80 FR 26595 - Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving a Proposed Rule Change, as Modified by Amendment No. 1, to the List and Trade Shares of the Principal EDGE Active Income ETF Under NYSE Arca Equities Rule 8.600
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 89 (May 8, 2015)
Federal Register Volume 80, Issue 89 (May 8, 2015)
| Page Range | 26595-26599 | |
| FR Document | 2015-11080 |
[Federal Register Volume 80, Number 89 (Friday, May 8, 2015)] [Notices] [Pages 26595-26599] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-11080] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-74866; File No. SR-NYSEArca-2015-15] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving a Proposed Rule Change, as Modified by Amendment No. 1, to the List and Trade Shares of the Principal EDGE Active Income ETF Under NYSE Arca Equities Rule 8.600 May 4, 2015. I. Introduction On March 12, 2015, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE Arca'') filed with the Securities and Exchange Commission (the ``Commission''), pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (the ``Act'' or ``Exchange Act'') \2\ and Rule 19b-4 thereunder,\3\ a proposed rule change to list and trade shares (``Shares'') of the Principal EDGE Active Income ETF (``Fund'') under NYSE Arca Equities Rule 8.600. The proposed rule change was published for comment in the Federal Register on March 27, 2015.\4\ On April 14, 2015, the Exchange filed Amendment No. 1 to the proposal.\5\ The Commission received no [[Page 26596]] comments on the proposal. This order approves the proposed rule change, as modified by Amendment No.1. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. \4\ See Securities Exchange Act Release No. 74562 (March 23, 2015), 80 FR 16477 (``Notice''). \5\ In Amendment No. 1, the Exchange: (1) Clarifies that the Fund's investments in restricted securities (Rule 144A securities) will be limited to fixed income securities; and (2) specifies that the Fund will not invest in debt that is in default at the time of purchase. Amendment No. 1 is not subject to notice and comment because it is a technical amendment that does not materially alter the substance of the proposed rule change or raise any novel regulatory issues. --------------------------------------------------------------------------- II. The Exchange's Description of the Proposal \6\ --------------------------------------------------------------------------- \6\ Additional information regarding, among other things, the Shares, the Fund, its investment objective, its investments, its investment strategies, its investment methodology, its investment restrictions, its fees, its creation and redemption procedures, availability of information, trading rules and halts, and surveillance procedures can be found in the Notice and in the Registration Statement. See Notice, supra note 4, and Registration Statement, infra note 8, respectively. --------------------------------------------------------------------------- NYSE Arca proposes to list and trade shares of the Fund under NYSE Arca Equities Rule 8.600, which governs the listing and trading of Managed Fund Shares.\7\ The Fund is a series of the Principal Exchange- Traded Funds (``Trust''), a statutory trust organized under the laws of the State of Delaware and registered with the Commission as an open-end management investment company.\8\ Principal Management Corporation will be the investment manager for the Fund (``Adviser''). Principal Global Investors, LLC and Edge Asset Management, LLC will each serve as a sub- adviser and portfolio manager (each referred to as a ``Sub-Adviser'' and collectively as the ``Sub-Advisers'').\9\ The Adviser and Sub- Advisers are not registered as broker-dealers but are affiliated with three broker-dealers and have implemented and will maintain a fire wall with respect to each such broker-dealer affiliate regarding access to information concerning the composition and/or changes to the portfolios.\10\ --------------------------------------------------------------------------- \7\ A Managed Fund Share is a security that represents an interest in an investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1) (``1940 Act'') organized as an open-end investment company or similar entity that invests in a portfolio of securities selected by its investment adviser consistent with its investment objectives and policies. \8\ The Trust is registered under the 1940 Act. On February 6, 2015, the Trust filed with the Commission a registration statement on Form N-1A under the Securities Act of 1933 (15 U.S.C. 77a) (``Securities Act'') and the 1940 Act relating to the Fund (File Nos. 333-201935 and 811-23029) (the ``Registration Statement''). The description of the operation of the Trust and the Fund herein is based, in part, on the Registration Statement. In addition, the Commission has issued an order granting certain exemptive relief to the Adviser (as defined herein) under the 1940 Act. See Investment Company Act Release No. 30742 (File No. 812-14136) (``Exemptive Order''). The Fund will be offered in reliance upon the Exemptive Order issued to the Adviser. \9\ An investment adviser to an open-end fund is required to be registered under the Investment Advisers Act of 1940 (the ``Advisers Act''). As a result, the Adviser and Sub-Advisers and their related personnel are subject to the provisions of Rule 204A-1 under the Advisers Act relating to codes of ethics. This Rule requires investment advisers to adopt a code of ethics that reflects the fiduciary nature of the relationship to clients as well as compliance with other applicable securities laws. Accordingly, procedures designed to prevent the communication and misuse of non- public information by an investment adviser must be consistent with Rule 204A-1 under the Advisers Act. In addition, Rule 206(4)-7 under the Advisers Act makes it unlawful for an investment adviser to provide investment advice to clients unless such investment adviser has (i) adopted and implemented written policies and procedures reasonably designed to prevent violation, by the investment adviser and its supervised persons, of the Advisers Act and the Commission rules adopted thereunder; (ii) implemented, at a minimum, an annual review regarding the adequacy of the policies and procedures established pursuant to subparagraph (i) above and the effectiveness of their implementation; and (iii) designated an individual (who is a supervised person) responsible for administering the policies and procedures adopted under subparagraph (i) above. \10\ See Notice, supra note 4, at 16478. In the event that (a) the Adviser or Sub-Advisers become registered broker-dealers or newly affiliated with one or more broker-dealers, or (b) any new adviser or 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 portfolios, and will be subject to procedures designed to prevent the use and dissemination of material non-public information regarding such portfolios. See id. --------------------------------------------------------------------------- A. Principal Investments of the Fund The Fund will seek to provide current income, and will invest in a manner designed to provide shareholders with regular cash flow from their investment in the Fund. With regard to each investment category, the Fund will carry out its investment strategy by investing in the securities listed in each investment category below and/or through the purchase of shares issued by U.S. exchange-traded funds (``ETFs'') \11\ or other investment companies, including shares in unit investment trusts and open-end investment companies, that invest a majority of their assets in the securities listed in the Principal Investment categories below. Under normal market circumstances,\12\ the Fund will invest a majority of its net assets in the following financial instruments listed in sections II.A.1 and 2, below: --------------------------------------------------------------------------- \11\ All ETF shares held by the Fund will be listed and traded in the U.S. on a national securities exchange. See id., n.8. \12\ The term ``under normal market circumstances'' includes, but is not limited to, the absence of extreme volatility or trading halts in the equity and fixed income markets or the financial markets generally; events or circumstances causing a disruption in market liquidity or orderly markets; 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. See id., n.9. --------------------------------------------------------------------------- 1. Investment Grade and Non-Investment Grade U.S. and Non-U.S. Fixed Income Securities Under normal market circumstances, at least 20% but no more than 90% of the Fund's net assets will be invested in investment grade and non-investment grade fixed income securities \13\ which will consist of the following: U.S. Treasuries; agency securities; asset-backed securities; residential mortgage-backed securities; commercial mortgage-backed securities; zero-coupon securities; variable and floating rate instruments including inverse floaters; covered securities; sinking fund securities; equipment trust certificates; sovereign bonds; convertible bonds; pay-in-kind securities; step-coupon securities; stripped securities; inflation-indexed bonds; inflation protected debt securities; bank loans; municipal bonds; and corporate bonds issued by U.S., supranational and non-U.S. issuers (including issuers located in emerging markets) and denominated in U.S. dollars.\14\ --------------------------------------------------------------------------- \13\ The Fund will limit its investments in non-investment grade fixed income securities to 75% or less of the Fund's net assets. See id., n.10. \14\ Under normal market circumstances, the Fund will generally seek to invest in corporate bond issuances that have at least $100,000,000 par amount outstanding in developed countries and at least $200,000,000 par amount outstanding in emerging market countries. See Notice, supra note 4, 80 FR at 16479, n.24. --------------------------------------------------------------------------- 2. Equity Securities Including U.S. and Non-U.S. Issues Under normal market circumstances, at least 20% but no more than 90% of the Fund's net assets will be invested in a diversified portfolio of equity securities issued by companies located in the U.S. and/or foreign countries, including emerging markets, which trade on a U.S. or foreign exchange. The Fund may carry out its investment in foreign securities by purchasing American Depositary Receipts (``ADRs''), European Depositary Receipts (``EDRs'') and Global Depositary Receipts (``GDRs'', together with EDRs and ADRs, ``Depositary Receipts'').\15\ The equity securities will be common stocks and preferred stocks as well as master limited partnerships and real estate investment trusts. --------------------------------------------------------------------------- \15\ Not more than 10% of the net assets of the Fund will be invested in non-exchange-listed ADRs. See id. at 16483. --------------------------------------------------------------------------- The Fund may engage in short sales. B. Non-Principal Investments While the Fund, under normal market circumstances, will invest a majority of [[Page 26597]] its assets in the securities and financial instruments described above, the Fund may invest in other securities and financial instruments, as described below. With regard to each non-principal investment category, the Fund may carry out its investment strategy by investing in the securities listed in each investment category below and/or through the purchase of shares issued by ETFs or other investment companies that invest a majority of their assets in the securities listed in the investment categories below. The Fund may invest in the following money market instruments: commercial paper issued by U.S. and foreign corporations; bank obligations; certificates of deposit; time deposits and bankers' acceptances of U.S. commercial banks and overseas branches of U.S. commercial banks and foreign banks; and short-term corporate debt, all of which have, at the time of purchase, 397 days or less remaining to maturity issued by U.S. and foreign issuers. A portion of the Fund's assets may be invested in cross currency positions of the currencies of developed and emerging markets through spot foreign exchange currency contracts, forward foreign exchange currency contracts, and foreign exchange currency options that trade on U.S. exchanges. The Fund may invest in the following derivative instruments: Futures contracts (consisting of futures contracts based on equity or fixed income securities and/or equity or fixed income indices, commodities, interest rates and currencies); swap agreements on any of the following asset classes: equity, fixed income, currency and interest rates (such swaps may be based on the price return or total return of the referenced asset); credit default swaps (consisting of credit default swaps in which the referenced asset is a single fixed income security or a group of fixed income securities); options (consisting of long and short positions in call options and put options on indices based on equities, fixed income securities, interest rates, currencies or commodities, individual securities or currencies, swaptions and options on futures contracts); and forward contracts (consisting of forward contracts based on equity or fixed income securities and/or equity or fixed income indices, currencies, interest rates, swap forwards and non-deliverable forwards). Futures contracts and options on futures contracts in which the Fund may invest will be traded on U.S. exchanges regulated by the Commodity Futures Trading Commission (``CFTC''),\16\ all of which will be members of the ISG or exchanges with which the Exchange has in place a CSSA. All other options contracts will be listed on a U.S. national securities exchange or a non-U.S. securities exchange that is a member of ISG or a party to a CSSA with the Exchange. --------------------------------------------------------------------------- \16\ According to the Exchange, the Fund has claimed an exclusion from the definition of a ``commodity pool operator'' under the Commodity Exchange Act (``CEA'') (7 U.S.C. 1) and is not subject to registration or regulation as a commodity pool operator under the CEA. --------------------------------------------------------------------------- The Fund may use repurchase agreements, reverse repurchase agreements, and mortgage dollar rolls for temporary or emergency purposes or to earn additional income on portfolio securities, such as Treasury bills or notes.\17\ --------------------------------------------------------------------------- \17\ The Fund will enter into reverse repurchase agreements only with parties that the Sub-Advisers deems creditworthy. --------------------------------------------------------------------------- With respect to its investments in fixed income securities, the Fund may invest in restricted securities (Rule 144A securities), which are subject to legal restrictions on their sale.\18\ --------------------------------------------------------------------------- \18\ See Amendment No. 1, supra note 5. --------------------------------------------------------------------------- C. Investment Restrictions The Exchange represents that the Fund will limit its investment in non-government sponsored residential mortgage-backed securities, commercial mortgage-backed securities and asset-backed securities (including equipment trust certificates) as well as bank loans and illiquid restricted securities, in the aggregate, to 20% or less of the Fund's net assets. The Exchange represents that the Fund may hold up to an aggregate amount of 15% of its net assets in illiquid assets (calculated at the time of investment), including Rule 144A securities deemed illiquid by the Adviser, consistent with Commission guidance. The Fund will monitor its portfolio liquidity on an ongoing basis to determine whether, in light of current circumstances, an adequate level of liquidity is being maintained, and will consider taking appropriate steps in order to maintain adequate liquidity if, through a change in values, net assets, or other circumstances, more than 15% of the Fund's net assets are held in illiquid assets. Not more than 10% of the net assets of the Fund in the aggregate invested in exchange-listed equity securities shall consist of equity securities whose principal market is not a member of the Intermarket Surveillance Group (``ISG'') or a party to a comprehensive surveillance sharing agreement (``CSSA'') with the Exchange. The Fund's investments will be consistent with its investment objective and will not be used to enhance leverage. While the Fund may invest in inverse ETFs, the Fund will not invest in leveraged (e.g., 2X, -2X, 3X or -3X) ETFs. III. Discussion and Commission Findings After careful review, the Commission finds that the Exchange's proposal to list and trade the Shares is consistent with the Exchange Act and the rules and regulations thereunder applicable to a national securities exchange.\19\ In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Exchange Act,\20\ which requires, among other things, that the Exchange's rules be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. --------------------------------------------------------------------------- \19\ 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). \20\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Commission finds that the proposal to list and trade the Shares on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the Exchange Act,\21\ which sets forth Congress' 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. Quotation and last-sale information for the Shares will be available via the Consolidated Tape Association (``CTA'') high speed line. The Exchange represents that quotation and last-sale information for the portfolio holdings of the Fund that are U.S. exchange-listed will be available via the CTA high speed line. Quotation and last sale information for such U.S. exchange- listed securities, as well as futures, will also be available from the exchange on which they are listed. Quotation and last-sale information for exchange-listed options cleared via the Options Clearing Corporation will be available via the Options Price Reporting Authority. In addition, quotation information for OTC-traded securities, OTC-traded derivative instruments, investment company securities (excluding ETFs), Rule 144A [[Page 26598]] securities, U.S. Treasuries, agency securities, asset-backed securities, residential mortgage-backed securities, commercial mortgage-backed securities, zero-coupon securities, variable and floating rate instruments including inverse floaters, covered securities, sinking fund securities, equipment trust certificates, sovereign bonds, convertible bonds, pay-in-kind securities, step-coupon securities, stripped securities, inflation-indexed bonds, inflation protected debt securities, bank loans, municipal bonds, corporate bonds, and money market instruments may be obtained from brokers and dealers who make markets in such securities or through nationally recognized pricing services through subscription agreements. The U.S. dollar value of foreign securities, instruments and currencies can be derived by using foreign currency exchange rate quotations obtained from nationally recognized pricing services. --------------------------------------------------------------------------- \21\ 15 U.S.C. 78k-1(a)(1)(C)(iii). --------------------------------------------------------------------------- The Commission also 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. On each business day, before commencement of trading in Shares in the Core Trading Session on the Exchange, the Adviser will disclose on the Fund's Web site the Disclosed Portfolio for the Fund as defined in NYSE Arca Equities Rule 8.600(c)(2) that will form the basis for the Fund's calculation of NAV at the end of the business day.\22\ The Exchange will obtain a representation from the issuer of the Shares that the NAV and the Disclosed Portfolio will be made available to all market participants at the same time.\23\ In addition, the Portfolio Indicative Value (``PIV''), as defined in NYSE Arca Equities Rule 8.600(c)(3), will be widely disseminated by one or more major market data vendors at least every 15 seconds during the Core Trading Session.\24\ The Fund will make available, prior to the opening of trading on the NYSE (currently 9:30 a.m. Eastern Time), through the National Securities Clearing Corporation the names and quantities of the instruments comprising the in-kind deposit of specified instruments, as well as the difference in market value of the aggregate market value of the in-kind deposit and the NAV attributable to a creation unit (if any), for that day. The NAV of the Shares will be calculated after 4:00 p.m. Eastern Time each trading day. The Fund's Web site will include a form of the prospectus for the Fund that may be downloaded and additional information relating to NAV and other applicable information. --------------------------------------------------------------------------- \22\ Under accounting procedures to be followed by the Fund, trades made on the prior business day (``T'') will be booked and reflected in NAV on the current business day (``T+1''). Accordingly, the Fund will be able to disclose at the beginning of the business day the portfolio that will form the basis for the NAV calculation at the end of the business day. \23\ See NYSE Arca Equities Rule 8.600(d)(1)(B). \24\ Currently, it is the Exchange's understanding that several major market data vendors display and/or make widely available PIVs taken from the CTA or other data feeds. --------------------------------------------------------------------------- The Exchange represents that trading in the Shares will be halted if the circuit breaker parameters in NYSE Arca Equities Rule 7.12 have been reached or because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable.\25\ Trading in the Shares will be subject to NYSE Arca Equities Rule 8.600(d)(2)(D), which sets forth circumstances under which Shares may be halted. --------------------------------------------------------------------------- \25\ 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. --------------------------------------------------------------------------- The Exchange states that it has a general policy prohibiting the distribution of material, non-public information by its employees. The Exchange represents that the Adviser and Sub-Advisers are not registered as broker-dealers but are affiliated with three broker- dealers and have implemented and will maintain a ``fire wall'' with respect to each such broker-dealer affiliate regarding access to information concerning the composition and/or changes to the portfolios. 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. The Exchange states that trading in the Shares will be subject to the existing trading surveillances, administered by the Financial Industry Regulatory Authority (``FINRA'') on behalf of the Exchange, which are designed to detect violations of Exchange rules and applicable federal securities laws.\26\ On behalf of the Exchange, FINRA will communicate as needed regarding trading in the Shares, ETFs, other exchange-traded equity securities (including exchange-listed Depositary Receipts), options, futures, and options on futures 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 such financial instruments, as applicable, from such markets and other entities. In addition, the Exchange may obtain information regarding trading in such financial instruments, as applicable, from markets and other entities that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement.\27\ FINRA, on behalf of the Exchange, is able to access, as needed, trade information for certain fixed income securities held by the Fund reported to FINRA's Trade Reporting and Compliance Engine. --------------------------------------------------------------------------- \26\ FINRA surveils trading on the Exchange pursuant to a regulatory services agreement. The Exchange is responsible for FINRA's performance under this regulatory services agreement. \27\ 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. --------------------------------------------------------------------------- The Exchange represents that it 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. In support of this proposal, the Exchange has also made the following representations: (1) The Shares of the Fund 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) Trading in the Shares will be subject to the existing trading surveillances, administered by FINRA on behalf of the Exchange, which are designed to detect violations of Exchange rules and applicable federal securities laws, and these procedures are adequate to properly monitor Exchange trading of the Shares in all trading sessions and to deter and detect violations of Exchange rules and federal securities laws applicable to trading on the Exchange. (4) Prior to the commencement of trading, the Exchange will inform its Equity Trading Permit Holders in a Bulletin of the special characteristics and risks associated with trading the Shares. Specifically, the Bulletin will discuss the following: (a) The procedures for purchases and redemptions of Shares in Creation Units (and that Shares are not individually redeemable); (b) NYSE Arca Equities Rule 9.2(a), which imposes a duty of due diligence on its ETP Holders to learn the essential facts relating to every customer prior to trading the Shares; (c) [[Page 26599]] the risks involved in trading the Shares during the Opening and Late Trading Sessions when an updated PIV will not be calculated or publicly disseminated; (d) how information regarding the PIV and the Disclosed Portfolio is disseminated; (e) the requirement that ETP Holders deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; and (f) trading information. (5) For initial and/or continued listing, the Fund will be in compliance with Rule 10A-3 \28\ under the Act, as provided by NYSE Arca Equities Rule 5.3. --------------------------------------------------------------------------- \28\ 17 CFR 240 10A-3. --------------------------------------------------------------------------- (6) The Fund may hold up to an aggregate amount of 15% of its net assets in illiquid assets (calculated at the time of investment), including Rule 144A securities deemed illiquid by the Adviser, consistent with Commission guidance. The Fund will monitor its portfolio liquidity on an ongoing basis to determine whether, in light of current circumstances, an adequate level of liquidity is being maintained, and will consider taking appropriate steps in order to maintain adequate liquidity if, through a change in values, net assets, or other circumstances, more than 15% of the Fund's net assets are held in illiquid assets. (7) The Fund will limit its investment in non-government sponsored residential mortgage-backed securities, commercial mortgage-backed securities and asset-backed securities (including equipment trust certificates) as well as bank loans and illiquid restricted securities, in the aggregate, to 20% or less of the Fund's net assets. (8) Not more than 10% of the net assets of the Fund will be invested in non-exchange-listed ADRs. (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 party to a CSSA with the Exchange. (10) A minimum of 100,000 Shares will be outstanding at the commencement of trading on the Exchange. This approval order is based on all of the Exchange's representations, including those set forth above and in the Notice. 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 \29\ and the rules and regulations thereunder applicable to a national securities exchange. --------------------------------------------------------------------------- \29\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Exchange Act, that the proposed rule change (SR-NYSEArca-2015-15), as modified by Amendment No. 1, is hereby approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\30\ --------------------------------------------------------------------------- \30\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2015-11080 Filed 5-7-15; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 80, No. 89 / Friday, May 8, 2015 / Notices 26595
B. Self-Regulatory Organization’s thereunder, because it establishes a due, business days between the hours of
Statement on Burden on Competition fee, or other charge imposed by the 10:00 a.m. and 3:00 p.m. Copies of the
The Exchange does not believe that Exchange. filing will also be available for
the proposed rule change will impose At any time within 60 days of the inspection and copying at the NYSE’s
any burden on competition that is not filing of such proposed rule change, the principal office and on its Internet Web
necessary or appropriate in furtherance Commission summarily may site at www.nyse.com. All comments
of the purposes of the Act. An temporarily suspend such rule change if received will be posted without change;
exchange’s ability to price its it appears to the Commission that such the Commission does not edit personal
proprietary market data feed products is action is necessary or appropriate in the identifying information from
constrained by actual competition for public interest, for the protection of submissions. You should submit only
the sale of proprietary market data investors, or otherwise in furtherance of information that you wish to make
products, the joint product nature of the purposes of the Act. If the available publicly. All submissions
exchange platforms, and the existence of Commission takes such action, the should refer to File Number SR–
alternatives to the Exchange’s Commission shall institute proceedings NYSEARCA–2015–34, and should be
proprietary data. In addition to being under Section 19(b)(2)(B) 13 of the Act to submitted on or before May 29, 2015.
able to choose which proprietary data determine whether the proposed rule For the Commission, by the Division of
products (if any) to use and how to use change should be approved or Trading and Markets, pursuant to delegated
them, a user can avoid the late fees that disapproved. authority.14
are the subject of this filing entirely by IV. Solicitation of Comments Brent J. Fields,
simply complying with the requisite Secretary.
deadlines. Interested persons are invited to
submit written data, views, and [FR Doc. 2015–11059 Filed 5–7–15; 8:45 am]
In setting the proposed fees, the
Exchange considered the arguments concerning the foregoing, BILLING CODE 8011–01–P
competitiveness of the market for including whether the proposed rule
proprietary data and all of the change is consistent with the Act.
Comments may be submitted by any of SECURITIES AND EXCHANGE
implications of that competition. The COMMISSION
Exchange believes that it has considered the following methods:
all relevant factors and has not Electronic Comments [Release No. 34–74866; File No. SR–
considered irrelevant factors in order to NYSEArca–2015–15]
• Use the Commission’s Internet
establish fair, reasonable, and not
comment form (http://www.sec.gov/ Self-Regulatory Organizations; NYSE
unreasonably discriminatory fees and an
rules/sro.shtml); or Arca, Inc.; Order Approving a
equitable allocation of fees among all
• Send an email to rule-comments@ Proposed Rule Change, as Modified by
users. The existence of fierce
sec.gov. Please include File Number SR– Amendment No. 1, to the List and
competition to sell proprietary data
NYSEARCA–2015–34 on the subject Trade Shares of the Principal EDGE
products and for order flow, as well as
line. Active Income ETF Under NYSE Arca
numerous alternatives to the Exchange’s
products, including proprietary data Paper Comments Equities Rule 8.600
from other sources, ensures that the • Send paper comments in triplicate May 4, 2015.
Exchange cannot set unreasonable fees, to Secretary, Securities and Exchange
or fees that are unreasonably I. Introduction
Commission, 100 F Street NE.,
discriminatory, when vendors and Washington, DC 20549–1090. On March 12, 2015, NYSE Arca, Inc.
subscribers can elect these alternatives (the ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed
All submissions should refer to File
or choose not to purchase a specific with the Securities and Exchange
Number SR–NYSEARCA–2015–34. This
proprietary data product if the attendant Commission (the ‘‘Commission’’),
file number should be included on the
fees are not justified by the returns that pursuant to Section 19(b)(1) 1 of the
subject line if email is used.
any particular vendor or data recipient To help the Commission process and Securities Exchange Act of 1934 (the
would achieve through the purchase review your comments more efficiently, ‘‘Act’’ or ‘‘Exchange Act’’) 2 and Rule
(the returns on use being a particularly 19b–4 thereunder,3 a proposed rule
please use only one method. The
important aspect of non-display uses of change to list and trade shares
Commission will post all comments on
proprietary data). (‘‘Shares’’) of the Principal EDGE Active
the Commission’s Internet Web site
C. Self-Regulatory Organization’s (http://www.sec.gov/rules/sro.shtml). Income ETF (‘‘Fund’’) under NYSE Arca
Statement on Comments on the Copies of the submission, all subsequent Equities Rule 8.600. The proposed rule
Proposed Rule Change Received From amendments, all written statements change was published for comment in
Members, Participants, or Others with respect to the proposed rule the Federal Register on March 27,
change that are filed with the 2015.4 On April 14, 2015, the Exchange
No written comments were solicited filed Amendment No. 1 to the
or received with respect to the proposed Commission, and all written
communications relating to the proposal.5 The Commission received no
rule change.
proposed rule change between the
III. Date of Effectiveness of the Commission and any person, other than
14 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
Proposed Rule Change and Timing for those that may be withheld from the
asabaliauskas on DSK5VPTVN1PROD with NOTICES
2 15 U.S.C. 78a.
Commission Action public in accordance with the 3 17 CFR 240.19b–4.
The foregoing rule change is effective provisions of 5 U.S.C. 552, will be 4 See Securities Exchange Act Release No. 74562
upon filing pursuant to Section available for Web site viewing and (March 23, 2015), 80 FR 16477 (‘‘Notice’’).
19(b)(3)(A) 11 of the Act and printing in the Commission’s Public 5 In Amendment No. 1, the Exchange: (1) Clarifies
Reference Room, 100 F Street NE., that the Fund’s investments in restricted securities
subparagraph (f)(2) of Rule 19b–4 12 (Rule 144A securities) will be limited to fixed
Washington, DC 20549, on official income securities; and (2) specifies that the Fund
11 15 U.S.C. 78s(b)(3)(A). will not invest in debt that is in default at the time
12 17 CFR 240.19b–4(f)(2). 13 15 U.S.C. 78s(b)(2)(B). Continued
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![Federal Register / Vol. 80, No. 89 / Friday, May 8, 2015 / Notices 26599
the risks involved in trading the Shares regulations thereunder applicable to a proceedings to determine whether the
during the Opening and Late Trading national securities exchange. proposed rule change should be
Sessions when an updated PIV will not disapproved. The 45th day for this filing
IV. Conclusion
be calculated or publicly disseminated; is May 7, 2015.
(d) how information regarding the PIV It is therefore ordered, pursuant to The Commission is extending the 45-
and the Disclosed Portfolio is Section 19(b)(2) of the Exchange Act, day time period for Commission action
disseminated; (e) the requirement that that the proposed rule change (SR– on the proposed rule change. The
ETP Holders deliver a prospectus to NYSEArca–2015–15), as modified by Commission finds that it is appropriate
investors purchasing newly issued Amendment No. 1, is hereby approved. to designate a longer period within
Shares prior to or concurrently with the For the Commission, by the Division of which to take action on the proposed
confirmation of a transaction; and (f) Trading and Markets, pursuant to delegated rule change so that it has sufficient time
trading information. authority.30 to consider and take action on the
(5) For initial and/or continued Brent J. Fields, Exchange’s proposed rule change.
listing, the Fund will be in compliance Secretary. Accordingly, pursuant to Section
with Rule 10A–3 28 under the Act, as [FR Doc. 2015–11080 Filed 5–7–15; 8:45 am] 19(b)(2)(A)(ii)(I) of the Act 5 and for the
provided by NYSE Arca Equities Rule BILLING CODE 8011–01–P reasons stated above, the Commission
5.3. designates June 21, 2015, as the date by
(6) The Fund may hold up to an
which the Commission should either
aggregate amount of 15% of its net SECURITIES AND EXCHANGE approve or disapprove, or institute
assets in illiquid assets (calculated at COMMISSION proceedings to determine whether to
the time of investment), including Rule
[Release No. 34–74862; File No. SR–CBOE– disapprove, the proposed rule change
144A securities deemed illiquid by the
2015–026] (File No. SR–CBOE–2015–026).
Adviser, consistent with Commission
guidance. The Fund will monitor its For the Commission, by the Division of
Self-Regulatory Organizations; Trading and Markets, pursuant to delegated
portfolio liquidity on an ongoing basis
Chicago Board Options Exchange, authority.6
to determine whether, in light of current
Incorporated; Notice of Designation of Brent J. Fields,
circumstances, an adequate level of
Longer Period for Commission Action Secretary.
liquidity is being maintained, and will
on Proposed Rule Change Relating to
consider taking appropriate steps in [FR Doc. 2015–11056 Filed 5–7–15; 8:45 am]
Rules 6.74A and 6.74B
order to maintain adequate liquidity if, BILLING CODE 8011–01–P
through a change in values, net assets, May 4, 2015.
or other circumstances, more than 15% On March 6, 2015, Chicago Board
of the Fund’s net assets are held in Options Exchange, Incorporated SECURITIES AND EXCHANGE
illiquid assets. (‘‘Exchange’’) filed with the Securities COMMISSION
(7) The Fund will limit its investment and Exchange Commission
in non-government sponsored (‘‘Commission’’), pursuant to Section [Release No. 34–74861; File No. SR–NYSE–
residential mortgage-backed securities, 19(b)(1) of the Securities Exchange Act 2015–22]
commercial mortgage-backed securities of 1934 (‘‘Act’’) 1 and Rule 19b–4
and asset-backed securities (including thereunder,2 a proposed rule change to Self-Regulatory Organizations; New
equipment trust certificates) as well as amend its rules regarding the ability of York Stock Exchange LLC; Notice of
bank loans and illiquid restricted a Market-Maker assigned to an options Filing and Immediate Effectiveness of
securities, in the aggregate, to 20% or class to be solicited as the contra party Proposed Rule Change Amending the
less of the Fund’s net assets. to an Agency Order in that class on the Fees for NYSE BBO and NYSE Trades
(8) Not more than 10% of the net Exchange’s Automated Improvement To Add a Late Fee In Connection With
assets of the Fund will be invested in Mechanism and Solicitation Auction Failure To Submit the Non-Display Use
non-exchange-listed ADRs. Mechanism. The proposed rule change Declaration
(9) Not more than 10% of the net was published for comment in the
assets of the Fund in the aggregate May 4, 2015.
Federal Register on March 23, 2015.3
invested in exchange-traded equity The Commission has received no Pursuant to Section 19(b)(1) 1 of the
securities shall consist of equity comment letters on the proposal. Securities Exchange Act of 1934 (the
securities whose principal market is not Section 19(b)(2) of the Act 4 provides ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
a member of the ISG or party to a CSSA that within 45 days of the publication of notice is hereby given that, on April 27,
with the Exchange. notice of the filing of a proposed rule 2015, New York Stock Exchange LLC
(10) A minimum of 100,000 Shares change, or within such longer period up (‘‘NYSE’’ or the ‘‘Exchange’’) filed with
will be outstanding at the to 90 days as the Commission may the Securities and Exchange
commencement of trading on the designate if it finds such longer period Commission (the ‘‘Commission’’) the
Exchange. to be appropriate and publishes its proposed rule change as described in
This approval order is based on all of reasons for so finding or as to which the Items I, II, and III below, which Items
the Exchange’s representations, self-regulatory organization consents, have been prepared by the self-
including those set forth above and in the Commission shall either approve the regulatory organization. The
asabaliauskas on DSK5VPTVN1PROD with NOTICES
the Notice. proposed rule change, disapprove the Commission is publishing this notice to
For the foregoing reasons, the solicit comments on the proposed rule
proposed rule change, or institute
Commission finds that the proposed change from interested persons.
rule change, as modified by Amendment 30 17 CFR 200.30–3(a)(12).
No. 1, is consistent with Section 6(b)(5) 1 15 U.S.C. 78s(b)(1). 5 15 U.S.C. 78s(b)(2)(A)(ii)(I).
of the Act 29 and the rules and 2 17 CFR 240.19b–4. 6 17 CFR 200.30–3(a)(31).
3 See Securities Exchange Act Release No. 74519 1 15 U.S.C.78s(b)(1).
28 17 CFR 240 10A–3. (March 17, 2015), 80 FR 15264. 2 15 U.S.C. 78a.
29 15 U.S.C. 78f(b)(5). 4 15 U.S.C. 78s(b)(2). 3 17 CFR 240.19b–4.
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Document Created: 2018-02-21 10:24:13
Document Modified: 2018-02-21 10:24:13
| 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 26595 |
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