80 FR 22580 - Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 3.5 (Advertising Practices) and Repeal Exchange Rule 3.20 (Initial or Partial Payments)

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 77 (April 22, 2015)

Page Range		22580-22584
FR Document		2015-09272
Federal Register, Volume 80 Issue 77 (Wednesday, April 22, 2015)
[Federal Register Volume 80, Number 77 (Wednesday, April 22, 2015)]
[Notices]
[Pages 22580-22584]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-09272]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74743; File No. SR-BATS-2015-30]


Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Exchange Rule 3.5 (Advertising Practices) and Repeal Exchange Rule 3.20 
(Initial or Partial Payments)

April 16, 2015.
    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 1, 2015, BATS Exchange, Inc. (``Exchange'' or ``BATS'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been substantially prepared by the Exchange. The Exchange has 
designated this proposal 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 it effective upon filing with the 
Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to: (i) Amend Exchange Rule 3.5 
(Advertising Practices); and (ii) repeal Exchange Rule 3.20 (Initial or 
Partial Payments) to conform with the rules of the Financial Industry 
Regulatory Authority, Inc. (``FINRA'') for purposes of an agreement 
between the Exchange and FINRA pursuant to Rule 17d-2 under the Act.\5\ 
The proposed rule change is identical to proposed rule changes 
submitted by the EDGX Exchange, Inc. (``EDGX'') and the EDGA Exchange, 
Inc. (``EDGA'') that were published by the Commission.\6\
---------------------------------------------------------------------------

    \5\ 17 CFR 240.17d-2.
    \6\ See Securities Exchange Act Release Nos. 70837 (Nov. 8, 
2013), 78 FR 68889 (Nov. 15, 2013) (SR-EDGA-2013-32) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change to Amend 
EDGA Rule 3.5 (Advertising Practices) and to Repeal Rule 3.20 
(Initial or Partial Payments) to Conform with the Rules of the 
Financial Industry Regulatory Authority); and 70836 (Nov. 8, 2013), 
78 FR 68897 (Nov. 15, 2013) (SR-EDGX-2013-40) (Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change to Amend EDGX Rule 
3.5 (Advertising Practices) and to Repeal Rule 3.20 (Initial or 
Partial Payments) to Conform with the Rules of the Financial 
Industry Regulatory Authority).
---------------------------------------------------------------------------

    The text of the proposed rule change is available at the Exchange's 
Web site at www.batstrading.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 parts of such 
statements.

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

1. Purpose
    Pursuant to Rule 17d-2 under the Act,\7\ the Exchange and FINRA 
entered into an agreement to allocate regulatory responsibility for 
common rules (``17d-2 Agreement''). The 17d-2 Agreement covers common 
members of the Exchange and FINRA (``Common Members'') and allocates to 
FINRA regulatory responsibility, with respect to Common Members, for 
the following: (i) Examination of Common Members for compliance with 
federal securities laws, rules, and regulations, and rules of the 
Exchange that the Exchange has certified as identical or substantially 
similar to FINRA rules; (ii) investigation of Common Members for 
violations of federal securities laws, rules, and regulations, and 
Exchange rules that the Exchange has certified as identical or 
substantially identical to FINRA rules; and (iii) enforcement of 
compliance by Common Members with the federal securities laws, rules, 
and regulations, and the rules of the Exchange that the Exchange has 
certified as identical or substantially similar to FINRA rules.\8\
---------------------------------------------------------------------------

    \7\ 17 CFR 240.17d-2.
    \8\ See Securities and Exchange Release No. 61698 (Mar. 12, 
2010), 75 FR 13151 (Mar. 18, 2010) (approving File No. 10-196).
---------------------------------------------------------------------------

    The 17d-2 Agreement included a certification by the Exchange that 
states that the requirements contained in certain Exchange rules are 
identical to, or substantially similar to, certain FINRA rules that 
have been identified as comparable. To conform with comparable FINRA 
rules for purposes of the 17d-2 Agreement, the Exchange proposes to: 
(i) Amend Exchange Rule 3.5 (Advertising Practices); and (ii) repeal 
Exchange Rule 3.20 (Initial or Partial Payments).
Rule 3.5 (Advertising Practices)
    The Exchange proposes to delete the current text of Rule 3.5 and 
adopt text that would require Exchange members \9\

[[Page 22581]]

(``Members'') to comply with FINRA Rule 2210 as if this Rule was part 
of the Exchange's rules and to rename Rule 3.5 ``Communications with 
the Public.'' \10\ The proposed rule text is substantially the same as 
Rule 2210(a) of the Nasdaq Stock Market LLC (``Nasdaq''), which has 
been approved by the Commission.\11\
---------------------------------------------------------------------------

    \9\ ``Member'' is defined as ``any registered broker or dealer, 
or any person associated with a registered broker or dealer, that 
has been admitted to membership in the Exchange. A Member will have 
the status of a `member' of the Exchange as that term is defined in 
Section 3(a)(3) of the Act.'' Exchange Rule 1.5(n).
    \10\ The Exchange does not propose to require that Members 
comply with FINRA Rule 2210(c). FINRA Rule 2210(c) generally 
requires that FINRA members file certain communications with FINRA. 
The Exchange believes that it is inappropriate for its rules to 
require Members to file certain communications with FINRA as such 
filing requirements under FINRA rules are between FINRA and its 
members.
    \11\ See Securities Exchange Act Release No. 53128 (Jan. 13, 
2006), 71 FR 3550 (Jan. 23, 2006) (order approving Nasdaq's 
application for registration as a national securities exchange); see 
also Securities Exchange Act Release No. 58069 (June 30, 2008), 73 
FR 39360 (July 9, 2008) (SR-Nasdaq-2008-054) (Notice of Filing and 
Immediate Effectiveness).
---------------------------------------------------------------------------

    Currently, Exchange Rule 3.5(d) and (f) are excluded from the 17d-2 
Agreement because they are not are identical to, or substantially 
similar to, certain FINRA rules. First, Exchange Rule 3.5(d) requires 
that advertising and sales literature be pre-approved and signed or 
initialed by a supervisor while FINRA Rule 2210(b) only requires 
supervisory pre-approval for retail communication, and different 
supervisory review standards for institutional communication, and 
correspondence. Second, Rule 3.5(f) and FINRA Rule 2210(d)(6) also 
contain different content requirements for testimonials. Exchange Rule 
3.5(d) and (f) were, therefore, excluded from the 17d-2 Agreement 
because their requirements were not identical or substantially similar 
to those required under FINRA Rule 2210(b) and (d)(6) respectively. To 
harmonize its rules with FINRA, the Exchange proposes to delete the 
current text of Rule 3.5 and adopt text that would require Members to 
comply with FINRA Rule 2210 as if such Rule were part of the Exchange's 
rules so that Rule 3.5 may be incorporated into the 17d-2 Agreement in 
its entirety.
    The Exchange believes that these changes would help to avoid 
confusion among Common Members by further aligning Exchange Rule 3.5 
with FINRA Rule 2210. The proposed changes to Rule 3.5 are designed to 
enable the Exchange to incorporate Rule 3.5 into the 17d-2 Agreement, 
further reducing duplicative regulation of Common Members.
Summary of FINRA Rule 2210
    FINRA Rule 2210 generally sets forth the content, filing, 
supervisory review, and record retention requirements for FINRA 
member's communications with the public. A summary of FINRA Rule 2210 
is below. A more complete description of FINRA Rule 2210 is provided in 
FINRA's Regulatory Notice 12-29 \12\ and Regulatory Notice 14-30.\13\
---------------------------------------------------------------------------

    \12\ See FINRA Regulatory Notice 12-29 (June 2012) available at 
http://finra.complinet.com/net_file_store/new_rulebooks/f/i/FINRANotice12_29.pdf.
    \13\ See FINRA Regulatory Notice 14-30 (July 2014) available at 
http://finra.complinet.com/net_file_store/new_rulebooks/f/i/FINRANotice_14_30.pdf.
---------------------------------------------------------------------------

    FINRA Rule 2210 divides a Member's communications with the public 
into the following three categories:
     Institutional communication. FINRA Rule 2210(a)(3) defines 
``institutional communication'' as ``any written (including electronic) 
communication that is distributed or made available only to 
institutional investors, but does not include a member's internal 
communications.''
     Retail communication. FINRA Rule 2210(a)(5) defines 
``retail communication'' as ``any written (including electronic) 
communication that is distributed or made available to more than 25 
retail investors within any 30-day calendar period.'' FINRA Rule 
2210(a)(6) defines ``Retail investor'' as ``any person other than an 
institutional investor, regardless of whether the person has an account 
with the member.'' Communications that are considered advertisements 
and sales literature fall under the definition of ``retail 
communication.''
     Correspondence. FINRA Rule 2210(a)(2) defines 
``correspondence'' as ``any written (including electronic) 
communication that is distributed or made available to fewer than 25 
retail investors within any 30-day calendar period.''
    Supervisory Review. To comply with the supervisory requirements of 
FINRA Rule 2210(b), Common Members must obtain supervisory pre-approval 
of all retail communications, while institutional communications and 
correspondence would be subject to supervisory review, but not pre-
approval.
    Under FINRA Rule 2210(b)(1), all retail communications must be 
approved by a supervisor prior to their first use or filing with FINRA 
under FINRA Rule 2210(c). FINRA's Rule 2210(b)(1)'s supervisory 
requirements do not apply to a retail communication if, at the time 
that a member intends to publish or distribute it: (i) Another member 
has filed it with FINRA and has received a letter from FINRA stating 
that it appears to be consistent with applicable standards; and (ii) 
the member has not materially altered it and will not use it in a 
manner that is inconsistent with the conditions of FINRA's letter. The 
rule's supervisory review requirements also do not apply to the 
following retail communications, provided that the member supervises 
and reviews such communications in the same manner as required for 
supervising and reviewing correspondence pursuant to FINRA Rule 3110(b) 
and Supplemental Material 3110.06 through .09: (i) Any retail 
communication that is excepted from the definition of ``research 
report'' pursuant to NASD Rule 2711(a)(9)(A), unless the communication 
makes any financial or investment recommendation; (ii) any retail 
communication that is posted on an online interactive electronic forum; 
and (iii) any retail communication that does not make any financial or 
investment recommendation or otherwise promote a product or service of 
the member.
    For institutional communications, FINRA Rule 2210(b)(3) requires 
that members establish written procedures that are appropriate to its 
business, size, structure, and customers for the review by an 
appropriately qualified registered principal of institutional 
communications used by the member and its associated persons. These 
procedures must be reasonably designed to ensure that institutional 
communications comply with applicable standards. When these procedures 
do not require review of all institutional communications prior to 
first use or distribution, they must include provisions for: (i) The 
education and training of associated persons as to the firm's 
procedures governing institutional communications; (ii) the 
documentation of their education and training; and (iii) surveillance 
and follow-up to ensure that these procedures are implemented and 
adhered to. Evidence that these supervisory procedures have been 
implemented and carried out must be maintained and made available to 
FINRA upon request.
    FINRA Rule 2210(b)(2) states that correspondence is subject to the 
supervision and review requirements of FINRA Rule 3110(b) and 
Supplemental Material 3110.06 through .09. Under FINRA Rule 3110(b)(4), 
each member shall develop written procedures that are appropriate to 
its business, size, structure, and customers for reviewing incoming and 
outgoing written (including electronic) correspondence

[[Page 22582]]

with the public relating to its investment banking or securities 
business, including procedures for reviewing incoming written 
correspondence directed to registered representatives, and related to 
the member's investment banking or securities business, to properly 
identify and handle customer complaints and to ensure that customer 
funds and securities are handled in accordance with firm procedures. 
Where these procedures for the review of correspondence do not require 
review of all correspondence prior to use or distribution, they must 
include provisions for: (i) The education and training of associated 
persons as to the firm's procedures governing correspondence; (ii) the 
documentation of their education and training; and (iii) surveillance 
and follow-up to ensure that these procedures are implemented and 
adhered to.
    Record Retention. Under FINRA Rule 2210(b)(4)(A), members must 
maintain all retail communications and institutional communications for 
the retention period required by Rule 17a-4(b) under the Act and in a 
format and media that comply with Rule 17a-4 under the Act. The records 
must include:
     A copy of the communication and the dates of first and (if 
applicable) last use of such communication;
     the name of any registered principal who approved the 
communication and the date that approval was given;
     in the case of a retail communication or an institutional 
communication that is not approved prior to first use by a registered 
principal, the name of the person who prepared or distributed the 
communication;
     information concerning the source of any statistical 
table, chart, graph, or other illustration used in the communication; 
and
     for any retail communication for which principal approval 
is not required pursuant to FINRA Rule 2210(b)(1)(C), the name of the 
member that filed the retail communication with the FINRA Advertising 
Regulation Department, and a copy of the corresponding review letter 
from the Department.
    Filing Requirements. Like Nasdaq Rule 2210(a), Exchange Rule 3.5 
would expressly state that Members would not be required to comply with 
FINRA Rule 2210(c). FINRA Rule 2210(c) generally requires FINRA members 
to file certain retail communications with FINRA prior to first use. 
Exchange members who are also FINRA members would continue to be 
subject to FINRA Rule 2210(c).
    Content Standards. FINRA Rule 2210(d) sets forth general content 
standards for all communications. All member communications must be 
based on principles of fair dealing and good faith, must be fair and 
balanced, and must provide a sound basis for evaluating the facts in 
regard to any particular security or type of security, industry, or 
service. No member may omit any material fact or qualification if the 
omission, in light of the context of the material presented, would 
cause the communications to be misleading. No member may make any 
false, exaggerated, unwarranted, promissory, or misleading statement or 
claim in any communication. No member may publish, circulate, or 
distribute any communication that the member knows or has reason to 
know contains any untrue statement of a material fact or is otherwise 
false or misleading. Information may be placed in a legend or footnote 
only in the event that such placement would not inhibit an investor's 
understanding of the communication. Members must ensure that statements 
are clear and not misleading within the context in which they are made, 
and that they provide balanced treatment of risks and potential 
benefits. Communications must be consistent with the risks of 
fluctuating prices and the uncertainty of dividends, rates of return, 
and yield inherent to investments. Members must consider the nature of 
the audience to which the communication will be directed and must 
provide details and explanations appropriate to the audience.
    Communications may also not predict or project performance, imply 
that past performance will recur, or make any exaggerated or 
unwarranted claim, opinion, or forecast; provided, however, 
communications may include: (i) A hypothetical illustration of 
mathematical principles, provided that it does not predict or project 
the performance of an investment or investment strategy; (ii) an 
investment analysis tool, or a written report produced by an investment 
analysis tool, that meets the requirements of FINRA Rule 2214; and 
(iii) a price target contained in a research report on debt or equity 
securities, provided that the price target has a reasonable basis, the 
report discloses the valuation methods used to determine the price 
target, and the price target is accompanied by disclosure concerning 
the risks that may impede achievement of the price target.
    Testimonials. To comply with FINRA Rule 2210(d)(6): (i) If a 
testimonial includes a technical aspect of investing, the person making 
the testimonial must have the knowledge and expertise to form a valid 
opinion; and (ii) retail communications or correspondence providing any 
testimonial concerning the investment advice or investment performance 
of a member or its products must prominently disclose that the 
testimonial: (a) May not be representative of the experience of other 
customers; (b) is no guarantee of future performance or success; and 
(c) is a paid testimonial, if more than $100 in value has been paid.
    Recommendations. FINRA Rule 2210(d)(7)(A) requires that retail 
communications that include a recommendation of securities must have a 
reasonable basis for the recommendation and must disclose, if 
applicable, the following: (i) That at the time the communication was 
published or distributed, the member was making a market in the 
security being recommended, or in the underlying security if the 
recommended security is an option or security future, or that the 
member or associated persons will sell to or buy from customers on a 
principal basis; (ii) that the member or any associated person that is 
directly and materially involved in the preparation of the content of 
the communication has a financial interest in any of the securities of 
the issuer whose securities are recommended, and the nature of the 
financial interest (including, without limitation, whether it consists 
of any option, right, warrant, future, long or short position), unless 
the extent of the financial interest is nominal; and (iii) that the 
member was manager or co-manager of a public offering of any securities 
of the issuer whose securities are recommended within the past 12 
months. Members must provide, or offer to furnish upon request, 
available investment information supporting the recommendation. When a 
member recommends a corporate equity security, the member must provide 
the price at the time the recommendation is made.
    Retail communication or correspondence may not refer, directly or 
indirectly, to past specific recommendations of the member that were or 
would have been profitable to any person; provided, however, that a 
retail communication or correspondence may set out or offer to furnish 
a list of all recommendations as to the same type, kind, grade, or 
classification of securities made by the member within the immediately 
preceding period of not less than one year, if the communication or 
list: (i) States the name of each security recommended, the date and 
nature of each recommendation (e.g.,

[[Page 22583]]

whether to buy, sell, or hold), the market price at that time, the 
price at which the recommendation was to be acted upon, and the market 
price of each security as of the most recent practicable date; and (ii) 
contains the following cautionary legend, which must appear prominently 
within the communication or list: ``it should not be assumed that 
recommendations made in the future will be profitable or will equal the 
performance of the securities in this list.''
Rule 3.20 (Initial or Partial Payments)
    The Exchange also proposes to delete Exchange Rule 3.20 (Initial or 
Partial Payments). In January 2010, FINRA repealed NASD Rule 2450 
(Initial or Partial Payments) and does not currently include a 
comparable rule in its rulebook.\14\ Like NASD Rule 2450, Exchange Rule 
3.20 prohibits any arrangement whereby the customer of a Member submits 
partial or installment payments for the purchase of a security with the 
following exceptions: (i) If a Member is acting as agent or broker in 
the transaction, then the Member must immediately make an actual 
purchase of the security for the account of the customer, and 
immediately take possession or control of the security and maintain 
possession or control of the security as long as the Member is under 
the obligation to deliver the security to the customer; (ii) if a 
Member is acting as principal in the transaction, the Member must, at 
the time of the transaction, own the security and maintain possession 
or control of the security as long as the Member is under the 
obligation to deliver the security to the customer; and (iii) if 
applicable to a Member, the provisions of Regulation T of the Federal 
Reserve Board \15\ are satisfied. The rule also prohibits a Member, 
whether acting as principal or agent, in connection with any 
installment or partial sales transaction, from making any agreement 
with the customer whereby the Member would be allowed to pledge or 
hypothecate any security involved in such transaction for any amount in 
excess of the indebtedness of the customer to the Member.
---------------------------------------------------------------------------

    \14\ See Securities Exchange Act Release No. 61542 (Feb. 18, 
2010), 75 FR 8768 (Feb. 25, 2010) (SR-FINRA-2009-093) (order 
approving proposal to repeal NASD Rule 2450).
    \15\ Federal Reserve Board, Regulation T (Credit by Brokers and 
Dealers), 12 CFR 220 et seq.
---------------------------------------------------------------------------

    Section 220.8 of Regulation T permits the purchase of a security in 
a cash account predicated on either: (i) There being sufficient funds 
in the account; or (ii) the Member accepts in good faith the customer's 
agreement that full cash payment will be made.\16\ The rule further 
stipulates that payment must be made within a specified payment 
period.\17\ Regulation T also allows the purchase of a security in a 
margin account, whereby a customer must deposit an initial requirement, 
based upon the amount of the transaction, within the specified payment 
period.
---------------------------------------------------------------------------

    \16\ See Section 220.8(a)(1) of Regulation T.
    \17\ According to Section 220.2 of Regulation T, ``payment 
period'' means the number of business days in the standard 
securities settlement cycle in the United States, as defined in Rule 
15c6-1(a) under the Act (17 CFR 240.15c6-1(a)), plus two business 
days.
---------------------------------------------------------------------------

    The Exchange proposes to repeal Exchange Rule 3.20 in light of the 
explicit provisions in Regulation T requiring the deposit of sufficient 
funds within the specified payment period. The Exchange also believes 
that the hypothecation prohibition in Exchange Rule 3.20 would no 
longer be relevant because it is predicated on a partial or installment 
payment under the rule. The Exchange notes that, notwithstanding the 
repeal of Exchange Rule 3.20, Members are required to comply with all 
applicable federal securities laws, including Regulation T.
2. Statutory Basis
    The Exchange believes that proposed rule change is consistent with 
Section 6(b)(5) of the Act,\18\ 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 foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system. The Exchange believes that the 
proposed rule change would further these requirements by eliminating 
duplicative and unnecessary rules and advancing the development of a 
more efficient and effective Exchange Rulebook. The Exchange believes 
that the proposed rule change would provide greater harmonization 
between Exchange and FINRA rules of similar purpose, resulting in 
greater uniformity and less burdensome and more efficient regulatory 
compliance. Accordingly, the Exchange believes that the proposed rule 
change would foster cooperation and coordination with persons engaged 
in facilitating transactions in securities and would remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system.


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

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

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

    The Exchange does not believe that the proposed rule change would 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange believes that 
the proposed rule change is not designed to address any competitive 
issues but rather is designed to provide greater harmonization among 
Exchange and FINRA rules of similar purpose, resulting in less 
burdensome and more efficient regulatory compliance for Common Members 
and facilitating FINRA's performance of its regulatory functions under 
the 17d-2 Agreement.

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

    The Exchange has neither solicited nor received written comments on 
the proposal.

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

    The Exchange has designated the proposed rule change as non-
controversial under Section 19(b)(3)(A) of the Act \19\ and Rule 19b-
4(f)(6) \20\ thereunder. 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 the 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 
and Rule 19b-4(f)(6) thereunder.\21\
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 17 CFR 240.19b-4.
    \21\ Rule 19b-4(f)(6) also requires that the Exchange give the 
Commission 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. The Exchange satisfied this requirement.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily temporarily suspend the proposed 
rule change if it appears to the Commission that this 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 this action, it shall 
institute proceedings

[[Page 22584]]

under Section 19(b)(2)(B) of the Act \22\ to determine whether the 
proposed rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposal 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 No. SR-BATS-2015-30 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 No. SR-BATS-2015-30. 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 Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 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 will also 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 No. SR-BATS-2015-30 and should be 
submitted on or before May 13, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
---------------------------------------------------------------------------

    \23\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2015-09272 Filed 4-21-15; 8:45 am]
 BILLING CODE 8011-01-P
22580 Federal Register / Vol. 80, No. 77 / Wednesday, April 22, 2015 / Notices

that date, and June 28, 2015 is an (‘‘Act’’),1 and Rule 19b–4 thereunder,2 the proposed rule change and discussed
additional 60 days from that date. notice is hereby given that on April 1, any comments it received on the
The Commission finds it appropriate 2015, BATS Exchange, Inc. (‘‘Exchange’’ proposed rule change. The text of these
to designate a longer period within or ‘‘BATS’’) filed with the Securities statements may be examined at the
which to issue an order approving or and Exchange Commission places specified in Item IV below. The
disapproving the proposed rule change (‘‘Commission’’) the proposed rule Exchange has prepared summaries, set
so that it has sufficient time to consider change as described in Items I and II forth in Sections A, B, and C below, of
the proposed rule change, the issues below, which Items have been the most significant parts of such
raised in the comment letter that has substantially prepared by the Exchange. statements.
been submitted in connection with the The Exchange has designated this
proposal and the response from the A. Self-Regulatory Organization’s
proposal as a ‘‘non-controversial’’ Statement of the Purpose of, and
Exchange and any comments that may proposed rule change pursuant to
be submitted on the proposed rule Statutory Basis for, the Proposed Rule
Section 19(b)(3)(A) of the Act 3 and Rule Change
change, as modified by Amendment No. 19b–4(f)(6) thereunder,4 which renders
2. As the Commission noted in the it effective upon filing with the 1. Purpose
Order Instituting Proceedings, the Commission. The Commission is Pursuant to Rule 17d–2 under the
proposal raises questions as to whether publishing this notice to solicit Act,7 the Exchange and FINRA entered
the Exchange’s proposed rule change is comments on the proposed rule change into an agreement to allocate regulatory
consistent with the requirements of from interested persons. responsibility for common rules
Sections 6(b)(5) 93 of the Act.94 (‘‘17d–2 Agreement’’). The 17d–2
Extending the time within which to I. Self-Regulatory Organization’s
Statement of the Terms of Substance of Agreement covers common members of
approve or disapprove the proposed the Exchange and FINRA (‘‘Common
rule change, as modified by Amendment the Proposed Rule Change
Members’’) and allocates to FINRA
No. 2, will enable the Commission to The Exchange filed a proposal to: (i) regulatory responsibility, with respect to
more fully consider the issues raised by Amend Exchange Rule 3.5 (Advertising Common Members, for the following: (i)
the proposed rule change, the comment Practices); and (ii) repeal Exchange Rule Examination of Common Members for
letter received to date and the 3.20 (Initial or Partial Payments) to compliance with federal securities laws,
Exchange’s response and any comments conform with the rules of the Financial rules, and regulations, and rules of the
that may be submitted on the proposed Industry Regulatory Authority, Inc. Exchange that the Exchange has
rule change, as modified by Amendment (‘‘FINRA’’) for purposes of an agreement certified as identical or substantially
No. 2. between the Exchange and FINRA similar to FINRA rules; (ii) investigation
Accordingly, the Commission, pursuant to Rule 17d–2 under the Act.5 of Common Members for violations of
pursuant to Section 19(b)(2) of the The proposed rule change is identical to federal securities laws, rules, and
Act,95 designates June 28, 2015, as the proposed rule changes submitted by the regulations, and Exchange rules that the
date by which the Commission should EDGX Exchange, Inc. (‘‘EDGX’’) and the Exchange has certified as identical or
either approve or disapprove the EDGA Exchange, Inc. (‘‘EDGA’’) that substantially identical to FINRA rules;
proposed rule change, as modified by were published by the Commission.6 and (iii) enforcement of compliance by
Amendment No. 2 (File No. SR–Phlx– The text of the proposed rule change Common Members with the federal
2014–66). is available at the Exchange’s Web site securities laws, rules, and regulations,
For the Commission, by the Division of at www.batstrading.com, at the and the rules of the Exchange that the
Trading and Markets, pursuant to delegated principal office of the Exchange, and at Exchange has certified as identical or
authority.96 the Commission’s Public Reference substantially similar to FINRA rules.8
Brent J. Fields, Room. The 17d–2 Agreement included a
Secretary. II. Self-Regulatory Organization’s certification by the Exchange that states
[FR Doc. 2015–09265 Filed 4–21–15; 8:45 am] Statement of the Purpose of, and that the requirements contained in
BILLING CODE 8011–01–P Statutory Basis for, the Proposed Rule certain Exchange rules are identical to,
Change or substantially similar to, certain
FINRA rules that have been identified as
SECURITIES AND EXCHANGE In its filing with the Commission, the comparable. To conform with
COMMISSION Exchange included statements comparable FINRA rules for purposes of
concerning the purpose of, and basis for, the 17d–2 Agreement, the Exchange
[Release No. 34–74743; File No. SR–BATS–
2015–30] 1 15
proposes to: (i) Amend Exchange Rule
U.S.C. 78s(b)(1).
2 17
3.5 (Advertising Practices); and (ii)
CFR 240.19b–4.
Self-Regulatory Organizations; BATS 3 15 U.S.C. 78s(b)(3)(A). repeal Exchange Rule 3.20 (Initial or
Exchange, Inc.; Notice of Filing and 4 17 CFR 240.19b–4(f)(6). Partial Payments).
Immediate Effectiveness of a Proposed 5 17 CFR 240.17d–2.
Rule 3.5 (Advertising Practices)
Rule Change To Amend Exchange 6 See Securities Exchange Act Release Nos. 70837

Rule 3.5 (Advertising Practices) and (Nov. 8, 2013), 78 FR 68889 (Nov. 15, 2013) (SR– The Exchange proposes to delete the
Repeal Exchange Rule 3.20 (Initial or EDGA–2013–32) (Notice of Filing and Immediate current text of Rule 3.5 and adopt text
Effectiveness of Proposed Rule Change to Amend that would require Exchange members 9
Partial Payments)
asabaliauskas on DSK5VPTVN1PROD with NOTICES

EDGA Rule 3.5 (Advertising Practices) and to
Repeal Rule 3.20 (Initial or Partial Payments) to
April 16, 2015. Conform with the Rules of the Financial Industry
7 17 CFR 240.17d–2.
Pursuant to Section 19(b)(1) of the Regulatory Authority); and 70836 (Nov. 8, 2013), 78 8 See Securities and Exchange Release No. 61698
Securities Exchange Act of 1934 FR 68897 (Nov. 15, 2013) (SR–EDGX–2013–40) (Mar. 12, 2010), 75 FR 13151 (Mar. 18, 2010)
(Notice of Filing and Immediate Effectiveness of (approving File No. 10–196).
93 15
Proposed Rule Change to Amend EDGX Rule 3.5 9 ‘‘Member’’ is defined as ‘‘any registered broker
U.S.C. 78f(b)(5). (Advertising Practices) and to Repeal Rule 3.20 or dealer, or any person associated with a registered
94 See supra note 10. (Initial or Partial Payments) to Conform with the broker or dealer, that has been admitted to
95 15 U.S.C. 78s(b)(2).
Rules of the Financial Industry Regulatory membership in the Exchange. A Member will have
96 17 CFR 200.30–3(a)(12) and (a)(57). Authority). the status of a ‘member’ of the Exchange as that

VerDate Sep<11>2014 18:00 Apr 21, 2015 Jkt 235001 PO 00000 Frm 00108 Fmt 4703 Sfmt 4703 E:\FR\FM\22APN1.SGM 22APN1
22582 Federal Register / Vol. 80, No. 77 / Wednesday, April 22, 2015 / Notices

with the public relating to its continue to be subject to FINRA Rule includes a technical aspect of investing,
investment banking or securities 2210(c). the person making the testimonial must
business, including procedures for Content Standards. FINRA Rule have the knowledge and expertise to
reviewing incoming written 2210(d) sets forth general content form a valid opinion; and (ii) retail
correspondence directed to registered standards for all communications. All communications or correspondence
representatives, and related to the member communications must be based providing any testimonial concerning
member’s investment banking or on principles of fair dealing and good the investment advice or investment
securities business, to properly identify faith, must be fair and balanced, and performance of a member or its products
and handle customer complaints and to must provide a sound basis for must prominently disclose that the
ensure that customer funds and evaluating the facts in regard to any testimonial: (a) May not be
securities are handled in accordance particular security or type of security, representative of the experience of other
with firm procedures. Where these industry, or service. No member may customers; (b) is no guarantee of future
procedures for the review of omit any material fact or qualification if performance or success; and (c) is a paid
correspondence do not require review of the omission, in light of the context of testimonial, if more than $100 in value
all correspondence prior to use or the material presented, would cause the has been paid.
distribution, they must include communications to be misleading. No Recommendations. FINRA Rule
provisions for: (i) The education and member may make any false, 2210(d)(7)(A) requires that retail
training of associated persons as to the exaggerated, unwarranted, promissory, communications that include a
firm’s procedures governing or misleading statement or claim in any recommendation of securities must have
correspondence; (ii) the documentation communication. No member may a reasonable basis for the
of their education and training; and (iii) publish, circulate, or distribute any recommendation and must disclose, if
surveillance and follow-up to ensure communication that the member knows applicable, the following: (i) That at the
that these procedures are implemented or has reason to know contains any time the communication was published
and adhered to. untrue statement of a material fact or is or distributed, the member was making
Record Retention. Under FINRA Rule otherwise false or misleading. a market in the security being
2210(b)(4)(A), members must maintain Information may be placed in a legend recommended, or in the underlying
all retail communications and or footnote only in the event that such security if the recommended security is
institutional communications for the placement would not inhibit an an option or security future, or that the
retention period required by Rule 17a– investor’s understanding of the member or associated persons will sell
4(b) under the Act and in a format and communication. Members must ensure to or buy from customers on a principal
media that comply with Rule 17a–4 that statements are clear and not basis; (ii) that the member or any
under the Act. The records must misleading within the context in which associated person that is directly and
include: they are made, and that they provide materially involved in the preparation
balanced treatment of risks and of the content of the communication has
• A copy of the communication and
potential benefits. Communications a financial interest in any of the
the dates of first and (if applicable) last
must be consistent with the risks of securities of the issuer whose securities
use of such communication;
fluctuating prices and the uncertainty of are recommended, and the nature of the
• the name of any registered principal
dividends, rates of return, and yield financial interest (including, without
who approved the communication and
inherent to investments. Members must limitation, whether it consists of any
the date that approval was given; consider the nature of the audience to option, right, warrant, future, long or
• in the case of a retail which the communication will be short position), unless the extent of the
communication or an institutional directed and must provide details and financial interest is nominal; and (iii)
communication that is not approved explanations appropriate to the that the member was manager or co-
prior to first use by a registered audience. manager of a public offering of any
principal, the name of the person who Communications may also not predict securities of the issuer whose securities
prepared or distributed the or project performance, imply that past are recommended within the past 12
communication; performance will recur, or make any months. Members must provide, or offer
• information concerning the source exaggerated or unwarranted claim, to furnish upon request, available
of any statistical table, chart, graph, or opinion, or forecast; provided, however, investment information supporting the
other illustration used in the communications may include: (i) A recommendation. When a member
communication; and hypothetical illustration of recommends a corporate equity security,
• for any retail communication for mathematical principles, provided that the member must provide the price at
which principal approval is not it does not predict or project the the time the recommendation is made.
required pursuant to FINRA Rule performance of an investment or Retail communication or
2210(b)(1)(C), the name of the member investment strategy; (ii) an investment correspondence may not refer, directly
that filed the retail communication with analysis tool, or a written report or indirectly, to past specific
the FINRA Advertising Regulation produced by an investment analysis recommendations of the member that
Department, and a copy of the tool, that meets the requirements of were or would have been profitable to
corresponding review letter from the FINRA Rule 2214; and (iii) a price target any person; provided, however, that a
Department. contained in a research report on debt retail communication or correspondence
Filing Requirements. Like Nasdaq or equity securities, provided that the may set out or offer to furnish a list of
asabaliauskas on DSK5VPTVN1PROD with NOTICES

Rule 2210(a), Exchange Rule 3.5 would price target has a reasonable basis, the all recommendations as to the same
expressly state that Members would not report discloses the valuation methods type, kind, grade, or classification of
be required to comply with FINRA Rule used to determine the price target, and securities made by the member within
2210(c). FINRA Rule 2210(c) generally the price target is accompanied by the immediately preceding period of not
requires FINRA members to file certain disclosure concerning the risks that may less than one year, if the communication
retail communications with FINRA impede achievement of the price target. or list: (i) States the name of each
prior to first use. Exchange members Testimonials. To comply with FINRA security recommended, the date and
who are also FINRA members would Rule 2210(d)(6): (i) If a testimonial nature of each recommendation (e.g.,

VerDate Sep<11>2014 18:00 Apr 21, 2015 Jkt 235001 PO 00000 Frm 00110 Fmt 4703 Sfmt 4703 E:\FR\FM\22APN1.SGM 22APN1
Federal Register / Vol. 80, No. 77 / Wednesday, April 22, 2015 / Notices 22583

whether to buy, sell, or hold), the payment will be made.16 The rule
market price at that time, the price at further stipulates that payment must be B. Self-Regulatory Organization’s
which the recommendation was to be made within a specified payment Statement on Burden on Competition
acted upon, and the market price of period.17 Regulation T also allows the
each security as of the most recent purchase of a security in a margin The Exchange does not believe that
practicable date; and (ii) contains the account, whereby a customer must the proposed rule change would impose
following cautionary legend, which deposit an initial requirement, based any burden on competition that is not
must appear prominently within the upon the amount of the transaction, necessary or appropriate in furtherance
communication or list: ‘‘it should not be within the specified payment period. of the purposes of the Act. The
assumed that recommendations made in Exchange believes that the proposed
The Exchange proposes to repeal rule change is not designed to address
the future will be profitable or will Exchange Rule 3.20 in light of the
equal the performance of the securities any competitive issues but rather is
explicit provisions in Regulation T designed to provide greater
in this list.’’ requiring the deposit of sufficient funds harmonization among Exchange and
Rule 3.20 (Initial or Partial Payments) within the specified payment period. FINRA rules of similar purpose,
The Exchange also believes that the resulting in less burdensome and more
The Exchange also proposes to delete
hypothecation prohibition in Exchange efficient regulatory compliance for
Exchange Rule 3.20 (Initial or Partial
Rule 3.20 would no longer be relevant Common Members and facilitating
Payments). In January 2010, FINRA
because it is predicated on a partial or FINRA’s performance of its regulatory
repealed NASD Rule 2450 (Initial or
Partial Payments) and does not installment payment under the rule. The functions under the 17d–2 Agreement.
currently include a comparable rule in Exchange notes that, notwithstanding
the repeal of Exchange Rule 3.20, C. Self-Regulatory Organization’s
its rulebook.14 Like NASD Rule 2450, Statement on Comments on the
Exchange Rule 3.20 prohibits any Members are required to comply with
all applicable federal securities laws, Proposed Rule Change Received From
arrangement whereby the customer of a Members, Participants or Others
Member submits partial or installment including Regulation T.
payments for the purchase of a security 2. Statutory Basis The Exchange has neither solicited
with the following exceptions: (i) If a nor received written comments on the
Member is acting as agent or broker in The Exchange believes that proposed proposal.
the transaction, then the Member must rule change is consistent with Section
III. Date of Effectiveness of the
immediately make an actual purchase of 6(b)(5) of the Act,18 which requires,
Proposed Rule Change and Timing for
the security for the account of the among other things, that the Exchange’s Commission Action
customer, and immediately take rules be designed to prevent fraudulent
possession or control of the security and and manipulative acts and practices, to The Exchange has designated the
maintain possession or control of the promote just and equitable principles of proposed rule change as non-
security as long as the Member is under trade, to foster cooperation and controversial under Section 19(b)(3)(A)
the obligation to deliver the security to coordination with persons engaged in of the Act 19 and Rule 19b–4(f)(6) 20
the customer; (ii) if a Member is acting facilitating transactions in securities, thereunder. Because the proposed rule
as principal in the transaction, the and to remove impediments to and change does not: (i) Significantly affect
Member must, at the time of the perfect the mechanism of a free and the protection of investors or the public
transaction, own the security and open market and a national market interest; (ii) impose any significant
maintain possession or control of the system. The Exchange believes that the burden on competition; and (iii) become
security as long as the Member is under proposed rule change would further operative for 30 days after the date of
the obligation to deliver the security to these requirements by eliminating the filing, or such shorter time as the
the customer; and (iii) if applicable to a duplicative and unnecessary rules and Commission may designate if consistent
Member, the provisions of Regulation T advancing the development of a more with the protection of investors and the
of the Federal Reserve Board 15 are efficient and effective Exchange public interest, the proposed rule
satisfied. The rule also prohibits a Rulebook. The Exchange believes that change has become effective pursuant to
Member, whether acting as principal or the proposed rule change would provide Section 19(b)(3)(A) of the Act and Rule
agent, in connection with any greater harmonization between 19b–4(f)(6) thereunder.21
Exchange and FINRA rules of similar At any time within 60 days of the
installment or partial sales transaction,
purpose, resulting in greater uniformity filing of the proposed rule change, the
from making any agreement with the
and less burdensome and more efficient Commission may summarily
customer whereby the Member would
regulatory compliance. Accordingly, the temporarily suspend the proposed rule
be allowed to pledge or hypothecate any
Exchange believes that the proposed change if it appears to the Commission
security involved in such transaction for
any amount in excess of the rule change would foster cooperation that this action is: (i) Necessary or
indebtedness of the customer to the and coordination with persons engaged appropriate in the public interest; (ii) for
Member. in facilitating transactions in securities the protection of investors; or (iii)
Section 220.8 of Regulation T permits and would remove impediments to and otherwise in furtherance of the purposes
the purchase of a security in a cash perfect the mechanism of a free and of the Act. If the Commission takes this
account predicated on either: (i) There open market and a national market action, it shall institute proceedings
being sufficient funds in the account; or
asabaliauskas on DSK5VPTVN1PROD with NOTICES

system. 19 15 U.S.C. 78s(b)(3)(A).
(ii) the Member accepts in good faith the 20 17 CFR 240.19b–4.
customer’s agreement that full cash 16 See Section 220.8(a)(1) of Regulation T. 21 Rule 19b–4(f)(6) also requires that the Exchange
17 According to Section 220.2 of Regulation T, give the Commission written notice of its intent to
14 See Securities Exchange Act Release No. 61542 ‘‘payment period’’ means the number of business file the proposed rule change, along with a brief
(Feb. 18, 2010), 75 FR 8768 (Feb. 25, 2010) (SR– days in the standard securities settlement cycle in description and text of the proposed rule change,
FINRA–2009–093) (order approving proposal to the United States, as defined in Rule 15c6–1(a) at least five business days prior to the date of filing
repeal NASD Rule 2450). under the Act (17 CFR 240.15c6–1(a)), plus two of the proposed rule change, or such shorter time
15 Federal Reserve Board, Regulation T (Credit by business days. as designated by the Commission. The Exchange
Brokers and Dealers), 12 CFR 220 et seq. 18 15 U.S.C. 78f(b)(5). satisfied this requirement.

VerDate Sep<11>2014 18:00 Apr 21, 2015 Jkt 235001 PO 00000 Frm 00111 Fmt 4703 Sfmt 4703 E:\FR\FM\22APN1.SGM 22APN1
22584 Federal Register / Vol. 80, No. 77 / Wednesday, April 22, 2015 / Notices

under Section 19(b)(2)(B) of the Act 22 to For the Commission, by the Division of II. Description of the Proposal
determine whether the proposed rule Trading and Markets, pursuant to delegated
authority.23 The Exchange proposes to list and
change should be approved or trade the Shares under Nasdaq Rule
disapproved. Brent J. Fields,
5735, which governs the listing and
Secretary. trading of Managed Fund Shares on the
IV. Solicitation of Comments
[FR Doc. 2015–09272 Filed 4–21–15; 8:45 am] Exchange. The Fund will be an actively-
Interested persons are invited to BILLING CODE 8011–01–P managed exchange-traded fund (‘‘ETF’’).
submit written data, views, and
The Shares will be offered by the Trust.7
arguments concerning the foregoing,
The Trust is registered with the
including whether the proposal is SECURITIES AND EXCHANGE Commission as an investment company
consistent with the Act. Comments may COMMISSION and has filed a registration statement on
be submitted by any of the following
[Release No. 34–74742; File No. SR– Form N–1A (‘‘Registration Statement’’)
methods:
NASDAQ–2015–011] with the Commission.8 The Fund will
Electronic Comments be a series of the Trust.
• Use the Commission’s Internet Self-Regulatory Organizations; The First Trust Advisors L.P. will be the
comment form (http://www.sec.gov/ NASDAQ Stock Market LLC; Order investment adviser (‘‘Adviser’’) to the
rules/sro.shtml); or Approving a Proposed Rule Change, Fund. First Trust Portfolios L.P. (the
• Send an email to rule-comments@ as Modified by Amendments No. 1 and ‘‘Distributor’’) will be the principal
sec.gov. Please include File No. SR– No. 2, To List and Trade the Shares of underwriter and distributor of the
BATS–2015–30 on the subject line. the First Trust Strategic Floating Rate Fund’s Shares. The Bank of New York
ETF of First Trust Exchange-Traded Mellon Corporation will act as the
Paper Comments Fund IV administrator, accounting agent,
• Send paper comments in triplicate custodian and transfer agent to the
to Secretary, Securities and Exchange April 16, 2015. Fund. The Exchange states that the
Commission, 100 F Street NE., I. Introduction Adviser is not a broker-dealer, although
Washington, DC 20549–1090. it is affiliated with the Distributor, a
On February 12, 2015, The NASDAQ broker-dealer.9 In addition, the
All submissions should refer to File No. Stock Market LLC (the ‘‘Exchange’’ or
SR–BATS–2015–30. This file number Exchange states that the Adviser has
‘‘Nasdaq’’) filed with the Securities and implemented a fire wall with respect to
should be included on the subject line Exchange Commission (‘‘Commission’’),
if email is used. To help the its broker-dealer affiliate regarding
pursuant to Section 19(b)(1) 1 of the access to information concerning the
Commission process and review your Securities Exchange Act of 1934 (‘‘Act’’
comments more efficiently, please use composition and/or changes to the
or ‘‘Exchange Act’’) 2 and Rule 19b–4 portfolio, and that personnel who make
only one method. The Commission will thereunder,3 a proposed rule change to
post all comments on the Commission’s decisions on the Fund’s portfolio
list and trade shares (‘‘Shares’’) of the composition will be subject to
Internet Web site (http://www.sec.gov/ First Trust Strategic Floating Rate ETF
rules/sro.shtml). Copies of the procedures designed to prevent the use
(the ‘‘Fund’’) of First Trust Exchange- and dissemination of material non-
submission, all subsequent Traded Fund IV (the ‘‘Trust’’) under
amendments, all written statements public information regarding the Fund’s
NASDAQ Rule 5735. The proposed rule portfolio.10 In the event (a) the Adviser
with respect to the proposed rule change was published for comment in
change that are filed with the becomes, or becomes newly affiliated
the Federal Register on March 3, 2015.4 with, a broker-dealer, or (b) any new
Commission, and all written On April 6, 2015, the Exchange filed
communications relating to the adviser or sub-adviser is a registered
Amendment No. 1 to the proposed rule broker-dealer or becomes affiliated with
proposed rule change between the change.5 On April 15, 2015, the
Commission and any person, other than another broker-dealer, it will implement
Exchange filed Amendment No. 2 to the a fire wall with respect to its relevant
those that may be withheld from the proposed rule change.6 The Commission
public in accordance with the personnel and/or such broker-dealer
received no comments on the proposed affiliate, as applicable, regarding access
provisions of 5 U.S.C. 552, will be rule change. This order approves the
available for Web site viewing and to information concerning the
proposed rule change, as modified by composition and/or changes to the
printing in the Commission’s Public Amendments No. 1 and No. 2.
Reference Room, 100 F Street NE., portfolio and will be subject to
Washington, DC 20549, on official 1 15
procedures designed to prevent the use
U.S.C. 78s(b)(1).
business days between the hours of 2 15 U.S.C. 78a.
and dissemination of material non-
10:00 a.m. and 3:00 p.m. Copies of the 3 17 CFR 240.19b–4. public information regarding such
filing will also be available for 4 See Securities Exchange Act Release No. 74378
7 The Commission has issued an order, upon
inspection and copying at the principal (February 25, 2015), 80 FR 11509 (‘‘Notice’’).
5 In Amendment No. 1, the Exchange clarified which the Trust may rely, granting certain
office of the Exchange. All comments exemptive relief under the Investment Company
that the quotation and last-sale information will be
received will be posted without change; available via the Options Price Reporting Authority Act of 1940 (‘‘1940 Act’’). See Investment Company
the Commission does not edit personal only for U.S. exchange-listed options that the Fund Act Release No. 30029 (April 10, 2012) (File No.
identifying information from holds. Amendment No. 1 is not subject to notice 812–13795) (the ‘‘Exemptive Relief ’’). In addition,
and comment because it is a technical amendment the Commission has issued no-action relief that the
asabaliauskas on DSK5VPTVN1PROD with NOTICES

submissions. You should submit only Fund believes affects its ability to invest in
that does not materially alter the substance of the
information that you wish to make proposed rule change or raise any novel regulatory derivatives notwithstanding certain representations
available publicly. All submissions issues. in the application for the Exemptive Relief. See
should refer to File No. SR–BATS– 6 In Amendment No. 2, the Exchange removed Commission No-Action Letter (December 6, 2012).
8 See Post-Effective Amendment No. 104 to
2015–30 and should be submitted on or exchange-listed options on U.S. Treasury securities
from the types of derivative instruments in which Registration Statement on Form N–1A for the Trust,
before May 13, 2015. the Fund may invest. Amendment No. 2 is not dated January 29, 2015 (File Nos. 333–174332 and
subject to notice and comment because it does not 811–22559).
22 15 U.S.C. 78s(b)(2)(B). 9 See Notice, supra note 4, 80 FR at 11510.
materially alter the substance of the proposed rule
23 17 CFR 200.30–3(a)(12). change or raise any novel regulatory issues. 10 See id.

VerDate Sep<11>2014 18:00 Apr 21, 2015 Jkt 235001 PO 00000 Frm 00112 Fmt 4703 Sfmt 4703 E:\FR\FM\22APN1.SGM 22APN1
Document Created: 2015-12-16 08:27:28
Document Modified: 2015-12-16 08:27:28
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 22580