[Federal Register Volume 83, Number 81 (Thursday, April 26, 2018)]
[Notices]
[Pages 18384-18385]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-08732]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83083; File No. SR-GEMX-2018-13]


Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Incorporate by 
Reference The Nasdaq Stock Market LLC's Consolidated Audit Trail Rules 
Into the Rules of Nasdaq GEMX

April 20, 2018.
    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 April 10, 2018, Nasdaq GEMX, LLC (``GEMX'' 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 Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to incorporate by reference The Nasdaq Stock 
Market LLC's (``Nasdaq'') rule at General 7, entitled ``Consolidated 
Audit Trail Compliance'' into GEMX's General 7.
    The text of the proposed rule change is available on the Exchange's 
website at http://nasdaqgemx.cchwallstreet.com/, at the principal 
office of the Exchange, and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the 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 incorporate by reference Nasdaq's rule at 
General 7, entitled ``Consolidated Audit Trail Compliance'' into GEMX's 
General 7. The rule sets are identical.\3\ GEMX proposes to remove the 
current rule text from General 7 and replace that rule text with the 
following text: \4\
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    \3\ See Securities Exchange Act Release Nos. 82601 (January 30, 
2018), 83 FR 4949 (February 2, 2018) (SR-Phlx-2018-11); 82604 
(January 30, 2018), 83 FR 5154 (February 5, 2018) (SR-NASDAQ-2018-
007); 82597 (January 30, 2018), 83 FR 4942 (February 2, 2018) (SR-
BX-2018-007); 82599 (January 30, 2017), 83 FR 4947 (February 2, 
2018) (SR-ISE-2018-09); 82598 (January 30, 2018), 83 FR 4936 
(February 2, 2018) (SR-GEMX-2018-02); and 82600 (January 30, 2018), 
83 FR 4934 (February 2, 2018) (SR-MRX-2018-03).
    \4\ GEMX shall include a hyperlink to Nasdaq's General 7 for 
ease of reference.
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    The rules contained in The Nasdaq Stock Market LLC General 7, as 
such rules may be in effect from time to time (the ``General 7 
Rules''), are hereby incorporated by reference into this Nasdaq GEMX 
General 7, and are thus Nasdaq GEMX Rules and thereby applicable to 
Nasdaq GEMX Members. Nasdaq GEMX Members shall comply with the General 
7 Rules as though such rules were fully set forth herein. All defined 
terms, including any variations thereof, contained in the General 7 
Rules shall be read to refer to the Nasdaq GEMX related meaning of such 
term. Solely by way of example, and not in limitation or in exhaustion: 
the defined term ``Exchange'' in the General 7 Rules shall be read to 
refer to the Nasdaq GEMX Exchange; the defined term ``Rule'' in the 
General 7 Rules shall be read to refer to the Nasdaq GEMX Rule.
    Should any rules which impact trading behavior be added to the 
Consolidated Audit Trail Compliance Rules in Nasdaq General 7 in the 
future, those rules shall not become subject to the incorporation by 
reference and shall be placed elsewhere within GEMX's Rulebook. The 
incorporations by reference of Nasdaq General 7 into GEMX's General 7 
Rule are regulatory in nature.\5\ The Exchange notes that as a 
condition of an exemption, which the Exchange will request and will 
need to be approved by the Commission,\6\ GEMX agrees to provide 
written notice to its members whenever Nasdaq proposes a change to its 
General 7 Rule.\7\ Such notice will alert GEMX members to the proposed 
Nasdaq rule change and give them an opportunity to comment on the 
proposal. GEMX will similarly inform its members in writing when the 
SEC approves any such proposed change.
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    \5\ The General 7 Rules are categories of rules that are not 
trading rules. See 17 CFR 200.30-3(a)(76) (contemplating such 
requests). In addition, several other SROs incorporate by reference 
certain regulatory rules of another SRO and have received from the 
Commission similar exemptions from Section 19(b) of the Exchange 
Act. See e.g., Securities Exchange Act Release Nos. 57478 (March 12, 
2008), 73 FR 14521 (March 18, 2008), 53128 (January 13, 2006), 71 FR 
3550 (January 23, 2006); 49260 (February 17, 2004), 69 FR 8500 
(February 24, 2004).
    \6\ The Exchange will request an exemption pursuant to its 
authority under Section 36 of the Exchange Act of 1934 (``Act'') and 
Rule 0-121 thereunder, from the Section 19(b) rule filing 
requirements to separately file a proposed rule change to amend GEMX 
General 7.
    \7\ GEMX will provide such notice via a posting on the same 
website location where GEMX posts its own rule filings pursuant to 
Rule 19b-4 within the timeframe require by such Rule. The website 
posting will include a link to the location on the Nasdaq website 
where the applicable proposed rule change is posted.
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Implementation
    The Exchange proposes that this rule change become operative at 
such time as it receives approval for an exemption from the Securities 
and Exchange Commission, pursuant to its authority under Section 36 of 
the Exchange Act of 1934 (``Act'') and Rule 0-12 \8\ thereunder, from 
the Section 19(b) rule filing requirements to separately file a 
proposed rule change to amend GEMX General 7.
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    \8\ See 17 CFR 240.0-12; Exchange Act Release No. 39624 
(February 5, 1998), 63 FR 8101 (February 18, 1998).
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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, by consolidating its rules into a single rule set. The 
Exchange intends to also file similar proposed rule changes for the 
Nasdaq PHLX LLC; Nasdaq GEMX, LLC; Nasdaq ISE, LLC; and Nasdaq MRX, LLC 
markets so that the General 7 Rules

[[Page 18385]]

which govern Consolidated Audit Trail Compliance are conformed.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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    Incorporating by reference the Nasdaq General 7 Rules into the GEMX 
General 7 Rules will provide an easy reference for Members seeking to 
comply with Consolidated Audit Trail on multiple markets. As noted, the 
Exchange intends to file similar proposed rule changes for other 
affiliated markets so that Nasdaq General 7 is the source document for 
all Nasdaq Consolidated Audit Trail rules. The Exchange notes that the 
current rule is not changing and GEMX members will be required to 
continue to comply with the General 7 Rules as though such rules are 
fully set forth in GEMX's Rulebook. The Exchange desires to conform its 
rules and locate those rules within the same location in each Rulebook 
to provide Members the ability to quickly locate rules.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange believes that this 
rule change does not impose an undue burden on competition because GEMX 
is merely incorporating by reference the rules of Nasdaq's General 7 
into its own Rulebook. The current General 7 is not being amended and 
therefore no Member is impacted.

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

    No written comments were either solicited or received.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days 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 \11\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change, along with a 
brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Exchange has satisfied this requirement.
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    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 protected]. Please include 
File Number SR-GEMX-2018-13 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-GEMX-2018-13. 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-GEMX-2018-13 and should be submitted on 
or before May 17, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-08732 Filed 4-25-18; 8:45 am]
 BILLING CODE 8011-01-P


