80 FR 14425 - Self-Regulatory Organizations; Miami International Securities Exchange LLC; Order Approving a Proposed Rule Change To Amend MIAX Rule 402

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 53 (March 19, 2015)

Page Range		14425-14426
FR Document		2015-06285
Federal Register, Volume 80 Issue 53 (Thursday, March 19, 2015)
[Federal Register Volume 80, Number 53 (Thursday, March 19, 2015)]
[Notices]
[Pages 14425-14426]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-06285]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74509; File No. SR-MIAX-2015-04]


Self-Regulatory Organizations; Miami International Securities 
Exchange LLC; Order Approving a Proposed Rule Change To Amend MIAX Rule 
402

March 13, 2015.

I. Introduction

    On January 16, 2015, Miami International Securities Exchange LLC 
(``MIAX'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission''), pursuant to section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to amend its listing standards 
under Exchange Rule 402 to eliminate a requirement that the Exchange 
obtain a comprehensive surveillance sharing agreement (``CSSA'') before 
listing and trading options that overlie certain exchange-traded fund 
shares (``ETFs''), provided such ETFs are listed pursuant to generic 
listing standards on an equities exchange for portfolio depositary 
receipts and index fund shares based on international or global indexes 
under which a CSSA with a foreign market is not required. The proposed 
rule change was published for comment in the Federal Register on 
January 30, 2015.\3\ The Commission received one comment letter 
supporting the proposed rule change.\4\ This order approves the 
proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 74131 (January 26, 
2015), 80 FR 5161 (SR-MIAX-2015-04) (``Notice'').
    \4\ See Letter to Brent J. Fields, Secretary, Commission, from 
Elizabeth King, Secretary and General Counsel, New York Stock 
Exchange, dated February 6, 2015 (``NYSE Letter'') (stating that 
``NYSE Group agrees with . . . and is supportive of MIAX's efforts 
to make options available as a risk management tool for those ETFs 
listed on an equities exchange pursuant to generic listing standards 
without the requirement for a CSSA'').
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II. Description of the Proposal

    The Exchange allows for the listing and trading of options on ETFs 
that satisfy certain listing standards.\5\ These rules require, in 
part, that (i) any non-U.S. component securities of an index or 
portfolio of securities on which the ETFs are based that are not 
subject to CSSAs do not in the aggregate represent more than 50% of the 
weight of the index or portfolio; \6\ (ii) component securities of an 
index or portfolio of securities on which the ETFs are based for which 
the primary market is in any one country that is not subject to a CSSA 
do not represent 20% or more of the weight of the index; \7\ and (iii) 
component securities of an index or portfolio of securities on which 
the ETFs are based for which the primary market is in any two countries 
that are not subject to CSSAs do not represent 33% or more of the 
weight of the index.\8\ The generic listing standards on equities 
exchanges for the listing of portfolio depositary receipts and index 
fund shares based on international or global indexes do not, however, 
contain a parallel requirement regarding CSSAs.\9\
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    \5\ See MIAX Rule 402(i).
    \6\ See MIAX Rule 402(i)(5)(ii)(A) (renumbered as 
402(i)(E)(2)(ii)(A) as part of the proposed rule change).
    \7\ See MIAX Rule 402(i)(5)(ii)(B) (renumbered as 
402(i)(E)(2)(ii)(B) as part of the proposed rule change).
    \8\ See MIAX Rule 402(i)(5)(ii)(C) (renumbered as 
402(i)(E)(2)(ii)(C) as part of the proposed rule change).
    \9\ See, e.g., NYSE MKT Rule 1000, Commentary .03(a)(B); NYSE 
MKT Rule 1000A, Commentary .02(a)(B); NYSE Arca Equities Rule 
5.2(j)(3), Commentary .01(a)(B); NYSE Arca Equities Rule 8.100, 
Commentary .01(a)(B); NASDAQ Rule 5705(a)(3)(A)(ii); NASDAQ Rule 
5705(b)(3)(A)(ii); BATS Rule 14.11(b)(3)(A)(ii); and BATS Rule 
14.11(c)(3)(A)(ii). See also Securities Exchange Act Release Nos. 
54739 (November 9, 2006), 71 FR 66993 (November 17, 2006) (SR-Amex-
2006-78); 55621 (April 12, 2007), 72 FR 19571 (April 18, 2007) (SR-
NYSEArca-2006-86); and 55269 (February 9, 2007), 72 FR 7490 
(February 15, 2007) (SR-NASDAQ-2006-050).
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    The Exchange proposes to amend its listing standards to enable the 
Exchange to list and trade options on certain ETFs without a CSSA 
provided that such ETFs that underlie options are listed on an equities 
exchange pursuant to the generic listing standards for portfolio 
depositary receipts and index fund shares based on international or 
global indexes under which a CSSA is not required.\10\ Accordingly, the 
proposed rule change would provide a limited exception to the 
requirement regarding CSSAs under the Exchange's listing standards only 
in circumstances where the underlying ETF was listed on an equities 
exchange pursuant to generic listing standards for international or 
global indexes that do not require such exchange to enter into a CSSA 
with a foreign market.\11\ The requirement for the Exchange to enter 
into a CSSA with a foreign market would continue to apply with respect 
to products that do not fit under the proposed exception.\12\ In 
addition, options on ETFs that may be listed and traded without a CSSA 
under this proposal would be subject to, in all other respects, the 
Exchange's existing listing and trading rules that apply to options on 
ETFs and would be captured under the Exchange's surveillance program 
for options on ETFs.\13\
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    \10\ See Proposed MIAX Rule 402(i)(E)(2)(i). See also NYSE MKT 
Rule 1000, Commentary .03(a)(B); NYSE MKT Rule 1000A, Commentary 
.02(a)(B); NYSE Arca Equities Rule 5.2(j)(3), Commentary .01(a)(B); 
NYSE Arca Equities Rule 8.100, Commentary .01(a)(B); NASDAQ Rule 
5705(a)(3)(A)(ii); NASDAQ Rule 5705(b)(3)(A)(ii); BATS Rule 
14.11(b)(3)(A)(ii); and BATS Rule 14.11(c)(3)(A)(ii).
    \11\ Id.
    \12\ See Proposed MIAX Rules 402(i)(E)(2)(ii)(A)-(C).
    \13\ See Notice, supra note 3.
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    Finally, the Exchange proposes several technical and non-
substantive changes to the formatting of Rule 402(i), including 
relocating current Rule 402(i)(5)(ii)(E) to proposed Rule 
402(i)(E)(1)(iii) and the re-numbering of current Rule 402(i)(5)(ii) to 
proposed Rule 402(i)(E)(2)(ii). In addition, the Exchange proposes 
making corrections to inaccurate citations located in Rule 403(g)(1) 
and (2), so that Rule 403(g)(1) properly cites to Rule 402(i)(E)(1)(i) 
regarding closed-end ETFs and Rule 403(g)(2) properly cites to Rule 
402(i)(E)(1)(ii) regarding open-end ETFs.

III. Discussion and Commission's Findings

    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of section 6 of the Act \14\ 
and the rules and regulations thereunder applicable to a national 
securities exchange.\15\ Specifically, the Commission finds that the 
proposed rule change is consistent

[[Page 14426]]

with section 6(b)(5) of the Act,\16\ which requires, among other 
things, that the Exchange's rules be 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.
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    \14\ 15 U.S.C. 78f.
    \15\ Additionally, in approving the proposed rule change, the 
Commission has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \16\ 15 U.S.C. 78f(b)(5).
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    MIAX proposes to eliminate the requirement that it obtain a CSSA 
with the applicable foreign market before trading options on certain 
ETFs that track broad-based indexes of securities.\17\ CSSAs help to 
ensure that the listing exchange has the ability to obtain the 
information necessary to detect and deter potential trading abuses.\18\ 
According to the Exchange, it believes that this proposed listing 
standard for options on ETFs is reasonable for international and global 
indexes, and, when applied in conjunction with the other listing 
requirements, would result in options overlying ETFs that are 
sufficiently broad-based in scope and therefore not readily susceptible 
to manipulation.\19\ Moreover, the Exchange believes that the proposed 
rule change would benefit investors by providing valuable risk 
management tools.\20\ The NYSE Group agrees with these statements by 
the Exchange and supports the proposal.\21\
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    \17\ See Proposed MIAX Rule 402(i)(E)(2)(i). See also NYSE MKT 
Rule 1000, Commentary .03(a)(B); NYSE MKT Rule 1000A, Commentary 
.02(a)(B); NYSE Arca Equities Rule 5.2(j)(3), Commentary .01(a)(B); 
NYSE Arca Equities Rule 8.100, Commentary .01(a)(B); NASDAQ Rule 
5705(a)(3)(A)(ii); NASDAQ Rule 5705(b)(3)(A)(ii); BATS Rule 
14.11(b)(3)(A)(ii); and BATS Rule 14.11(c)(3)(A)(ii).
    \18\ See Securities Exchange Act Release No. 40761 (December 8, 
1998), 63 FR 70952, 70959 (December 22, 1998).
    \19\ See Notice, supra note 3.
    \20\ Id.
    \21\ See NYSE Letter, supra note 4.
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    The Commission approved generic listing standards for ETFs based on 
international or global indexes in 2006.\22\ At that time, the 
Commission determined that for certain ETFs based on broad-based 
indexes of securities, the generic listing standards for equities 
exchanges need not require the exchange to obtain a CSSA to list and 
trade such ETFs.\23\ These generic ETF listing standards contain 
quantitative criteria with respect to components included in the ETF's 
underlying index that provide minimum thresholds regarding trading 
volume, market capitalization, number of index components, and index 
concentration limits.\24\ They do not, however, require the listing 
exchange to obtain a CSSA with the home country market for the 
underlying index components.\25\ The Commission stated that a CSSA with 
the home country market was not required, because the listing standards 
provided for minimum levels of liquidity, concentration, and pricing 
transparency for index components.\26\ In addition, the Commission 
noted that the generic listing standards for ETFs based on global or 
international indexes applied in conjunction with the other applicable 
listing requirements would ``permit the listing only of ETFs that are 
sufficiently broad-based in scope to minimize potential manipulation . 
. . [and] are designed to preclude ETFs from becoming surrogates for 
trading in unregistered securities.'' \27\
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    \22\ See Securities Exchange Act Release No. 54739, supra note 9 
(SR-Amex-2006-78). Subsequently, other exchanges filed similar 
proposals that were approved by the Commission. See, e.g., 
Securities Exchange Act Release Nos. 55621, supra note 9 (approving 
SR-NYSEArca-2006-86); and 55269, supra note 9 (approving SR-NASDAQ-
2006-050).
    \23\ See id.
    \24\ For example, with respect to ETFs for portfolio depositary 
receipts based on international or global indexes, the generic 
listing standards generally contain the following requirements with 
respect to the underlying index: (1) Component stocks that in the 
aggregate account for at least 90% of the weight of the index or 
portfolio each shall have a minimum market value of at least $100 
million; (2) component stocks that in the aggregate account for at 
least 90% of the weight of the index or portfolio each shall have a 
minimum worldwide monthly trading volume over the most recent six-
month period of at least 250,000 shares; (3) that the index observe 
certain concentration limits (e.g., that no component may exceed 25% 
of the weight of the index and that the five most heavily weighted 
components may not exceed 60% of the weight of the index); (4) that 
there be a minimum number of 20 component stocks in the index; and 
(5) that each component either be an exchange-listed NMS stock or, 
if a non-U.S. stock, be listed and traded on an exchange that has 
last-sale reporting. See, e.g., NYSE MKT Rule 1000, Commentary .03; 
NYSE Arca Equities Rule 8.100, Commentary .01; NASDAQ Rule 5705(a); 
and BATS Rule 14.11(b). The requirements with respect to the 
underlying index under the generic listing standards for index fund 
shares based on international or global indexes are substantially 
similar. See, e.g., NYSE MKT Rule 1000A, Commentary .02; NYSE Arca 
Equities Rule 5.2(j)(3), Commentary .01; NASDAQ Rule 5705(b); and 
BATS Rule 14.11(c).
    \25\ See, e.g., Securities Exchange Act Release No. 54739, supra 
note 9.
    \26\ Id. at 71 FR 66995 n.18. See also supra note 24 and 
accompanying text.
    \27\ See Securities Exchange Act Release No. 54739, supra note 
9, at 71 FR 66997.
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    MIAX now seeks to establish parallel listing standards for options. 
The Commission believes that it is consistent with the Act for the 
Exchange to list and trade options that overlie ETFs, provided such 
ETFs are listed pursuant to generic listing standards on equities 
exchanges for portfolio depositary receipts and index fund shares based 
on international or global indexes under which a CSSA with a foreign 
market is not required.\28\ All of the other listing criteria under 
MIAX's rules would continue to apply to any such options. In addition, 
the Commission notes that the requirement for MIAX to obtain a CSSA 
will continue to apply to other products that do not fit this limited 
exception. The Commission believes that the proposed rule change should 
facilitate listing and trading of additional investment options for 
market participants seeking efficient trading and hedging vehicles and 
thereby, benefit investors by providing them with valuable risk 
management tools.
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    \28\ See supra note 24 and accompanying text.
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IV. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\29\ that the proposed rule change (File No. SR-MIAX-2015-04) be, 
and hereby is, approved.
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    \29\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\30\
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    \30\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-06285 Filed 3-18-15; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Notices 14425

Securities and Exchange Commission, the proposed rule change.4 This order indexes under which a CSSA is not
Office of Information and Regulatory approves the proposed rule change. required.10 Accordingly, the proposed
Affairs, Office of Management and rule change would provide a limited
II. Description of the Proposal
Budget, Room 10102, New Executive exception to the requirement regarding
Office Building, Washington, DC 20503 The Exchange allows for the listing CSSAs under the Exchange’s listing
or by sending an email to: Shagufta_ and trading of options on ETFs that standards only in circumstances where
Ahmed@omb.eop.gov; and (ii) Pamela satisfy certain listing standards.5 These the underlying ETF was listed on an
Dyson, Director/Chief Information rules require, in part, that (i) any non- equities exchange pursuant to generic
Officer, Securities and Exchange U.S. component securities of an index listing standards for international or
Commission, c/o Remi Pavlik-Simon, or portfolio of securities on which the global indexes that do not require such
100 F Street NE., Washington, DC ETFs are based that are not subject to exchange to enter into a CSSA with a
20549, or send an email to: PRA_ CSSAs do not in the aggregate represent foreign market.11 The requirement for
Mailbox@sec.gov. Comments must be more than 50% of the weight of the the Exchange to enter into a CSSA with
submitted to OMB within 30 days of index or portfolio; 6 (ii) component a foreign market would continue to
this notice. securities of an index or portfolio of apply with respect to products that do
securities on which the ETFs are based
Dated: March 13, 2015. not fit under the proposed exception.12
for which the primary market is in any
Brent J. Fields, In addition, options on ETFs that may
one country that is not subject to a
be listed and traded without a CSSA
Secretary. CSSA do not represent 20% or more of
under this proposal would be subject to,
[FR Doc. 2015–06315 Filed 3–18–15; 8:45 am] the weight of the index; 7 and (iii)
component securities of an index or in all other respects, the Exchange’s
BILLING CODE 8011–01–P existing listing and trading rules that
portfolio of securities on which the
ETFs are based for which the primary apply to options on ETFs and would be
market is in any two countries that are captured under the Exchange’s
SECURITIES AND EXCHANGE surveillance program for options on
COMMISSION not subject to CSSAs do not represent
33% or more of the weight of the index.8 ETFs.13
The generic listing standards on equities Finally, the Exchange proposes
[Release No. 34–74509; File No. SR–MIAX–
2015–04] exchanges for the listing of portfolio several technical and non-substantive
depositary receipts and index fund changes to the formatting of Rule 402(i),
Self-Regulatory Organizations; Miami shares based on international or global including relocating current Rule
International Securities Exchange LLC; indexes do not, however, contain a 402(i)(5)(ii)(E) to proposed Rule
Order Approving a Proposed Rule parallel requirement regarding CSSAs.9 402(i)(E)(1)(iii) and the re-numbering of
Change To Amend MIAX Rule 402 The Exchange proposes to amend its current Rule 402(i)(5)(ii) to proposed
listing standards to enable the Exchange Rule 402(i)(E)(2)(ii). In addition, the
March 13, 2015. to list and trade options on certain ETFs Exchange proposes making corrections
without a CSSA provided that such to inaccurate citations located in Rule
I. Introduction ETFs that underlie options are listed on 403(g)(1) and (2), so that Rule 403(g)(1)
On January 16, 2015, Miami an equities exchange pursuant to the properly cites to Rule 402(i)(E)(1)(i)
International Securities Exchange LLC generic listing standards for portfolio regarding closed-end ETFs and Rule
(‘‘MIAX’’ or ‘‘Exchange’’) filed with the depositary receipts and index fund 403(g)(2) properly cites to Rule
Securities and Exchange Commission shares based on international or global 402(i)(E)(1)(ii) regarding open-end ETFs.
(‘‘Commission’’), pursuant to section
19(b)(1) of the Securities Exchange Act
4 See Letter to Brent J. Fields, Secretary, III. Discussion and Commission’s
Commission, from Elizabeth King, Secretary and Findings
of 1934 (‘‘Act’’) 1 and Rule 19b–4 General Counsel, New York Stock Exchange, dated
thereunder,2 a proposed rule change to February 6, 2015 (‘‘NYSE Letter’’) (stating that After careful review, the Commission
amend its listing standards under ‘‘NYSE Group agrees with . . . and is supportive of
MIAX’s efforts to make options available as a risk finds that the proposed rule change is
Exchange Rule 402 to eliminate a management tool for those ETFs listed on an consistent with the requirements of
requirement that the Exchange obtain a equities exchange pursuant to generic listing section 6 of the Act 14 and the rules and
comprehensive surveillance sharing standards without the requirement for a CSSA’’).
regulations thereunder applicable to a
5 See MIAX Rule 402(i).
agreement (‘‘CSSA’’) before listing and national securities exchange.15
6 See MIAX Rule 402(i)(5)(ii)(A) (renumbered as
trading options that overlie certain Specifically, the Commission finds that
402(i)(E)(2)(ii)(A) as part of the proposed rule
exchange-traded fund shares (‘‘ETFs’’), change). the proposed rule change is consistent
provided such ETFs are listed pursuant 7 See MIAX Rule 402(i)(5)(ii)(B) (renumbered as

to generic listing standards on an 402(i)(E)(2)(ii)(B) as part of the proposed rule 10 See Proposed MIAX Rule 402(i)(E)(2)(i). See
equities exchange for portfolio change).
8 See MIAX Rule 402(i)(5)(ii)(C) (renumbered as
also NYSE MKT Rule 1000, Commentary .03(a)(B);
depositary receipts and index fund 402(i)(E)(2)(ii)(C) as part of the proposed rule
NYSE MKT Rule 1000A, Commentary .02(a)(B);
shares based on international or global NYSE Arca Equities Rule 5.2(j)(3), Commentary
change).
.01(a)(B); NYSE Arca Equities Rule 8.100,
indexes under which a CSSA with a 9 See, e.g., NYSE MKT Rule 1000, Commentary
Commentary .01(a)(B); NASDAQ Rule
foreign market is not required. The .03(a)(B); NYSE MKT Rule 1000A, Commentary 5705(a)(3)(A)(ii); NASDAQ Rule 5705(b)(3)(A)(ii);
proposed rule change was published for .02(a)(B); NYSE Arca Equities Rule 5.2(j)(3), BATS Rule 14.11(b)(3)(A)(ii); and BATS Rule
Commentary .01(a)(B); NYSE Arca Equities Rule 14.11(c)(3)(A)(ii).
comment in the Federal Register on 8.100, Commentary .01(a)(B); NASDAQ Rule
Rmajette on DSK2VPTVN1PROD with NOTICES

11 Id.
January 30, 2015.3 The Commission 5705(a)(3)(A)(ii); NASDAQ Rule 5705(b)(3)(A)(ii); 12 See Proposed MIAX Rules 402(i)(E)(2)(ii)(A)–
received one comment letter supporting BATS Rule 14.11(b)(3)(A)(ii); and BATS Rule
(C).
14.11(c)(3)(A)(ii). See also Securities Exchange Act
13 See Notice, supra note 3.
Release Nos. 54739 (November 9, 2006), 71 FR
1 15 U.S.C. 78s(b)(1). 14 15 U.S.C. 78f.
66993 (November 17, 2006) (SR-Amex-2006–78);
2 17 CFR 240.19b–4. 15 Additionally, in approving the proposed rule
55621 (April 12, 2007), 72 FR 19571 (April 18,
3 See Securities Exchange Act Release No. 74131 2007) (SR–NYSEArca-2006–86); and 55269 change, the Commission has considered the
(January 26, 2015), 80 FR 5161 (SR–MIAX–2015– (February 9, 2007), 72 FR 7490 (February 15, 2007) proposed rule’s impact on efficiency, competition,
04) (‘‘Notice’’). (SR–NASDAQ–2006–050). and capital formation. See 15 U.S.C. 78c(f).

VerDate Sep<11>2014 15:18 Mar 18, 2015 Jkt 235001 PO 00000 Frm 00069 Fmt 4703 Sfmt 4703 E:\FR\FM\19MRN1.SGM 19MRN1
14426 Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Notices

with section 6(b)(5) of the Act,16 which regarding trading volume, market the other listing criteria under MIAX’s
requires, among other things, that the capitalization, number of index rules would continue to apply to any
Exchange’s rules be designed to promote components, and index concentration such options. In addition, the
just and equitable principles of trade, to limits.24 They do not, however, require Commission notes that the requirement
remove impediments to and perfect the the listing exchange to obtain a CSSA for MIAX to obtain a CSSA will
mechanism of a free and open market with the home country market for the continue to apply to other products that
and a national market system, and, in underlying index components.25 The do not fit this limited exception. The
general, to protect investors and the Commission stated that a CSSA with the Commission believes that the proposed
public interest. home country market was not required, rule change should facilitate listing and
MIAX proposes to eliminate the because the listing standards provided trading of additional investment options
requirement that it obtain a CSSA with for minimum levels of liquidity, for market participants seeking efficient
the applicable foreign market before concentration, and pricing transparency trading and hedging vehicles and
trading options on certain ETFs that for index components.26 In addition, the thereby, benefit investors by providing
track broad-based indexes of Commission noted that the generic them with valuable risk management
securities.17 CSSAs help to ensure that listing standards for ETFs based on tools.
the listing exchange has the ability to global or international indexes applied
obtain the information necessary to in conjunction with the other applicable IV. Conclusion
detect and deter potential trading listing requirements would ‘‘permit the It is therefore ordered, pursuant to
abuses.18 According to the Exchange, it listing only of ETFs that are sufficiently section 19(b)(2) of the Act,29 that the
believes that this proposed listing broad-based in scope to minimize proposed rule change (File No. SR–
standard for options on ETFs is potential manipulation . . . [and] are MIAX–2015–04) be, and hereby is,
reasonable for international and global designed to preclude ETFs from approved.
indexes, and, when applied in becoming surrogates for trading in For the Commission, by the Division of
conjunction with the other listing unregistered securities.’’ 27 Trading and Markets, pursuant to delegated
requirements, would result in options MIAX now seeks to establish parallel authority.30
overlying ETFs that are sufficiently listing standards for options. The Jill M. Peterson,
broad-based in scope and therefore not Commission believes that it is
Assistant Secretary.
readily susceptible to manipulation.19 consistent with the Act for the Exchange
Moreover, the Exchange believes that to list and trade options that overlie [FR Doc. 2015–06285 Filed 3–18–15; 8:45 am]
the proposed rule change would benefit ETFs, provided such ETFs are listed BILLING CODE 8011–01–P

investors by providing valuable risk pursuant to generic listing standards on
management tools.20 The NYSE Group equities exchanges for portfolio
agrees with these statements by the depositary receipts and index fund SECURITIES AND EXCHANGE
Exchange and supports the proposal.21 shares based on international or global COMMISSION
The Commission approved generic indexes under which a CSSA with a
Submission for OMB Review;
listing standards for ETFs based on foreign market is not required.28 All of
Comment Request
international or global indexes in
2006.22 At that time, the Commission 24 For example, with respect to ETFs for portfolio
Upon Written Request, Copies Available
determined that for certain ETFs based depositary receipts based on international or global
indexes, the generic listing standards generally
From: Securities and Exchange
on broad-based indexes of securities, the contain the following requirements with respect to Commission, Office of FOIA Services,
generic listing standards for equities the underlying index: (1) Component stocks that in Washington, DC 20549–2736.
exchanges need not require the the aggregate account for at least 90% of the weight
of the index or portfolio each shall have a minimum Extension: Rule 15g–4.
exchange to obtain a CSSA to list and SEC File No. 270–347, OMB Control No.
market value of at least $100 million; (2) component
trade such ETFs.23 These generic ETF stocks that in the aggregate account for at least 90% 3235–0393.
listing standards contain quantitative of the weight of the index or portfolio each shall
criteria with respect to components have a minimum worldwide monthly trading Notice is hereby given that pursuant
included in the ETF’s underlying index volume over the most recent six-month period of at to the Paperwork Reduction Act of 1995
least 250,000 shares; (3) that the index observe (‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
that provide minimum thresholds certain concentration limits (e.g., that no
component may exceed 25% of the weight of the
Securities and Exchange Commission
16 15 U.S.C. 78f(b)(5). index and that the five most heavily weighted (Commission) has submitted to the
17 See Proposed MIAX Rule 402(i)(E)(2)(i). See components may not exceed 60% of the weight of Office of Management and Budget
also NYSE MKT Rule 1000, Commentary .03(a)(B); the index); (4) that there be a minimum number of (‘‘OMB’’) a request for extension of the
NYSE MKT Rule 1000A, Commentary .02(a)(B); 20 component stocks in the index; and (5) that each
NYSE Arca Equities Rule 5.2(j)(3), Commentary component either be an exchange-listed NMS stock
existing collection of information
.01(a)(B); NYSE Arca Equities Rule 8.100, or, if a non-U.S. stock, be listed and traded on an provided for in Rule 15g–4—Disclosure
Commentary .01(a)(B); NASDAQ Rule exchange that has last-sale reporting. See, e.g., of compensation to brokers or dealers
5705(a)(3)(A)(ii); NASDAQ Rule 5705(b)(3)(A)(ii); NYSE MKT Rule 1000, Commentary .03; NYSE (17 CRF 240.15g–4) under the Securities
BATS Rule 14.11(b)(3)(A)(ii); and BATS Rule Arca Equities Rule 8.100, Commentary .01;
14.11(c)(3)(A)(ii). NASDAQ Rule 5705(a); and BATS Rule 14.11(b).
Exchange Act of 1934 (15 U.S.C. 78a et
18 See Securities Exchange Act Release No. 40761 The requirements with respect to the underlying seq.).
(December 8, 1998), 63 FR 70952, 70959 (December index under the generic listing standards for index Rule 15g–4 requires brokers and
22, 1998). fund shares based on international or global indexes dealers effecting transactions in penny
19 See Notice, supra note 3. are substantially similar. See, e.g., NYSE MKT Rule
20 Id. 1000A, Commentary .02; NYSE Arca Equities Rule
stocks for or with customers to disclose
the amount of compensation received by
Rmajette on DSK2VPTVN1PROD with NOTICES

21 See NYSE Letter, supra note 4. 5.2(j)(3), Commentary .01; NASDAQ Rule 5705(b);
22 See Securities Exchange Act Release No. 54739, and BATS Rule 14.11(c). the broker-dealer in connection with the
supra note 9 (SR-Amex-2006–78). Subsequently,
25 See, e.g., Securities Exchange Act Release No.
transaction. The purpose of the rule is
other exchanges filed similar proposals that were 54739, supra note 9. to increase the level of disclosure to
26 Id. at 71 FR 66995 n.18. See also supra note
approved by the Commission. See, e.g., Securities investors concerning penny stocks
Exchange Act Release Nos. 55621, supra note 9 24 and accompanying text.
(approving SR–NYSEArca-2006–86); and 55269, 27 See Securities Exchange Act Release No. 54739,

supra note 9 (approving SR–NASDAQ–2006–050). supra note 9, at 71 FR 66997. 29 15 U.S.C. 78s(b)(2).
23 See id. 28 See supra note 24 and accompanying text. 30 17 CFR 200.30–3(a)(12).

VerDate Sep<11>2014 15:18 Mar 18, 2015 Jkt 235001 PO 00000 Frm 00070 Fmt 4703 Sfmt 4703 E:\FR\FM\19MRN1.SGM 19MRN1
Document Created: 2018-02-21 09:42:32
Document Modified: 2018-02-21 09:42:32
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		80 FR 14425