81 FR 88286 - UBS Financial Services Inc.; Notice of Application
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 235 (December 7, 2016)
Federal Register Volume 81, Issue 235 (December 7, 2016)
| Page Range | 88286-88289 | |
| FR Document | 2016-29299 |
[Federal Register Volume 81, Number 235 (Wednesday, December 7, 2016)] [Notices] [Pages 88286-88289] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-29299] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. IA-4580; File No. 803-00235] UBS Financial Services Inc.; Notice of Application December 1, 2016. AGENCY: Securities and Exchange Commission (``Commission''). ACTION: Notice of application for an exemptive order under section 206A of the Investment Advisers Act of 1940 (``Advisers Act'') providing an exemption from the written disclosure and consent requirements of section 206(3). ----------------------------------------------------------------------- Applicant: UBS Financial Services Inc. (``Applicant''). Relevant Advisers Act Sections: Exemption requested under section 206A from the written disclosure and consent requirements of section 206(3). Summary of Application: Applicant requests that the Commission issue an order under section 206A exempting it and Future Advisers (as defined below) from the written disclosure and consent requirements of section 206(3) with respect to principal transactions with nondiscretionary advisory client accounts. Filing Dates: The application was filed on November 22, 2016. Hearing or Notification of Hearing: An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving Applicant with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on December 27, 2016, and should be accompanied by proof of service on Applicant, in the form of an affidavit or, for lawyers, a certificate of service. Pursuant to rule 0-5 under the Advisers Act, hearing requests should state the nature of the writer's interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary. ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. Applicant, Laura E. Flores and Steven W. Stone, Morgan, Lewis & Bockius LLP, 1111 Pennsylvania Ave. NW., Washington, DC 20004. FOR FURTHER INFORMATION CONTACT: Robert Shapiro, Senior Counsel, at (202) 551-7758 (Chief Counsel's Office, Division of Investment Management) or Melissa Harke, Senior Special Counsel, at (202) 551-6787 (Investment Adviser Regulation Office, Division of Investment Management). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained via the Commission's Web site at http://www.sec.gov/rules/iareleases.shtml or by calling (202) 551-8090. Applicant seeks relief from the written disclosure and consent requirements of section 206(3) of the Advisers Act that would be similar to relief currently provided by Advisers Act rule 206(3)-3T (the ``Rule''), which will expire by its terms on December 31, 2016. The relief sought by Applicant, if granted, would be subject to conditions similar to those under the Rule, as well as certain revised or additional conditions. Applicant's Representations 1. The Applicant is registered as an investment adviser with the Commission and is a registered broker-dealer. The Applicant is a subsidiary of UBS AG, a diversified financial services company with operations around the world. The Applicant offers a number of advisory programs, including the UBS Strategic Advisor Program (the ``Program''), a nondiscretionary advisory program. 2. In 2007, many of the Applicant's fee-based brokerage accounts were converted to nondiscretionary advisory accounts in the Program, following the invalidation of former rule 202(a)(11)-1 under the Advisers Act. When these accounts had been fee-based brokerage accounts, the Applicant, in its capacity as a broker-dealer, engaged in principal transactions with its customers in accordance with applicable law. The Applicant currently relies on the Rule to engage in principal transactions with its client accounts in the Program. 3. The Applicant currently has approximately 115,982 client accounts enrolled in the Program. Those accounts have approximately $65 billion in assets under management as of September 20, 2016. In the period January 1, 2015 through December 31, 2015, 11,619 trades were effected in reliance on the Rule in the Program. Approximately 66% percent of the trades done in reliance on the Rule in this period were purchases by client accounts; the average purchase was approximately $109,838. Approximately 34% percent of the trades done in reliance on the Rule in this period were sales from client accounts; the average sale was approximately $105,022. [[Page 88287]] 4. As permitted under the Rule, the Applicant has engaged in principal trades in investment-grade fixed income securities underwritten by the Applicant or an affiliate. 5. The Applicant acknowledges that the Order, if granted, would not be construed as relieving in any way the Applicant from acting in the best interests of an advisory client, including fulfilling the duty to seek the best execution for the particular transaction for the advisory client; nor shall it relieve the Applicant from any obligation that may be imposed by sections 206(1) or (2) of the Advisers Act or by other applicable provisions of the federal securities laws or applicable FINRA rules. Applicant's Legal Analysis 1. Section 206(3) provides that it is unlawful for any investment adviser, directly or indirectly, acting as principal for its own account, knowingly to sell any security to or purchase any security from a client, without disclosing to the client in writing before the completion of the transaction the capacity in which the adviser is acting and obtaining the client's consent to the transaction. Rule 206(3)-3T deems an investment adviser to be in compliance with the provisions of section 206(3) of the Advisers Act when the investment adviser, or a person controlling, controlled by, or under common control with the investment adviser, acting as principal for its own account, sells to or purchases from an advisory client any security, provided that the investment adviser complies with the conditions of the Rule. 2. Rule 206(3)-3T requires, among other things, that the investment adviser obtain a client's written, revocable consent prospectively authorizing the adviser, directly or indirectly, acting as principal for its own account, to sell any security to or purchase any security from the client. The consent must be obtained after the adviser provides the client with written disclosure about: (i) The circumstances under which the investment adviser may engage in principal transactions with the client; (ii) the nature and significance of the conflicts the investment adviser has with its client's interests as a result of those transactions; and (iii) how the investment adviser addresses those conflicts. The investment adviser also must provide trade-by-trade disclosure to the client, before the execution of each principal transaction, of the capacity in which the adviser may act with respect to the transaction, and obtain the client's consent (which may be written or oral) to the transaction. The Rule is available only to an investment adviser that is also a broker- dealer registered under section 15 of the Securities Exchange Act of 1934 (``Exchange Act'') and may only be relied upon with respect to a nondiscretionary account that is a brokerage account subject to the Exchange Act, and the rules thereunder, and the rules of the self- regulatory organization(s) of which it is a member. Rule 206(3)-3T is not available for principal transactions if the investment adviser or a person who controls, is controlled by, or is under common control with the adviser (``control person'') is the issuer or is an underwriter of the security, except that an adviser may rely on the Rule for trades in which the adviser or a control person is an underwriter of non- convertible investment-grade debt securities. 3. The investment adviser also must provide to the client a trade confirmation that, in addition to the requirements of rule 10b-10 under the Exchange Act, includes a conspicuous, plain English statement informing the client that the investment adviser disclosed to the client before the execution of the transaction that the investment adviser may act as principal in connection with the transaction, that the client authorized the transaction, and that the investment adviser sold the security to or bought the security from the client for its own account. The investment adviser also must deliver to the client, at least annually, a written statement listing all transactions that were executed in the account in reliance on the Rule, including the date and price of each transaction. 4. Rule 206(3)-3T is scheduled to expire on December 31, 2016. Upon expiration, the Applicant would be required to provide trade-by-trade written disclosure to each nondiscretionary advisory client with whom the Applicant sought to engage in a principal transaction in accordance with section 206(3). The Applicant submits that its nondiscretionary clients, through the Applicant's current reliance on the Rule, have had access to the Applicant's inventory through principal transactions for a number of years, and expect to continue to have such access in the future. The Applicant believes that engaging in principal transactions with its clients provides certain benefits to its clients, including access to securities of limited availability, such as municipal bonds, and that the written disclosure and client consent requirements of section 206(3) act as an operational barrier to its ability to engage in principal trades with its clients, especially when the transaction involves securities of limited availability. 5. Unless the Applicant is provided an exemption from the written disclosure and client consent requirements of section 206(3), Applicant believes that it will be unable to provide the same range of services and access to the same types of securities to its nondiscretionary advisory clients as it currently is able to provide to clients under the Rule. 6. The Applicant notes that, if the requested relief is granted, it will remain subject to the fiduciary duties that are generally enforceable under sections 206(1) and 206(2) of the Advisers Act, which, in general terms, require the Applicant to: (i) Disclose material facts about the advisory relationship to its clients; (ii) treat each client fairly; and (iii) act only in the best interests of its client, disclosing conflicts of interest when present and obtaining client consent to arrangements that present such conflicts. 7. The Applicant further notes that, in its capacity as a broker- dealer with respect to these accounts, it will remain subject to a comprehensive set of Commission and FINRA regulations that apply to the relationship between a broker-dealer and its customer in addition to the fiduciary duties an adviser owes a client. These rules require, among other things, that the Applicant deal fairly with its customers, seek to obtain best execution of customer orders, and make only suitable recommendations. These obligations are designed to promote business conduct that protects customers from abusive practices that may not necessarily be fraudulent, and to protect against unfair prices and excessive commissions. Specifically, these provisions, among other things, require that the prices charged by the Applicant be reasonably related to the prevailing market, and limit the commissions and mark- ups the Applicant can charge. Additionally, these obligations require that the Applicant have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on information obtained through reasonable diligence. 8. The Applicant requests that the Commission issue an Order pursuant to section 206A exempting it from the written disclosure and consent requirements of section 206(3) only with respect to client accounts in the Program and any similar nondiscretionary program to be created in the future. The Applicant also requests that the Commission's Order [[Page 88288]] apply to future investment advisers controlling, controlled by, or under common control with the Applicant (``Future Advisers''). Any Future Adviser relying on any Order granted pursuant to the application will comply with the terms and conditions stated in the application.\1\ --------------------------------------------------------------------------- \1\ All entities that currently intend to rely on any order granted pursuant to the application are named as Applicants. --------------------------------------------------------------------------- Applicant's Conditions The Applicant agrees that any Order granting the requested relief will be subject to the following conditions: 1. The Applicant will exercise no ``investment discretion'' (as such term is defined in section 3(a)(35) of the Exchange Act), except investment discretion granted by the advisory client on a temporary or limited basis,\2\ with respect to the client's account. --------------------------------------------------------------------------- \2\ Discretion is considered to be temporary or limited for purposes of this condition when the investment adviser is given discretion: (i) As to the price at which or the time to execute an order given by a client for the purchase or sale of a definite amount or quantity of a specified security; (ii) on an isolated or infrequent basis, to purchase or sell a security or type of security when a client is unavailable for a limited period of time not to exceed a few months; (iii) as to cash management, such as to exchange a position in a money market fund for another money market fund or cash equivalent; (iv) to purchase or sell securities to satisfy margin requirements; (v) to sell specific bonds and purchase similar bonds in order to permit a client to take a tax loss on the original position; (vi) to purchase a bond with a specified credit rating and maturity; and (vii) to purchase or sell a security or type of security limited by specific parameters established by the client. See, e.g., Temporary Rule Regarding Principal Trades with Certain Advisory Clients, Investment Advisers Act Release No. 2653 (Sept. 24, 2007) at n. 31. --------------------------------------------------------------------------- 2. The Applicant will not trade in reliance on this Order any security for which the Applicant or any person controlling, controlled by, or under common control with the Applicant is the issuer, or, at the time of the sale, an underwriter (as defined in section 202(a)(20) of the Advisers Act). 3. The Applicant will not directly or indirectly require the client to consent to principal trading as a condition to opening or maintaining an account with the Applicant. 4. The advisory client has executed a written revocable consent prospectively authorizing the Applicant directly or indirectly to act as principal for its own account in selling any security to or purchasing any security from the advisory client. The advisory client's written consent must be obtained through a signature or other positive manifestation of consent that is separate from or in addition to the signature indicating the client's consent to the advisory agreement. The separate or additional signature line or alternative means of expressing consent must be preceded immediately by prominent, plain English disclosure containing either: (a) An explanation of: (i) The circumstances under which the Applicant directly or indirectly may engage in principal transactions; (ii) the nature and significance of conflicts with its client's interests as a result of the transactions; and (iii) how the Applicant addresses those conflicts; or (b) a statement explaining that the client is consenting to principal transactions, followed by a cross-reference to a specific document provided to the client containing the disclosure in (a)(i)-(iii) above and to the specific page or pages on which such disclosure is located; provided, however, that if the Applicant requires time to modify its electronic systems to provide the specific page cross-reference required by clause (b), the Applicant may, while updating such electronic systems, and for no more than 90 days from the date of the Order, instead provide a cross-reference to a specific document provided to the client containing the disclosure in (a)(i)-(iii) above and to the specific section in such document in which such disclosure is located. Transition provision: To the extent that the Applicant obtained fully informed written revocable consent from an advisory client for purposes of rule 206(3)-3T(a)(3) prior to the date of this Order, the Applicant may rely on this Order with respect to such client without obtaining additional prospective consent from such client. 5. The Applicant, prior to the execution of each transaction in reliance on this Order, will: (a) Inform the advisory client, orally or in writing, of the capacity in which it may act with respect to such transaction; and (b) obtain consent from the advisory client, orally or in writing, to act as principal for its own account with respect to such transaction. 6. The Applicant will send a written confirmation at or before completion of each such transaction that includes, in addition to the information required by rule 10b-10 under the Exchange Act, a conspicuous, plain English statement informing the advisory client that the Applicant: (a) Disclosed to the client prior to the execution of the transaction that the Applicant may be acting in a principal capacity in connection with the transaction and the client authorized the transaction; and (b) sold the security to, or bought the security from, the client for its own account. 7. The Applicant will send to the client, no less frequently than annually, written disclosure containing a list of all transactions that were executed in the client's account in reliance upon this Order, and the date and price of each such transaction. 8. The Applicant is a broker-dealer registered under section 15 of the Exchange Act and each account for which the Applicant relies on this Order is a brokerage account subject to the Exchange Act, and the rules thereunder, and the rules of the self-regulatory organization(s) of which it is a member. 9. Each written disclosure required as a condition to this Order will include a conspicuous, plain English statement that the client may revoke the written consent referred to in Condition 4 above without penalty at any time by written notice to the Applicant in accordance with reasonable procedures established by the Applicant, but in all cases such revocation must be given effect within 5 business days of the Applicant's receipt thereof. 10. The Applicant will maintain records sufficient to enable verification of compliance with the conditions of this Order. Such records will include, without limitation: (a) Documentation sufficient to demonstrate compliance with each disclosure and consent requirement under this Order; (b) in particular, documentation sufficient to demonstrate that, prior to the execution of each transaction in reliance on this Order, the Applicant informed the advisory client of the capacity in which it may act with respect to the transaction and that it received the advisory client's consent (if the Applicant informs the client orally of the capacity in which it may act with respect to such transaction or obtains oral consent, such records may, for example, include recordings of telephone conversations or contemporaneous written notations); and (c) documentation sufficient to enable assessment of compliance by the Applicant with sections 206(1) and (2) of the Advisers Act in connection with its reliance on this Order.\3\ In each case, such records will be maintained and preserved in an easily accessible place for a period of not less than five years, the first two years in an appropriate office of the Applicant, and be available for inspection by the staff of the Commission. --------------------------------------------------------------------------- \3\ For example, under sections 206(1) and (2), an adviser may not engage in any transaction on a principal basis with a client that is not consistent with the best interests of the client or that subrogates the client's interests to the adviser's own. Cf. Investment Advisers Act Release No. 2106 (Jan. 31, 2003) (adopting Rule 206(4)-6). --------------------------------------------------------------------------- 11. The Applicant will adopt written compliance policies and procedures reasonably designed to ensure, and the Applicant's chief compliance officer will monitor, the Applicant's [[Page 88289]] compliance with the conditions of this Order. The Applicant's chief compliance officer will, on at least a quarterly basis, conduct testing reasonably sufficient to verify such compliance. Such written policies and procedures, monitoring and testing will address, without limitation: (a) Compliance by the Applicant with its disclosure and consent requirements under this Order; (b) the integrity and operation of electronic systems employed by the Applicant in connection with its reliance on this Order; (c) compliance by the Applicant with its recordkeeping obligations under this Order; and (d) whether there is any evidence of the Applicant engaging in ``dumping'' in connection with its reliance on this Order.\4\ The Applicant's chief compliance officer will document the frequency and results of such monitoring and testing, and the Applicant will maintain and preserve such documentation in an easily accessible place for a period of not less than five years, the first two years in an appropriate office of the Applicant, and be available for inspection by the staff of the Commission. --------------------------------------------------------------------------- \4\ See Report of the Securities and Exchange Commission, Investment Trusts and Investment Companies, H.R. Doc. No. 279, 76th Cong., 2d Sess., pt. 3, at 2581, 2589 (1939); Hearings on S.3580 Before a Subcommittee of the Commission on Banking and Currency, 76th Cong., 3d Sess. 209, 212-23 (1940); Hearings on S. 3580 Before the Subcomm. of the Comm. on Banking and Currency, 76th Cong., 3d Sess. 322 (1940). By the Commission. Brent J. Fields, Secretary. [FR Doc. 2016-29299 Filed 12-6-16; 8:45 am] BILLING CODE 8011-01-P
![88286 Federal Register / Vol. 81, No. 235 / Wednesday, December 7, 2016 / Notices
Electronic Comments SECURITIES AND EXCHANGE Division of Investment Management) or
COMMISSION Melissa Harke, Senior Special Counsel,
• Use the Commission’s Internet at (202) 551–6787 (Investment Adviser
comment form (http://www.sec.gov/ [Release No. IA–4580; File No. 803–00235]
Regulation Office, Division of
rules/sro.shtml); or Investment Management).
UBS Financial Services Inc.; Notice of
• Send an email to rule-comments@ Application SUPPLEMENTARY INFORMATION: The
sec.gov. Please include File Number SR- following is a summary of the
BatsBZX–2016–80 on the subject line. December 1, 2016. application. The complete application
AGENCY: Securities and Exchange may be obtained via the Commission’s
Paper Comments Commission (‘‘Commission’’). Web site at http://www.sec.gov/rules/
ACTION: Notice of application for an iareleases.shtml or by calling (202) 551–
• Send paper comments in triplicate
exemptive order under section 206A of 8090.
to Brent J. Fields, Secretary, Securities Applicant seeks relief from the
and Exchange Commission, 100 F Street the Investment Advisers Act of 1940
(‘‘Advisers Act’’) providing an written disclosure and consent
NE., Washington, DC 20549–1090. requirements of section 206(3) of the
exemption from the written disclosure
All submissions should refer to File and consent requirements of section Advisers Act that would be similar to
Number SR-BatsBZX–2016–80. This file 206(3). relief currently provided by Advisers
number should be included on the Act rule 206(3)–3T (the ‘‘Rule’’), which
subject line if email is used. To help the APPLICANT: UBS Financial Services Inc. will expire by its terms on December 31,
Commission process and review your (‘‘Applicant’’). 2016. The relief sought by Applicant, if
RELEVANT ADVISERS ACT SECTIONS:
granted, would be subject to conditions
comments more efficiently, please use
Exemption requested under section similar to those under the Rule, as well
only one method. The Commission will
as certain revised or additional
post all comments on the Commission’s 206A from the written disclosure and
conditions.
Internet Web site (http://www.sec.gov/ consent requirements of section 206(3).
rules/sro.shtml). Copies of the SUMMARY OF APPLICATION: Applicant Applicant’s Representations
submission, all subsequent requests that the Commission issue an 1. The Applicant is registered as an
amendments, all written statements order under section 206A exempting it investment adviser with the
with respect to the proposed rule and Future Advisers (as defined below) Commission and is a registered broker-
change that are filed with the from the written disclosure and consent dealer. The Applicant is a subsidiary of
Commission, and all written requirements of section 206(3) with UBS AG, a diversified financial services
communications relating to the respect to principal transactions with company with operations around the
proposed rule change between the nondiscretionary advisory client world. The Applicant offers a number of
Commission and any person, other than accounts. advisory programs, including the UBS
those that may be withheld from the FILING DATES: The application was filed Strategic Advisor Program (the
public in accordance with the on November 22, 2016. ‘‘Program’’), a nondiscretionary advisory
provisions of 5 U.S.C. 552, will be HEARING OR NOTIFICATION OF HEARING: An program.
order granting the requested relief will 2. In 2007, many of the Applicant’s
available for Web site viewing and fee-based brokerage accounts were
printing in the Commission’s Public be issued unless the Commission orders
a hearing. Interested persons may converted to nondiscretionary advisory
Reference Room, 100 F Street NE., accounts in the Program, following the
Washington, DC 20549, on official request a hearing by writing to the
Commission’s Secretary and serving invalidation of former rule 202(a)(11)–1
business days between the hours of under the Advisers Act. When these
10:00 a.m. and 3:00 p.m. Copies of the Applicant with a copy of the request,
personally or by mail. Hearing requests accounts had been fee-based brokerage
filing also will be available for accounts, the Applicant, in its capacity
inspection and copying at the principal should be received by the Commission
as a broker-dealer, engaged in principal
by 5:30 p.m. on December 27, 2016, and
office of the Exchange. All comments transactions with its customers in
should be accompanied by proof of
received will be posted without change; accordance with applicable law. The
service on Applicant, in the form of an
the Commission does not edit personal Applicant currently relies on the Rule to
affidavit or, for lawyers, a certificate of
identifying information from engage in principal transactions with its
service. Pursuant to rule 0–5 under the
submissions. You should submit only client accounts in the Program.
Advisers Act, hearing requests should 3. The Applicant currently has
information that you wish to make state the nature of the writer’s interest,
available publicly. All submissions approximately 115,982 client accounts
any facts bearing upon the desirability enrolled in the Program. Those accounts
should refer to File Number SR- of a hearing on the matter, the reason for
BatsBZX–2016–80 and should be have approximately $65 billion in assets
the request, and the issues contested. under management as of September 20,
submitted on or before December 28, Persons who wish to be notified of a 2016. In the period January 1, 2015
2016. hearing may request notification by through December 31, 2015, 11,619
For the Commission, by the Division of writing to the Commission’s Secretary. trades were effected in reliance on the
Trading and Markets, pursuant to delegated ADDRESSES: Secretary, U.S. Securities Rule in the Program. Approximately
authority.8 and Exchange Commission, 100 F Street 66% percent of the trades done in
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Brent J. Fields, NE., Washington, DC 20549–1090. reliance on the Rule in this period were
Secretary. Applicant, Laura E. Flores and Steven purchases by client accounts; the
W. Stone, Morgan, Lewis & Bockius average purchase was approximately
[FR Doc. 2016–29294 Filed 12–6–16; 8:45 am]
LLP, 1111 Pennsylvania Ave. NW., $109,838. Approximately 34% percent
BILLING CODE 8011–01–P
Washington, DC 20004. of the trades done in reliance on the
FOR FURTHER INFORMATION CONTACT: Rule in this period were sales from
Robert Shapiro, Senior Counsel, at (202) client accounts; the average sale was
8 17 CFR 200.30–3(a)(12). 551–7758 (Chief Counsel’s Office, approximately $105,022.
VerDate Sep<11>2014 17:54 Dec 06, 2016 Jkt 241001 PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 E:\FR\FM\07DEN1.SGM 07DEN1](https://thefederalregister.org/doc/81_FR_88521/page/1.svg)
![Federal Register / Vol. 81, No. 235 / Wednesday, December 7, 2016 / Notices 88289
compliance with the conditions of this change as described in Items I, II, and Exchange notes that these changes are
Order. The Applicant’s chief III below, which Items have been purely clerical and do not substantively
compliance officer will, on at least a prepared by the Exchange. The amend any fee or rebate, nor do they
quarterly basis, conduct testing Exchange has designated the proposed alter the manner in which the Exchange
reasonably sufficient to verify such rule change as one establishing or assesses fees or calculates rebates. The
compliance. Such written policies and changing a member due, fee, or other proposed changes are simply intended
procedures, monitoring and testing will charge imposed by the Exchange under to provide greater transparency to
address, without limitation: (a) Section 19(b)(3)(A)(ii) of the Act 3 and market participants regarding how the
Compliance by the Applicant with its Rule 19b–4(f)(2) thereunder,4 which Exchange assesses fees and calculates
disclosure and consent requirements renders the proposed rule change rebates. Specifically, the Exchange
under this Order; (b) the integrity and effective upon filing with the proposes to:
operation of electronic systems Commission. The Commission is • Capitalize the title of the column
employed by the Applicant in publishing this notice to solicit setting forth each tier’s rate under
connection with its reliance on this comments on the proposed rule change footnotes 3 and 4;
Order; (c) compliance by the Applicant from interested persons. • replace the phrase ‘‘of at least’’ with
with its recordkeeping obligations under ‘‘≥’’ in all required criteria cells under
this Order; and (d) whether there is any I. Self-Regulatory Organization’s footnotes 3 and 4;
evidence of the Applicant engaging in Statement of the Terms of the Substance • amend the description of the
‘‘dumping’’ in connection with its of the Proposed Rule Change required criteria of ‘‘Step-Up Tier 1’’
reliance on this Order.4 The Applicant’s The Exchange filed a proposal to and the ‘‘Step-Up Tier 2’’ under footnote
chief compliance officer will document make several non-substantive changes to 4 to begin with ‘‘MPID adds/has’’ and
the frequency and results of such the fee schedule applicable to delete the phrase ‘‘[o]n an MPID Basis’’.
monitoring and testing, and the Members 5 and non-members of the Amending this description is intended
Applicant will maintain and preserve Exchange pursuant to Exchange Rules to harmonize the format of the tier’s
such documentation in an easily 15.1(a) and (c). criteria with that of other tier’s listed
accessible place for a period of not less The text of the proposed rule change under footnotes 3 and 4 which state
than five years, the first two years in an is available at the Exchange’s Web site ‘‘Member has’’ or ‘‘Member adds’’.
appropriate office of the Applicant, and at www.batstrading.com, at the 2. Statutory Basis
be available for inspection by the staff principal office of the Exchange, and at
the Commission’s Public Reference The Exchange believes that the
of the Commission. proposed rule change is consistent with
Room.
By the Commission. the requirements of the Act and the
Brent J. Fields, II. Self-Regulatory Organization’s rules and regulations thereunder that
Secretary. Statement of the Purpose of, and are applicable to a national securities
[FR Doc. 2016–29299 Filed 12–6–16; 8:45 am] Statutory Basis for, the Proposed Rule exchange, and, in particular, with the
BILLING CODE 8011–01–P
Change requirements of Section 6 of the Act.6
In its filing with the Commission, the Specifically, the Exchange believes that
Exchange included statements the proposed rule change is consistent
SECURITIES AND EXCHANGE concerning the purpose of and basis for with Sections 6(b)(4) of the Act of the
COMMISSION the proposed rule change and discussed Act [sic],7 in that it provides for the
[Release No. 34–79436; File No. SR– any comments it received on the equitable allocation of reasonable dues,
BatsEDGA–2016–29] proposed rule change. The text of these fees and other charges among members
statements may be examined at the and other persons using any facility or
Self-Regulatory Organizations; Bats places specified in Item IV below. The system which the Exchange operates or
EDGA Exchange, Inc.; Notice of Filing Exchange has prepared summaries, set controls. The Exchange believes that the
and Immediate Effectiveness of a forth in Sections A, B, and C below, of proposed changes are reasonable and
Proposed Rule Change To Make Non- the most significant parts of such equitable because they are intended to
Substantive Changes to the Fee statements. simplify the Exchange’s fee schedule
Schedule and provide greater transparency to
A. Self-Regulatory Organization’s market participants regarding how the
December 1, 2016. Statement of the Purpose of, and Exchange assesses fees and calculates
Pursuant to Section 19(b)(1) of the Statutory Basis for, the Proposed Rule rebates. The Exchange notes that these
Securities Exchange Act of 1934 (the Change changes are purely clerical and do not
‘‘Act’’),1 and Rule 19b–4 thereunder,2 substantively amend any fee or rebate,
1. Purpose
notice is hereby given that on November nor do they alter the manner in which
18, 2016, Bats EDGA Exchange, Inc. (the The Exchange proposes to make
the Exchange assesses fees or calculates
‘‘Exchange’’ or ‘‘EDGA’’) filed with the certain clarifying and non-substantive
rebates. The Exchange also believes that
Securities and Exchange Commission changes to its fee schedule in order to
the proposal is non-discriminatory
(the ‘‘Commission’’) the proposed rule improve formatting, eliminate certain
because it applies uniformly to all
redundancies, increase overall
Members. Finally, the Exchange
4 See Report of the Securities and Exchange readability, and provide users with
asabaliauskas on DSK3SPTVN1PROD with NOTICES
believes that the proposed changes will
Commission, Investment Trusts and Investment straightforward descriptions to augment
Companies, H.R. Doc. No. 279, 76th Cong., 2d Sess., make the fee schedule clearer and
overall comprehensibility and usability
pt. 3, at 2581, 2589 (1939); Hearings on S.3580 eliminate potential investor confusion,
Before a Subcommittee of the Commission on of the existing fee schedule. The
thereby removing impediments to and
Banking and Currency, 76th Cong., 3d Sess. 209,
212–23 (1940); Hearings on S. 3580 Before the 3 15U.S.C. 78s(b)(3)(A)(ii).
perfecting the mechanism of a free and
Subcomm. of the Comm. on Banking and Currency, 4 17CFR 240.19b–4(f)(2). open market and a national market
76th Cong., 3d Sess. 322 (1940). 5 A Member is defined as ‘‘any registered broker
1 15 U.S.C. 78s(b)(1). 6 15 U.S.C. 78f.
or dealer that has been admitted to membership in
2 17 CFR 240.19b–4. the Exchange.’’ See Exchange Rule 1.5(n). 7 15 U.S.C. 78f(b)(4).
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Document Created: 2016-12-07 05:31:39
Document Modified: 2016-12-07 05:31:39
| 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 | |
| Action | Notice of application for an exemptive order under section 206A of the Investment Advisers Act of 1940 (``Advisers Act'') providing an exemption from the written disclosure and consent requirements of section 206(3). | |
| Dates | The application was filed on November 22, 2016. | |
| Contact | Robert Shapiro, Senior Counsel, at (202) 551-7758 (Chief Counsel's Office, Division of Investment Management) or Melissa Harke, Senior Special Counsel, at (202) 551-6787 (Investment Adviser Regulation Office, Division of Investment Management). | |
| FR Citation | 81 FR 88286 |
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