81 FR 20428 - Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing of Amendment No. 2, and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 2, To List and Trade Shares of the SPDR DoubleLine Short Duration Total Return Tactical ETF of the SSgA Active Trust
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 67 (April 7, 2016)
Federal Register Volume 81, Issue 67 (April 7, 2016)
| Page Range | 20428-20432 | |
| FR Document | 2016-07938 |
[Federal Register Volume 81, Number 67 (Thursday, April 7, 2016)] [Notices] [Pages 20428-20432] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-07938] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-77499; File No. SR-BATS-2016-04] Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing of Amendment No. 2, and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 2, To List and Trade Shares of the SPDR DoubleLine Short Duration Total Return Tactical ETF of the SSgA Active Trust April 1, 2016. I. Introduction On February 4, 2016, BATS Exchange, Inc. (``BATS'' or ``Exchange'') filed with the Securities and Exchange Commission (``Commission''), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to list and trade shares (``Shares'') of the SPDR DoubleLine Short Duration Total Return Tactical ETF (``Fund'') of the SSgA Active Trust (``Trust'') pursuant to BATS Rule 14.11(i). A notice of the proposed rule change was published in the Federal Register on February 12, 2016.\3\ On March 8, 2016, the Exchange filed Amendment No. 1 to the proposed rule change. On March 24, 2016, the Exchange withdrew Amendment No. 1 and filed Amendment No. 2 to the proposed rule change.\4\ On March 25, 2016, pursuant to Section 19(b)(2) of the Act,\5\ the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.\6\ The Commission received no comments on the proposal. The Commission is publishing this notice to solicit comments on Amendment No. 2 from interested persons, and is approving the proposed rule change, as modified by Amendment No. 2, on an accelerated basis. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ See Securities Exchange Act Release No. 77078 (February 8, 2016), 81 FR 7599. \4\ In Amendment No. 2, which replaced the original filing in its entirety, the Exchange: (1) Modified the name of the Fund by replacing the word ``Term'' with ``Duration;'' (2) clarified that, under normal circumstances, at least 80% of the Fund's net assets (plus the amount of borrowings for investment purposes) will be invested in its principal holdings; (3) stated that the Fund may invest up to 20% of its portfolio in securities issued or guaranteed by state or local governments or their agencies or instrumentalities; (4) clarified which assets held by the Fund would trade on markets that are members of the Intermarket Surveillance Group or that have entered into a comprehensive surveillance agreement with the Exchange; (5) clarified the application of the investment restrictions to derivatives and restricted securities; (6) described how fixed income instruments, including municipal securities, would be valued for purposes of calculating the net asset value of the Fund; (7) clarified that all statements and representations made in the filing regarding the description of the portfolio, limitations on portfolio holdings or reference assets, or the applicability of Exchange rules and surveillance procedures constitute continued listing requirements for listing the Shares on the Exchange; (8) stated that the issuer has represented to the Exchange that it will advise the Exchange of any failure by the Fund to comply with the continued listing requirements, and, pursuant to its obligations under Section 19(g)(1) of the Act, the Exchange will surveil for compliance with the continued listing requirements, and if the Fund is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under Exchange Rule 14.12; and (9) made other technical amendments. Amendment No. 2 is available at: http://www.sec.gov/comments/sr-bats-2016-04/bats201604.shtml. \5\ 15 U.S.C. 78s(b)(2). \6\ See Securities Exchange Act Release No. 77451, 81 FR 18660 (March 31, 2016). --------------------------------------------------------------------------- II. The Exchange's Description of the Proposal The Exchange proposes to list and trade the Shares under BATS Rule 14.11(i), which governs the listing and [[Page 20429]] trading of Managed Fund Shares on the Exchange. The Shares will be offered by the Trust, which is registered with the Commission as an investment company.\7\ The investment adviser to the Fund will be SSGA Funds Management, Inc. (``Adviser''), and the sub-adviser to the Fund will be DoubleLine Capital LP (``Sub-Adviser'').\8\ The Adviser will serve as the Fund's administrator. State Street Global Markets, LLC will be the principal underwriter and distributor of the Fund's Shares. State Street Bank and Trust Company will serve as the sub- administrator, custodian, transfer agent, and, where applicable, lending agent for the Fund. --------------------------------------------------------------------------- \7\ The Trust is registered under the Investment Company Act of 1940 (``1940 Act''). See Registration Statement on Form N-1A for the Trust, dated October 8, 2015 (File Nos. 333-173276 and 811-22542) (``Registration Statement''). In addition, the Exchange states that the Commission has issued an order granting certain exemptive relief to the Trust under the 1940 Act. See Investment Company Act Release No. 29524 (December 13, 2010) (File No. 812-13487). \8\ The Adviser and Sub-Adviser are not registered as broker- dealers, but the Adviser is affiliated with a broker-dealer and has implemented a fire wall with respect to its broker-dealer affiliate regarding access to information concerning the composition of or changes to the portfolio. In the event (a) the Adviser or Sub- Adviser become registered broker-dealers or newly affiliated with a broker-dealer, 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 of or changes to the portfolio, and it will be subject to procedures designed to prevent the use and dissemination of material non-public information regarding such portfolio. --------------------------------------------------------------------------- The investment objective of the Fund is to seek to maximize current income with a dollar-weighted average effective duration between one and three years. To achieve its objective, the Fund will invest, under normal circumstances,\9\ in a diversified portfolio of fixed income securities of any credit quality, subject to certain limitations set forth below. --------------------------------------------------------------------------- \9\ The term ``under normal circumstances'' includes, but is not limited to, the absence of extreme volatility or trading halts in the fixed income markets or the financial markets generally; operational issues causing dissemination of inaccurate market information; or force majeure type events such as systems failure, natural or man-made disaster, act of God, armed conflict, act of terrorism, riot or labor disruption or any similar intervening circumstance. --------------------------------------------------------------------------- A. The Fund's Principal Investments The Fund intends to achieve its investment objective by investing, under normal circumstances, at least 80% of its net assets (plus the amount of borrowings for investment purposes) in a diversified portfolio of Fixed Income Securities, which are defined as the following instruments: Securities issued or guaranteed by the U.S. government or its agencies, instrumentalities or sponsored corporations; inflation protected public obligations of the U.S. Treasury; securities issued or guaranteed by state or local governments or their agencies or instrumentalities; \10\ asset-backed securities (``ABS''), which include the following: Agency and non-agency residential mortgage-backed securities, agency and non-agency commercial mortgage-backed securities, and any other agency and non- agency asset-backed securities, collateralized debt obligations, collateralized loan obligations, collateralized bond obligations, collateralized mortgage obligations, Real Estate Mortgage Investment Conduits (``REMICs''), and REMICs that have been resecuritized; \11\ stripped securities; zero coupon securities; foreign (including emerging markets) and domestic corporate bonds;\12\ sovereign debt; bank loans; \13\ preferred securities; and exchange traded products (``ETPs'') that invest in Fixed Income Securities.\14\ To the extent applicable, debt instruments that comprise Fixed Income Securities may be either fixed rate securities, floating securities, or variable rate securities. --------------------------------------------------------------------------- \10\ No more 20% of the Fund's net assets will be invested in securities issued or guaranteed by state or local governments or their agencies or instrumentalities. See Amendment No. 2, supra note 4. \11\ The Fund intends to invest at least 25% of its net assets in mortgage-backed securities of any maturity or type guaranteed by, or secured by collateral that is guaranteed by, the United States Government, its agencies, instrumentalities or sponsored corporations. The Fund may invest up to 20% of its net assets in the aggregate in non-agency ABS. \12\ The Sub-Adviser expects that, under normal 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. Corporate bonds that in the aggregate account for at least 75% of the weight of the Fund's corporate bonds will have a minimum original principal outstanding of $100 million or more. \13\ No more 20% of the Fund's net assets will be invested in junior bank loans. \14\ For purposes of this filing, ETPs include those securities described in BATS Rule 14.11, and all ETPs held by the Fund will be listed and traded in the U.S. on national securities exchanges. While the Fund may invest in inverse ETPs, the Fund will not invest in leveraged or inverse leveraged ETPs. The Fund may invest up to 20% of its net assets in one or more ETPs that are qualified publicly traded partnerships and whose principal activities are the buying and selling of commodities or options, futures, or forwards with respect to commodities. --------------------------------------------------------------------------- B. The Fund's Non-Principal Investments While the Adviser and Sub-Adviser, under normal circumstances, will invest at least 80% of the Fund's net assets (plus the amount of any borrowings for investment purposes) in the instruments described above, the Adviser and Sub-Adviser may invest up to 20% of the Fund's net assets in other securities and financial instruments, as described below. The Fund may invest in repurchase agreements with commercial banks, brokers or dealers to generate income from its excess cash balances and to invest securities lending cash collateral. The Fund may also enter into reverse repurchase agreements.\15\ --------------------------------------------------------------------------- \15\ The Fund's exposure to reverse repurchase agreements will be covered by securities having a value equal to or greater than such commitments. The Fund does not expect to engage, under normal circumstances, in reverse repurchase agreements with respect to more than 10% of its net assets. --------------------------------------------------------------------------- The Fund may invest in exchange-traded \16\ and over-the-counter (``OTC'') U.S. common stocks, exchange-traded common stocks of foreign corporations,\17\ and unsponsored ADRs. --------------------------------------------------------------------------- \16\ All exchange-traded equity securities in which the Fund may invest will trade on markets that are members of the Intermarket Surveillance Group (``ISG'') or that have entered into a comprehensive surveillance agreement with the Exchange. \17\ The Fund's investments in common stocks of foreign corporations may also be in the form of American Depositary Receipts (``ADRs''), Global Depositary Receipts, and European Depositary Receipts (collectively ``Depositary Receipts''). The Fund may invest in sponsored or unsponsored ADRs; however, not more than 10% of the net assets of the Fund will be invested in unsponsored ADRs. --------------------------------------------------------------------------- The Fund may invest in convertible securities. The Fund may lend its portfolio securities in an amount not to exceed 33\1/3\% of the value of its total assets via a securities lending program.\18\ --------------------------------------------------------------------------- \18\ A securities lending program allows the Fund to receive a portion of the income generated by lending its securities and investing the respective collateral. The Fund will receive collateral for each loaned security which is at least equal to 102% of the market value of that security, marked to market each trading day. --------------------------------------------------------------------------- In addition to repurchase agreements, the Fund may invest in short- term instruments, including money market instruments, cash, and cash equivalents, on an ongoing basis to provide liquidity or for other reasons.\19\ --------------------------------------------------------------------------- \19\ Money market instruments are generally short-term investments that may include but are not limited to: (1) Shares of money market funds; (2) obligations issued or guaranteed by the U.S. government, its agencies or instrumentalities (including government- sponsored enterprises); (3) negotiable certificates of deposit, bankers' acceptances, fixed time deposits, and other obligations of U.S. and foreign banks (including foreign branches) and similar institutions; (4) commercial paper rated at the date of purchase ``Prime-1'' by Moody's or ``A-1'' by S&P, or if unrated, of comparable quality as determined by the Adviser; (5) non-convertible corporate debt securities with remaining maturities at the date of purchase of not more than 397 days and that satisfy the rating requirements set forth in Rule 2a-7 under the 1940 Act; and (6) short-term U.S. dollar-denominated obligations of foreign banks (including U.S. branches) that, in the opinion of the Adviser, are of comparable quality to obligations of U.S. banks which may be purchased by the Fund. --------------------------------------------------------------------------- [[Page 20430]] The Fund may conduct foreign currency transactions on a spot or forward basis. The Fund may invest in inverse floating rate debt instruments. In addition to ETPs that invest in Fixed Income Securities, the Fund may also invest in the securities of non-exchange traded investment companies, including affiliated funds and money market funds, subject to applicable limitations under Section 12(d)(1) of the 1940 Act. The Fund may invest in the securities of real estate investment trusts. The Fund may invest up to 20% of its assets in the following derivatives: Exchange-traded futures on Treasuries or Eurodollars; U.S. exchange-traded or OTC put and call options contracts, and OTC or exchange-traded swap agreements on Fixed Income Securities and/or derivatives on indices based on Fixed Income Securities (including interest rate swaps, total return swaps, excess return swaps, and credit default swaps).\20\ --------------------------------------------------------------------------- \20\ This 20% limit on derivatives will be calculated according to the total absolute notional value of the Fund's derivatives. Additionally, to the extent that the derivatives held by the Fund overlie any of the assets subject to limitations described in the proposed rule change, such derivatives will be counted toward those limitations. --------------------------------------------------------------------------- The Fund may also invest in Restricted Securities.\21\ --------------------------------------------------------------------------- \21\ ``Restricted Securities,'' for purposes of this filing, are defined as Rule 144A securities. To the extent that the Fund's holding of Restricted Securities include any of the assets subject to limitations described in the proposed rule change, such holdings will be subject to those limitations. --------------------------------------------------------------------------- C. The Fund's Investment Restrictions 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 Restricted Securities deemed illiquid by the Adviser or Sub- Adviser \22\ under the 1940 Act. 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 invested in illiquid assets. Illiquid assets include securities subject to contractual or other restrictions on resale and other instruments that lack readily available markets as determined in accordance with Commission staff guidance. --------------------------------------------------------------------------- \22\ In reaching liquidity decisions, the Adviser and Sub- Adviser may consider factors including: The frequency of trades and quotes for the security; the number of dealers wishing to purchase or sell the security and the number of other potential purchasers; dealer undertakings to make a market in the security; and the nature of the security and the nature of the marketplace in which it trades (e.g., the time needed to dispose of the security, the method of soliciting offers, and the mechanics of transfer). --------------------------------------------------------------------------- The Fund intends to qualify each year as a regulated investment company under the Internal Revenue Code. The Fund's investments will be consistent with its investment objective and will not be used to seek to achieve leveraged or inverse leveraged returns. Under normal circumstances, the combined total of corporate, sovereign, non-agency, and all other debt rated below investment grade will not exceed 40% of the Fund's net assets. The Fund may invest up to 15% of its net assets in securities denominated in foreign currencies, and may invest beyond this limit in U.S. dollar-denominated securities of foreign issuers. The Fund may invest up to 20% of its net assets in securities and instruments that are economically tied to emerging market countries. 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.\23\ In particular, the Commission finds that the proposed rule change, as modified by Amendment No. 2, is consistent with Section 6(b)(5) of the Exchange Act,\24\ 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. --------------------------------------------------------------------------- \23\ 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). \24\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Commission also finds that the proposal is consistent with Section 11A(a)(1)(C)(iii) of the Exchange Act,\25\ which sets forth Congress's finding that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure the availability to brokers, dealers, and investors of information with respect to quotations for and transactions in securities. --------------------------------------------------------------------------- \25\ 15 U.S.C. 78k-1(a)(1)(C)(iii). --------------------------------------------------------------------------- Quotation and last-sale information for the Shares will be available on the facilities of the Consolidated Tape Association (``CTA''). With respect to the Fund, an estimated value, defined in BATS Rule 14.11(i)(3)(C) as the ``Intraday Indicative Value,'' which reflects an estimated intraday value of the Fund's portfolio, will be based upon the current value for the components of the Disclosed Portfolio \26\ and will be updated and widely disseminated by one or more major market data vendors at least every 15 seconds during the Exchange's Regular Trading Hours.\27\ On each business day, before commencement of trading in Shares during Regular Trading Hours, the Fund will disclose on its Web site the Disclosed Portfolio that will form the basis for the Fund's calculation of the net asset value (``NAV'') at the end of the business day.\28\ The Fund's Web site will also include a form of the prospectus for the Fund and additional data relating to NAV and other applicable quantitative information. Information regarding market price and volume of the Shares will be continually available on a real-time basis throughout the day on brokers' computer screens and other electronic services. The previous day's closing price and trading volume information for the Shares will be published daily in the financial section of newspapers. The intra- day, closing, and settlement prices of exchange-listed instruments (including exchange-traded Depositary Receipts, preferred securities, convertible securities, common stock, futures, ETPs, and QPTPs) will be readily available from the exchanges trading such instruments as well as automated quotation systems, published or other public sources, or online information services such as Bloomberg or Reuters. [[Page 20431]] Price information regarding U.S. exchange-listed equities will also be available on the facilities of the CTA. Intraday and closing price information for exchange-traded options and futures will be available from the applicable exchange and from major market data vendors. In addition, price information for U.S. exchange-traded options will be available from the Options Price Reporting Authority. Quotation information from brokers and dealers or pricing services will be available for Fixed Income Securities. Price information regarding spot currency transactions and OTC-traded derivative instruments, including options, swaps, and forward currency transactions, as well as equity securities traded in the OTC market, including Restricted Securities, inverse floaters, short-term instruments, OTC-traded preferred securities, OTC-traded ADRs, and OTC-traded convertible securities, is available from major market data vendors. Price information for repurchase and reverse repurchase agreements will generally be available through nationally recognized data service providers through subscription arrangements. --------------------------------------------------------------------------- \26\ The term ``Disclosed Portfolio'' is defined in BATS Rule 14.11(i)(3)(B). The Disclosed Portfolio will include, as applicable: Ticker symbol; CUSIP number or other identifier, if any; a description of the holding (including the type of holding); the identity of the security, commodity, index, or other asset or instrument underlying the holding, if any; for options, the option strike price; quantity held (as measured by, for example, par value, notional value, or number of shares, contracts, or units); maturity date, if any; coupon rate, if any; effective date, if any; market value of the holding; and the percentage weighting of the holding in the Fund's portfolio. The Web site information will be publicly available at no charge. \27\ According to the Exchange, several major market data vendors display and/or make widely available Intraday Indicative Values published via the CTA or other data feeds. \28\ The NAV of the Shares generally will be calculated once daily Monday through Friday as of the close of regular trading on the Exchange, generally 4:00 p.m. Eastern Time (``NAV Calculation Time'') on each day that the Exchange is open for trading, based on prices at the NAV Calculation Time. --------------------------------------------------------------------------- The Commission further believes that the proposal to list and trade the Shares is reasonably designed to promote fair disclosure of information that may be necessary to price the Shares appropriately and to prevent trading when a reasonable degree of transparency cannot be assured. The Exchange will obtain a representation from the issuer of the Shares that the NAV per Share will be calculated daily and that the NAV and the Disclosed Portfolio will be made available to all market participants at the same time. The Exchange will halt trading in the Shares under the conditions specified in BATS Rule 11.18. Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable.\29\ Trading in the Shares also will be subject to BATS Rule 14.11(i)(4)(B)(iv), which sets forth circumstances under which Shares of the Fund may be halted. The Exchange states it prohibits the distribution of material non- public information by its employees. The Adviser and Sub-Adviser are not registered as broker-dealers, but the Adviser is affiliated with a broker-dealer and has implemented a fire wall with respect to its broker-dealer affiliate regarding access to information concerning the composition of or changes to the portfolio.\30\ --------------------------------------------------------------------------- \29\ These may include: (1) The extent to which trading is not occurring in the securities and/or the financial instruments composing 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. \30\ See supra note 8. The Exchange represents that an investment adviser to an open-end fund is required to be registered under the Investment Advisers Act of 1940. --------------------------------------------------------------------------- Prior to the commencement of trading, the Exchange will inform its members in an Information Circular of the special characteristics and risks associated with trading the Shares. The Exchange represents that trading in the Shares will be subject to the Exchange's surveillance procedures, which are adequate to properly monitor the trading of the Shares on the Exchange during all trading sessions and to deter and detect violations of Exchange rules and the applicable federal securities laws. 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 made the following representations: (1) The Shares will be subject to BATS Rule 14.11(i), which sets forth the initial and continued listing criteria applicable to Managed Fund Shares. (2) The Exchange has appropriate rules to facilitate transactions in the Shares during all trading sessions. (3) The Exchange believes that its surveillance procedures are adequate to properly monitor the trading of the Shares on the Exchange during all trading sessions and to deter and detect violations of Exchange rules and the applicable federal securities laws. Trading of the Shares through the Exchange will be subject to the Exchange's surveillance procedures for derivative products, including Managed Fund Shares. (4) The Exchange may obtain information regarding trading in the Shares and the underlying exchange traded investment companies, equity securities, futures, and options via the ISG, from other exchanges who are members or affiliates of the ISG, or with which the Exchange has entered into a comprehensive surveillance sharing agreement. In addition, the Exchange is able to access, as needed, trade information for certain fixed income instruments reported to FINRA's Trade Reporting and Compliance Engine. The Exchange can also access municipal bond trading activity for surveillance purposes in connection with trading in the Shares through the Municipal Securities Rulemaking Board's Electronic Municipal Market Access. (5) All of the exchange-listed assets will trade on markets that are a member of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. (6) Prior to the commencement of trading, the Exchange will inform its members in an Information Circular of the special characteristics and risks associated with trading the Shares. Specifically, the Information Circular will discuss the following: (i) The procedures for purchases and redemptions of Shares in Creation Units (and that Shares are not individually redeemable); (ii) BATS Rule 3.7, which imposes suitability obligations on Exchange members with respect to recommending transactions in the Shares to customers; (iii) how information regarding the Intraday Indicative Value and the Disclosed Portfolio is disseminated; (iv) the risks involved in trading the Shares during the Pre-Opening and After Hours Trading Sessions when an updated Intraday Indicative Value will not be calculated or publicly disseminated; (v) the requirement that members deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; and (vi) trading information. (7) For initial and continued listing, the Fund must be in compliance with Rule 10A-3 under the Act.\31\ --------------------------------------------------------------------------- \31\ 17 CFR 240.10A-3. --------------------------------------------------------------------------- (8) The Fund will not invest more than 20% of its net assets in the aggregate in non-agency ABS. (9) Under normal 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. Corporate bonds that in the aggregate account for at least 75% of the weight of the Fund's corporate bonds will have a minimum original principal outstanding of $100 million or more. (10) Under normal circumstances, the combined total of corporate, sovereign, non-agency, and all other debt rated below investment grade will not exceed 40% of the Fund's net assets. (11) The Fund will not invest more than 15% of its net assets in securities denominated in foreign currencies, and will not invest more than 20% of its net assets in securities and instruments that are economically tied to emerging market countries. [[Page 20432]] (12) No more 20% of the Fund's net assets will be invested in junior bank loans. (13) While the Fund may invest in inverse ETPs, the Fund will not invest in leveraged or inverse leveraged ETPs. (14) A minimum of 100,000 Shares for the Fund will be outstanding at the commencement of trading on the Exchange. The Exchange represents that all statements and representations made in the filing regarding (a) the description of the portfolio, (b) limitations on portfolio holdings or reference assets, or (c) the applicability of Exchange rules and surveillance procedures constitute continued listing requirements for listing the Shares on the Exchange. In addition, the issuer has represented to the Exchange that it will advise the Exchange of any failure by the Fund to comply with the continued listing requirements, and, pursuant to its obligations under Section 19(g)(1) of the Act, the Exchange will surveil for compliance with the continued listing requirements. If a Fund is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under BATS Rule 14.12. This approval order is based on all of the Exchange's representations, including those set forth above and in Amendment No. 2. The Commission notes that the Fund and the Shares must comply with the requirements of BATS Rule 14.11(i) to be initially and continuously listed and traded on the Exchange. For the foregoing reasons, the Commission finds that the proposed rule change, as modified by Amendment No. 2, is consistent with Section 6(b)(5) of the Exchange Act \32\ and Section 11A(a)(1)(C)(iii) of the Exchange Act \33\ and the rules and regulations thereunder applicable to a national securities exchange. --------------------------------------------------------------------------- \32\ 15 U.S.C. 78f(b)(5). \33\ 15 U.S.C. 78k-1(a)(1)(C)(iii). --------------------------------------------------------------------------- IV. Solicitation of Comments on Amendment No. 2 Interested persons are invited to submit written data, views, and arguments concerning whether Amendment No. 2 is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse 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-2016-04 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-2016-04. 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 such filing also will 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-2016-04, and should be submitted on or before April 28, 2016. V. Accelerated Approval of the Proposed Rule Change, as Modified by Amendment No. 2 The Commission finds good cause to approve the proposed rule change, as modified by Amendment No. 2, prior to the thirtieth day after the date of publication of Amendment No. 2 in the Federal Register. The additional information in Amendments No. 2 helped the Commission to evaluate the Shares' susceptibility to manipulation and the Exchange's ability to investigate possible manipulative activity. Amendment No. 2 also provided clarifications and additional details to the proposed rule change. Accordingly, the Commission finds good cause for approving the proposed rule change, as modified by Amendment No. 2, on an accelerated basis, pursuant to Section 19(b)(2) of the Act.\34\ --------------------------------------------------------------------------- \34\ 15 U.S.C. 78s(b)(2). --------------------------------------------------------------------------- VI. Conclusion It Is Therefore Ordered, pursuant to Section 19(b)(2) of the Exchange Act,\35\ that the proposed rule change (SR-BATS-2016-04), as modified by Amendment No. 2, be, and it hereby is, approved on an accelerated basis. --------------------------------------------------------------------------- \35\ 15 U.S.C. 78s(b)(2). \36\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\36\ Brent J. Fields, Secretary. [FR Doc. 2016-07938 Filed 4-6-16; 8:45 am] BILLING CODE 8011-01-P
![20428 Federal Register / Vol. 81, No. 67 / Thursday, April 7, 2016 / Notices
essence of the competition the Exchange with respect to the proposed rule SSgA Active Trust (‘‘Trust’’) pursuant to
Act is designed to promote.7 change that are filed with the BATS Rule 14.11(i). A notice of the
Commission, and all written proposed rule change was published in
C. Self-Regulatory Organization’s
communications relating to the the Federal Register on February 12,
Statement on Comments on the
proposed rule change between the 2016.3 On March 8, 2016, the Exchange
Proposed Rule Change Received From
Commission and any person, other than filed Amendment No. 1 to the proposed
Members, Participants, or Others
those that may be withheld from the rule change. On March 24, 2016, the
No written comments were either public in accordance with the Exchange withdrew Amendment No. 1
solicited or received. provisions of 5 U.S.C. 552, will be and filed Amendment No. 2 to the
III. Date of Effectiveness of the available for Web site viewing and proposed rule change.4 On March 25,
Proposed Rule Change and Timing for printing in the Commission’s Public 2016, pursuant to Section 19(b)(2) of the
Commission Action Reference Room, 100 F Street NE., Act,5 the Commission designated a
Washington, DC 20549 on official longer period within which to approve
The foregoing rule change has become business days between the hours of the proposed rule change, disapprove
effective pursuant to Section 10:00 a.m. and 3:00 p.m. Copies of such the proposed rule change, or institute
19(b)(3)(A)(ii) of the Act.8 filing also will be available for proceedings to determine whether to
At any time within 60 days of the inspection and copying at the principal disapprove the proposed rule change.6
filing of the proposed rule change, the offices of the Exchange. All comments The Commission received no comments
Commission summarily may received will be posted without change; on the proposal. The Commission is
temporarily suspend such rule change if the Commission does not edit personal publishing this notice to solicit
it appears to the Commission that such identifying information from comments on Amendment No. 2 from
action is: (i) Necessary or appropriate in submissions. You should submit only interested persons, and is approving the
the public interest; (ii) for the protection information that you wish to make proposed rule change, as modified by
of investors; or (iii) otherwise in available publicly. All submissions Amendment No. 2, on an accelerated
furtherance of the purposes of the Act. should refer to File Number SR– basis.
If the Commission takes such action, the NASDAQ–2016–046, and should be
Commission shall institute proceedings submitted on or before April 27, 2016. II. The Exchange’s Description of the
to determine whether the proposed rule Proposal
For the Commission, by the Division of
should be approved or disapproved. Trading and Markets, pursuant to delegated The Exchange proposes to list and
IV. Solicitation of Comments authority.9 trade the Shares under BATS Rule
Brent J. Fields, 14.11(i), which governs the listing and
Interested persons are invited to
submit written data, views, and Secretary.
3 See Securities Exchange Act Release No. 77078
arguments concerning the foregoing, [FR Doc. 2016–07937 Filed 4–6–16; 8:45 am]
(February 8, 2016), 81 FR 7599.
including whether the proposed rule BILLING CODE 8011–01–P 4 In Amendment No. 2, which replaced the
change is consistent with the Act. original filing in its entirety, the Exchange: (1)
Comments may be submitted by any of Modified the name of the Fund by replacing the
SECURITIES AND EXCHANGE word ‘‘Term’’ with ‘‘Duration;’’ (2) clarified that,
the following methods: under normal circumstances, at least 80% of the
COMMISSION Fund’s net assets (plus the amount of borrowings
Electronic Comments for investment purposes) will be invested in its
[Release No. 34–77499; File No. SR–BATS–
• Use the Commission’s Internet 2016–04] principal holdings; (3) stated that the Fund may
comment form (http://www.sec.gov/ invest up to 20% of its portfolio in securities issued
or guaranteed by state or local governments or their
rules/sro.shtml); or Self-Regulatory Organizations; BATS agencies or instrumentalities; (4) clarified which
• Send an email to rule-comments@ Exchange, Inc.; Notice of Filing of assets held by the Fund would trade on markets
sec.gov. Please include File Number SR– Amendment No. 2, and Order Granting that are members of the Intermarket Surveillance
NASDAQ–2016–046 on the subject line. Accelerated Approval of a Proposed Group or that have entered into a comprehensive
surveillance agreement with the Exchange; (5)
Paper Comments Rule Change, as Modified by clarified the application of the investment
Amendment No. 2, To List and Trade restrictions to derivatives and restricted securities;
• Send paper comments in triplicate Shares of the SPDR DoubleLine Short (6) described how fixed income instruments,
to Secretary, Securities and Exchange Duration Total Return Tactical ETF of including municipal securities, would be valued for
Commission, 100 F Street NE., purposes of calculating the net asset value of the
the SSgA Active Trust Fund; (7) clarified that all statements and
Washington, DC 20549–1090. representations made in the filing regarding the
All submissions should refer to File April 1, 2016. description of the portfolio, limitations on portfolio
Number SR–NASDAQ–2016–046. This I. Introduction holdings or reference assets, or the applicability of
Exchange rules and surveillance procedures
file number should be included on the
On February 4, 2016, BATS Exchange, constitute continued listing requirements for listing
subject line if email is used. To help the the Shares on the Exchange; (8) stated that the
Inc. (‘‘BATS’’ or ‘‘Exchange’’) filed with
Commission process and review your issuer has represented to the Exchange that it will
the Securities and Exchange advise the Exchange of any failure by the Fund to
comments more efficiently, please use
Commission (‘‘Commission’’), pursuant comply with the continued listing requirements,
only one method. The Commission will
to Section 19(b)(1) of the Securities and, pursuant to its obligations under Section
post all comments on the Commission’s 19(g)(1) of the Act, the Exchange will surveil for
Exchange Act of 1934 (‘‘Act’’ or
Internet Web site (http://www.sec.gov/ compliance with the continued listing
‘‘Exchange Act’’) 1 and Rule 19b–4 requirements, and if the Fund is not in compliance
rules/sro.shtml). Copies of the
mstockstill on DSK4VPTVN1PROD with NOTICES
thereunder,2 a proposed rule change to with the applicable listing requirements, the
submission, all subsequent
list and trade shares (‘‘Shares’’) of the Exchange will commence delisting procedures
amendments, all written statements under Exchange Rule 14.12; and (9) made other
SPDR DoubleLine Short Duration Total
technical amendments. Amendment No. 2 is
7 The Chicago Mercantile Exchange is currently
Return Tactical ETF (‘‘Fund’’) of the available at: http://www.sec.gov/comments/sr-bats-
using FPGA technology in order entry ports for the 2016-04/bats201604.shtml.
9 17 CFR 200.30–3(a)(12).
trading of futures. See https://www.cmegroup.com/ 5 15 U.S.C. 78s(b)(2).
globex/files/NewiLinkArchitecture2014.pdf. 1 15 U.S.C. 78s(b)(1). 6 See Securities Exchange Act Release No. 77451,
8 15 U.S.C. 78s(b)(3)(A)(ii). 2 17 CFR 240.19b–4. 81 FR 18660 (March 31, 2016).
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![20432 Federal Register / Vol. 81, No. 67 / Thursday, April 7, 2016 / Notices
(12) No more 20% of the Fund’s net • Send an email to rule-comments@ accelerated basis, pursuant to Section
assets will be invested in junior bank sec.gov. Please include File No. SR– 19(b)(2) of the Act.34
loans. BATS–2016–04 on the subject line.
VI. Conclusion
(13) While the Fund may invest in Paper Comments
inverse ETPs, the Fund will not invest It Is Therefore Ordered, pursuant to
in leveraged or inverse leveraged ETPs. • Send paper comments in triplicate
Section 19(b)(2) of the Exchange Act,35
to Secretary, Securities and Exchange
(14) A minimum of 100,000 Shares for that the proposed rule change (SR–
Commission, 100 F Street NE.,
the Fund will be outstanding at the BATS–2016–04), as modified by
Washington, DC 20549–1090.
commencement of trading on the Amendment No. 2, be, and it hereby is,
All submissions should refer to File No. approved on an accelerated basis.
Exchange.
SR–BATS–2016–04. This file number
The Exchange represents that all should be included on the subject line For the Commission, by the Division of
statements and representations made in if email is used. To help the Trading and Markets, pursuant to delegated
the filing regarding (a) the description of Commission process and review your authority.36
the portfolio, (b) limitations on portfolio comments more efficiently, please use Brent J. Fields,
holdings or reference assets, or (c) the only one method. The Commission will Secretary.
applicability of Exchange rules and post all comments on the Commission’s [FR Doc. 2016–07938 Filed 4–6–16; 8:45 am]
surveillance procedures constitute Internet Web site (http://www.sec.gov/ BILLING CODE 8011–01–P
continued listing requirements for rules/sro.shtml). Copies of the
listing the Shares on the Exchange. In submission, all subsequent
addition, the issuer has represented to amendments, all written statements
the Exchange that it will advise the with respect to the proposed rule DEPARTMENT OF STATE
Exchange of any failure by the Fund to change that are filed with the
comply with the continued listing Commission, and all written
requirements, and, pursuant to its communications relating to the [Public Notice: 9512]
obligations under Section 19(g)(1) of the proposed rule change between the
Certification Related to the
Act, the Exchange will surveil for Commission and any person, other than
Government of Haiti Under the
compliance with the continued listing those that may be withheld from the
Department of State, Foreign
requirements. If a Fund is not in public in accordance with the
Operations, and Related Programs
compliance with the applicable listing provisions of 5 U.S.C. 552, will be
Appropriations Act, 2016
requirements, the Exchange will available for Web site viewing and
commence delisting procedures under printing in the Commission’s Public
Pursuant to the authority vested in the
BATS Rule 14.12. Reference Room, 100 F Street NE.,
Secretary of State, including under
This approval order is based on all of Washington, DC 20549 on official
section 7045(c)(2) of the Department of
the Exchange’s representations, business days between the hours of
State, Foreign Operations, and Related
including those set forth above and in 10:00 a.m. and 3:00 p.m. Copies of such
Programs Appropriations Act, 2016
Amendment No. 2. The Commission filing also will be available for
(Div. K, Pub. L. 114–113), I hereby
notes that the Fund and the Shares must inspection and copying at the principal
certify that the Government of Haiti is
comply with the requirements of BATS office of the Exchange. All comments
taking effective steps to:
Rule 14.11(i) to be initially and received will be posted without change;
the Commission does not edit personal • Hold free and fair parliamentary
continuously listed and traded on the
identifying information from elections and seat a new Haitian
Exchange.
submissions. You should submit only parliament;
For the foregoing reasons, the
Commission finds that the proposed
information that you wish to make • Strengthen the rule of law in Haiti,
available publicly. All submissions including by selecting judges in a
rule change, as modified by Amendment
should refer to File No. SR–BATS– transparent manner; respect the
No. 2, is consistent with Section 6(b)(5) 2016–04, and should be submitted on or
of the Exchange Act 32 and Section independence of the judiciary; and
before April 28, 2016. improve governance by implementing
11A(a)(1)(C)(iii) of the Exchange Act 33
and the rules and regulations V. Accelerated Approval of the reforms to increase transparency and
thereunder applicable to a national Proposed Rule Change, as Modified by accountability;
securities exchange. Amendment No. 2 • Combat corruption, including by
The Commission finds good cause to implementing the anti-corruption law
IV. Solicitation of Comments on
approve the proposed rule change, as enacted in 2014 and prosecuting corrupt
Amendment No. 2
modified by Amendment No. 2, prior to officials; and
Interested persons are invited to the thirtieth day after the date of • Increase government revenues,
submit written data, views, and publication of Amendment No. 2 in the including by implementing tax reforms,
arguments concerning whether Federal Register. The additional and increase expenditures on public
Amendment No. 2 is consistent with the information in Amendments No. 2 services.
Act. Comments may be submitted by helped the Commission to evaluate the
any of the following methods: Dated: March 31, 2016.
Shares’ susceptibility to manipulation
John F. Kerry,
mstockstill on DSK4VPTVN1PROD with NOTICES
Electronic Comments and the Exchange’s ability to investigate
possible manipulative activity. Secretary of State.
• Use the Commission’s Internet Amendment No. 2 also provided [FR Doc. 2016–08066 Filed 4–6–16; 8:45 am]
comment form (http://www.sec.gov/ clarifications and additional details to BILLING CODE 4710–29–P
rules/sro.shtml); or the proposed rule change. Accordingly,
the Commission finds good cause for 34 15 U.S.C. 78s(b)(2).
32 15 U.S.C. 78f(b)(5). approving the proposed rule change, as 35 15 U.S.C. 78s(b)(2).
33 15 U.S.C. 78k–1(a)(1)(C)(iii). modified by Amendment No. 2, on an 36 17 CFR 200.30–3(a)(12).
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Document Created: 2016-04-06 23:44:24
Document Modified: 2016-04-06 23:44:24
| 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 | 81 FR 20428 |
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