S. Options Market Volume Summary
(June 13,2019), available at http://markets.cboe.com/us/options/market_share/.
    \23\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
    \24\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010)
(quoting Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
---------------------------------------------------------------------------

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 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 from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \25\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\26\
---------------------------------------------------------------------------

    \25\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \26\ 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.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of the filing. However,
Rule 19b-4(f)(6)(iii) \27\ permits the Commission to designate a
shorter time if such action is consistent with the protection of
investors and the public interest. In its filing, Cboe Options
requested that the Commission waive the 30-day operative delay. The
Exchange indicated in its filing that its extension of the above-
described fee waivers and incentive programs was designed to encourage
increased market participation, including in GTH and in relatively new
products. The Commission believes that waiver of the 30-day operative
delay is consistent with the protection of investors and the public
interest as it will avoid the potential for disruption among TPHs
associated with an interruption in the continuity of the proposed
extensions set forth above. Accordingly, the Commission waives the 30-
day operative delay and designates the proposed rule change operative
upon filing.\28\
---------------------------------------------------------------------------

    \27\ 17 CFR 240.19b-4(f)(6)(iii).
    \28\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    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: (i)
necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-CBOE-2019-031 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-CBOE-2019-031. 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-CBOE-2019-031, and should be submitted
on or before August 7, 2019.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
---------------------------------------------------------------------------

    \29\ 17 CFR 200.30-3(a)(12) and (59).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-15139 Filed 7-16-19; 8:45 am]
BILLING CODE 8011-01-P


? Need to return call by / at/ between and . Signature: Project No.: 0<IP_ADDRESS>   DISTRIBUTION Page _ 1_ of _ 1 Project Name: 304( m)

TELEPHONE CALL RECORD Outgoing Call Date: 2/ 28/ 05 Time: 9: 10 AM Company Name: OxyVinyls LaPorte VCM LaPorte, TX Contact Name: Phil Anastasio Phone No.: ( 281) 476 8757 Name: Meghan Kandle Eastern Research Group GENERAL SUBJECT : TRI 2002 PCB releases to wastewater TOPICS DISCUSSED AND ACTION TAKEN I called Mr. Phil Anastasio on Monday, February 28th to ask about PCB releases reported to TRI for 2002. OxyVinyls reported three pounds of PCBs released to wastewater for 2002. He said that the reported pounds of PCBs were based on sampling data, and that the PCBs are formed as an unintentional by product of EDC production.

I also asked Mr. Anastasio about the basis of the reported releases for hexachlorobenzene. He said that the hexachlorobenzene releases were estimated based on MSDS data.


[Federal Register Volume 85, Number 94 (Thursday, May 14, 2020)]
[Proposed Rules]
[Pages 28893-28895]
[FR Doc No: 2020-10015]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2020-0473; Product Identifier 2018-CE-058-AD]
RIN 2120-AA64

Airworthiness Directives; Polskie Zaklady Lotnicze Sp. z o.o.
Airplanes

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: The FAA proposes to adopt a new airworthiness directive (AD)
for certain Polskie Zaklady Lotnicze Sp. z o.o. Model PZL M28 05
airplanes. This proposed AD results from mandatory continuing
airworthiness information (MCAI) originated by an aviation authority of
another country to identify and correct an unsafe condition on an
aviation product. The MCAI describes the unsafe condition as defective
thermo-shrinkable tubes installed on the electrical harnesses located
in the fuel tanks. The FAA is proposing this AD to address the unsafe
condition on these products.

DATES: The FAA must receive comments on this proposed AD by June 29,
2020.

ADDRESSES: You may send comments by any of the following methods:
     Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
     Hand Delivery: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
    For service information identified in this proposed AD, contact
Polskie Zaklady Lotnicze Sp. z o.o., Wojska Polskiego 3, 39-300 Mielec,
Poland, +48 17 743 1901, email<EMAIL_ADDRESS>internet:
www.pzlmielec.pl. You may review this referenced service information at
the FAA, Airworthiness Products Section, Operational Safety Branch, 901
Locust, Kansas City, Missouri 64106. For information on the
availability of this material at the FAA, call<PHONE_NUMBER>.

Examining the AD Docket

    You may examine the AD docket on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2020-
0473; or in person at Docket Operations between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays. The AD docket contains
this proposed AD, the regulatory evaluation, any comments received, and
other information. The street address for Docket Operations is listed
above. Comments will be available in the AD docket shortly after
receipt.

FOR FURTHER INFORMATION CONTACT: Doug Rudolph, Aerospace Engineer, FAA,
Small Airplane Standards Branch, 901 Locust, Room 301, Kansas City,
Missouri 64106; telephone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Comments Invited

    The FAA invites you to send any written relevant data, views, or
arguments about this proposed AD. Send your comments to an address
listed under the ADDRESSES section. Include ``Docket No. FAA-2020-0473;
Product Identifier 2018-CE-058-AD'' at the beginning of your comments.
The FAA specifically invites comments on the overall regulatory,
economic, environmental, and energy aspects of this proposed AD. The
FAA will consider all comments received by the closing date and may
amend this proposed AD because of those comments.
    The FAA will post all comments we receive, without change, to
https://regulations.gov, including any personal information you
provide. The FAA will also post a report summarizing each substantive
verbal contact received about this proposed AD.

Discussion

    The European Aviation Safety Agency (EASA), which is the Technical
Agent for the Member States of the European Community, has issued AD
No. 2018-0242, dated October 8, 2018 (referred to after this as ``the
MCAI''), to correct an unsafe condition for the specified products. The
MCAI states:

    During accomplishment of maintenance on an M28 05 military
version airplane, torn pieces of thermo-shrinkable tubes were found
in the header section of the main fuel tank. These tubes are
installed on electrical harnesses located in the fuel tanks and
serve as marking and protection devices against mechanical damage
during manufacturing and servicing. Pieces of these tubes may travel
with the fuel flow and may block the jet pump or reduce its
performance, particularly in the centre-wing fuel tank, in which the
jet pump is the only way of further transfer of fuel to the engine.
Subsequent investigation determined that degradation of the tube
material was caused by a manufacturing deficiency, leading to
insufficient material resistance against mechanical damage when a
tube is located in a fuel.
    This condition, if not detected and corrected, could lead to
reduced fuel supply to the engines, inability to use all the fuel in
fuel tanks and reduced available engine power, resulting in reduced
aeroplane performance.
    To address this potentially unsafe condition, PZL identified the
batch of aeroplanes that are potentially equipped with thermo-
shrinkable tubes having this manufacturing defect, and issued the
[service bulletin] SB providing inspection and replacement
instructions.
    For the reasons described above, this [EASA] AD requires a one-
time inspection of the electrical harnesses located in the fuel
tanks and, depending on findings, replacement of the affected
harness.

    Polskie Zaklady Lotnicze Sp. z o.o. informed us the potential for
damage to the thermo-shrinkable tubes does not progress with time.
Therefore, we determined repetitive inspections are not required. You
may examine the MCAI on the internet at https://www.regulations.gov by
searching for and locating Docket No. FAA-2020-0473.

Related Service Information Under 1 CFR Part 51

    Polskie Zaklady Lotnicze Sp. z o.o. has issued Service Bulletin No.
E/12.141/2018, dated May 15, 2018. The service information contains
procedures for inspecting the thermo-shrinkable tubes on the electrical
harnesses in the center and outer wing fuel tanks for damage and
replacing any electrical harness with damaged thermo-shrinkable tubes.
This service information is reasonably available

because the interested parties have access to it through their normal
course of business or by the means identified in the ADDRESSES section.

FAA's Determination and Requirements of the Proposed AD

    This product has been approved by the aviation authority of another
country, and is approved for operation in the United States. Pursuant
to the FAA's bilateral agreement with this State of Design Authority,
it has notified the FAA of the unsafe condition described in the MCAI
and service information referenced above. The FAA is proposing this AD
because it evaluated all information and determined the unsafe
condition exists and is likely to exist or develop on other products of
the same type design.

Costs of Compliance

    The FAA estimates that this proposed AD would affect 15 products of
U.S. registry. The FAA also estimates that it would take about 3 work-
hours per product to comply with the basic inspection requirement of
this proposed AD. The average labor rate is $85 per work-hour.
    Based on these figures, the FAA estimates the cost of the proposed
AD on U.S. operators to be $3,825, or $255 per product.
    In addition, the FAA estimates that any necessary follow-on
replacement action would take about 60 work-hours and require parts
costing $5,000, for a cost of $10,100 per electrical harness. The FAA
has no way of determining the number of products that may need these
actions.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. 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.
    The FAA is issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, section 44701: General requirements.
Under that section, Congress charges the FAA with promoting safe flight
of civil aircraft in air commerce by prescribing regulations for
practices, methods, and procedures the Administrator finds necessary
for safety in air commerce. This regulation is within the scope of that
authority because it addresses an unsafe condition that is likely to
exist or develop on products identified in this rulemaking action.

Regulatory Findings

    The FAA determined that this proposed AD would not have federalism
implications under Executive Order 13132. This proposed AD would not
have a substantial direct effect on the States, on the relationship
between the national Government and the States, or on the distribution
of power and responsibilities among the various levels of government.
    For the reasons discussed above, I certify this proposed
regulation:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Will not affect intrastate aviation in Alaska, and
    (3) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

The Proposed Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority:  49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive (AD):

Polskie Zaklady Lotnicze Sp. z o.o.: Docket No. FAA-2020-0473;
Product Identifier 2018-CE-058-AD.

(a) Comments Due Date

    The FAA must receive comments by June 29, 2020.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Polskie Zaklady Lotnicze Sp. z o.o. Model PZL
M28 05 airplanes, serial numbers AJE00301 through AJE00343, and
AJE00345 through AJE00347, certificated in any category.

(d) Subject

    Air Transport Association of America (ATA) Code 28: Fuel Tank.

(e) Reason

    This AD was prompted by mandatory continuing airworthiness
information (MCAI) originated by an aviation authority of another
country to identify and correct an unsafe condition on an aviation
product. The MCAI describes the unsafe condition as defective
thermo-shrinkable tubes installed on the electrical harnesses
located in the fuel tanks. The FAA is issuing this AD to prevent
broken pieces of the thermo-shrinkable tubes from blocking the jet
pump, reducing fuel supply to the engines, and resulting in the
inability to use all the fuel in the fuel tanks. This condition
could lead to reduced engine power and airplane performance.

(f) Actions and Compliance

    Unless already done, do the following actions in paragraphs
(f)(1) and (2) of this AD:
    (1) Within the next 200 hours time-in-service (TIS) after the
effective date of this AD or within the next 8 months after the
effective date of this AD, whichever occurs first:
    (i) Inspect each electrical wire harness in the center wing and
the left-hand and right-hand outer wing fuel tanks for cracking,
tears, and seizing of the thermo-shrinkable tubes in accordance with
paragraphs II.1 through 2 a) of the Procedure for Bulletin Execution
section in Polskie Zaklady Lotnicze Sp. z o.o. Service Bulletin No.
E/12.141/2018, dated May 15, 2018.
    (ii) If there is a tear or any cracking in or any seizing of an
electrical wire harness thermo-shrinkable tube, before further
flight, replace the harness in accordance with section II. a)
Replacement of harness KL8 (KP), II. b) Replacement of Harness KL9
(KP9), or II. c) Replacement of harness KL10 (KP10), as applicable,
of the Procedure for Bulletin Execution in Polskie Zaklady Lotnicze
Sp. z o.o. Service Bulletin No. E/12.141/2018, dated May 15, 2018.
    (2) As of the effective date of this AD, do not install any
electrical wire harness part number 28.14.7205.073.000,
28.14.7205.074.000, 28.14.7205.075.000, 28.14.7205.076.000,
28.14.7205.077.000, or 28.14.7205.078.000, that has more than zero
hours TIS on any airplane, unless it has passed the inspection
required by paragraph (f)(1)(i) of this AD.

(g) Alternative Methods of Compliance (AMOCs)

    The Manager, Small Airplane Standards Branch, FAA, has the
authority to approve AMOCs for this AD, if requested using the
procedures found in 14 CFR 39.19. Send information to ATTN: Doug
Rudolph, Aerospace Engineer, FAA, Small Airplane Standards Branch,
901 Locust, Room 301, Kansas City, Missouri 64106; telephone: (816)
329-4059; fax:<PHONE_NUMBER>; email<EMAIL_ADDRESS>Before
using any approved AMOC on any airplane to which the AMOC applies,
notify your appropriate principal inspector (PI) in the FAA Flight
Standards District Office (FSDO), or lacking a PI, your local FSDO.

(h) Related Information

    Refer to MCAI European Aviation Safety Agency (EASA) AD No.
2018-0242, dated October 8, 2018, for related information. You may
examine the MCAI on the internet at https://www.regulations.gov by
searching for and locating Docket No. FAA-2020-0473.

For service information related to this AD, contact Polskie Zaklady
Lotnicze Sp. z o.o., Wojska Polskiego 3, 39-300 Mielec, Poland, +48
17 743 1901, email<EMAIL_ADDRESS>internet: www.pzlmielec.pl. You
may review this referenced service information at the FAA,
Airworthiness Products Section, Operational Safety Branch, 901
Locust, Kansas City, Missouri 64106. For information on the
availability of this material at the FAA, call<PHONE_NUMBER>.

    Issued on May 6, 2020.
Gaetano A. Sciortino,
Deputy Director for Strategic Initiatives, Compliance & Airworthiness
Division, Aircraft Certification Service.
[FR Doc. 2020-10015 Filed 5-13-20; 8:45 am]
 BILLING CODE 4910-13-P


[Federal Register Volume 83, Number 20 (Tuesday, January 30, 2018)]
[Notices]
[Pages 4210-4211]
[FR Doc No: 2018-01643]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2018-N-0129]

Evaluating Inclusion and Exclusion Criteria in Clinical Trials;
Public Meeting

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice of public meeting.

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SUMMARY: The Food and Drug Administration (FDA, the Agency, or we) is
announcing a public meeting entitled ``Evaluating Inclusion and
Exclusion Criteria in Clinical Trials.'' Convened by the Duke-Robert J.
Margolis, MD, Center for Health Policy at Duke University and supported
by a cooperative agreement with FDA, the purpose of the public meeting
is to bring the stakeholder community together to discuss a variety of
topics related to eligibility criteria in clinical trials and their
potential impact on patient access to investigational drugs, and how to
facilitate the enrollment of a diverse patient population.

DATES: The public meeting will be held on April 16, 2018, from 8:30
a.m. to 5 p.m. See the SUPPLEMENTARY INFORMATION section for
registration date and information.

ADDRESSES: The public meeting will be held at the National Press Club,
529 14th St. NW, Washington, DC 20045. For additional travel and hotel
information, please refer to the following website: https://healthpolicy.duke.edu/events/evaluating-inclusion-and-exclusion-criteria-clinical-trials. There will also be a live webcast for those
unable to attend the meeting in person (see Streaming Webcast of the
Public Meeting).

FOR FURTHER INFORMATION CONTACT: Dianne Paraoan, Center for Drug
Evaluation and Research, Food and Drug Administration, 10903 New
Hampshire Ave., Bldg. 51, Rm. 3326, Silver Spring, MD 20993, 301-796-
2500, [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    This public meeting implements FDA's mandate under section 610 of
the FDA Reauthorization Act of 2017 to convene a public meeting to
discuss clinical trial inclusion and exclusion criteria that will
ultimately inform an FDA guidance on this subject. Among other things,
the public meeting will include discussion about various ways in which
participation in clinical trials can be improved, including through
alternative trial designs and expanded access trials (see Section II.
Topics for Discussion at the Public Meeting).
    Inclusion of relevant subpopulations in drug development programs
helps ensure that approved products will be safe and effective for the
population likely to be treated when the drug is marketed. However,
certain eligibility criteria in clinical trials can exclude patient
subgroups, resulting in the enrollment of study populations that may
not be fully representative of that broader patient population. FDA has
and will continue its efforts to encourage greater diversity in
clinical trial populations. For example, FDA regulations require
marketing applications to provide analyses of safety and effectiveness
by demographic and other relevant subgroups (see 21 CFR
314.50(d)(5)(v)). In addition, in 2016, FDA published guidance on the
collection of race and ethnicity data in clinical trials (available on
FDA's guidance web page at https://www.fda.gov/downloads/

regulatoryinformation/guidances/ucm126396.pdf).

II. Topics for Discussion at the Public Meeting

    Topics for discussion during this meeting include:
     The risks and benefits of participation in clinical trials
as well as potential regulatory, geographical, and socioeconomic
barriers to participation.
     the rationale for eligibility criteria in clinical trials,
as well as the impact of exclusion criteria on the enrollment of
populations, such as infants, children, pregnant and lactating women,
elderly, individuals with advanced disease, and individuals with co-
morbid conditions.
     alternative clinical trial designs that may increase
enrollment of more diverse patient populations, while facilitating the
collection of data to establish safety and effectiveness.
     how appropriate patient populations can benefit from the
results of trials that employ alternative designs.
     how changes to eligibility criteria may impact the
complexity and length of clinical trials, as well as the strength of
data necessary to demonstrate safety and effectiveness.
     opportunities for using data from expanded access trials.

III. Participating in the Public Meeting

    Registration: To register for the public meeting, please visit the
following website: https://healthpolicy.duke.edu/events/evaluating-inclusion-and-exclusion-criteria-clinical-trials. Please provide
complete contact information for each attendee, including name, title,
affiliation, address, email, and telephone. Registration is free and
based on space availability, with priority given to early registrants.
Persons interested in attending this public meeting must register by
April 12, 2018, midnight Eastern Time. There will be no onsite
registration. Early registration is recommended because seating is
limited; therefore, FDA may limit the number of participants from each
organization. Registrants will receive confirmation when they have been
accepted. Duke-Margolis will post on its website if registration closes
before the day of the public meeting.
    If you need special accommodations due to a disability, please
contact Sarah Supsiri at the Duke-Margolis Center for Health Policy,
202-791-9561, [email protected], no later than April 12, 2018.
    Streaming Webcast of the Public Meeting: This public meeting will
also be webcast; archived video footage will be available at the Duke-
Margolis website (https://healthpolicy.duke.edu/events/evaluating-inclusion-and-exclusion-criteria-clinical-trials) following the
meeting. Organizations are requested to register all participants, but
to view using one connection per location whenever possible. Webcast
participants will be sent technical system requirements in advance of
the event. Prior to joining the streaming webcast of the public
workshop, we recommend that you review these technical system
requirements in advance.
    Transcripts: Please be advised that transcripts will not be
available.
    FDA has verified the website addresses in this document, as of the
date this document publishes in the Federal Register, but websites are
subject to change over time.
    Meeting Materials: All event materials will be provided to
registered attendees via email prior to the workshop and publicly
available at the Duke-Margolis website: https://healthpolicy.duke.edu/events/evaluating-inclusion-and-exclusion-criteria-clinical-trials.

    Dated: January 24, 2018.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2018-01643 Filed 1-29-18; 8:45 am]
 BILLING CODE 4164-01-P


[Federal Register: October 1, 2009 (Volume 74, Number 189)]
[Notices]
[Page 50851-50852]
[DOCID:fr01oc09-124]

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SECURITIES AND EXCHANGE COMMISSION

[File No. 500-1]

 In the Matter of Consumers Financial Corporation; Order of
Suspension of Trading

September 29, 2009.
    It appears to the Securities and Exchange Commission that there is
a lack of current and accurate information concerning the securities of
Consumers Financial Corporation because it has not filed any periodic
reports since the period ended December 31, 2005.
    The Commission is of the opinion that the public interest and the
protection of investors require a suspension of trading in the
securities of the above-listed company.
    Therefore, it is ordered, pursuant to Section 12(k) of the
Securities Exchange Act of 1934, that trading in the securities of the
above-listed company is suspended for the period from 9:30 a.m. EDT, on
September 29, 2009, through 11:59 p.m. EDT, on October 12, 2009.

    By the Commission.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-23805 Filed 9-29-09; 4:15 pm]

BILLING CODE 8011-01-P


[Federal Register Volume 86, Number 196 (Thursday, October 14, 2021)]
[Notices]
[Pages 57227-57229]
[FR Doc No: 2021-22437]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93277; File No. SR-NASDAQ-2021-065]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Order
Granting Approval of a Proposed Rule Change To Amend Nasdaq Rule 5750
(Proxy Portfolio Shares) To Provide for the Use of Custom Baskets
Consistent With the Exemptive Relief Issued Pursuant to the Investment
Company Act of 1940 Applicable to a Series of Proxy Portfolio Shares

October 8, 2021.

I. Introduction

    On August 25, 2021, The Nasdaq Stock Market LLC (``Exchange'' or
``Nasdaq'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Exchange Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to amend Nasdaq Rule 5750 (Proxy
Portfolio Shares) to provide for the use of custom baskets consistent
with the exemptive relief issued pursuant to the Investment Company Act
of 1940 (``1940 Act'') \3\ applicable to a series of Proxy Portfolio
Shares. The proposed rule change was published for comment in the
Federal Register on September 2, 2021.\4\ The Commission has received
no comments on the proposed rule change. The Commission is approving
the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 80a.
    \4\ See Securities Exchange Act Release No. 92790 (August 27,
2021), 86 FR 49357.

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II. Description

    The Exchange proposes to amend Nasdaq Rule 5750, which permits the
listing and trading of series of Proxy Portfolio Shares. Nasdaq Rule
5750 currently requires that Proxy Portfolio Shares be issued and
redeemed in a specified aggregate minimum number in return for the
Proxy Basket \5\ and/or cash.\6\ The Exchange proposes to amend the
definition of ``Proxy Portfolio Share'' in Nasdaq Rule 5750(c)(1) to
permit creations and redemptions of shares in return for a Custom
Basket in addition to the Proxy Basket, to the extent permitted by a
fund's exemptive relief.\7\ Further, the Exchange proposes to define
the term ``Custom Basket'' as a portfolio of securities that is
different from the Proxy Basket and is otherwise consistent with the
exemptive relief issued pursuant to the 1940 Act applicable to a series
of Proxy Portfolio Shares.\8\ The Exchange also proposes to amend the
definition of ``Reporting Authority'' in Nasdaq Rule 5750(c)(3) to
include Custom Baskets among the types of information for which the
Reporting Authority designated for a particular series of Proxy
Portfolio Shares will be the official source for calculating and
reporting such information.\9\
---------------------------------------------------------------------------

    \5\ The term ``Proxy Basket'' means the identities and
quantities of the securities and other assets included in a basket
that is designed to closely track the daily performance of the Fund
Portfolio, as provided in the exemptive relief under the 1940 Act
applicable to a series of Proxy Portfolio Shares. See Nasdaq Rule
5750(c)(5). The term ``Fund Portfolio'' means the identities and
quantities of the securities and other assets held by the investment
company registered under the 1940 Act (``Investment Company'') that
will form the basis for the Investment Company's calculation of net
asset value (``NAV'') at the end of the business day. See Nasdaq
Rule 5750(c)(2).
    \6\ See Nasdaq Rule 5750(c)(1) (defining the term ``Proxy
Portfolio Share'').
    \7\ See proposed Nasdaq Rule 5750(c)(1) (defining ``Proxy
Portfolio Share'' as a security that: (A) Represents an interest in
an Investment Company organized as an open-end management investment
company, that invests in a portfolio of securities selected by the
Investment Company's investment adviser consistent with the
Investment Company's investment objectives and policies; (B) is
issued in a specified aggregate minimum number in return for a
deposit of a specified Proxy Basket or Custom Basket, as applicable,
and/or a cash amount with a value equal to the next determined NAV;
(C) when aggregated in the same specified minimum number, may be
redeemed at a holder's request, which holder will be paid a
specified Proxy Basket or Custom Basket, as applicable, and/or a
cash amount with a value equal to the next determined NAV; and (D)
the portfolio holdings for which are disclosed within at least 60
days following the end of every fiscal quarter).
    \8\ See proposed Nasdaq Rule 5750(c)(6).
    \9\ See proposed Nasdaq Rule 5750(c)(3) (defining ``Reporting
Authority'' in respect of a particular series of Proxy Portfolio
Shares as the Exchange, an institution, or a reporting service
designated by the Exchange or by the exchange that lists a
particular series of Proxy Portfolio Shares (if the Exchange is
trading such series pursuant to unlisted trading privileges) as the
official source for calculating and reporting information relating
to such series, including, but not limited to, the Proxy Basket; the
Fund Portfolio; the Custom Basket; the amount of any cash
distribution to holders of Proxy Portfolio Shares, NAV, or other
information relating to the issuance, redemption or trading of Proxy
Portfolio Shares).
---------------------------------------------------------------------------

    The Exchange proposes to amend Nasdaq Rule 5750(d) to incorporate
specific initial and continued listing criteria relating to Custom
Baskets. Specifically, the Exchange proposes to add a new initial
listing requirement to stipulate that the Exchange will obtain a
representation from the issuer of each series of Proxy Portfolio Shares
that the issuer and any person acting on behalf of the series of Proxy
Portfolio Shares will comply with Regulation Fair Disclosure under the
Exchange Act (``Regulation FD''),\10\ including with respect to any
Custom Basket.\11\ The Exchange also proposes to add a new continued
listing requirement that, with respect to each Custom Basket utilized
by a series of Proxy Portfolio Shares, each business day, before the
opening of trading in the regular market session,\12\ the Investment
Company shall make publicly available on its website the composition of
any Custom Basket transacted on the previous business day, except a
Custom Basket that differs from the applicable Proxy Basket only with
respect to cash.\13\
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    \10\ 17 CFR 243.100.
    \11\ See proposed Nasdaq Rule 5750(d)(1)(B)(iii). Nasdaq Rule
5750(d)(1)(B) currently provides that the Exchange will obtain a
representation from the issuer of each series of Proxy Portfolio
Shares that the NAV per share for the series will be calculated
daily and that the NAV, the Proxy Basket, and the Fund Portfolio
will be made available to all market participants at the same time
when disclosed. The current requirements would be designated as
Nasdaq Rule 5750(d)(1)(B)(i) and (ii).
    \12\ ``Regular market session'' means the trading session from
9:30 a.m. until 4:00 p.m. or 4:15 p.m. See Nasdaq Rule
4120(b)(4)(D).
    \13\ See proposed Nasdaq Rule 5750(d)(2)(A)(ii). Nasdaq Rule
5750(d)(2)(A) currently provides that the Proxy Basket will be
publicly disseminated at least once daily and will be made available
to all market participants at the same time. This current
requirement would be designated as Nasdaq Rule 5750(d)(2)(A)(i). The
Exchange also proposes to amend the title of Nasdaq Rule
5750(d)(2)(A) to ``Proxy Basket and Custom Basket.'' See proposed
Nasdaq Rule 5750(d)(2)(A).
---------------------------------------------------------------------------

    Finally, the Exchange proposes to amend Nasdaq Rules 5750(b)(5) and
(6), which contain requirements that specified parties must erect and
maintain ``fire walls'' with respect to access to information
concerning the Fund Portfolio and Proxy Basket and enact procedures
designed to prevent the use and dissemination of material nonpublic
information regarding the Fund Portfolio and Proxy Basket, so that
these requirements would also cover information concerning Custom
Baskets. As proposed to be amended, Nasdaq Rule 5750(b)(5) would
require that, if the investment adviser to the Investment Company
issuing Proxy Portfolio Shares is registered as a broker-dealer or is
affiliated with a broker-dealer, such investment adviser will erect and
maintain a ``fire wall'' between the investment adviser and personnel
of the broker-dealer or broker-dealer affiliate, as applicable, with
respect to access to information concerning the composition of and/or
changes to the Fund Portfolio, the Proxy Basket, and/or the Custom
Basket, as applicable. In addition, any person related to the
investment adviser or Investment Company who makes decisions pertaining
to the Investment Company's Fund Portfolio, the Proxy Basket, and/or
the Custom Basket or has access to nonpublic information regarding the
Fund Portfolio, the Proxy Basket, and/or the Custom Basket, as
applicable, or changes thereto, must be subject to procedures designed
to prevent the use and dissemination of material nonpublic information
regarding the Fund Portfolio, and/or the Proxy Basket, and/or the
Custom Basket, as applicable, or changes thereto. Proposed Nasdaq Rule
5750(b)(6) would require that any person or entity, including a
custodian, Reporting Authority, distributor, or administrator, who has
access to nonpublic information regarding the Fund Portfolio, the Proxy
Basket, or the Custom Basket, as applicable, or changes thereto, must
be subject to procedures designed to prevent the use and dissemination
of material nonpublic information regarding the applicable Fund
Portfolio, the Proxy Basket, or the Custom Basket, as applicable, or
changes thereto. Moreover, if any such person or entity is registered
as a broker-dealer or affiliated with a broker-dealer, such person or
entity will erect and maintain a ``fire wall'' between the person or
entity and the broker-dealer with respect to access to information
concerning the composition and/or changes to such Fund Portfolio, Proxy
Basket, or Custom Basket, as applicable.

III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule
change is consistent with the Exchange Act and rules and regulations
thereunder applicable to a national securities exchange.\14\ In
particular, the

Commission finds that the proposed rule change is consistent with
Section 6(b)(5) of the Exchange Act,\15\ which requires, among other
things, that the Exchange's rules be designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and a national market system, and, in
general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \14\ In approving this proposed rule change, the Commission
notes that it has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
    \15\ 15 U.S.C. 78f(b)(5).
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    The Exchange previously filed a proposed rule change to adopt
Nasdaq Rule 5750 to permit the listing and trading of Proxy Portfolio
Shares.\16\ As discussed above, under the current rule, a series of
Proxy Portfolio Shares must create or redeem shares in return for the
Proxy Basket and/or cash. The Exchange is now proposing to amend Nasdaq
Rule 5750 to allow a series of Proxy Portfolio Shares to create or
redeem shares in return for a Custom Basket, which is a portfolio of
securities that is different from the Proxy Basket, to the extent
consistent with an issuer's exemptive relief under the 1940 Act.\17\
For the reasons discussed below, the Commission finds that the proposed
amendments to Nasdaq Rule 5750 to provide for the use of Custom Baskets
for Proxy Portfolio Shares, to the extent permitted by an issuer's
exemptive relief under the 1940 Act, are consistent with Section
6(b)(5) of the Exchange Act.
---------------------------------------------------------------------------

    \16\ See Securities Exchange Act Release No. 89110 (June 22,
2020), 85 FR 38461 (June 26, 2020) (SR-NASDAQ-2020-032) (Notice of
Filing and Immediate Effectiveness to Adopt Nasdaq Rule 5750 to List
and Trade Proxy Portfolio Shares) (``2020 Notice''). At the time,
the Exchange stated that the proposed rule change to adopt new
Nasdaq Rule 5750 was substantially similar to a proposed rule change
by Cboe BZX Exchange, Inc. (``BZX'') to adopt BZX Rule 14.11(m) that
the Commission had recently approved. See id. at 38461 (citing
Securities Exchange Act Release No. 88887 (May 15, 2020), 85 FR
30990 (May 21, 2020) (SR-CboeBZX-2019-107) (``2020 Order'')). The
Exchange must file a separate proposed rule change pursuant to
Section 19(b) of the Exchange Act for each series of Proxy Portfolio
Shares. See Nasdaq Rule 5750(b)(1).
    \17\ In the 2020 Notice, the Exchange identified several
applications for exemptive relief and subsequent orders granting
certain exemptive relief under the 1940 Act and stated that it
believed that each associated series of shares would qualify as
Proxy Portfolio Shares under proposed Nasdaq Rule 5750. See 2020
Notice, supra note 16, 85 FR at 38461 n.3. The Commission has since
granted exemptive relief under the 1940 Act to certain series of
shares that the Exchange had identified as qualifying as Proxy
Portfolio Shares to permit the creation or redemption of shares
using a Custom Basket that includes instruments that are not
included, or included with different weightings, in the fund's
equivalent to a Proxy Basket. See, e.g., Fidelity Beach Street
Trust, et al., Investment Company Act Release No. 34350 (August 5,
2021).
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    The Commission believes that the proposed changes to Nasdaq Rules
5750(b)(5) and (6) are consistent with the Exchange Act and are
reasonably designed to help prevent fraudulent and manipulative acts
and practices. The Commission notes that, because Proxy Portfolio
Shares do not publicly disclose on a daily basis information about the
holdings of the Fund Portfolio, it is vital that key information
relating to Proxy Portfolio Shares, including information relating to
Custom Baskets, be kept confidential prior to its public disclosure and
not be subject to misuse.\18\ Accordingly, the Commission believes that
the Exchange's proposal to amend Nasdaq Rules 5750(b)(5) and (6) \19\
to apply the current ``fire wall'' and other requirements contained
therein to those that have access to information concerning, or make
decisions pertaining to, the composition of and/or changes to the
Custom Baskets, in addition to the existing requirements relating to
the Fund Portfolio and the Proxy Basket, is designed to prevent fraud
and manipulation with respect to Proxy Portfolio Shares.
---------------------------------------------------------------------------

    \18\ See 2020 Order, supra note 16, 85 FR at 31002-03.
    \19\ See supra Section II, describing proposed Nasdaq Rules
5750(b)(5) and (6).
---------------------------------------------------------------------------

    The Commission also believes that the proposed amendments to the
initial and continued listing requirements for Proxy Portfolio Shares
are adequate to ensure transparency of information relating to Custom
Baskets utilized by a fund and to ensure that such information is
available to the rest of the market participants at the same time.
Specifically, prior to the opening of trading on each business day, the
Investment Company will make publicly available on its website the
composition of any Custom Basket transacted on the previous business
day, except a Custom Basket that differs from the applicable Proxy
Basket only with respect to cash.\20\ In addition, prior to the initial
listing of the Proxy Portfolio Shares, the Exchange will be required to
obtain a representation from the issuer of each series of Proxy
Portfolio Shares that the issuer and any person acting on behalf of the
series of Proxy Portfolio Shares will comply with Regulation FD,
including with respect to any Custom Basket.\21\ These measures help to
mitigate concerns that certain information regarding the funds will be
available only to select market participants and thereby helps to
prevent fraud and manipulation.
---------------------------------------------------------------------------

    \20\ See proposed Nasdaq Rule 5750(d)(2)(A)(ii).
    \21\ See proposed Nasdaq Rule 5750(d)(1)(B)(iii). The Commission
notes that a fund's use of, or conversations with authorized
participants about, Creation Baskets that would result in selective
disclosure of nonpublic information would effectively be limited by
the fund's obligation to comply with Regulation FD. See, e.g.,
Fidelity Beach Street Trust, et al., Investment Company Act Release
No. 34326 (July 9, 2021).
---------------------------------------------------------------------------

    The Commission notes that, as set forth in the definition of
``Custom Basket,'' a series of Proxy Portfolio Shares may only utilize
Custom Baskets to the extent consistent with the exemptive relief
issued pursuant to the 1940 Act applicable to such series.\22\ The
Commission further notes that all series of Proxy Portfolio Shares will
continue to be subject to the existing rules and procedures that govern
the listing and trading of Proxy Portfolio Shares and the trading of
equity securities on the Exchange.
---------------------------------------------------------------------------

    \22\ See proposed Nasdaq Rule 5750(c)(6).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act \23\ that the proposed rule change (SR-NASDAQ-2021-065),
be, and it hereby is, approved.
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    \23\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
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    \24\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-22437 Filed 10-13-21; 8:45 am]
BILLING CODE 8011-01-P