81 FR 61263 - Securities Investor Protection Corporation: Order Approving a Proposed Bylaw Change Relating to SIPC Fund Assessments on SIPC Members
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 172 (September 6, 2016)
Federal Register Volume 81, Issue 172 (September 6, 2016)
| Page Range | 61263-61265 | |
| FR Document | 2016-21269 |
[Federal Register Volume 81, Number 172 (Tuesday, September 6, 2016)] [Notices] [Pages 61263-61265] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-21269] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. SIPA-178; File No. SIPC-2016-02] Securities Investor Protection Corporation: Order Approving a Proposed Bylaw Change Relating to SIPC Fund Assessments on SIPC Members August 30, 2016. On May 2, 2016, the Securities Investors Protection Corporation (``SIPC'') filed with the Securities and Exchange Commission (``Commission'') a proposed bylaw change pursuant to section 3(e)(1) of the Securities Investor Protection Act of 1970 (``SIPA'') \1\ relating to assessments on SIPC member broker-dealers.\2\ On May 27, 2016, SIPC consented to a 60-day extension of time before the proposed bylaw change takes effect pursuant to section 3(e)(1) of SIPA.\3\ Pursuant to section 3(e)(1)(B) of SIPA, the Commission found that the proposed bylaw change involved a matter of such significant public interest that public comment should be obtained.\4\ This meant that the Commission could require the proposed bylaw change to be treated under the procedures in section 3(e)(2) of SIPA applicable to a proposed SIPC rule change.\5\ Consequently, pursuant to section 3(e)(2)(A) of SIPA,\6\ notice requesting comment on the proposed bylaw change was published in the Federal Register on June 20, 2016.\7\ The Commission received one comment regarding the proposal.\8\ This order approves the proposed bylaw change under section 3(e)(2) of SIPA.\9\ --------------------------------------------------------------------------- \1\ 15 U.S.C. 78ccc(e)(1). \2\ See letter dated May 2, 2016 from Josephine Wang, Secretary, SIPC, to Brent J. Fields, Secretary, Commission. \3\ 15 U.S.C. 78ccc(e)(1). This section provides that a proposed bylaw change shall take effect thirty days after the date of the filing of a copy thereof with the Commission, or upon such later date as SIPC may designate or such earlier date as the Commission may determine unless: (1) The Commission, by notice to SIPC setting forth the reasons therefor, disapproves such proposed bylaw change as being contrary to the public interest or contrary to the purposes of SIPA; or (2) the Commission finds that such proposed bylaw change involves a matter of such significant public interest that public comment should be obtained, in which case it may, after notifying SIPC in writing of such finding, require that the procedures set forth in section 3(e)(2) of SIPA be followed with respect to such proposed bylaw change, in the same manner as if such proposed bylaw change were a proposed SIPC rule change. \4\ 15 U.S.C. 78ccc(e)(1)(B). \5\ See 15 U.S.C. 78ccc(e)(1)(B); 15 U.S.C. 78ccc(e)(2). \6\ 15 U.S.C. 78ccc(e)(2)(A). \7\ See Securities Investor Protection Corporation; Notice of Filing of Proposed Bylaw Amendment Relating to Assessment of SIPC Members, Release No. SIPA-177 (June 15, 2016), 81 FR 39986 (June 20, 2016). \8\ See email dated June 17, 2016 from Jay Lanstein, Chief Executive Officer, Cantella & Co., Inc., available at https://www.sec.gov/comments/sipc-2016-02/sipc201602-1.htm. \9\ See 15 U.S.C. 78ccc(e)(2). --------------------------------------------------------------------------- I. Description of the Proposed Bylaw Change A. Background SIPA requires SIPC, by bylaw, to impose assessments upon its member broker-dealers as, after consultation with self-regulatory organizations, SIPC may deem necessary and appropriate to establish and maintain a broker-dealer liquidation fund administered by SIPC (the ``SIPC Fund'') from which all expenditures by SIPC are to be made, including funds used to facilitate the liquidation of broker- dealers.\10\ Pursuant to this authority, SIPC collects annual assessments from its members.\11\ The amount of the annual assessment is prescribed by SIPA and the SIPC bylaws and is a percentage of the member broker-dealer's net operating revenues from its securities business.\12\ --------------------------------------------------------------------------- \10\ 15 U.S.C. 78ddd. SIPC stated that it solicited the views of self-regulatory organizations regarding the proposed bylaw change. See email dated July 22, 2016 from Josephine Wang, Secretary, SIPC, to Brent J. Fields, Secretary, Commission. \11\ 15 U.S.C. 78ddd(d)(2)(C). \12\ See 15 U.S.C. 78ddd(d); Bylaws of the Securities Investor Protection Corporation, Article 6, available at http://www.sipc.org/about-sipc/statute-and-rules/bylaws. Net operating revenues from the securities business are gross revenues from the securities business, as defined in section 16(9) of SIPA, 15 U.S.C. 78lll(9), less total interest and dividend expense, but not exceeding total interest and dividend income. See Article 6; SIPC Form SIPC-6, available at http://www.sipc.org/Content/media/filing-forms/SIPC-6-20130830.PDF. --------------------------------------------------------------------------- Article 6 of the SIPC bylaws (``Article 6'') currently provides for an assessment rate of \1/4\ of one percent until the SIPC Fund reaches $2.5 billion and SIPC determines that the Fund will remain at or above $2.5 billion for at least six months. Once that determination is made, the assessment rate falls to the minimum assessment permitted under SIPA, which is 0.02 percent.\13\ Article 6 also provides that the assessment rate is \1/4\ of one percent if it is reasonably likely that the balance of the Fund will fall below $2.5 billion and remain at less than $2.5 billion for six months or more. --------------------------------------------------------------------------- \13\ 15 U.S.C. 78ddd(c)(2). --------------------------------------------------------------------------- SIPC represented in its proposed bylaw change filing that it continues to examine whether the Fund ``target balance'' of $2.5 billion is adequate for SIPC to carry out its mission of customer protection, and that it wished to ensure that at a minimum, and to the extent possible, the Fund does not fall below $2.5 billion. SIPC indicated that it believed it was prudent to consider not only the size of the Fund over a six-month period, but also SIPC's actual expenditures and its projected expenditures from the Fund over a longer term. In addition, SIPC stated that the size of the Fund is more likely to stay at or above the target balance if there is a more gradual reduction in assessment rates before the minimum assessment rate is imposed. Finally, SIPC stated that such measures would make less likely sudden changes in the assessment rate while giving SIPC members some relief in the amount of the assessment that they owe. B. The Proposed Amendments With these considerations in mind, SIPC proposed to modify Article 6 in two respects. First, SIPC proposed to impose an intermediary assessment rate that would apply when the balance of the SIPC Fund is expected to be $2.5 billion for at least six months but SIPC's unrestricted net assets--a measure of net assets that takes into account the anticipated cost of ongoing customer protection proceedings--are less than $2.5 billion, as reflected in its most recent audited Statement of Financial Position.\14\ Secondly, SIPC proposed to [[Page 61264]] lengthen the time period with respect to when a change in assessments becomes effective after notice of the change is published. --------------------------------------------------------------------------- \14\ See, e.g., SIPC, 2015 Annual Report at 20, available at http://www.sipc.org/Content/media/annual-reports/2015-annual-report.pdf (audited statement of financial position reporting unrestricted net assets of $1,622,910,520). --------------------------------------------------------------------------- 1. Imposition of an Intermediary Assessment Rate When large SIPA liquidation proceedings are pending that require sizeable advances by SIPC, the SIPC Fund could remain at or above the $2.5 billion target level for six months, but then fall significantly below that amount as additional advances are made. Under Article 6, once the Fund reaches the $2.5 billion target level and is projected to remain at or above that amount for six months or more, SIPC could change the assessment rate from \1/4\ of one percent to 0.02 percent. On the other hand, because projected expenditures in pending proceedings could reasonably cause the balance of the SIPC Fund to be less than $2.5 billion for six months or more, SIPC alternatively could require that the assessment rate remain at \1/4\ of one percent. SIPC proposed to amend Article 6 to provide clarity as to what actions it might take when the Fund reaches the $2.5 billion target level, to maintain the SIPC Fund at or above the target balance of $2.5 billion, and to offer some relief in the amount of the assessment that member broker-dealers must pay while reducing the likelihood of sudden changes in the rates. Under the proposed bylaw change, when the SIPC Fund reaches $2.5 billion and is projected to be at $2.5 billion for six months or more, SIPC would consider the balance of its unrestricted net assets, as reflected in its most recent audited Statement of Financial Position.\15\ Specifically, SIPC could impose an annual assessment rate of 0.15 percent of a member's net operating revenues from the securities business if: (1) The amount of the SIPC Fund were at $2.5 billion or more; (2) SIPC determined that the Fund will remain at or above $2.5 billion for at least six months; but (3) SIPC's unrestricted net assets were less than $2.5 billion, as reflected in its most recent audited Statement of Financial Condition. --------------------------------------------------------------------------- \15\ Among other items included in the calculation of unrestricted net assets is a provision for trustees' estimated costs to complete ongoing customer protection proceedings. See, e.g., SIPC, 2015 Annual Report at 20. --------------------------------------------------------------------------- 2. Amendment of the Effective Date of a Change in the Assessment SIPC also proposed to amend Article 6 with respect to when a change in assessments becomes effective. Currently, Article 6 provides that a change in assessments is to occur on the first day of the month following the date on which SIPC announces a change in the assessment and continue until SIPC provides otherwise (``Notice Provision''). Under current practice, the SIPC Board of Directors in the ordinary course determines the rate of assessment at its September meeting. The Board's determination is announced shortly thereafter, and is made effective the first day of the following month. SIPC proposed to amend the Notice Provision in order to give its member broker-dealers earlier notice of the assessment rate for the following year. Under the proposal, an assessment rate would be effective on the first day of the year following the date on which SIPC announces its determination. Consequently, under the current practice where the assessment is determined at a September meeting of the Board, an assessment rate would be effective on January 1 of the new year. However, the proposal recognizes that there may be emergency situations when the need for an assessment rate to become effective is more immediate. In that case, the assessment rate would be effective on the date announced by SIPC provided that the exigency of the circumstances so warrants. II. Comments Received The Commission received one comment regarding the proposal.\16\ The commenter stated that the SIPC assessment rate ``should be lowered as soon as the SIPC fund reaches its target balance, rather than waiting potentially a full year.'' The commenter also stated that the proposed reductions in the assessment rate should be further reduced and that unless there is ``another major crisis'' the flat fee assessment should be reinstated. The commenter further stated that since under the proposal SIPC can immediately raise assessments when warranted and SIPC can borrow from the Treasury if necessary, extracting ``unnecessary fees'' presents a financial burden to customers of firms that pass the assessments to their customers. --------------------------------------------------------------------------- \16\ See email dated June 17, 2016 from Jay Lanstein, Chief Executive Officer, Cantella & Co., Inc., available at https://www.sec.gov/comments/sipc-2016-02/sipc201602-1.htm. --------------------------------------------------------------------------- On July 22, 2016, SIPC filed with the Commission a response to the comment.\17\ With regard to the comment that the assessment rate should be lowered as soon as the SIPC Fund reaches its target balance, SIPC stated that it believes that lowering the assessment rate gradually ``balances the financial interests of its members with the need for robust reserves that are vital to SIPC's mission.'' In addition, SIPC stated that ``with a gradual reduction in rates, the Fund is more likely to stay above the current target balance.'' With regard to the comment that assessments should be further reduced and that SIPC extracts ``unnecessary fees,'' SIPC stated that ``in 20 of its 45 years of operation, most recently from 1996 to March 2009, assessments were the minimum allowed by statute, ranging from $25 to $150 annually.'' SIPC further stated that ``even since the financial crisis of 2008, SIPC has assessed its members at only a fraction of the maximum percentage legally permissible.'' SIPC also stated that ``relating its assessment needs to its net assets instead of to the balance of the SIPC Fund, offers a more realistic and accurate starting point for measuring potential future needs.'' Accordingly, SIPC stated that it ``believes it prudent to consider booked liabilities in addition to the size of the Fund in determining the appropriate assessment rate.'' With regard to the comment that SIPC should reinstate a flat fee assessment, SIPC stated that ``absent legislative change, SIPC may no longer assess a `flat fee' minimum as suggested by the comment'' because ``SIPA section 78ddd(d)(1)(C) was amended in 2010 to provide for a minimum assessment no greater than 0.02 percent of the gross revenues from the securities business of SIPC members.'' --------------------------------------------------------------------------- \17\ See email dated July 22, 2016 from Josephine Wang, Secretary, SIPC, to Brent J. Fields, Secretary, Commission. --------------------------------------------------------------------------- III. Commission Findings Section 3(e)(2)(D) of SIPA provides that the Commission shall approve a proposed rule change if it finds that the proposed rule change is in the public interest and is consistent with the purposes of SIPA.\18\ The Commission finds, pursuant to section 3(e)(2)(D) of SIPA, that the proposed bylaw change is in the public interest and consistent with the purposes of SIPA.\19\ --------------------------------------------------------------------------- \18\ 15 U.S.C. 78ccc(e)(2)(D). \19\ 15 U.S.C. 78ccc(e)(2)(D). --------------------------------------------------------------------------- The SIPC Fund, which is built from assessments on its members and the interest earned on the Fund, is used for the protection of customers of members liquidated under SIPA to maintain investor confidence in the securities markets.\20\ In order to reduce the [[Page 61265]] likelihood that the SIPC Fund does not fall below the $2.5 billion target, the Commission believes that, in setting the assessment rate, it is appropriate to consider not only the size of the Fund over a six- month period, but SIPC's actual expenditures and its projected expenditures from the Fund over a longer term. In addition, the Commission believes that the size of the Fund is more likely to remain at or above the target level if there is a more gradual reduction in rates before the minimum assessment rate is imposed. Finally, the Commission believes that the proposed bylaw change would give SIPC members appropriate relief in the amount of assessment that they owe while maintaining the assessment rate at a level that is designed to keep the fund at the target level. Further, the Commission notes that the Fund plays a critical role in protecting customers of failed broker-dealer. --------------------------------------------------------------------------- \20\ See, e.g., Securities Investor Protection Corporation; Notice of Filing of Proposed Bylaw Amendment Relating to Assessment of SIPC Members, Release No. SIPA-177 (June 15, 2016), 81 FR 39986, 39988 (June 20, 2016). --------------------------------------------------------------------------- In addition, the Commission believes that the proposed amendment to the Notice Provision will provide SIPC member broker-dealers with earlier notice of the assessment rate for the following year but also allow for more prompt changes to the assessment level when merited in certain emergency situations. IV. Conclusion IT IS THEREFORE ORDERED, pursuant to section 3(e)(2) of SIPA, that the proposed bylaw change is approved.\21\ --------------------------------------------------------------------------- \21\ 15 U.S.C. 78ccc(e)(2). --------------------------------------------------------------------------- By the Commission. Dated: August 30, 2016. Brent J. Fields, Secretary. [FR Doc. 2016-21269 Filed 9-2-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 172 / Tuesday, September 6, 2016 / Notices 61263
provisions of 5 U.S.C. 552, will be SIPA, the Commission found that the Article 6 of the SIPC bylaws (‘‘Article
available for Web site viewing and proposed bylaw change involved a 6’’) currently provides for an assessment
printing in the Commission’s Public matter of such significant public interest rate of 1⁄4 of one percent until the SIPC
Reference Room, 100 F Street NE., that public comment should be Fund reaches $2.5 billion and SIPC
Washington, DC 20549, on official obtained.4 This meant that the determines that the Fund will remain at
business days between the hours of Commission could require the proposed or above $2.5 billion for at least six
10:00 a.m. and 3:00 p.m. Copies of the bylaw change to be treated under the months. Once that determination is
filing also will be available for procedures in section 3(e)(2) of SIPA made, the assessment rate falls to the
inspection and copying at the principal applicable to a proposed SIPC rule minimum assessment permitted under
office of the Exchange. All comments change.5 Consequently, pursuant to SIPA, which is 0.02 percent.13 Article 6
received will be posted without change; section 3(e)(2)(A) of SIPA,6 notice also provides that the assessment rate is
the Commission does not edit personal requesting comment on the proposed 1⁄4 of one percent if it is reasonably
identifying information from bylaw change was published in the likely that the balance of the Fund will
submissions. You should submit only Federal Register on June 20, 2016.7 The fall below $2.5 billion and remain at
information that you wish to make Commission received one comment less than $2.5 billion for six months or
available publicly. All submissions regarding the proposal.8 This order more.
should refer to File Number SR– approves the proposed bylaw change SIPC represented in its proposed
NYSEArca–2016–63 and should be under section 3(e)(2) of SIPA.9 bylaw change filing that it continues to
submitted on or before September 27, I. Description of the Proposed Bylaw examine whether the Fund ‘‘target
2016. Rebuttal comments should be Change balance’’ of $2.5 billion is adequate for
submitted by October 11, 2016. SIPC to carry out its mission of
For the Commission, by the Division of
A. Background customer protection, and that it wished
Trading and Markets, pursuant to delegated SIPA requires SIPC, by bylaw, to to ensure that at a minimum, and to the
authority.18 impose assessments upon its member extent possible, the Fund does not fall
Robert W. Errett, broker-dealers as, after consultation below $2.5 billion. SIPC indicated that
Deputy Secretary. with self-regulatory organizations, SIPC it believed it was prudent to consider
[FR Doc. 2016–21252 Filed 9–2–16; 8:45 am] may deem necessary and appropriate to not only the size of the Fund over a six-
BILLING CODE 8011–01–P establish and maintain a broker-dealer month period, but also SIPC’s actual
liquidation fund administered by SIPC expenditures and its projected
(the ‘‘SIPC Fund’’) from which all expenditures from the Fund over a
SECURITIES AND EXCHANGE expenditures by SIPC are to be made, longer term. In addition, SIPC stated
COMMISSION including funds used to facilitate the that the size of the Fund is more likely
liquidation of broker-dealers.10 Pursuant to stay at or above the target balance if
[Release No. SIPA–178; File No. SIPC–2016–
02]
to this authority, SIPC collects annual there is a more gradual reduction in
assessments from its members.11 The assessment rates before the minimum
Securities Investor Protection amount of the annual assessment is assessment rate is imposed. Finally,
Corporation: Order Approving a prescribed by SIPA and the SIPC bylaws SIPC stated that such measures would
Proposed Bylaw Change Relating to and is a percentage of the member make less likely sudden changes in the
SIPC Fund Assessments on SIPC broker-dealer’s net operating revenues assessment rate while giving SIPC
Members from its securities business.12 members some relief in the amount of
the assessment that they owe.
August 30, 2016. Commission finds that such proposed bylaw change
On May 2, 2016, the Securities involves a matter of such significant public interest B. The Proposed Amendments
Investors Protection Corporation that public comment should be obtained, in which
case it may, after notifying SIPC in writing of such With these considerations in mind,
(‘‘SIPC’’) filed with the Securities and finding, require that the procedures set forth in SIPC proposed to modify Article 6 in
Exchange Commission (‘‘Commission’’) section 3(e)(2) of SIPA be followed with respect to
such proposed bylaw change, in the same manner two respects. First, SIPC proposed to
a proposed bylaw change pursuant to
as if such proposed bylaw change were a proposed impose an intermediary assessment rate
section 3(e)(1) of the Securities Investor SIPC rule change. that would apply when the balance of
Protection Act of 1970 (‘‘SIPA’’) 1 4 15 U.S.C. 78ccc(e)(1)(B).
the SIPC Fund is expected to be $2.5
relating to assessments on SIPC member 5 See 15 U.S.C. 78ccc(e)(1)(B); 15 U.S.C.
billion for at least six months but SIPC’s
broker-dealers.2 On May 27, 2016, SIPC 78ccc(e)(2).
unrestricted net assets—a measure of
consented to a 60-day extension of time 6 15 U.S.C. 78ccc(e)(2)(A).
7 See Securities Investor Protection Corporation; net assets that takes into account the
before the proposed bylaw change takes
Notice of Filing of Proposed Bylaw Amendment anticipated cost of ongoing customer
effect pursuant to section 3(e)(1) of Relating to Assessment of SIPC Members, Release protection proceedings—are less than
SIPA.3 Pursuant to section 3(e)(1)(B) of No. SIPA–177 (June 15, 2016), 81 FR 39986 (June
20, 2016).
$2.5 billion, as reflected in its most
18 17 CFR 200.30–3(a)(57). 8 See email dated June 17, 2016 from Jay Lanstein, recent audited Statement of Financial
1 15 U.S.C. 78ccc(e)(1). Chief Executive Officer, Cantella & Co., Inc., Position.14 Secondly, SIPC proposed to
2 See letter dated May 2, 2016 from Josephine available at https://www.sec.gov/comments/sipc-
Wang, Secretary, SIPC, to Brent J. Fields, Secretary, 2016-02/sipc201602-1.htm. from the securities business are gross revenues from
9 See 15 U.S.C. 78ccc(e)(2).
Commission. the securities business, as defined in section 16(9)
3 15 U.S.C. 78ccc(e)(1). This section provides that 10 15 U.S.C. 78ddd. SIPC stated that it solicited of SIPA, 15 U.S.C. 78lll(9), less total interest and
mstockstill on DSK3G9T082PROD with NOTICES
a proposed bylaw change shall take effect thirty the views of self-regulatory organizations regarding dividend expense, but not exceeding total interest
days after the date of the filing of a copy thereof the proposed bylaw change. See email dated July and dividend income. See Article 6; SIPC Form
with the Commission, or upon such later date as 22, 2016 from Josephine Wang, Secretary, SIPC, to SIPC–6, available at http://www.sipc.org/Content/
SIPC may designate or such earlier date as the Brent J. Fields, Secretary, Commission. media/filing-forms/SIPC–6–20130830.PDF.
11 15 U.S.C. 78ddd(d)(2)(C). 13 15 U.S.C. 78ddd(c)(2).
Commission may determine unless: (1) The
Commission, by notice to SIPC setting forth the 12 See 15 U.S.C. 78ddd(d); Bylaws of the 14 See, e.g., SIPC, 2015 Annual Report at 20,
reasons therefor, disapproves such proposed bylaw Securities Investor Protection Corporation, Article available at http://www.sipc.org/Content/media/
change as being contrary to the public interest or 6, available at http://www.sipc.org/about-sipc/ annual-reports/2015-annual-report.pdf (audited
contrary to the purposes of SIPA; or (2) the statute-and-rules/bylaws. Net operating revenues Continued
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![Federal Register / Vol. 81, No. 172 / Tuesday, September 6, 2016 / Notices 61265
likelihood that the SIPC Fund does not 17(a)(2) of the Act, and under section bearing upon the desirability of a
fall below the $2.5 billion target, the 12(d)(1)(J) for an exemption from hearing on the matter, the reason for the
Commission believes that, in setting the sections 12(d)(1)(A) and 12(d)(1)(B) of request, and the issues contested.
assessment rate, it is appropriate to the Act. The requested order would Persons who wish to be notified of a
consider not only the size of the Fund permit (a) actively-managed series of hearing may request notification by
over a six-month period, but SIPC’s certain open-end management writing to the Commission’s Secretary.
actual expenditures and its projected investment companies (‘‘Funds’’) to ADDRESSES: Brent J. Fields, Secretary,
expenditures from the Fund over a issue shares redeemable in large Securities and Exchange Commission,
longer term. In addition, the aggregations only (‘‘Creation Units’’); (b) 100 F Street NE., Washington, DC
Commission believes that the size of the secondary market transactions in Fund 20549–1090; Applicants: Voya
Fund is more likely to remain at or shares to occur at negotiated market Investment Management, 7337 East
above the target level if there is a more prices rather than at net asset value Doubletree Ranch Road, Suite 100,
gradual reduction in rates before the (‘‘NAV’’); (c) certain Funds to pay Scottsdale, Arizona 85258.
minimum assessment rate is imposed. redemption proceeds, under certain FOR FURTHER INFORMATION CONTACT:
Finally, the Commission believes that circumstances, more than seven days Laura J. Riegel, Senior Counsel, at (202)
the proposed bylaw change would give after the tender of shares for 551–3038, or Mary Kay Frech, Branch
SIPC members appropriate relief in the redemption; (d) certain affiliated Chief, at (202) 551–6821 (Division of
amount of assessment that they owe persons of a Fund to deposit securities Investment Management, Chief
while maintaining the assessment rate at into, and receive securities from, the Counsel’s Office).
a level that is designed to keep the fund Fund in connection with the purchase
SUPPLEMENTARY INFORMATION: The
at the target level. Further, the and redemption of Creation Units; (e)
following is a summary of the
Commission notes that the Fund plays certain registered management
application. The complete application
a critical role in protecting customers of investment companies and unit
may be obtained via the Commission’s
failed broker-dealer. investment trusts outside of the same
Web site by searching for the file
In addition, the Commission believes group of investment companies as the
number, or for an applicant using the
that the proposed amendment to the Funds (‘‘Funds of Funds’’) to acquire
Company name box, at http://
Notice Provision will provide SIPC shares of the Funds; and (f) certain
www.sec.gov/search/search.htm or by
member broker-dealers with earlier Funds (‘‘Feeder Funds’’) to create and
calling (202) 551–8090.
notice of the assessment rate for the redeem Creation Units in-kind in a
following year but also allow for more master-feeder structure. Summary of the Application
prompt changes to the assessment level 1. Applicants request an order that
when merited in certain emergency APPLICANTS: Voya ETF Trust (the would allow Funds to operate as
situations. ‘‘Trust’), a Delaware statutory trust that actively-managed exchange traded
will be registered under the Act as an funds (‘‘ETFs’’).1 Fund shares will be
IV. Conclusion
open-end management investment purchased and redeemed at their NAV
IT IS THEREFORE ORDERED, company with multiple series, Voya
pursuant to section 3(e)(2) of SIPA, that in Creation Units only. All orders to
Investments, LLC, an Arizona limited purchase Creation Units and all
the proposed bylaw change is liability company, and Directed
approved.21 redemption requests will be placed by
Services, LLC, a Delaware limited or through an ‘‘Authorized Participant’’,
By the Commission. liability company (each of Voya which will have signed a participant
Dated: August 30, 2016. Investments, LLC and Directed Services, agreement with the Distributor. Shares
Brent J. Fields, LLC, an ‘‘Initial Adviser’’), each will be listed and traded individually on
registered as an investment adviser a national securities exchange, where
Secretary.
under the Investment Advisers Act of share prices will be based on the current
[FR Doc. 2016–21269 Filed 9–2–16; 8:45 am]
1940, Voya Investments Distributor, LLC bid/offer market. Certain Funds may
BILLING CODE 8011–01–P
(the ‘‘Distributor’’), an Arizona limited operate as Feeder Funds in a master-
liability company and broker-dealer feeder structure. Any order granting the
registered under the Securities requested relief would be subject to the
SECURITIES AND EXCHANGE
Exchange Act of 1934 (‘‘Exchange Act’’). terms and conditions stated in the
COMMISSION
FILING DATES: The application was filed application.
[Investment Company Act Release No. on October 27, 2015 and amended on 2. Each Fund will consist of a
32246; 812–14571] April 1, 2016. portfolio of securities and other assets
Voya ETF Trust, et al., Notice of HEARING OR NOTIFICATION OF HEARING: An and investment positions (‘‘Portfolio
Application order granting the requested relief will Positions’’). Each Fund will disclose on
be issued unless the Commission orders its Web site the identities and quantities
August 30, 2016. a hearing. Interested persons may of the Portfolio Positions that will form
AGENCY: Securities and Exchange request a hearing by writing to the the basis for the Fund’s calculation of
Commission (‘‘Commission’’). Commission’s Secretary and serving NAV at the end of the day.
ACTION: Notice of an application for an applicants with a copy of the request,
order under section 6(c) of the personally or by mail. Hearing requests 1 Applicants request that the order apply to the
Investment Company Act of 1940 (the should be received by the Commission initial Fund, as well as future series of the Trust and
mstockstill on DSK3G9T082PROD with NOTICES
other open-end management investment companies
‘‘Act’’) for an exemption from sections by 5:30 p.m. on September 26, 2016, or series thereof that currently exist or that may be
2(a)(32), 5(a)(1), 22(d), and 22(e) of the and should be accompanied by proof of created in the future (each, included in the term
Act and rule 22c–1 under the Act, under service on applicants, in the form of an ‘‘Fund’’), each of which will operate as an actively-
sections 6(c) and 17(b) of the Act for an affidavit, or for lawyers, a certificate of managed ETF. Any Fund will (a) be advised by an
Initial Adviser or an entity controlling, controlled
exemption from sections 17(a)(1) and service. Pursuant to rule 0–5 under the by, or under common control with such Initial
Act, hearing requests should state the Adviser (each, an ‘‘Adviser’’) and (b) comply with
21 15 U.S.C. 78ccc(e)(2). nature of the writer’s interest, any facts the terms and conditions of the application.
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Document Created: 2018-02-09 12:04:23
Document Modified: 2018-02-09 12:04:23
| 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 61263 |
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