80 FR 17795 - Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving Proposed Rule Change, as Modified by Amendment No. 1, Relating to the Listing and Trading of Shares of the Innovator IBD® 50 Fund Under NYSE Arca Equities Rule 8.600
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 63 (April 2, 2015)
Federal Register Volume 80, Issue 63 (April 2, 2015)
| Page Range | 17795-17797 | |
| FR Document | 2015-07517 |
[Federal Register Volume 80, Number 63 (Thursday, April 2, 2015)] [Notices] [Pages 17795-17797] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-07517] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-74595; File No. SR-NYSEArca-2015-04] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving Proposed Rule Change, as Modified by Amendment No. 1, Relating to the Listing and Trading of Shares of the Innovator IBD[supreg] 50 Fund Under NYSE Arca Equities Rule 8.600 March 27, 2015. On January 30, 2015, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE Arca'') 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 list and trade shares (``Shares'') of the Innovator IBD[supreg] 50 Fund (``Fund''). On February 12, 2015, the Exchange filed Amendment No. 1 to the proposed rule change, which amended and replaced the proposal in its entirety. The proposed rule change was published for comment in the Federal Register on February 20, 2015.\3\ No comments on the proposal have been received. This order approves the proposed rule change, as modified by Amendment No. 1. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ See Securities Exchange Act Release No. 74278 (February 13, 2015), 80 FR 9294. --------------------------------------------------------------------------- I. The Exchange's Description of the Proposed Rule Change The Exchange proposes to list and trade the Shares under NYSE Arca Equities Rule 8.600, which governs the listing and trading of Managed Fund Shares on the Exchange. The Shares will be offered by Academy Funds Trust (the ``Trust''), an open-end management investment company.\4\ The Fund will issue and sell Shares only in ``Creation Unit'' size at the NAV next determined after receipt, on any business day, of an order in proper form.\5\ --------------------------------------------------------------------------- \4\ The Trust is registered under the 1940 Act. On October 9, 2014 and on December 19, 2014, the Trust filed with the Commission amendments to its registration statement on Form N-1A under the Securities Act of 1933 (15 U.S.C. 77a) (``Securities Act'') and under the 1940 Act relating to the Fund (File Nos. 333-146827 and 811-22135) (``Registration Statement''). In addition, the Commission has issued an order granting certain exemptive relief to the Trust under the 1940 Act. See Investment Company Act Release No. 31248 (September 9, 2014) (File No. 812-14308) (``Exemptive Order''). \5\ A Creation Unit consists of 25,000 Shares, and the size of a Creation Unit is subject to change. See Notice, supra note 3, 80 FR at 9296. --------------------------------------------------------------------------- The investment adviser to the Fund will be Innovator Management LLC (the ``Adviser''). Penserra Capital Management LLC will be the Fund's sub-adviser (``Sub-Adviser''). Neither the Adviser nor the Sub-Adviser is registered as a broker-dealer. The Adviser is not affiliated with a broker-dealer. The Sub-Adviser is affiliated with a broker-dealer and has implemented a ``fire wall'' with respect to such broker-dealer regarding access to information concerning the composition of or changes to the Fund's portfolio.\6\ U.S. Bank, N.A.(the ``Administrator'' or ``Custodian'') will serve as the administrator, custodian and transfer agent for the Fund. Quasar Distributors, LLC will be the principal underwriter and distributor of the Shares. --------------------------------------------------------------------------- \6\ Commentary .06 to Rule 8.600 provides that, if the investment adviser to the investment company issuing Managed Fund Shares is affiliated with a broker-dealer, such investment adviser shall erect a ``fire wall'' between the investment adviser and the broker-dealer with respect to access to information concerning the composition and/or changes to such investment company portfolio. In addition, Commentary .06 requires that personnel who make decisions on the open-end fund's portfolio composition must be subject to procedures designed to prevent the use and dissemination of material nonpublic information regarding the open-end fund's portfolio. Commentary .06 to Rule 8.600 is similar to Commentary .03(a)(i) and (iii) to NYSE Arca Equities Rule 5.2(j)(3); however, Commentary .06 in connection with the establishment of a ``fire wall'' between the investment adviser and the broker-dealer reflects the applicable open-end fund's portfolio, not an underlying benchmark index, as is the case with index-based funds. The Exchange states that, in the event (a) the Adviser or the Sub-Adviser becomes a registered broker-dealer or becomes newly affiliated with a broker-dealer, or (b) any new adviser or any sub-adviser is a registered broker-dealer or becomes affiliated with a broker-dealer, it will implement a fire wall with respect to its relevant personnel or its broker-dealer affiliate regarding access to information concerning the composition and/or changes to the Fund's portfolio, and will be subject to procedures designed to prevent the use and dissemination of material non-public information regarding such portfolio. --------------------------------------------------------------------------- The investment objective of the Fund will be to seek long-term capital appreciation. Under normal circumstances,\7\ the Fund will invest at least 80% of its net assets in companies included in the IBD[supreg] 50 Index (``Index'') and in U.S. exchange-traded equities.\8\ Typically, the Fund will hold U.S. exchange-traded common stocks as well as U.S. exchange-traded master limited partnerships (``MLPs''), real estate investment trusts (``REITs''), royalty trusts and business development companies (``BDCs''). It will invest primarily in U.S. equity securities but may, to a lesser extent, invest in equity securities of foreign companies in both developed and emerging markets, generally through American depositary receipts (``ADRs''). The Fund may invest in companies of any size. --------------------------------------------------------------------------- \7\ The term ``under normal circumstances'' means, without limitation, the absence of extreme volatility or trading halts in the equity markets or the financial markets generally; operational issues causing dissemination of inaccurate market information; or force majeure type events such as systems failure, natural or man- made disaster, act of God, armed conflict, act of terrorism, riot or labor disruption or any similar intervening circumstance. \8\ The Index is a computer-generated stock index published by Investor's Business Daily[supreg] (``IBD[supreg]''). IBD[supreg] uses proprietary fundamental and technical ratings to compile what IBD[supreg] considers the 50 leading growth companies that trade on U.S. national securities exchanges. Companies included in the Index must meet minimum earnings, sales, profit margin, volume and technical requirements. --------------------------------------------------------------------------- Other Portfolio Holdings. The Fund may invest in money market securities for liquidity and cash management purposes or if the Adviser or Sub-Adviser determines that securities meeting the Fund's investment objective and policies are not otherwise readily available for purchase. Money market securities include (i) short-term U.S. government securities; (ii) commercial paper rated in the highest short-term rating category by a nationally recognized statistical ratings [[Page 17796]] organization (``NRSRO''), such as Standard & Poor's or Moody's, or determined by the Adviser or Sub-Adviser to be of comparable quality at the time of purchase; (iii) short-term bank obligations (certificates of deposit, time deposits and bankers' acceptances) of U.S. domestic banks, foreign banks and foreign branches of domestic banks, and commercial banks with assets of at least $1 billion as of the end of their most recent fiscal year; (iv) repurchase agreements involving such securities; and (v) money market mutual funds. The Fund may invest in securities of other investment companies (other than BDCs), including shares of the following: (1) Exchange- traded funds (``ETFs''), unit investment trusts, and closed-end investment companies, each of which will be listed and traded on a U.S. national securities exchange, and (2) non-exchange-listed open-end investment companies. II. Discussion After careful review, the Commission finds that the proposed rule change is consistent with the requirements of Section 6 of the Act and the rules and regulations thereunder applicable to a national securities exchange.\9\ In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act, 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. The Commission also finds that the proposal to list and trade the Shares on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the Act, which sets forth Congress's finding that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure the availability to brokers, dealers, and investors of information with respect to quotations for, and transactions in, securities. --------------------------------------------------------------------------- \9\ In approving this 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). --------------------------------------------------------------------------- Quotation and last-sale information for the Shares and U.S. exchange-listed equity securities will be available via the Consolidated Tape Association (``CTA'') high-speed line, and will be available from the national securities exchange on which they are listed.\10\ The Exchange represents that intra-day and closing price information relating to the investments of the Fund will be available from major market data vendors and from securities exchanges, as applicable.\11\ Further, the Portfolio Indicative Value, as defined in NYSE Arca Equities Rule 8.600(c)(3), based on current information regarding the value of the securities and other assets in the Disclosed Portfolio, will be widely disseminated at least every 15 seconds during the Core Trading Session by one or more major market data vendors.\12\ The Custodian, through the National Securities Clearing Corporation (``NSCC'') will make available on each business day, prior to the opening of business on the Exchange (currently 9:30 a.m., Eastern time), the list of the names and the required number of shares of each Deposit Security to be included in the current Fund Deposit \13\ (based on information at the end of the previous business day) for the Fund.\14\ In addition, a basket composition file, which includes the security names and share quantities (as applicable) required to be delivered in exchange for Shares, together with estimates and actual cash components, will be publicly disseminated daily prior to the opening of the NYSE via the NSCC.\15\ The NAV of the Fund will be calculated at the close of regular trading (ordinarily 4:00 p.m. Eastern time) every day the New York Stock Exchange is open for trading.\16\ Information regarding market price and trading of the Shares will be continually available on a real-time basis throughout the day on brokers' computer screens and other electronic services.\17\ Information regarding the previous day's closing price and trading volume information for the Shares will be published daily in the financial section of newspapers.\18\ --------------------------------------------------------------------------- \10\ See Notice, supra note 3, 80 FR at 9298. \11\ See id. Price information regarding money market mutual funds will be available from on-line sources and from the Web site for the applicable fund. See id. \12\ The Exchange understands that several major market data vendors display or make widely available Portfolio Indicative Values taken from CTA or other data feeds. See id., n.26. \13\ The ``Fund Deposit'' is the consideration for purchase of Creation Units of the Fund, which generally will consist of the in- kind deposit of a designated portfolio of equity securities and an amount of cash. See id. at 9296-97. \14\ See id. at 9297. \15\ See id. at 9298. \16\ See id. at 9296. \17\ See id. at 9298. \18\ See id. --------------------------------------------------------------------------- The Commission further believes that the proposal to list and trade the Shares is reasonably designed to promote fair disclosure of information that may be necessary to price the Shares appropriately and to prevent trading when a reasonable degree of transparency cannot be assured. The Commission notes that the Exchange will obtain a representation from the issuer of the Shares that the NAV per Share of the Fund will be calculated daily and that the NAV and the Disclosed Portfolio will be made available to all market participants at the same time. In addition, trading in the Shares would be subject to NYSE Arca Equities Rule 8.600(d)(2)(D), which set forth circumstances under which trading in the Shares may be halted. Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable.\19\ Further, the Commission notes that the Adviser, as the Reporting Authority, that provides the Disclosed Portfolio must implement and maintain, or be subject to, procedures designed to prevent the use and dissemination of material, non-public information regarding the actual components of the Fund's portfolio.\20\ In addition, the Exchange may obtain information regarding trading in the Shares and underlying exchange-traded equity securities from markets and other entities that are members of Intermarket Surveillance Group (``ISG'') or with which the Exchange has in place a comprehensive surveillance sharing agreement.\21\ The Exchange represents that it prohibits the distribution of material non- public information by its employees. The Exchange represents that the Adviser is not a registered broker-dealer and is not affiliated with any broker-dealers. The Exchange represents that the Sub-Adviser is affiliated with a broker-dealer and has implemented a ``fire wall'' with respect to such broker-dealer regarding access to information concerning the composition of or changes to the Fund's portfolio.\22\ --------------------------------------------------------------------------- \19\ These may include: (1) The extent to which trading is not occurring in the securities and/or the financial instruments comprising the Disclosed Portfolio of the Fund; or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. See id. \20\ See NYSE Arca Equities Rule 8.600(d)(2)(B)(ii). \21\ For a list of the current members of ISG, see www.isgportal.org. The Exchange notes that not all components of the Disclosed Portfolio for the Fund may trade on markets that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. \22\ The Exchange also represents that, in the event that (a) the Adviser or the Sub-Adviser becomes a registered broker-dealer or becomes newly affiliated with a broker-dealer, or (b) any new adviser or any sub-adviser is a registered broker-dealer or becomes affiliated with a broker-dealer, it will implement a fire wall with respect to its relevant personnel or its broker-dealer affiliate regarding access to information concerning the composition and/or changes to the Fund's portfolio, and will be subject to procedures designed to prevent the use and dissemination of material non-public information regarding such portfolio. See Notice, supra note 3, 80 FR at 9300. --------------------------------------------------------------------------- [[Page 17797]] The Exchange deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities. Additionally, in support of its proposal, the Exchange has made the following representations: (1) The Shares will conform to the initial and continued listing criteria under NYSE Arca Equities Rule 8.600. (2) The Exchange has appropriate rules to facilitate transactions in the Shares during all trading sessions. (3) The Exchange has in place surveillance procedures that are adequate to properly monitor trading in the Shares in all trading sessions and to deter and detect violations of Exchange rules and applicable federal securities laws. (4) Financial Industry Regulatory Authority (``FINRA''), on behalf of the Exchange, will communicate as needed regarding trading in the Shares and underlying exchange-traded equity securities with other markets and other entities that are members of the ISG, and FINRA, on behalf of the Exchange, may obtain trading information regarding trading in the Shares, underlying exchange-traded equity securities, from such markets and other entities. (5) Prior to the commencement of trading, the Exchange will inform its Equity Trading Permit Holders in an Information Bulletin (``Bulletin'') of the special characteristics and risks associated with trading the Shares. Specifically, the Bulletin will discuss the following: (1) The procedures for purchases and redemptions of Shares in Creation Unit aggregations (and that Shares are not individually redeemable); (2) NYSE Arca Equities Rule 9.2(a), which imposes a duty of due diligence on its Equity Trading Permit Holders to learn the essential facts relating to every customer prior to trading the Shares; (3) the risks involved in trading the Shares during the Opening and Late Trading Sessions when an updated Portfolio Indicative Value will not be calculated or publicly disseminated; (4) how information regarding the Portfolio Indicative Value is disseminated; (5) the requirement that Equity Trading Permit Holders deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; and (6) trading information. (6) The Exchange represents that, for initial and continued listing, the Fund will be in compliance with Rule 10A-3 \23\ under the Act, as provided by NYSE Arca Equities Rule 5.3. --------------------------------------------------------------------------- \23\ 17 CFR 240.10A-3. --------------------------------------------------------------------------- (7) The Fund may hold up to an aggregate amount of 15% of its net assets (calculated at the time of investment) in assets deemed illiquid by the Adviser, consistent with Commission guidance. (8) A minimum of 100,000 Shares of each Fund will be outstanding at the commencement of trading on the Exchange. (9) Not more than 10% of the net assets of the Fund in the aggregate invested in exchange-traded equity securities shall consist of equity securities whose principal market is not a member of the ISG or is a market with which the Exchange does not have a comprehensive surveillance sharing agreement. (10) The Fund will not invest in options, futures contracts or swaps agreements. (11) The Fund will not invest in leveraged or inverse leveraged (e.g., 2X, -2X, 3X or -3X) ETFs. This approval order is based on all of the Exchange's representations and description of the Funds. For the foregoing reasons, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with Section 6(b)(5) of the Act and the rules and regulations thereunder applicable to a national securities exchange. III. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act, that the proposed rule change (SR-NYSEArca-2015-04), as modified by Amendment No. 1, be, and it hereby is, approved. --------------------------------------------------------------------------- \24\ 17 CFR 200.30-3(a)(57). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\24\ Brent J. Fields, Secretary. [FR Doc. 2015-07517 Filed 4-1-15; 8:45 am] BILLING CODE CODE 8011-01-P
![Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Notices 17795
post all comments on the Commission’s the Exchange filed Amendment No. 1 to U.S. Bank, N.A.(the ‘‘Administrator’’ or
Internet Web site (http://www.sec.gov/ the proposed rule change, which ‘‘Custodian’’) will serve as the
rules/sro.shtml). Copies of the amended and replaced the proposal in administrator, custodian and transfer
submission, all subsequent its entirety. The proposed rule change agent for the Fund. Quasar Distributors,
amendments, all written statements was published for comment in the LLC will be the principal underwriter
with respect to the proposed rule Federal Register on February 20, 2015.3 and distributor of the Shares.
change that are filed with the No comments on the proposal have been The investment objective of the Fund
Commission, and all written received. This order approves the will be to seek long-term capital
communications relating to the proposed rule change, as modified by appreciation. Under normal
proposed rule change between the Amendment No. 1. circumstances,7 the Fund will invest at
Commission and any person, other than least 80% of its net assets in companies
those that may be withheld from the I. The Exchange’s Description of the included in the IBD® 50 Index (‘‘Index’’)
public in accordance with the Proposed Rule Change and in U.S. exchange-traded equities.8
provisions of 5 U.S.C. 552, will be The Exchange proposes to list and Typically, the Fund will hold U.S.
available for Web site viewing and trade the Shares under NYSE Arca exchange-traded common stocks as well
printing in the Commission’s Public Equities Rule 8.600, which governs the as U.S. exchange-traded master limited
Reference Room, 100 F Street NE., listing and trading of Managed Fund partnerships (‘‘MLPs’’), real estate
Washington, DC 20549–1090, on official Shares on the Exchange. The Shares will investment trusts (‘‘REITs’’), royalty
business days between the hours of be offered by Academy Funds Trust (the trusts and business development
10:00 a.m. and 3:00 p.m. Copies of such ‘‘Trust’’), an open-end management companies (‘‘BDCs’’). It will invest
filing also will be available for investment company.4 The Fund will primarily in U.S. equity securities but
inspection and copying at the principal issue and sell Shares only in ‘‘Creation may, to a lesser extent, invest in equity
office of the Exchange. All comments Unit’’ size at the NAV next determined securities of foreign companies in both
received will be posted without change; after receipt, on any business day, of an developed and emerging markets,
the Commission does not edit personal order in proper form.5 generally through American depositary
identifying information from The investment adviser to the Fund receipts (‘‘ADRs’’). The Fund may invest
submissions. You should submit only will be Innovator Management LLC (the in companies of any size.
information that you wish to make ‘‘Adviser’’). Penserra Capital Other Portfolio Holdings. The Fund
available publicly. All submissions Management LLC will be the Fund’s may invest in money market securities
should refer to File Number SR–BATS– sub-adviser (‘‘Sub-Adviser’’). Neither for liquidity and cash management
2015–24, and should be submitted on or the Adviser nor the Sub-Adviser is purposes or if the Adviser or Sub-
before April 23, 2015. registered as a broker-dealer. The Adviser determines that securities
For the Commission, by the Division of Adviser is not affiliated with a broker- meeting the Fund’s investment objective
Trading and Markets, pursuant to delegated dealer. The Sub-Adviser is affiliated and policies are not otherwise readily
authority.36 with a broker-dealer and has available for purchase. Money market
Brent J. Fields, implemented a ‘‘fire wall’’ with respect securities include (i) short-term U.S.
Secretary. to such broker-dealer regarding access to government securities; (ii) commercial
[FR Doc. 2015–07519 Filed 4–1–15; 8:45 am] information concerning the composition paper rated in the highest short-term
BILLING CODE 8011–01–P of or changes to the Fund’s portfolio.6 rating category by a nationally
recognized statistical ratings
3 See Securities Exchange Act Release No. 74278
(February 13, 2015), 80 FR 9294. wall’’ between the investment adviser and the
SECURITIES AND EXCHANGE 4 The Trust is registered under the 1940 Act. On broker-dealer reflects the applicable open-end
COMMISSION October 9, 2014 and on December 19, 2014, the fund’s portfolio, not an underlying benchmark
[Release No. 34–74595; File No. SR– Trust filed with the Commission amendments to its index, as is the case with index-based funds. The
registration statement on Form N–1A under the Exchange states that, in the event (a) the Adviser
NYSEArca–2015–04]
Securities Act of 1933 (15 U.S.C. 77a) (‘‘Securities or the Sub-Adviser becomes a registered broker-
Act’’) and under the 1940 Act relating to the Fund dealer or becomes newly affiliated with a broker-
Self-Regulatory Organizations; NYSE (File Nos. 333–146827 and 811–22135) dealer, or (b) any new adviser or any sub-adviser
Arca, Inc.; Order Approving Proposed (‘‘Registration Statement’’). In addition, the is a registered broker-dealer or becomes affiliated
Rule Change, as Modified by Commission has issued an order granting certain with a broker-dealer, it will implement a fire wall
Amendment No. 1, Relating to the exemptive relief to the Trust under the 1940 Act. with respect to its relevant personnel or its broker-
See Investment Company Act Release No. 31248 dealer affiliate regarding access to information
Listing and Trading of Shares of the (September 9, 2014) (File No. 812–14308) concerning the composition and/or changes to the
Innovator IBD® 50 Fund Under NYSE (‘‘Exemptive Order’’). Fund’s portfolio, and will be subject to procedures
Arca Equities Rule 8.600 5 A Creation Unit consists of 25,000 Shares, and designed to prevent the use and dissemination of
the size of a Creation Unit is subject to change. See material non-public information regarding such
March 27, 2015. Notice, supra note 3, 80 FR at 9296. portfolio.
7 The term ‘‘under normal circumstances’’ means,
On January 30, 2015, NYSE Arca, Inc. 6 Commentary .06 to Rule 8.600 provides that, if
the investment adviser to the investment company without limitation, the absence of extreme volatility
(the ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed or trading halts in the equity markets or the
issuing Managed Fund Shares is affiliated with a
with the Securities and Exchange broker-dealer, such investment adviser shall erect a financial markets generally; operational issues
Commission (‘‘Commission’’), pursuant ‘‘fire wall’’ between the investment adviser and the causing dissemination of inaccurate market
to Section 19(b)(1) of the Securities broker-dealer with respect to access to information information; or force majeure type events such as
concerning the composition and/or changes to such systems failure, natural or man-made disaster, act
Exchange Act of 1934 (‘‘Act’’) 1 and Rule of God, armed conflict, act of terrorism, riot or labor
investment company portfolio. In addition,
19b–4 thereunder,2 a proposed rule Commentary .06 requires that personnel who make disruption or any similar intervening circumstance.
tkelley on DSK3SPTVN1PROD with NOTICES
change to list and trade shares decisions on the open-end fund’s portfolio 8 The Index is a computer-generated stock index
(‘‘Shares’’) of the Innovator IBD® 50 composition must be subject to procedures published by Investor’s Business Daily® (‘‘IBD®’’).
Fund (‘‘Fund’’). On February 12, 2015, designed to prevent the use and dissemination of IBD® uses proprietary fundamental and technical
material nonpublic information regarding the open- ratings to compile what IBD® considers the 50
end fund’s portfolio. Commentary .06 to Rule 8.600 leading growth companies that trade on U.S.
36 17 CFR 200.30–3(a)(12). is similar to Commentary .03(a)(i) and (iii) to NYSE national securities exchanges. Companies included
1 15 U.S.C. 78s(b)(1). Arca Equities Rule 5.2(j)(3); however, Commentary in the Index must meet minimum earnings, sales,
2 17 CFR 240.19b–4. .06 in connection with the establishment of a ‘‘fire profit margin, volume and technical requirements.
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![Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Notices 17797
The Exchange deems the Shares to be 3 23 under the Act, as provided by NYSE SECURITIES AND EXCHANGE
equity securities, thus rendering trading Arca Equities Rule 5.3. COMMISSION
in the Shares subject to the Exchange’s (7) The Fund may hold up to an [Release No. 34–74600; File No. SR–EDGA–
existing rules governing the trading of aggregate amount of 15% of its net 2015–14]
equity securities. Additionally, in assets (calculated at the time of
support of its proposal, the Exchange Self-Regulatory Organizations; EDGA
investment) in assets deemed illiquid by
has made the following representations: Exchange, Inc.; Notice of Filing and
the Adviser, consistent with
(1) The Shares will conform to the Immediate Effectiveness of a Proposed
initial and continued listing criteria Commission guidance.
Rule Change To Amend the Fees for
under NYSE Arca Equities Rule 8.600. (8) A minimum of 100,000 Shares of the BATS One Market Data Product
(2) The Exchange has appropriate each Fund will be outstanding at the
rules to facilitate transactions in the commencement of trading on the March 27, 2015.
Shares during all trading sessions. Exchange. Pursuant to Section 19(b)(1) of the
(3) The Exchange has in place (9) Not more than 10% of the net Securities Exchange Act of 1934 (the
surveillance procedures that are ‘‘Act’’),1 and Rule 19b–4 thereunder,2
assets of the Fund in the aggregate
adequate to properly monitor trading in notice is hereby given that on March 17,
invested in exchange-traded equity
the Shares in all trading sessions and to 2015, EDGA Exchange, Inc. (the
securities shall consist of equity
deter and detect violations of Exchange ‘‘Exchange’’ or ‘‘EDGA’’) filed with the
rules and applicable federal securities securities whose principal market is not Securities and Exchange Commission
laws. a member of the ISG or is a market with (‘‘Commission’’) the proposed rule
(4) Financial Industry Regulatory which the Exchange does not have a change as described in Items I and II
Authority (‘‘FINRA’’), on behalf of the comprehensive surveillance sharing below, which Items have been prepared
Exchange, will communicate as needed agreement. by the Exchange. The Exchange has
regarding trading in the Shares and (10) The Fund will not invest in designated the proposed rule change as
underlying exchange-traded equity options, futures contracts or swaps one establishing or changing a member
securities with other markets and other agreements. due, fee, or other charge imposed by the
entities that are members of the ISG, and Exchange under Section 19(b)(3)(A)(ii)
(11) The Fund will not invest in
FINRA, on behalf of the Exchange, may of the Act 3 and Rule 19b–4(f)(2)
leveraged or inverse leveraged (e.g., 2X,
obtain trading information regarding thereunder,4 which renders the
¥2X, 3X or ¥3X) ETFs.
trading in the Shares, underlying proposed rule change effective upon
exchange-traded equity securities, from This approval order is based on all of filing with the Commission. The
such markets and other entities. the Exchange’s representations and Commission is publishing this notice to
(5) Prior to the commencement of description of the Funds. solicit comments on the proposed rule
trading, the Exchange will inform its For the foregoing reasons, the change from interested persons.
Equity Trading Permit Holders in an Commission finds that the proposed I. Self-Regulatory Organization’s
Information Bulletin (‘‘Bulletin’’) of the rule change, as modified by Amendment Statement of the Terms of Substance of
special characteristics and risks No. 1, is consistent with Section 6(b)(5) the Proposed Rule Change
associated with trading the Shares.
of the Act and the rules and regulations The Exchange filed a proposal to
Specifically, the Bulletin will discuss
thereunder applicable to a national amend the market data section of its fee
the following: (1) The procedures for
securities exchange. schedule to: (i) Establish a Digital Media
purchases and redemptions of Shares in
Creation Unit aggregations (and that III. Conclusion Enterprise Fee for the BATS One Feed;
Shares are not individually redeemable); and (ii) make a non-substantive change
(2) NYSE Arca Equities Rule 9.2(a), It is therefore ordered, pursuant to to the description of the BATS One Feed
which imposes a duty of due diligence Section 19(b)(2) of the Act, that the Enterprise fee.
on its Equity Trading Permit Holders to proposed rule change (SR–NYSEArca– The text of the proposed rule change
learn the essential facts relating to every 2015–04), as modified by Amendment is available at the Exchange’s Web site
customer prior to trading the Shares; (3) No. 1, be, and it hereby is, approved. at www.batstrading.com, at the
the risks involved in trading the Shares principal office of the Exchange, and at
For the Commission, by the Division of
during the Opening and Late Trading the Commission’s Public Reference
Trading and Markets, pursuant to delegated
Sessions when an updated Portfolio Room.
authority.24
Indicative Value will not be calculated II. Self-Regulatory Organization’s
Brent J. Fields,
or publicly disseminated; (4) how Statement of the Purpose of, and
information regarding the Portfolio Secretary.
Statutory Basis for, the Proposed Rule
Indicative Value is disseminated; (5) the [FR Doc. 2015–07517 Filed 4–1–15; 8:45 am]
Change
requirement that Equity Trading Permit BILLING CODE CODE 8011–01–P
Holders deliver a prospectus to In its filing with the Commission, the
investors purchasing newly issued Exchange included statements
Shares prior to or concurrently with the concerning the purpose of and basis for
confirmation of a transaction; and (6) the proposed rule change and discussed
trading information. any comments it received on the
(6) The Exchange represents that, for proposed rule change. The text of these
tkelley on DSK3SPTVN1PROD with NOTICES
initial and continued listing, the Fund statements may be examined at the
will be in compliance with Rule 10A– places specified in Item IV below. The
1 15 U.S.C. 78s(b)(1).
to procedures designed to prevent the use and
2 17 CFR 240.19b–4.
dissemination of material non-public information
23 17 CFR 240.10A–3. 3 15 U.S.C. 78s(b)(3)(A)(ii).
regarding such portfolio. See Notice, supra note 3,
80 FR at 9300. 24 17 CFR 200.30–3(a)(57). 4 17 CFR 240.19b–4(f)(2).
VerDate Sep<11>2014 18:52 Apr 01, 2015 Jkt 235001 PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 E:\FR\FM\02APN1.SGM 02APN1](https://thefederalregister.org/doc/80_FR_17858/page/3.svg)
Document Created: 2018-02-21 10:03:27
Document Modified: 2018-02-21 10:03:27
| 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 17795 |
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