81 FR 86760 - Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving a Proposed Rule Change Relating To Listing and Trading of Shares of the Virtus Enhanced U.S. Equity ETF Under Commentary .01 to NYSE Arca Equities Rule 5.2(j)(3)
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 231 (December 1, 2016)
Federal Register Volume 81, Issue 231 (December 1, 2016)
| Page Range | 86760-86762 | |
| FR Document | 2016-28830 |
[Federal Register Volume 81, Number 231 (Thursday, December 1, 2016)] [Notices] [Pages 86760-86762] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-28830] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79402; File No. SR-NYSEArca-2016-131] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving a Proposed Rule Change Relating To Listing and Trading of Shares of the Virtus Enhanced U.S. Equity ETF Under Commentary .01 to NYSE Arca Equities Rule 5.2(j)(3) November 25, 2016. I. Introduction On October 3, 2016, NYSE Arca, Inc. (``Exchange'') filed with the Securities and Exchange Commission (``Commission''), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to list and trade shares (``Shares'') of the Virtus Enhanced U.S. Equity ETF (``Fund''), a series of Virtus ETF Trust II (``Trust''), under Commentary .01 to NYSE Arca Equities Rule 5.2(j)(3) (``Investment Company Units''). The proposed rule change was published for comment in the Federal Register on October 20, 2016.\3\ The Commission received no comments on the proposed rule change. This order approves the proposed rule change. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ See Securities Exchange Act Release No. 79101 (October 14, 2016), 81 FR 72630 (``Notice''). --------------------------------------------------------------------------- II. Exchange's Description of the Proposal \4\ --------------------------------------------------------------------------- \4\ The Commission notes that additional information regarding the Fund, the Trust, and the Shares, including investment strategies, risks, creation and redemption procedures, fees, portfolio holdings disclosure policies, calculation of net asset value (``NAV''), distributions, and taxes, among other things, can be found in the Notice, and the Registration Statement, as applicable. See Notice, supra note 3, and Registration Statement, infra note 6. --------------------------------------------------------------------------- The Exchange proposes to list and trade Shares of the Fund under Commentary .01 to NYSE Arca Equities Rule 5.2(j)(3), which governs the listing and trading of Investment Company Units on the Exchange. The Exchange represents that it has submitted the proposed rule change because the underlying index of the Fund does not meet all of the generic listing requirements of Commentary .01(a)(A) to NYSE Arca Equities Rule 5.2(j)(3), applicable to the listing of Investment Company Units based upon an index of ``US Component Stocks.'' Specifically, as discussed in the Notice,\5\ options on the S&P 500 index may be Index components. Consequently, the Index is not composed entirely of US Component Stocks, and therefore the Shares do not satisfy the requirements for generic listing under Commentary .01(a)(A) to NYSE Arca Equities Rule 5.2(j)(3). --------------------------------------------------------------------------- \5\ See Notice, supra note 3, 81 FR at 72631. --------------------------------------------------------------------------- The Fund will be an index-based exchange traded fund (``ETF''). The Shares will be offered by the Trust, which is registered with the Commission as an investment company and has filed a registration statement on Form N-1A (the ``Registration Statement'') with the Commission on behalf of the Fund.\6\ --------------------------------------------------------------------------- \6\ The Exchange represents that, on September 1, 2016, the Trust filed a Registration Statement on Form N-1A under the Securities and Exchange Act of 1933 and the Investment Company Act of 1940 (``1940 Act'') (File Nos. 333-206600 and 811-23078). According to the Exchange, the Trust has obtained certain exemptive relief from the Commission under the 1940 Act. See Investment Company Act Release No. 30825 (December 11, 2013) (File No. 812- 14212). --------------------------------------------------------------------------- The investment adviser to the Fund will be Virtus ETF Advisers LLC (``Adviser''). ETF Distributors LLC will serve as the distributor (``Distributor'') of Fund shares on an agency basis. The Bank of New York Mellon (``Administrator'') will be the administrator, custodian and transfer agent for the Fund. A. The Fund's Principal Investments According to the Exchange, the Fund's investment objective is to seek investment results that, before fees and expenses, closely correspond to the price and yield performance of the Rampart Enhanced U.S. Equity Index (``Index'').\7\ Under normal market conditions,\8\ the Fund will invest not less than 80% of its total assets in component securities of the Index. Additionally, under normal market conditions, the Fund will invest not less than 80% of its total assets in U.S. exchange-traded common stocks. The Fund will also seek to generate additional income by writing SPX call options and will seek additional capital appreciation by purchasing SPX call options. --------------------------------------------------------------------------- \7\ According to the Exchange, the Index was developed by Rampart Investment Management Company, LLC (``Index Provider''), and is calculated and maintained by NYSE Global Index Group (``Index Calculation Agent''). The Index Provider is affiliated with the Adviser and the Distributor. The Index Calculation Agent is not affiliated with the Adviser, Distributor, Administrator, or the Trust. \8\ The term ``normal market conditions'' is defined in NYSE Arca Equities Rule 8.600(c)(5). On a temporary basis, including for defensive purposes, during the initial invest-up period and during periods of high cash inflows or outflows, the Fund may depart from its principal investment strategies; for example, it may hold a higher than normal proportion of its assets in cash. During such periods, the Fund may not be able to achieve its investment objectives. The Fund may adopt a defensive strategy when the Adviser believes securities in which the Fund normally invests have elevated risks due to political or economic factors and in other extraordinary circumstances. --------------------------------------------------------------------------- B. The Fund's Non-Principal Investments While the Fund, under normal market conditions will invest at least 80% of its net assets in the securities and financial instruments described above, the Fund may invest its remaining assets in the securities and financial instruments described below. The Fund may invest in short-term, high quality securities issued or guaranteed by the U.S. government (in addition to U.S. Treasury securities) and non-U.S. governments, and each of their agencies and instrumentalities; debt securities issued by U.S. government sponsored enterprises; repurchase [[Page 86761]] agreements backed by U.S. government and non-U.S. government securities; money market mutual funds; and deposit and other obligations of U.S. and non-U.S. banks and financial institutions (``Money Market Instruments''). The Fund may invest in ETFs.\9\ --------------------------------------------------------------------------- \9\ The Fund will not invest in leveraged ETFs, (e.g., 2X or 3X) or inverse or inverse leveraged ETFs (e.g., -1X or -2X). --------------------------------------------------------------------------- The Fund may invest in U.S. exchange-traded equity index futures contracts. The Fund may invest in U.S. exchange-traded index options (other than SPX) and U.S. exchange-traded options on ETFs. The Fund may invest in U.S. exchange-traded options on futures contacts and U.S. exchange-traded options on stocks. C. Investment Restrictions The Exchange represents that the Fund will not invest in any non- U.S. equity securities. The Fund's investments will be consistent with the Fund's investment objective and will not be used to enhance leverage. The Fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended.\10\ --------------------------------------------------------------------------- \10\ 26 U.S.C. 851. --------------------------------------------------------------------------- III. Discussion and Commission's Findings After careful review, the Commission finds that the proposed rule change is consistent with the requirements of Section 6 of the Act \11\ and the rules and regulations thereunder applicable to a national securities exchange.\12\ In particular, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act,\13\ which requires, among other things, that the Exchange's rules be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, 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. --------------------------------------------------------------------------- \11\ 15 U.S.C. 78f. \12\ 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). \13\ 17 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Commission also finds that the proposal to list and trade the Shares on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the Act,\14\ which sets forth Congress' finding that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure the availability to brokers, dealers, and investors of information with respect to quotations for, and transactions in, securities. Quotation and last- sale information for the Shares will be available via the Consolidated Tape Association (``CTA''). The current value of the Index will be widely disseminated by one or more major market data vendors as required by NYSE Arca Equities Rule 5.2(j)(3), Commentary .02(b)(iii). In addition, during the Core Trading Session (9:30 a.m. to 4:00 p.m. Eastern Time), an IIV for the Shares will be disseminated by one or more major market data vendors and updated at least every 15 seconds.\15\ Information regarding market price and trading volume of the Shares will be continually available on a real-time basis throughout the day on brokers' computer screens and other electronic devices. The Web site for the Fund will include the prospectus for the Fund and additional data relating to the net asset value (``NAV'') and other applicable quantitative information. Information regarding each portfolio holding will be disclosed by the Trust on each business day before commencement of trading in Shares in the Core Trading Session on the Exchange. --------------------------------------------------------------------------- \14\ 15 U.S.C. 78k-1(a)(1)(C)(iii). \15\ The Exchange states that it understands that several major market data vendors display and/or make widely available IIV's taken from the CTA or other data feeds. See Notice, supra note 3, 81 FR at 72634, n.20. --------------------------------------------------------------------------- The Commission 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 may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares of a Fund. Shares of the Fund will be halted if the ``circuit breaker'' parameters in NYSE Arca Equities Rule 7.12 are reached. Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. These may include: (1) The extent to which trading is not occurring in the securities and/or the financial instruments of the Fund; or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. If the IIV, Index value or the value of the Index components is not being disseminated as required, the Exchange may halt trading during the day in which the disruption occurs; if the interruption persists past the day in which it occurred, the Exchange will halt trading no later than the beginning of the trading day following the interruption.\16\ The Exchange will obtain a representation from the Fund that the NAV for the Fund will be calculated daily and will be made available to all market participants at the same time.\17\ Under NYSE Arca Equities Rule 7.34(a)(5), if the Exchange becomes aware that the NAV for the Fund is not being disseminated to all market participants at the same time, it will halt trading in the Shares until such time as the NAV is available to all market participants. --------------------------------------------------------------------------- \16\ See id. at 72634. \17\ See id. --------------------------------------------------------------------------- In support of this proposal, the Exchange has made the following representations: (1) The Shares will conform to the initial and continued listing criteria under NYSE Arca Equities Rules 5.2(j)(3) and 5.5(g)(2), except that the Index will not meet the requirements of NYSE Arca Equities Rule 5.2(j)(3), Commentary .01(a)(A)(1-5) in that the Index will include options. (2) The Exchange represents that trading in the Shares will be subject to the existing Exchange trading surveillances procedures, as well as cross-market surveillances administered by the Financial Industry Regulatory Authority (``FINRA'') on behalf of the Exchange.\18\ The Exchange represents that these procedures are adequate to properly monitor Exchange trading of the Shares in all trading sessions and to deter and detect violations of Exchange rules and federal securities laws applicable to trading on the Exchange.\19\ --------------------------------------------------------------------------- \18\ FINRA conducts cross-market surveillances on behalf of the Exchange pursuant to a regulatory services agreement. The Exchange is responsible for FINRA's performance under this regulatory services agreement. \19\ See id. --------------------------------------------------------------------------- (3) The Exchange or FINRA, on behalf of the Exchange will communicate as needed regarding trading in the Shares, ETFs, options, and futures with markets and other entities that are members of the Intermarket Surveillance Group (``ISG''), and the Exchange or FINRA, on behalf of the Exchange may obtain trading information regarding trading in the Shares, ETFs, options, and futures from those markets and other entities that are members of ISG or with which [[Page 86762]] the Exchange has in place a comprehensive surveillance sharing agreement.\20\ The Exchange is able to access from FINRA, as needed, trade information for certain fixed income securities held by the Fund reported to FINRA's Trade Reporting and Compliance Engine.\21\ --------------------------------------------------------------------------- \20\ For a list of the current members of ISG, see www.isgportal.org. \21\ See id. --------------------------------------------------------------------------- (4) For initial and continued listing of the Shares, the Trust is required to comply with Rule 10A-3 under the Act.\22\ --------------------------------------------------------------------------- \22\ See 17 CFR 240.10A-3. --------------------------------------------------------------------------- (5) Prior to the commencement of trading of Shares in the Fund, the Exchange will inform its ETP Holders in an Information Bulletin (``Bulletin'') of the special characteristics and risks associated with trading the Shares. Specifically, the Bulletin will discuss the following: (a) The procedures for purchases and redemptions of Shares in Creation Unit aggregations (and that Shares are not individually redeemable); (b) NYSE Arca Equities Rule 9.2(a), which imposes a duty of due diligence on its ETP Holders to learn the essential facts relating to every customer prior to trading the Shares; (c) the risks involved in trading the Shares during the Opening and Late Trading Sessions when an updated IIV or Index value will not be calculated or publicly disseminated; (d) how information regarding the IIV and Index value will be disseminated; (e) the requirement that ETP Holders deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; and (f) trading information. (6) A minimum of 100,000 Shares will be outstanding at the commencement of trading on the Exchange.\23\ --------------------------------------------------------------------------- \23\ See Notice, supra note 3, 81 FR at 76234. --------------------------------------------------------------------------- (7) The Exchange represents that all statements and representations made in this 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 shall constitute continued listing requirements for listing the Shares on the Exchange.\24\ --------------------------------------------------------------------------- \24\ See id. at 72635. --------------------------------------------------------------------------- (8) 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 the Fund is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under NYSE Arca Equities Rule 5.5(m).\25\ --------------------------------------------------------------------------- \25\ See id. --------------------------------------------------------------------------- This approval order is based on all of the Exchange's representations, including those set forth above and in the Notice. For the foregoing reasons, the Commission finds that the proposed rule change, is consistent with Section 6(b)(5) of the Act \26\ and the rules and regulations thereunder applicable to a national securities exchange. --------------------------------------------------------------------------- \26\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,\27\ that the proposed rule change (SR-NYSEArca-2016-131), be, and it hereby is, approved. --------------------------------------------------------------------------- \27\ 15 U.S.C. 78s(b)(2). \28\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\28\ Brent J. Fields, Secretary. [FR Doc. 2016-28830 Filed 11-30-16; 8:45 am] BILLING CODE 8011-01-P
![86760 Federal Register / Vol. 81, No. 231 / Thursday, December 1, 2016 / Notices
Section 19(b)(2) of the Act 4 provides thereunder,2 a proposed rule change to The investment adviser to the Fund
that, within 45 days of the publication list and trade shares (‘‘Shares’’) of the will be Virtus ETF Advisers LLC
of notice of the filing of a proposed rule Virtus Enhanced U.S. Equity ETF (‘‘Adviser’’). ETF Distributors LLC will
change, or within such longer period up (‘‘Fund’’), a series of Virtus ETF Trust II serve as the distributor (‘‘Distributor’’)
to 90 days as the Commission may (‘‘Trust’’), under Commentary .01 to of Fund shares on an agency basis. The
designate if it finds such longer period NYSE Arca Equities Rule 5.2(j)(3) Bank of New York Mellon
to be appropriate and publishes its (‘‘Investment Company Units’’). The (‘‘Administrator’’) will be the
reasons for so finding or as to which the proposed rule change was published for administrator, custodian and transfer
self-regulatory organization consents, comment in the Federal Register on agent for the Fund.
the Commission shall either approve the October 20, 2016.3 The Commission A. The Fund’s Principal Investments
proposed rule change, disapprove the received no comments on the proposed
proposed rule change, or institute rule change. This order approves the According to the Exchange, the
proceedings to determine whether the proposed rule change. Fund’s investment objective is to seek
proposed rule change should be investment results that, before fees and
II. Exchange’s Description of the expenses, closely correspond to the
disapproved. The 45th day after
Proposal 4 price and yield performance of the
publication of the notice for this
proposed rule change is December 1, The Exchange proposes to list and Rampart Enhanced U.S. Equity Index
2016. The Commission is extending this trade Shares of the Fund under (‘‘Index’’).7 Under normal market
45-day time period. Commentary .01 to NYSE Arca Equities conditions,8 the Fund will invest not
The Commission finds that it is Rule 5.2(j)(3), which governs the listing less than 80% of its total assets in
appropriate to designate a longer period and trading of Investment Company component securities of the Index.
within which to take action on the Units on the Exchange. The Exchange Additionally, under normal market
proposed rule change so that it has represents that it has submitted the conditions, the Fund will invest not less
sufficient time to consider the proposed proposed rule change because the than 80% of its total assets in U.S.
rule change. Accordingly, the underlying index of the Fund does not exchange-traded common stocks. The
Commission, pursuant to Section meet all of the generic listing Fund will also seek to generate
19(b)(2) of the Act,5 designates January requirements of Commentary .01(a)(A) additional income by writing SPX call
15, 2017, as the date by which the to NYSE Arca Equities Rule 5.2(j)(3), options and will seek additional capital
Commission shall either approve or applicable to the listing of Investment appreciation by purchasing SPX call
disapprove or institute proceedings to options.
Company Units based upon an index of
determine whether to disapprove the ‘‘US Component Stocks.’’ Specifically, B. The Fund’s Non-Principal
proposed rule change (File Number SR– as discussed in the Notice,5 options on Investments
NASDAQ–2016–135). the S&P 500 index may be Index While the Fund, under normal market
For the Commission, by the Division of components. Consequently, the Index is conditions will invest at least 80% of its
Trading and Markets, pursuant to delegated not composed entirely of US net assets in the securities and financial
authority.6 Component Stocks, and therefore the instruments described above, the Fund
Brent J. Fields, Shares do not satisfy the requirements may invest its remaining assets in the
Secretary. for generic listing under Commentary securities and financial instruments
[FR Doc. 2016–28826 Filed 11–30–16; 8:45 am] .01(a)(A) to NYSE Arca Equities Rule described below.
BILLING CODE 8011–01–P 5.2(j)(3). The Fund may invest in short-term,
The Fund will be an index-based high quality securities issued or
exchange traded fund (‘‘ETF’’). The guaranteed by the U.S. government (in
SECURITIES AND EXCHANGE Shares will be offered by the Trust, addition to U.S. Treasury securities) and
COMMISSION which is registered with the non-U.S. governments, and each of their
[Release No. 34–79402; File No. SR–
Commission as an investment company agencies and instrumentalities; debt
NYSEArca–2016–131] and has filed a registration statement on securities issued by U.S. government
Form N–1A (the ‘‘Registration sponsored enterprises; repurchase
Self-Regulatory Organizations; NYSE Statement’’) with the Commission on
Arca, Inc.; Order Approving a behalf of the Fund.6 Company Act Release No. 30825 (December 11,
Proposed Rule Change Relating To 2013) (File No. 812–14212).
7 According to the Exchange, the Index was
2 17 CFR 240.19b–4.
Listing and Trading of Shares of the developed by Rampart Investment Management
3 See Securities Exchange Act Release No. 79101
Virtus Enhanced U.S. Equity ETF Company, LLC (‘‘Index Provider’’), and is
(October 14, 2016), 81 FR 72630 (‘‘Notice’’).
Under Commentary .01 to NYSE Arca 4 The Commission notes that additional
calculated and maintained by NYSE Global Index
Equities Rule 5.2(j)(3) Group (‘‘Index Calculation Agent’’). The Index
information regarding the Fund, the Trust, and the Provider is affiliated with the Adviser and the
Shares, including investment strategies, risks, Distributor. The Index Calculation Agent is not
November 25, 2016. creation and redemption procedures, fees, portfolio affiliated with the Adviser, Distributor,
holdings disclosure policies, calculation of net asset Administrator, or the Trust.
I. Introduction value (‘‘NAV’’), distributions, and taxes, among 8 The term ‘‘normal market conditions’’ is defined
On October 3, 2016, NYSE Arca, Inc. other things, can be found in the Notice, and the in NYSE Arca Equities Rule 8.600(c)(5). On a
Registration Statement, as applicable. See Notice,
(‘‘Exchange’’) filed with the Securities supra note 3, and Registration Statement, infra
temporary basis, including for defensive purposes,
and Exchange Commission during the initial invest-up period and during
note 6. periods of high cash inflows or outflows, the Fund
jstallworth on DSK7TPTVN1PROD with NOTICES
(‘‘Commission’’), pursuant to Section 5 See Notice, supra note 3, 81 FR at 72631.
may depart from its principal investment strategies;
19(b)(1) of the Securities Exchange Act 6 The Exchange represents that, on September 1,
for example, it may hold a higher than normal
of 1934 (‘‘Act’’) 1 and Rule 19b–4 2016, the Trust filed a Registration Statement on proportion of its assets in cash. During such
Form N–1A under the Securities and Exchange Act periods, the Fund may not be able to achieve its
4 15
of 1933 and the Investment Company Act of 1940 investment objectives. The Fund may adopt a
U.S.C. 78s(b)(2). (‘‘1940 Act’’) (File Nos. 333–206600 and 811– defensive strategy when the Adviser believes
5 Id.
23078). According to the Exchange, the Trust has securities in which the Fund normally invests have
6 17 CFR 200.30–3(a)(31). obtained certain exemptive relief from the elevated risks due to political or economic factors
1 15 U.S.C. 78s(b)(1). Commission under the 1940 Act. See Investment and in other extraordinary circumstances.
VerDate Sep<11>2014 15:02 Nov 30, 2016 Jkt 241001 PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 E:\FR\FM\01DEN1.SGM 01DEN1](https://thefederalregister.org/doc/81_FR_86991/page/1.svg)
![86762 Federal Register / Vol. 81, No. 231 / Thursday, December 1, 2016 / Notices
the Exchange has in place a compliance with the applicable listing this filing by the Commission. The
comprehensive surveillance sharing requirements, the Exchange will Commission is publishing this notice to
agreement.20 The Exchange is able to commence delisting procedures under solicit comments on the proposed rule
access from FINRA, as needed, trade NYSE Arca Equities Rule 5.5(m).25 change from interested persons.
information for certain fixed income This approval order is based on all of
I. Self-Regulatory Organization’s
securities held by the Fund reported to the Exchange’s representations,
Statement of the Terms of Substance of
FINRA’s Trade Reporting and including those set forth above and in
the Proposed Rule Change
Compliance Engine.21 the Notice.
(4) For initial and continued listing of For the foregoing reasons, the FINRA is proposing to amend FINRA
the Shares, the Trust is required to Commission finds that the proposed Rule 6433 (Minimum Quotation Size
comply with Rule 10A–3 under the rule change, is consistent with Section Requirements for OTC Equity
Act.22 6(b)(5) of the Act 26 and the rules and Securities) to extend the Tier Size Pilot,
(5) Prior to the commencement of regulations thereunder applicable to a which currently is scheduled to expire
trading of Shares in the Fund, the national securities exchange. on December 9, 2016, until June 9, 2017.
Exchange will inform its ETP Holders in The text of the proposed rule change
IV. Conclusion is available on FINRA’s Web site at
an Information Bulletin (‘‘Bulletin’’) of
the special characteristics and risks It is therefore ordered, pursuant to http://www.finra.org, at the principal
associated with trading the Shares. Section 19(b)(2) of the Act,27 that the office of FINRA and at the
Specifically, the Bulletin will discuss proposed rule change (SR–NYSEArca– Commission’s Public Reference Room.
the following: (a) The procedures for 2016–131), be, and it hereby is, II. Self-Regulatory Organization’s
purchases and redemptions of Shares in approved. Statement of the Purpose of, and
Creation Unit aggregations (and that For the Commission, by the Division of Statutory Basis for, the Proposed Rule
Shares are not individually redeemable); Trading and Markets, pursuant to delegated Change
(b) NYSE Arca Equities Rule 9.2(a), authority.28
In its filing with the Commission,
which imposes a duty of due diligence Brent J. Fields,
FINRA included statements concerning
on its ETP Holders to learn the essential Secretary. the purpose of and basis for the
facts relating to every customer prior to [FR Doc. 2016–28830 Filed 11–30–16; 8:45 am] proposed rule change and discussed any
trading the Shares; (c) the risks involved BILLING CODE 8011–01–P comments it received on the proposed
in trading the Shares during the rule change. The text of these statements
Opening and Late Trading Sessions may be examined at the places specified
when an updated IIV or Index value will SECURITIES AND EXCHANGE in Item IV below. FINRA has prepared
not be calculated or publicly COMMISSION summaries, set forth in sections A, B,
disseminated; (d) how information and C below, of the most significant
[Release No. 34–79401; File No. SR–FINRA–
regarding the IIV and Index value will aspects of such statements.
2016–044]
be disseminated; (e) the requirement
that ETP Holders deliver a prospectus to A. Self-Regulatory Organization’s
Self-Regulatory Organizations;
investors purchasing newly issued Statement of the Purpose of, and
Financial Industry Regulatory
Shares prior to or concurrently with the Statutory Basis for, the Proposed Rule
Authority, Inc.; Notice of Filing and
confirmation of a transaction; and (f) Change
Immediate Effectiveness of a Proposed
trading information. Rule Change To Extend the Tier Size 1. Purpose
(6) A minimum of 100,000 Shares will Pilot of FINRA Rule 6433 (Minimum
be outstanding at the commencement of FINRA proposes to amend FINRA
Quotation Size Requirements for OTC Rule 6433 (Minimum Quotation Size
trading on the Exchange.23 Equity Securities)
(7) The Exchange represents that all Requirements for OTC Equity
statements and representations made in November 25, 2016. Securities) (the ‘‘Rule’’) to extend, until
this filing regarding (a) the description Pursuant to Section 19(b)(1) of the June 9, 2017, the amendments set forth
of the portfolio, (b) limitations on Securities Exchange Act of 1934 in File No. SR–FINRA–2011–058 (‘‘Tier
portfolio holdings or reference assets, or (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 Size Pilot’’ or ‘‘Pilot’’), which currently
(c) the applicability of Exchange rules notice is hereby given that on November are scheduled to expire on December 9,
and surveillance procedures shall 23, 2016, Financial Industry Regulatory 2016.4
constitute continued listing Authority, Inc. (‘‘FINRA’’) filed with the The Tier Size Pilot was filed with the
requirements for listing the Shares on Securities and Exchange Commission SEC on October 6, 2011,5 to amend the
the Exchange.24 (‘‘SEC’’ or ‘‘Commission’’) the proposed minimum quotation sizes (or ‘‘tier
(8) The issuer has represented to the rule change as described in Items I and sizes’’) for OTC Equity Securities.6 The
Exchange that it will advise the II below, which Items have been goals of the Pilot were to simplify the
Exchange of any failure by the Fund to prepared by FINRA. FINRA has tier structure, facilitate the display of
comply with the continued listing designated the proposed rule change as customer limit orders, and expand the
requirements, and, pursuant to its constituting a ‘‘non-controversial’’ rule 4 See Securities Exchange Act Release No. 77923
obligations under Section 19(g)(1) of the change under paragraph (f)(6) of Rule (May 26, 2016), 81 FR 35432 (June 2, 2016) (Notice
Act, the Exchange will surveil for 19b–4 under the Act,3 which renders of Filing and Immediate Effectiveness of File No.
compliance with the continued listing the proposal effective upon receipt of SR–FINRA–2016–016) (‘‘June 2016 Extension’’).
jstallworth on DSK7TPTVN1PROD with NOTICES
5 See Securities Exchange Act Release No. 65568
requirements. If the Fund is not in
25 See id. (October 14, 2011), 76 FR 65307 (October 20, 2011)
26 15 (Notice of Filing of File No. SR–FINRA–2011–058).
20 Fora list of the current members of ISG, see U.S.C. 78f(b)(5). 6 ‘‘OTC Equity Security’’ means any equity
www.isgportal.org. 27 15 U.S.C. 78s(b)(2).
21 See id. 28 17 CFR 200.30–3(a)(12).
security that is not an ‘‘NMS stock’’ as that term is
defined in Rule 600(b)(47) of SEC Regulation NMS;
22 See 17 CFR 240.10A–3. 1 15 U.S.C. 78s(b)(1).
provided, however, that the term OTC Equity
23 See Notice, supra note 3, 81 FR at 76234. 2 17 CFR 240.19b–4.
Security shall not include any Restricted Equity
24 See id. at 72635. 3 17 CFR 240.19b–4(f)(6). Security. See FINRA Rule 6420.
VerDate Sep<11>2014 15:02 Nov 30, 2016 Jkt 241001 PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 E:\FR\FM\01DEN1.SGM 01DEN1](https://thefederalregister.org/doc/81_FR_86991/page/3.svg)
Document Created: 2018-02-14 09:00:51
Document Modified: 2018-02-14 09:00:51
| 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 86760 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR