82 FR 1387 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Fees for the Complex Order Book Data Feed
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 3 (January 5, 2017)
Federal Register Volume 82, Issue 3 (January 5, 2017)
| Page Range | 1387-1390 | |
| FR Document | 2016-31941 |
[Federal Register Volume 82, Number 3 (Thursday, January 5, 2017)] [Notices] [Pages 1387-1390] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-31941] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79709; File No. SR-CBOE-2016-092] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Fees for the Complex Order Book Data Feed December 29, 2016. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on December 19, 2016, Chicago Board Options Exchange, Incorporated (the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange Commission (the ``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. 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\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change Chicago Board Options Exchange, Incorporated (the ``Exchange'' or ``CBOE'') proposes to amend user fees for the Complex Order Book (``COB'') Data Feed. The text of the proposed rule change is available on the Exchange's Web site (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the Secretary, 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 Exchange 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 these 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 aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to amend user fees for the COB Data Feed. This data feed is made available by CBOE's affiliate Market Data Express, LLC (``MDX''). The Exchange proposes to make the following fee changes effective January 1, 2017. COB Data Feed: The COB Data Feed is a real-time data feed that includes data regarding the Exchange's Complex Order Book and related complex order information. The COB Data Feed contains the following information for all CBOE-traded complex order strategies (multi-leg strategies such as spreads, straddles and buy-writes): (i) Outstanding quotes and standing orders on each side of the market with aggregate size, (ii) data with respect to executed trades (``last sale data''), and (iii) totals of customer versus non-customer contracts.\3\ --------------------------------------------------------------------------- \3\ The data is made available during ``Regular Trading Hours'' as defined in CBOE Rule 1.1(qqq) and ``Extended Trading Hours'' as defined in CBOE Rule 1.1(rrr). --------------------------------------------------------------------------- Fees MDX currently charges Customers \4\ of the COB Data Feed a Data Fee of $100 per month plus applicable User Fees (as described below). The Data Fee for the COB Data Feed is waived for Customers of the CBOE BBO and Book Depth Data Feeds.\5\ --------------------------------------------------------------------------- \4\ A Customer is any person, company or other entity that, pursuant to a market data agreement with MDX, is entitled to receive data, either directly from MDX or through an authorized redistributor (i.e., a Customer or an extranet service provider), whether that data is distributed externally or used internally. The MDX fee schedule for CBOE data is located at https://www.cboe.org/MDX/CSM/OBOOKMain.aspx. \5\ Such COB Data Feed Customers are still subject to User Fees. --------------------------------------------------------------------------- MDX charges a Customer User Fees of $25 per month per Device \6\ or user ID for receipt of the data by ``Professional Users'' \7\. There is no charge for receipt of the data by ``Non-Professional Users'' \8\. User Fees are subject to a cap of $2,000 per month (i.e., a Customer pays no more than $2,000 in User Fees for a given month). The Exchange proposes to delete this fee cap from the MDX fee schedule for CBOE data. --------------------------------------------------------------------------- \6\ A ``Device'' means any computer, workstation or other item of equipment, fixed or portable, that receives, accesses and/or displays data in visual, audible or other form. \7\ A ``Professional User'' is any natural person recipient of Data who is not a Non-Professional User (as defined below). User Fees for Professional Users are payable for both ``internal'' Professional Users (Devices or user IDs of employees of a Customer) and ``external'' Professional Users (Devices or user IDs of Professional Users who receive the Data from a Customer and are not employed by the Customer). (Non-Professional Users must be external since a person who uses the COB Data Feed for a commercial purpose cannot be a Non-Professional User.) \8\ A ``Non-Professional User'' is a natural person or qualifying trust that uses Data only for personal purposes and not for any commercial purpose and, for a natural person who works in the United States, is not: (i) Registered or qualified in any capacity with the Securities and Exchange Commission, the Commodities Futures Trading Commission, any state securities agency, any securities exchange or association, or any commodities or futures contract market or association; (ii) engaged as an ``investment adviser'' as that term is defined in Section 201(11) of the Investment Advisors Act of 1940 (whether or not registered or qualified under that Act); or (iii) employed by a bank or other organization exempt from registration under federal or state securities laws to perform functions that would require registration or qualification if such functions were performed for an organization not so exempt; or, for a natural person who works outside of the United States, does not perform the same functions as would disqualify such person as a Non-Professional User if he or she worked in the United States. --------------------------------------------------------------------------- The Exchange also proposes to make a few clean-up changes to the MDX fee schedule for CBOE data, including removing a couple references to a January 1, 2016 effective date for prior fee changes and removing the $1 per month User Fee for COB Data Feed Non-Professional Users, which was eliminated effective January 1, 2015. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the ``Act'') and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.\9\ Specifically, the Exchange believes the proposed rule change is consistent with Section 6(b)(4) of the Act,\10\ which requires that Exchange rules provide for the equitable allocation of reasonable dues, fees, and other charges among its Trading Permit Holders and other persons using its facilities. The Exchange also believes the proposed rule change is consistent with the Section 6(b)(5) \11\ requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78f(b). \10\ 15 U.S.C. 78f(b)(4). \11\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes the proposal to delete the monthly cap on User Fees for receipt of the COB Data Feed is equitable and not unfairly discriminatory because it would apply [[Page 1388]] equally to all Customers. The Exchange believes the User Fees, without a fee cap, are reasonable because they are similar to fees that other markets charge for similar products. For example, NYSE Arca charges $20 per month to each Professional User and $1 per month to each Non- Professional User for receipt of the Arcabook for Arca Options--Complex data feed. The Exchange believes NYSE Arca does not cap its user fees.\12\ Similarly, NYSE MKT charges $20 per month to each Professional User and $1 per month to each Non-Professional User for receipt of the Arcabook for Amex Options Options--Complex data feed. The Exchange believes NYSE MKT does not cap its user fees. The Exchange also believes removing the fee cap is reasonable in that it is not anticipated to materially affect the amount of User Fees any Customer pays. --------------------------------------------------------------------------- \12\ See NYSE Market Data Pricing Guide available at www.nyxdata.com/doc/241907. --------------------------------------------------------------------------- The decision of the United States Court of Appeals for the District of Columbia Circuit in NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010), upheld reliance by the Securities and Exchange Commission (``Commission'') upon the existence of competitive market mechanisms to set reasonable and equitably allocated fees for proprietary market data: In fact, the legislative history indicates that the Congress intended that the market system `evolve through the interplay of competitive forces as unnecessary regulatory restrictions are removed' and that the SEC wield its regulatory power `in those situations where competition may not be sufficient,' such as in the creation of a `consolidated transactional reporting system.' Id. at 535 (quoting H.R. Rep. No. 94-229 at 92 (1975), as reprinted in 1975 U.S.C.C.A.N. 323). The court agreed with the Commission's conclusion that ``Congress intended that `competitive forces should dictate the services and practices that constitute the U.S. national market system for trading equity securities.' '' \13\ --------------------------------------------------------------------------- \13\ NetCoalition, 615 F.3d at 535 (Quoting Securities Exchange Act Release No. 59039 (December 9, 2008), 73 FR 74770 (December 9, 2008) at 74771). --------------------------------------------------------------------------- As explained below in the Exchange's Statement on Burden on Competition, the Exchange believes that the need to attract order flow from market participants provides an effective constraint on the market data fees that the Exchange, through MDX, has the ability and the incentive to charge. In addition, the existence of alternatives to this data product, such as proprietary data from other sources, as described below, further ensures that the Exchange cannot set unreasonable fees, or fees that are unreasonably discriminatory, when vendors and subscribers can select such alternatives. For the reasons cited above, the Exchange believes the proposed User Fees for receipt of the COB Data Feed are equitable, reasonable and not unfairly discriminatory. In addition, the Exchange believes that no substantial countervailing basis exists to support a finding that the proposed fees for the COB Data Feed fail to meet the requirements of the Act. B. Self-Regulatory Organization's Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. An exchange's ability to price its proprietary market data feed products is constrained by (1) the existence of actual competition for the sale of such data, (2) the joint product nature of exchange platforms, and (3) the existence of alternatives to the Exchange's proprietary data. The Existence of Actual Competition. The Exchange believes competition provides an effective constraint on the market data fees that the Exchange, through MDX, has the ability and the incentive to charge. CBOE has a compelling need to attract order flow from market participants in order to maintain its share of trading volume. This compelling need to attract order flow imposes significant pressure on CBOE to act reasonably in setting its fees for market data, particularly given that the market participants that will pay such fees often will be the same market participants from whom CBOE must attract order flow. These market participants include broker-dealers that control the handling of a large volume of customer and proprietary order flow. Given the portability of order flow from one exchange to another, any exchange that sought to charge unreasonably high data fees would risk alienating many of the same customers on whose orders it depends for competitive survival. CBOE currently competes with thirteen options exchanges (including CBOE's affiliate, C2 Options Exchange) for order flow.\14\ --------------------------------------------------------------------------- \14\ The Commission has previously made a finding that the options industry is subject to significant competitive forces. See e.g., Securities Exchange Act Release No. 59949 (May 20, 2009), 74 FR 25593 (May 28, 2009) (SR-ISE-2009-97) (order approving ISE's proposal to establish fees for a real-time depth of market data offering). --------------------------------------------------------------------------- In addition, in the case of products that are distributed through market data vendors, the vendors themselves provide additional price discipline for proprietary data products because they control the primary means of access to certain end users. These vendors impose price discipline based upon their business models. For example, vendors that assess a surcharge on data they sell are able to refuse to offer proprietary products that their end users do not or will not purchase in sufficient numbers. Similarly, Customers will not offer the COB Data Feed unless this product will help them maintain current users or attract new ones. For example, a broker-dealer will not choose to offer the COB Data Feed to its retail customers unless the broker-dealer believes that the retail customers will use and value the data and the provision of such data will help the broker-dealer maintain the customer relationship, which allows the broker-dealer to increase its revenues. Professional users will not request this feed from Customers unless they can use the data for profit-generating purposes in their businesses. All of these factors operate as constraints on pricing proprietary data products. Joint Product Nature of Exchange Platform. Transaction execution and proprietary data products are complementary in that market data is both an input and a byproduct of the execution service. In fact, proprietary market data and trade executions are a paradigmatic example of joint products with joint costs. The decision whether and on which platform to post an order will depend on the attributes of the platforms where the order can be posted, including the execution fees, data quality, and price and distribution of data products. Without a platform to post quotations, receive orders and execute trades, exchange data products would not exist. The costs of producing market data include not only the costs of the data distribution infrastructure, but also the costs of designing, maintaining, and operating the exchange's platform for posting quotes, receiving orders and executing trades, and the cost of regulating the exchange to ensure its fair operation and maintain investor confidence. The total return that a trading platform earns reflects the revenues it receives from both products and the joint costs it incurs. Moreover, an exchange's broker-dealer customers view the costs of transaction executions and market data as a unified cost of doing business with [[Page 1389]] the exchange. A broker-dealer will only choose to direct orders to an exchange if the revenue from the transaction exceeds its cost, including the cost of any market data that the broker-dealer chooses to buy in support of its order routing and trading decisions. If the costs of the transaction are not offset by its value, then the broker-dealer may choose instead not to purchase the product and trade away from that exchange. Analyzing the cost of market data product production and distribution in isolation from the cost of all of the inputs supporting the creation of market data and market data products will inevitably underestimate the cost of the data and data products because it is impossible to obtain the data inputs to create market data products without a fast, technologically robust, and well-regulated execution system, and system and regulatory costs affect the price of both obtaining the market data itself and creating and distributing market data products. It would be equally misleading, however, to attribute all of an exchange's costs to the market data portion of an exchange's joint products. Rather, all of an exchange's costs are incurred for the unified purposes of attracting order flow, executing and/or routing orders, and generating and selling data about market activity. The total return that an exchange earns reflects the revenues it receives from the joint products and the total costs of the joint products. The level of competition and contestability in the market is evident in the numerous alternative venues that compete for order flow, including 14 options self-regulatory organization (``SRO'') markets, as well as various forms of alternative trading systems (``ATSs''), including dark pools and electronic communication networks (``ECNs'') and internalizing broker-dealers. Competition among trading platforms can be expected to constrain the aggregate return that each platform earns from the sale of its joint products, but different platforms may choose from a range of possible, and equally reasonable, pricing strategies as the means of recovering total costs. For example, some platforms may choose to pay rebates to attract orders, charge relatively low prices for market data products (or provide market data products free of charge), and charge relatively high prices for accessing posted liquidity. Other platforms may choose a strategy of paying lower rebates (or no rebates) to attract orders, setting relatively high prices for market data products, and setting relatively low prices for accessing posted liquidity. In this environment, there is no economic basis for regulating maximum prices for one of the joint products in an industry in which suppliers face competitive constraints with regard to the joint offering. The Existence of Alternatives. CBOE is constrained in pricing the COB Data Feed by the availability to market participants of alternatives to purchasing this product. CBOE must consider the extent to which market participants would choose one or more alternatives instead of purchasing the exchange's data. Other options exchanges can and have produced their own complex order book market data products, and thus are sources of potential competition for MDX. For example, as noted above, NYSE Arca and NYSE MKT offer market data products that compete with the COB Data Feed. The large number of SROs, ATSs and internalizing broker-dealers that currently produce proprietary data or are currently capable of producing it provides further pricing discipline for proprietary data products. Each SRO, ATS, and broker-dealer is currently permitted to produce and sell proprietary data products, and many currently do. Further, data products are valuable to professional users only if they can be used for profit-generating purposes in their businesses and valuable to non-professional users only insofar as they provide information that such users expect will assist them in tracking prices and market trends and making trading decisions. The existence of numerous alternatives to the Exchange's products, including proprietary data from other sources, ensures that the Exchange cannot set unreasonable fees, or fees that are unreasonably discriminatory, when vendors and subscribers can elect these alternatives or choose not to purchase a specific proprietary data product if its cost to purchase is not justified by the returns any particular vendor or subscriber would achieve through the purchase. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act \15\ and paragraph (f) of Rule 19b-4 \16\ thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission will institute proceedings to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \15\ 15 U.S.C. 78s(b)(3)(A). \16\ 17 CFR 240.19b-4(f). --------------------------------------------------------------------------- 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-CBOE-2016-092 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-CBOE-2016-092. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for [[Page 1390]] 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-CBOE-2016-092, and should be submitted on or before January 26, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\17\ --------------------------------------------------------------------------- \17\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2016-31941 Filed 1-4-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 3 / Thursday, January 5, 2017 / Notices 1387
Dated: December 30, 2016. the most significant aspects of such of the data by ‘‘Non-Professional
Brent J. Fields, statements. Users’’ 8. User Fees are subject to a cap
Secretary. of $2,000 per month (i.e., a Customer
A. Self-Regulatory Organization’s
[FR Doc. 2016–32047 Filed 1–3–17; 11:15 am] pays no more than $2,000 in User Fees
Statement of the Purpose of, and
BILLING CODE 8011–01–P for a given month). The Exchange
Statutory Basis for, the Proposed Rule
proposes to delete this fee cap from the
Change MDX fee schedule for CBOE data.
SECURITIES AND EXCHANGE 1. Purpose The Exchange also proposes to make
COMMISSION a few clean-up changes to the MDX fee
The purpose of the proposed rule schedule for CBOE data, including
[Release No. 34–79709; File No. SR–CBOE– change is to amend user fees for the removing a couple references to a
2016–092] COB Data Feed. This data feed is made January 1, 2016 effective date for prior
available by CBOE’s affiliate Market fee changes and removing the $1 per
Self-Regulatory Organizations; Data Express, LLC (‘‘MDX’’). The
Chicago Board Options Exchange, month User Fee for COB Data Feed Non-
Exchange proposes to make the Professional Users, which was
Incorporated; Notice of Filing and following fee changes effective January
Immediate Effectiveness of a Proposed eliminated effective January 1, 2015.
1, 2017.
Rule Change Relating to Fees for the COB Data Feed: The COB Data Feed 2. Statutory Basis
Complex Order Book Data Feed is a real-time data feed that includes The Exchange believes the proposed
December 29, 2016. data regarding the Exchange’s Complex rule change is consistent with the
Order Book and related complex order Securities Exchange Act of 1934 (the
Pursuant to Section 19(b)(1) of the
information. The COB Data Feed ‘‘Act’’) and the rules and regulations
Securities Exchange Act of 1934 (the
contains the following information for thereunder applicable to the Exchange
‘‘Act’’),1 and Rule 19b–4 thereunder,2
all CBOE-traded complex order and, in particular, the requirements of
notice is hereby given that on December
strategies (multi-leg strategies such as Section 6(b) of the Act.9 Specifically,
19, 2016, Chicago Board Options
Exchange, Incorporated (the ‘‘Exchange’’ spreads, straddles and buy-writes): (i) the Exchange believes the proposed rule
or ‘‘CBOE’’) filed with the Securities Outstanding quotes and standing orders change is consistent with Section 6(b)(4)
and Exchange Commission (the on each side of the market with of the Act,10 which requires that
‘‘Commission’’) the proposed rule aggregate size, (ii) data with respect to Exchange rules provide for the equitable
change as described in Items I, II, and executed trades (‘‘last sale data’’), and allocation of reasonable dues, fees, and
III below, which Items have been (iii) totals of customer versus non- other charges among its Trading Permit
prepared by the Exchange. The customer contracts.3 Holders and other persons using its
Commission is publishing this notice to Fees facilities. The Exchange also believes
solicit comments on the proposed rule the proposed rule change is consistent
change from interested persons. MDX currently charges Customers 4 of with the Section 6(b)(5) 11 requirement
the COB Data Feed a Data Fee of $100 that the rules of an exchange not be
I. Self-Regulatory Organization’s per month plus applicable User Fees (as designed to permit unfair
Statement of the Terms of the Substance described below). The Data Fee for the discrimination between customers,
of the Proposed Rule Change COB Data Feed is waived for Customers issuers, brokers, or dealers.
Chicago Board Options Exchange, of the CBOE BBO and Book Depth Data The Exchange believes the proposal to
Incorporated (the ‘‘Exchange’’ or Feeds.5 delete the monthly cap on User Fees for
‘‘CBOE’’) proposes to amend user fees MDX charges a Customer User Fees of receipt of the COB Data Feed is
for the Complex Order Book (‘‘COB’’) $25 per month per Device 6 or user ID equitable and not unfairly
Data Feed. The text of the proposed rule for receipt of the data by ‘‘Professional discriminatory because it would apply
change is available on the Exchange’s Users’’ 7. There is no charge for receipt
Web site (http://www.cboe.com/ Users must be external since a person who uses the
3 The data is made available during ‘‘Regular COB Data Feed for a commercial purpose cannot be
AboutCBOE/ Trading Hours’’ as defined in CBOE Rule 1.1(qqq) a Non-Professional User.)
CBOELegalRegulatoryHome.aspx), at and ‘‘Extended Trading Hours’’ as defined in CBOE 8 A ‘‘Non-Professional User’’ is a natural person
the Exchange’s Office of the Secretary, Rule 1.1(rrr). or qualifying trust that uses Data only for personal
and at the Commission’s Public 4 A Customer is any person, company or other purposes and not for any commercial purpose and,
Reference Room. entity that, pursuant to a market data agreement for a natural person who works in the United States,
with MDX, is entitled to receive data, either directly is not: (i) Registered or qualified in any capacity
II. Self-Regulatory Organization’s from MDX or through an authorized redistributor with the Securities and Exchange Commission, the
Statement of the Purpose of, and (i.e., a Customer or an extranet service provider), Commodities Futures Trading Commission, any
whether that data is distributed externally or used state securities agency, any securities exchange or
Statutory Basis for, the Proposed Rule internally. The MDX fee schedule for CBOE data is association, or any commodities or futures contract
Change located at https://www.cboe.org/MDX/CSM/ market or association; (ii) engaged as an
OBOOKMain.aspx. ‘‘investment adviser’’ as that term is defined in
In its filing with the Commission, the 5 Such COB Data Feed Customers are still subject Section 201(11) of the Investment Advisors Act of
Exchange included statements to User Fees. 1940 (whether or not registered or qualified under
concerning the purpose of and basis for 6 A ‘‘Device’’ means any computer, workstation or that Act); or (iii) employed by a bank or other
the proposed rule change and discussed other item of equipment, fixed or portable, that organization exempt from registration under federal
receives, accesses and/or displays data in visual, or state securities laws to perform functions that
any comments it received on the would require registration or qualification if such
audible or other form.
mstockstill on DSK3G9T082PROD with NOTICES
proposed rule change. The text of these 7 A ‘‘Professional User’’ is any natural person functions were performed for an organization not so
statements may be examined at the recipient of Data who is not a Non-Professional exempt; or, for a natural person who works outside
places specified in Item IV below. The User (as defined below). User Fees for Professional of the United States, does not perform the same
Users are payable for both ‘‘internal’’ Professional functions as would disqualify such person as a
Exchange has prepared summaries, set Non-Professional User if he or she worked in the
Users (Devices or user IDs of employees of a
forth in sections A, B, and C below, of Customer) and ‘‘external’’ Professional Users United States.
9 15 U.S.C. 78f(b).
(Devices or user IDs of Professional Users who
1 15 U.S.C. 78s(b)(1). 10 15 U.S.C. 78f(b)(4).
receive the Data from a Customer and are not
2 17 CFR 240.19b–4. employed by the Customer). (Non-Professional 11 15 U.S.C. 78f(b)(5).
VerDate Sep<11>2014 21:06 Jan 04, 2017 Jkt 241001 PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 E:\FR\FM\05JAN1.SGM 05JAN1](https://thefederalregister.org/doc/82_FR_1390/page/1.svg)
![1390 Federal Register / Vol. 82, No. 3 / Thursday, January 5, 2017 / Notices
inspection and copying at the principal principal office, and at the Adviser’’) to the Fund: First Trust
office of the Exchange. All comments Commission’s Public Reference Room. Global Portfolios Ltd.; Energy Income
received will be posted without change; Partners, LLC; Stonebridge Advisors
II. Self-Regulatory Organization’s
the Commission does not edit personal LLC; and Richard Bernstein Advisors
Statement of the Purpose of, and
identifying information from LLC. First Trust Portfolios L.P. is the
Statutory Basis for, the Proposed Rule
submissions. You should submit only principal underwriter and distributor of
Change
information that you wish to make the Fund’s Shares. The Bank of New
available publicly. All submissions In its filing with the Commission, York Mellon Corporation acts as the
should refer to File Number SR–CBOE– Nasdaq included statements concerning administrator, accounting agent,
2016–092, and should be submitted on the purpose of, and basis for, the custodian and transfer agent to the
or before January 26, 2017. proposed rule change and discussed any Fund.
comments it received on the proposed The Prior Release provided that the
For the Commission, by the Division of
Trading and Markets, pursuant to delegated rule change. The text of these statements primary investment objective of the
authority.17 may be examined at the places specified Fund would be to seek risk-adjusted
Eduardo A. Aleman, in Item IV below. Nasdaq has prepared income and that its secondary objective
Assistant Secretary.
summaries, set forth in Sections A, B, would be capital appreciation.
and C below, of the most significant Additionally, the Prior Release stated
[FR Doc. 2016–31941 Filed 1–4–17; 8:45 am]
aspects of such statements. that under normal market conditions,
BILLING CODE 8011–01–P
A. Self-Regulatory Organization’s the Fund would seek to achieve its
Statement of the Purpose of, and investment objectives by following a
SECURITIES AND EXCHANGE Statutory Basis for, the Proposed Rule strategic and tactical asset allocation
COMMISSION Change process that would provide diversified
exposure to income-producing asset
[Release No. 34–79706; File No. SR– 1. Purpose classes. Further, the Prior Release stated
NASDAQ–2016–180] that the Adviser would determine the
The Exchange proposes to reflect
changes to the means of achieving the Fund’s strategic allocation among the
Self-Regulatory Organizations; The
Fund’s investment objectives. The following investment categories (the
NASDAQ Stock Market LLC; Notice of
Commission has approved the listing following currently existing investment
Filing and Immediate Effectiveness of
and trading of Shares under Nasdaq categories, as well as the proposed new
Proposed Rule Change Relating to the
Rule 5735, which governs the listing investment category described below,
Listing and Trading of the Shares of
and trading of Managed Fund Shares on are each referred to as an ‘‘Investment
the First Trust Strategic Income ETF of
the Exchange.3 The Exchange believes Category’’) and allocate the Fund’s
First Trust Exchange-Traded Fund IV
the proposed rule change reflects no assets to portfolio management teams
December 29, 2016. significant issues not previously comprised of personnel of the Adviser
Pursuant to Section 19(b)(1) of the addressed in the Prior Release. The and/or a Sub-Adviser (each such team,
Securities Exchange Act of 1934 Fund is an actively-managed exchange- with respect to the currently existing
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 traded fund (‘‘ETF’’). The Shares are Investment Categories as well as the
notice is hereby given that on December offered by the Trust, which was proposed new Investment Category
16, 2016, The NASDAQ Stock Market established as a Massachusetts business described below, is referred to as a
LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed trust on September 15, 2010. The Trust, ‘‘Management Team’’) which would
with the Securities and Exchange which is registered with the employ their respective investment
Commission (‘‘SEC’’ or ‘‘Commission’’) Commission as an investment company strategies: (i) High yield corporate bonds
the proposed rule change as described under the Investment Company Act of and first lien senior secured floating rate
in Items I and II below, which Items 1940 (the ‘‘1940 Act’’), has filed a bank loans (referred to as ‘‘senior
have been prepared by Nasdaq. The registration statement on Form N–1A loans’’); (ii) mortgage-related
Commission is publishing this notice to (‘‘Registration Statement’’) relating to investments; (iii) preferred securities
solicit comments on the proposed rule the Fund with the Commission.4 The (‘‘Investment Category (iii)’’); (iv)
change from interested persons. Fund is a series of the Trust. international sovereign bonds; (v) equity
First Trust Advisors L.P. is the securities of Energy Infrastructure
I. Self-Regulatory Organization’s Companies (as defined in the Prior
investment adviser (‘‘Adviser’’) to the
Statement of the Terms of Substance of Release) (‘‘Investment Category (v)’’);
Fund. The following serve as
the Proposed Rule Change and (vi) dividend paying domestic
investment sub-advisers (each a ‘‘Sub-
Nasdaq proposes a proposed rule equity securities and Depositary
change relating to the First Trust 3 The Commission approved Nasdaq Rule 5735 in Receipts (as defined in the Prior
Strategic Income ETF (the ‘‘Fund’’) of Securities Exchange Act Release No. 57962 (June Release), together with a related Option
First Trust Exchange-Traded Fund IV 13, 2008), 73 FR 35175 (June 20, 2008) (SR– Overlay Strategy (as defined in the Prior
NASDAQ–2008–039). The Commission previously Release) (‘‘Investment Category (vi)’’).
(the ‘‘Trust’’), the shares of which have approved the listing and trading of the Shares of the
been approved by the Commission for Fund. See Securities Exchange Act Release No.
The Exchange now proposes to
listing and trading under Nasdaq Rule 72506 (July 1, 2014), 79 FR 38631 (July 8, 2014) modify the description of the measures
5735 (‘‘Managed Fund Shares’’). The (SR–NASDAQ–2014–050) (‘‘Prior Order’’). See also utilized to achieve the Fund’s
Securities Exchange Act Release No. 72169 (May investment objectives. As described in
shares of the Fund are collectively 15, 2014), 79 FR 29247 (May 21, 2014) (SR–
further detail below, these changes
mstockstill on DSK3G9T082PROD with NOTICES
referred to herein as the ‘‘Shares.’’ NASDAQ–2014–050) (‘‘Prior Notice,’’ and together
The text of the proposed rule change with the Prior Order, the ‘‘Prior Release’’). would: (1) Remove a current limitation
is available at http:// 4 See Post-Effective Amendment No. 140 to on the Fund’s ability to invest in Other
nasdaq.cchwallstreet.com, at Nasdaq’s Registration Statement on Form N–1A for the Trust, ETFs (as defined below) and clarify,
dated February 26, 2016 (File Nos. 333–174332 and modify or delete certain representations
811–22559). The descriptions of the Fund and the
17 17 CFR 200.30–3(a)(12). Shares contained herein are based, in part, on
to facilitate the Fund’s ability to do so;
1 15 U.S.C. 78s(b)(1). information in the Registration Statement. See also (2) in conjunction with Investment
2 17 CFR 240.19b–4. note 5. Category (vi), (a) expand the Fund’s
VerDate Sep<11>2014 21:06 Jan 04, 2017 Jkt 241001 PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 E:\FR\FM\05JAN1.SGM 05JAN1](https://thefederalregister.org/doc/82_FR_1390/page/4.svg)
Document Created: 2018-02-01 14:51:01
Document Modified: 2018-02-01 14:51:01
| 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 | 82 FR 1387 |
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