81 FR 71127 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change Amending NYSE Arca Equities Rule 7.35P To Provide for Widened Price Collar Thresholds for the Core Open Auction on Volatile Trading Days
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 199 (October 14, 2016)
Federal Register Volume 81, Issue 199 (October 14, 2016)
| Page Range | 71127-71129 | |
| FR Document | 2016-24839 |
[Federal Register Volume 81, Number 199 (Friday, October 14, 2016)] [Notices] [Pages 71127-71129] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-24839] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79068; File No. SR-NYSEArca-2016-136] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change Amending NYSE Arca Equities Rule 7.35P To Provide for Widened Price Collar Thresholds for the Core Open Auction on Volatile Trading Days October 7, 2016. Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that, on September 28, 2016, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE Arca'') filed with the Securities and Exchange Commission (the ``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend NYSE Arca Equities Rule 7.35P to provide for widened price collar thresholds for the Core Open Auction on volatile trading days. The proposed rule change is available on the Exchange's Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend NYSE Arca Equities Rule 7.35P (``Rule 7.35P'') to provide for widened price collar thresholds for the Core Open Auction on volatile trading days. The Exchange believes that widening the Auction Collars for the Core Open Auction during periods of market-wide volatility would assist the Exchange in conducting fair and orderly auctions for its listed securities. As set forth in Rule 7.35P(a)(10), the price collar thresholds for the Core Open Auction are currently set at 10% for securities with an Auction Reference Price of $25.00 or less, 5% for securities with an Auction Reference Price greater than $25.00 but less than or equal to $50.00, and 3% for securities with an Auction Reference Price greater than $50.00.\4\ --------------------------------------------------------------------------- \4\ The Auction Reference Price for the Core Open Auction is the midpoint of the Auction NBBO or, if the Auction NBBO is locked, the locked price. If there is no Auction NBBO, the prior trading day's Official Closing Price. The Auction Reference Price for the Trading Halt Auction is the last consolidated round-lot price of that trading day, and if none, the prior trading day's Official Closing Price. See NYSE Arca Equities Rule 7.35P(a)(8). --------------------------------------------------------------------------- The Exchange proposes to widen the applicable Auction Collars for the Core Open Auction on days with market-wide volatility to 10% for all Auction-Eligible Securities,\5\ regardless of the Auction Reference Price. The Exchange believes that for securities priced greater than $25.00, the proposed wider price collar threshold would allow for additional price movements during periods of market-wide volatility, while continuing to prevent auctions from occurring at prices significantly away from the applicable Auction Reference Price.\6\ The proposed 10% price collar threshold for the Core Open Auction is the same as currently used by the [[Page 71128]] Nasdaq Stock Market LLC (``Nasdaq'') for its opening crosses.\7\ --------------------------------------------------------------------------- \5\ For the Core Open Auction, Auction-Eligible Securities are all securities for which the Exchange is the primary listing market and UTP Securities designated by the Exchange. See NYSE Arca Equities Rule 7.35P(a)(1)(A). \6\ On June 24, 2016, the Exchange temporarily widened Auction Collars for the Core Open Auction for all Auction-Eligible Securities to 10% in response to the a temporary basis [sic] referendum vote by the United Kingdom (``UK'') to leave the European Union, which resulted in an extraordinary level of global market activity, including the pricing of the ETPs traded on the Exchange. See Securities Exchange [sic] Release No. 78152 (June 24, 2016), 81 FR 42781 (June 30, 2016) (SR-NYSEArca-2016-90). \7\ See Nasdaq Rule 4752(d)(2)(E) and http://www.nasdaqtrader.com/content/productsservices/trading/crosses/openclose_faqs.pdf. --------------------------------------------------------------------------- To determine whether there is market-wide volatility, the Exchange proposes to use the same standard that its affiliated exchange, the New York Stock Exchange LLC (``NYSE''), recently added to determine whether there is market-wide volatility.\8\ As proposed, the Exchange would widen its Auction Collars for the Core Open Auction if, as of 9:00 a.m. Eastern Time, the E-mini S&P 500 Futures are +/- 2% from the prior day's closing price of the E-mini S&P 500 Futures or the Exchange determines that it is necessary or appropriate for the maintenance of a fair and orderly market. Market-wide volatility applies similar pricing pressure to all eligible securities and, in addition to the empirical measurement of the E-mini S&P 500 Futures, the Exchange proposes that it would have the power to widen the Auction Collars if it determines that it is necessary or appropriate for the maintenance of a fair and orderly market.\9\ --------------------------------------------------------------------------- \8\ See NYSE Rules 15(d)(2) and 123D(a)(1)(B)(ii); see also Securities Exchange [sic] Release No. 78228 (July 5, 2016), 81 FR 44907 (July 11, 2016) (SR-NYSE-2016-24) (Approval Order). \9\ Volatility affecting the Core Open Auction can emanate from many sources, including the previous day's trading session, overnight trading, trading in the foreign markets before the opening, substantial activity in the futures market before the opening, government actions or announcements, global news and events, and changes to the E-mini S&P Futures after 9:00 a.m. Eastern Time. --------------------------------------------------------------------------- The Exchange believes that widening the Auction Collars for the Core Open Auction during periods of market-wide volatility would promote greater efficiency and transparency on such trading days by specifying uniform parameters for how the Core Open Auction would be effectuated for all Auction-Eligible securities on trading days experiencing market-wide volatility. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Act,\10\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\11\ in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system, and in general, to protect investors and the public interest. --------------------------------------------------------------------------- \10\ 15 U.S.C. 78f(b). \11\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- In particular, the Exchange believes that applying the same Auction Collars of 10% to all Eligible Auction Securities during periods of market-wide volatility, regardless of the Auction Reference Price, would remove impediments to and perfect the mechanism of a free and open market and a national market system, and in general, protect investors and the public interest, because it would promote fair and orderly auctions during periods when market-wide volatility is causing pricing dislocation across all securities. The Exchange further believes that widening the price collar thresholds for all securities would remove impediments to and perfect the mechanism of a national market system because it is designed to allow for greater price movement, while at the same time preventing auction trades from occurring at prices significantly away from the applicable Auction Reference Price. Accordingly, investors would be protected from executions significantly away from the last sale in a security or other applicable reference price, but natural price fluctuations resulting from the market volatility would be permitted. In addition, the Exchange believes that widening the Auction Collars could reduce the possibility of securities triggering multiple trading pauses under the Regulation NMS Plan to Address Market Volatility. The Exchange further believes that by specifying the standards for when Auction Collars would be widened, the proposal would advance the efficiency and transparency of the opening process, thereby fostering accurate price discovery at the open of trading. For the same reasons, the proposal is also designed to protect investors as well as the public interest. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change is not designed to address competitive issues but rather is designed to ensure a fair and orderly market by widening the price collar thresholds for the Core Open Auction on trading days with market-wide volatility and therefore will not create a burden on competition. The proposed rule change is not intended to address competitive issues but rather promote greater efficiency and transparency at the open of trading on the Exchange. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: A. By order approve or disapprove such proposed rule change, or B. institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change 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 Number SR-NYSEArca-2016-136 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSEArca-2016-136. 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 [[Page 71129]] provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing 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 Number SR-NYSEArca-2016-136 and should be submitted on or before November 4, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\12\ --------------------------------------------------------------------------- \12\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-24839 Filed 10-13-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 199 / Friday, October 14, 2016 / Notices 71127
inspection and copying at the principal SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s
office of the Exchange. All comments COMMISSION Statement of the Purpose of, and the
received will be posted without change; Statutory Basis for, the Proposed Rule
the Commission does not edit personal [Release No. 34–79068; File No. SR– Change
identifying information from NYSEArca–2016–136] 1. Purpose
submissions. You should submit only
information that you wish to make Self-Regulatory Organizations; NYSE The Exchange proposes to amend
available publicly. All submissions Arca, Inc.; Notice of Filing of Proposed NYSE Arca Equities Rule 7.35P (‘‘Rule
should refer to File Number SR–Phlx– Rule Change Amending NYSE Arca 7.35P’’) to provide for widened price
2016–92 and should be submitted on or Equities Rule 7.35P To Provide for collar thresholds for the Core Open
before November 4, 2016. Widened Price Collar Thresholds for Auction on volatile trading days. The
the Core Open Auction on Volatile Exchange believes that widening the
VI. Accelerated Approval of Proposed
Trading Days Auction Collars for the Core Open
Rule Change, as Modified by Partial
Amendment Nos.1, 2 and 3 October 7, 2016.
Auction during periods of market-wide
volatility would assist the Exchange in
The Commission finds good cause to Pursuant to Section 19(b)(1) 1 of the conducting fair and orderly auctions for
approve the proposed rule change, as Securities Exchange Act of 1934 (the its listed securities.
modified by Partial Amendment Nos. 1, ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
As set forth in Rule 7.35P(a)(10), the
2 and 3, prior to the thirtieth day after notice is hereby given that, on
price collar thresholds for the Core
the date of publication of notice of the September 28, 2016, NYSE Arca, Inc.
Open Auction are currently set at 10%
proposed rule change, as modified by (the ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed
for securities with an Auction Reference
Partial Amendment Nos. 1, 2 and 3 in with the Securities and Exchange
Price of $25.00 or less, 5% for securities
the Federal Register. As described Commission (the ‘‘Commission’’) the
with an Auction Reference Price greater
above, the Exchange proposes to amend proposed rule change as described in
than $25.00 but less than or equal to
its rules to comply with the Plan. The Items I and II below, which Items have
$50.00, and 3% for securities with an
Commission notes that the Pilot started been prepared by the self-regulatory
Auction Reference Price greater than
implementation on October 3, 2016, and organization. The Commission is
$50.00.4
accelerated approval of the proposal publishing this notice to solicit
comments on the proposed rule change The Exchange proposes to widen the
would ensure that the rules of the
from interested persons. applicable Auction Collars for the Core
Exchange would be in place during
Open Auction on days with market-
implementation. Accordingly, the I. Self-Regulatory Organization’s wide volatility to 10% for all Auction-
Commission finds good cause, pursuant Statement of the Terms of Substance of Eligible Securities,5 regardless of the
to Section 19(b)(2) of the Exchange the Proposed Rule Change Auction Reference Price. The Exchange
Act,45 to approve the proposed rule
believes that for securities priced greater
change, as modified by Partial The Exchange proposes to amend
than $25.00, the proposed wider price
Amendment Nos. 1, 2 and 3, on an NYSE Arca Equities Rule 7.35P to
collar threshold would allow for
accelerated basis. provide for widened price collar
additional price movements during
thresholds for the Core Open Auction
VII. Conclusion periods of market-wide volatility, while
on volatile trading days. The proposed
continuing to prevent auctions from
It is therefore ordered that, pursuant rule change is available on the
occurring at prices significantly away
to Section 19(b)(2) of the Exchange Exchange’s Web site at www.nyse.com,
from the applicable Auction Reference
Act,46 that the proposed rule change at the principal office of the Exchange,
Price.6 The proposed 10% price collar
(SR–Phlx–2016–92), as modified by and at the Commission’s Public
threshold for the Core Open Auction is
Partial Amendment Nos. 1, 2 and 3, be Reference Room.
the same as currently used by the
and hereby is approved on an II. Self-Regulatory Organization’s
accelerated basis. Statement of the Purpose of, and 4 The Auction Reference Price for the Core Open
For the Commission, by the Division of Statutory Basis for, the Proposed Rule Auction is the midpoint of the Auction NBBO or,
if the Auction NBBO is locked, the locked price. If
Trading and Markets, pursuant to delegated Change there is no Auction NBBO, the prior trading day’s
authority.47 Official Closing Price. The Auction Reference Price
Robert W. Errett, In its filing with the Commission, the for the Trading Halt Auction is the last consolidated
self-regulatory organization included round-lot price of that trading day, and if none, the
Deputy Secretary. prior trading day’s Official Closing Price. See NYSE
statements concerning the purpose of,
[FR Doc. 2016–24835 Filed 10–13–16; 8:45 am] Arca Equities Rule 7.35P(a)(8).
and basis for, the proposed rule change 5 For the Core Open Auction, Auction-Eligible
BILLING CODE 8011–01–P
and discussed any comments it received Securities are all securities for which the Exchange
on the proposed rule change. The text is the primary listing market and UTP Securities
of those statements may be examined at designated by the Exchange. See NYSE Arca
Equities Rule 7.35P(a)(1)(A).
the places specified in Item IV below. 6 On June 24, 2016, the Exchange temporarily
The Exchange has prepared summaries, widened Auction Collars for the Core Open Auction
rmajette on DSK2TPTVN1PROD with NOTICES
set forth in sections A, B, and C below, for all Auction-Eligible Securities to 10% in
of the most significant parts of such response to the a temporary basis [sic] referendum
vote by the United Kingdom (‘‘UK’’) to leave the
statements. European Union, which resulted in an
extraordinary level of global market activity,
45 15
including the pricing of the ETPs traded on the
U.S.C. 78s(b)(2). 1 15 U.S.C. 78s(b)(1). Exchange. See Securities Exchange [sic] Release No.
46 Id. 2 15 U.S.C. 78a. 78152 (June 24, 2016), 81 FR 42781 (June 30, 2016)
47 17 CFR 200.30–3(a)(12). 3 17 CFR 240.19b–4. (SR–NYSEArca–2016–90).
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Nasdaq Stock Market LLC (‘‘Nasdaq’’) general, to protect investors and the C. Self-Regulatory Organization’s
for its opening crosses.7 public interest. Statement on Comments on the
To determine whether there is market- In particular, the Exchange believes Proposed Rule Change Received From
wide volatility, the Exchange proposes that applying the same Auction Collars Members, Participants, or Others
to use the same standard that its of 10% to all Eligible Auction Securities No written comments were solicited
affiliated exchange, the New York Stock during periods of market-wide or received with respect to the proposed
Exchange LLC (‘‘NYSE’’), recently volatility, regardless of the Auction rule change.
added to determine whether there is Reference Price, would remove
market-wide volatility.8 As proposed, impediments to and perfect the III. Date of Effectiveness of the
the Exchange would widen its Auction mechanism of a free and open market Proposed Rule Change and Timing for
Collars for the Core Open Auction if, as and a national market system, and in Commission Action
of 9:00 a.m. Eastern Time, the E-mini general, protect investors and the public Within 45 days of the date of
S&P 500 Futures are +/- 2% from the interest, because it would promote fair publication of this notice in the Federal
prior day’s closing price of the E-mini and orderly auctions during periods Register or within such longer period
S&P 500 Futures or the Exchange when market-wide volatility is causing up to 90 days (i) as the Commission may
determines that it is necessary or pricing dislocation across all securities. designate if it finds such longer period
appropriate for the maintenance of a fair The Exchange further believes that to be appropriate and publishes its
and orderly market. Market-wide widening the price collar thresholds for reasons for so finding or (ii) as to which
volatility applies similar pricing all securities would remove the self-regulatory organization
pressure to all eligible securities and, in impediments to and perfect the consents, the Commission will:
addition to the empirical measurement mechanism of a national market system A. By order approve or disapprove
of the E-mini S&P 500 Futures, the because it is designed to allow for such proposed rule change, or
Exchange proposes that it would have greater price movement, while at the B. institute proceedings to determine
the power to widen the Auction Collars same time preventing auction trades whether the proposed rule change
if it determines that it is necessary or from occurring at prices significantly should be disapproved.
appropriate for the maintenance of a fair away from the applicable Auction
and orderly market.9 Reference Price. Accordingly, investors IV. Solicitation of Comments
The Exchange believes that widening would be protected from executions Interested persons are invited to
the Auction Collars for the Core Open significantly away from the last sale in submit written data, views, and
Auction during periods of market-wide a security or other applicable reference arguments concerning the foregoing,
volatility would promote greater price, but natural price fluctuations including whether the proposed rule
efficiency and transparency on such resulting from the market volatility change is consistent with the Act.
trading days by specifying uniform would be permitted. In addition, the Comments may be submitted by any of
parameters for how the Core Open Exchange believes that widening the the following methods:
Auction would be effectuated for all Auction Collars could reduce the
Auction-Eligible securities on trading possibility of securities triggering Electronic Comments
days experiencing market-wide multiple trading pauses under the • Use the Commission’s Internet
volatility. Regulation NMS Plan to Address Market comment form (http://www.sec.gov/
2. Statutory Basis Volatility. rules/sro.shtml); or
The Exchange further believes that by • Send an email to rule-comments@
The proposed rule change is specifying the standards for when sec.gov. Please include File Number SR–
consistent with Section 6(b) of the Auction Collars would be widened, the NYSEArca–2016–136 on the subject
Act,10 in general, and furthers the proposal would advance the efficiency line.
objectives of Section 6(b)(5) of the Act,11 and transparency of the opening
in particular, in that it is designed to Paper Comments
process, thereby fostering accurate price
prevent fraudulent and manipulative discovery at the open of trading. For the • Send paper comments in triplicate
acts and practices, to promote just and same reasons, the proposal is also to Brent J. Fields, Secretary, Securities
equitable principles of trade, to foster designed to protect investors as well as and Exchange Commission, 100 F Street
cooperation and coordination with the public interest. NE., Washington, DC 20549–1090.
persons engaged in facilitating All submissions should refer to File
transactions in securities, and to remove B. Self-Regulatory Organization’s Number SR–NYSEArca–2016–136. This
impediments to and perfect the Statement on Burden on Competition file number should be included on the
mechanism of a free and open market The Exchange does not believe that subject line if email is used. To help the
and a national market system, and in the proposed rule change would impose Commission process and review your
any burden on competition that is not comments more efficiently, please use
7 See Nasdaq Rule 4752(d)(2)(E) and http://
necessary or appropriate in furtherance only one method. The Commission will
www.nasdaqtrader.com/content/productsservices/ of the purposes of the Act. The post all comments on the Commission’s
trading/crosses/openclose_faqs.pdf.
8 See NYSE Rules 15(d)(2) and 123D(a)(1)(B)(ii); proposed rule change is not designed to Internet Web site (http://www.sec.gov/
see also Securities Exchange [sic] Release No. 78228 address competitive issues but rather is rules/sro.shtml). Copies of the
(July 5, 2016), 81 FR 44907 (July 11, 2016) (SR– designed to ensure a fair and orderly submission, all subsequent
NYSE–2016–24) (Approval Order). market by widening the price collar amendments, all written statements
9 Volatility affecting the Core Open Auction can
thresholds for the Core Open Auction with respect to the proposed rule
rmajette on DSK2TPTVN1PROD with NOTICES
emanate from many sources, including the previous
day’s trading session, overnight trading, trading in on trading days with market-wide change that are filed with the
the foreign markets before the opening, substantial volatility and therefore will not create a Commission, and all written
activity in the futures market before the opening, burden on competition. The proposed communications relating to the
government actions or announcements, global news
and events, and changes to the E-mini S&P Futures
rule change is not intended to address proposed rule change between the
after 9:00 a.m. Eastern Time. competitive issues but rather promote Commission and any person, other than
10 15 U.S.C. 78f(b). greater efficiency and transparency at those that may be withheld from the
11 15 U.S.C. 78f(b)(5). the open of trading on the Exchange. public in accordance with the
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provisions of 5 U.S.C. 552, will be HEARING OR NOTIFICATION OF HEARING: established for the sole purpose of
available for Web site viewing and An order granting the application will holding the assets and issuing ABS to
printing in the Commission’s Public be issued unless the Commission orders investors (an ‘‘ABS Transaction’’).
Reference Room, 100 F Street NE., a hearing. Interested persons may Payments of interest and principal on
Washington, DC 20549 on official request a hearing by writing to the the ABS depend primarily on the cash
business days between the hours of Commission’s Secretary and serving flow generated by the pool of assets
10:00 a.m. and 3:00 p.m. Copies of the applicant with a copy of the request, owned by the Issuer.
filing also will be available for personally or by mail. Hearing requests 3. The parties to an ABS Transaction
inspection and copying at the principal should be received by the Commission enter into several transaction
office of the Exchange. All comments by 5:30 p.m. on October 31, 2016 and agreements that provide for the holding
received will be posted without change; should be accompanied by proof of of the assets by the Issuer and define the
the Commission does not edit personal service on the applicant, in the form of rights and responsibilities of the parties
identifying information from an affidavit or, for lawyers, a certificate to the transaction (‘‘Transaction
submissions. You should submit only of service. Pursuant to rule 0–5 under Documents’’). The operative Transaction
information that you wish to make the Act, hearing requests should state Document governing the trustee is
available publicly. All submissions the nature of the writer’s interest, any referred to herein as the ‘‘Agreement.’’
should refer to File Number SR– facts bearing upon the desirability of a 4. The sponsor of an ABS Transaction
NYSEArca–2016–136 and should be hearing on the matter, the reason for the assembles the pool of assets by
submitted on or before November 4, request, and the issues contested. purchasing or funding them, describes
2016. Persons who wish to be notified of a them in the offering materials, and
hearing may request notification by retains the underwriter to sell interests
For the Commission, by the Division of in the assets to investors. The sponsor
Trading and Markets, pursuant to delegated writing to the Commission’s Secretary.
ADDRESSES: Brent J. Fields, Secretary,
determines the structure of the ABS
authority.12
U.S. Securities and Exchange Transaction and drafts the Transaction
Robert W. Errett,
Commission, 100 F Street NE., Documents. The sponsor selects the
Deputy Secretary. other parties to the ABS Transaction,
[FR Doc. 2016–24839 Filed 10–13–16; 8:45 am]
Washington, DC 20549–1090.
including the underwriter, the servicer,
Applicants: Lincoln Finkenberg, Esq.,
BILLING CODE 8011–01–P and the trustee.
Associate General Counsel & Managing
5. The servicer, either directly or
Director, The Bank of New York Mellon, through subservicers, manages the
SECURITIES AND EXCHANGE 225 Liberty Street, New York, NY assets that the Issuer holds. The servicer
COMMISSION 10286. typically collects all the income from
FOR FURTHER INFORMATION CONTACT: the assets and remits the income to the
[Investment Company Act Release No. Laura J. Riegel, Senior Counsel, at (202) trustee. The trustee uses the income, as
32309; File No. 812–14680–01] 551–3038, or Mary Kay Frech, Branch instructed by the servicer and/or as
Chief, at (202) 551–6821 (Division of provided by the Agreement, to pay
The Bank of New York Mellon Trust
Investment Management, Chief interest and principal on the ABS, to
Company, National Association and
Counsel’s Office). fund reserve accounts and purchases of
The Bank of New York Mellon; Notice
SUPPLEMENTARY INFORMATION: The additional assets, and to make other
of Application
following is a summary of the payments including fees owed to the
October 7, 2016. application. The complete application trustee and other parties to the ABS
AGENCY: Securities and Exchange may be obtained via the Commission’s Transaction.
Commission (‘‘Commission’’). Web site by searching for the file 6. The sponsor of an ABS Transaction
number, or for an applicant using the selects the trustee and other participants
ACTION: Notice of an application under
Company name box, at http:// in the transaction. In selecting a trustee,
section 6(c) of the Investment Company
www.sec.gov/search/search.htm or by the sponsor generally seeks to obtain
Act of 1940 (‘‘Act’’) for an exemption
calling (202) 551–8090. customary trust administrative and
from certain requirements of rule 3a–
Applicants’ Representations: related services for the Issuer at minimal
7(a)(4)(i) under the Act.
1. Both applicants are wholly-owned cost. In some instances, other parties to
SUMMARY OF APPLICATION: Applicants direct subsidiaries of The Bank of New an ABS Transaction may provide
request an order that would permit an York Mellon Corporation.1 Each recommendations to a sponsor about
issuer of asset-backed securities applicant is frequently selected to act as potential trustees. An underwriter for an
(‘‘ABS’’) that is not registered as an trustee in connection with ABS issued ABS Transaction also may provide
investment company under the Act in by Issuers. advice to the sponsor about trustee
reliance on rule 3a–7 under the Act (an 2. An ABS transaction typically selection based on, among other things,
‘‘Issuer’’) to appoint any of the involves the transfer of assets by a the underwriter’s knowledge of the
applicants to act as a trustee in seller, usually by a ‘‘sponsor,’’ to a pricing and expertise offered by a
connection with the Issuer’s ABS when bankruptcy remote special purpose particular trustee in light of the
any such applicant is affiliated with an corporate or trust entity that is contemplated transaction.
7. If an underwriter affiliated with an
underwriter for the Issuer’s ABS. 1 Applicants also request that the order apply to applicant recommends a trustee to a
APPLICANTS: The Bank of New York an Issuer’s future appointment of any other entity sponsor, both the underwriter’s
rmajette on DSK2TPTVN1PROD with NOTICES
Mellon Trust Company, National controlling, controlled by, or under common
recommendation and any selection of an
Association and The Bank of New York control (as defined in section 2(a)(9) of the Act)
with any of the applicants as a trustee in connection applicant by the sponsor will be based
Mellon. with an Issuer’s ABS. Applicants represent that any upon customary market considerations
FILING DATES: The application was filed other entity that relies on the order in the future of pricing and expertise, among other
on August 1, 2016. will comply with the terms and conditions of the
application. Any existing entity currently intending
things, and the selection will result from
to rely on the requested order has been named as an arms-length negotiation between the
12 17 CFR 200.30–3(a)(12). an applicant. sponsor and an applicant. An applicant
VerDate Sep<11>2014 14:29 Oct 13, 2016 Jkt 241001 PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 E:\FR\FM\14OCN1.SGM 14OCN1](https://thefederalregister.org/doc/81_FR_71326/page/3.svg)
Document Created: 2016-10-14 00:00:51
Document Modified: 2016-10-14 00:00:51
| 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 71127 |
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