82 FR 20652 - Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of No Objection To Advance Notice Filing To Establish the Centrally Cleared Institutional Triparty Service and Make Other Changes
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 84 (May 3, 2017)
Federal Register Volume 82, Issue 84 (May 3, 2017)
| Page Range | 20652-20656 | |
| FR Document | 2017-08903 |
[Federal Register Volume 82, Number 84 (Wednesday, May 3, 2017)] [Notices] [Pages 20652-20656] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-08903] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80546; File No. SR-FICC-2017-803] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of No Objection To Advance Notice Filing To Establish the Centrally Cleared Institutional Triparty Service and Make Other Changes April 27, 2017. On March 9, 2017, Fixed Income Clearing Corporation (``FICC'') filed with the Securities and Exchange Commission (``Commission'') advance notice SR-FICC-2017-803 (``Advance Notice'') pursuant to Section 806(e)(1) of the Payment, Clearing, and Settlement Supervision Act of 2010 (``Clearing Supervision Act'') \1\ and Rule 19b- [[Page 20653]] 4(n)(1)(i) \2\ under the Securities Exchange Act of 1934 (``Exchange Act'').\3\ The Advance Notice was published for comment in the Federal Register on April 7, 2017.\4\ Although the Commission received no comments to the Advance Notice, it received one comment letter \5\ to the Proposed Rule Change in support of the proposal.\6\ This publication serves as notice that the Commission does not object to the changes set forth in the Advance Notice. --------------------------------------------------------------------------- \1\ 12 U.S.C. 5465(e)(1). The Financial Stability Oversight Council designated FICC a systemically important financial market utility on July 18, 2012. Financial Stability Oversight Council 2012 Annual Report, Appendix A, http://www.treasury.gov/initiatives/fsoc/Documents/2012%20Annual%20Report.pdf. Therefore, FICC is required to comply with the Clearing Supervision Act and file advance notices with the Commission. 12 U.S.C. 5465(e). \2\ 17 CFR 240.19b-4(n)(1)(i). \3\ 15 U.S.C. 78s(b)(1). \4\ Securities Exchange Act Release No. 80361 (April 3, 2017), 82 FR 17053 (April 7, 2017) (SR-FICC-2017-803) (``Notice''). FICC also filed a proposed rule change with the Commission pursuant to Section 19(b)(1) of the Exchange Act and Rule 19b-4 thereunder, seeking approval of changes to its rules necessary to implement the proposal. 15 U.S.C. 78s(b)(1) and 17 CFR 240.19b-4, respectively. The proposed rule change was published for comment in the Federal Register on March 30, 2017. Securities Exchange Act Release No. 80303 (March 24, 2017), 82 FR 15749 (March 30, 2017) (SR-FICC-2017- 803). \5\ See letter from Thomas Wipf, Chief Financial Officer, Morgan Stanley & Co. LLC, dated April 19, 2017, to Eduardo A. Aleman, Assistant Secretary, Commission, available at https://www.sec.gov/comments/sr-ficc-2017-005/ficc2017005.htm. \6\ Because the proposal contained in the Advance Notice was also filed as the Proposed Rule Change, see supra note 3, the Commission is considering any comment received on the Proposed Rule Change also to be a comment on the Advance Notice. --------------------------------------------------------------------------- I. Description of the Advance Notice Repurchase agreement (``repo'') transactions involve the sale of securities along with an agreement to repurchase the securities on a later date. Bilateral repo transactions involve a cash lender (e.g., a money market mutual fund, pension fund, or other entity with funds available for lending) and a cash borrower (typically a broker-dealer, hedge fund, or other entity seeking to finance securities that can be used to collateralize the loan). In the opening leg of the repo transaction, the cash borrower receives cash in exchange for securities equal in value to the amount of cash received, plus a haircut. In the closing leg of the repo transaction, the cash borrower pays back the cash plus interest in exchange for the securities posted as collateral. In tri-party repo transactions, a clearing bank tri-party agent provides to both the cash lender and the cash borrower certain operational, custodial, collateral valuation, and other services to facilitate the repo transactions. For example, the tri-party agent may facilitate and record the exchange of cash and securities on a book- entry basis for each of the counterparties to the repo transaction, as well as effectuating the collection and transfer of collateral that may be required under the terms of the repo transaction. Cash lenders use tri-party repos as investments that offer liquidity maximization, principal protection, and a small positive return, while cash borrowers rely on them as a major source of short-term funding.\7\ --------------------------------------------------------------------------- \7\ See Federal Reserve Bank of New York, Tri-Party Repo Infrastructure Reform, https://www.newyorkfed.org/banking/tpr_infr_reform.html (last visited Mar. 6, 2017). --------------------------------------------------------------------------- FICC currently provides central clearing to a segment of the tri- party repo market through its general collateral finance repo service (``GCF Repo [supreg] Service'').\8\ The GCF Repo Service is available to sell-side entities, such as dealers, that enter into tri-party repo transactions, in GCF Repo Securities, with each other.\9\ --------------------------------------------------------------------------- \8\ The term ``GCF Repo'' is a registered trademark of FICC. The GCF Repo Service is a service offered by FICC to compare, net, and settle general collateral repos. Notice, 82 FR at 17053. \9\ GCF Repo Securities are securities issued or guaranteed by the United States, a U.S. government agency or instrumentality, a U.S. government-sponsored corporation (or otherwise approved by FICC's Board of Directors), and such securities are only eligible for submission to FICC in connection with the comparison, netting and/or settlement of repo transactions involving generic CUSIP numbers (i.e., identifying numbers established for a category of securities, as opposed to a specific security). Notice, 82 FR at 17053. --------------------------------------------------------------------------- The Advance Notice is a proposal by FICC to broaden the pool of entities that would be eligible to submit tri-party repo transactions for central clearing at FICC. Specifically, FICC proposes to amend its Government Securities Division (``GSD'') Rulebook (``GSD Rules'') \10\ to establish the ``Centrally Cleared Institutional Tri-Party Service'' or the ``CCITTM Service.'' \11\ The proposed CCIT Service would allow the submission of tri-party repo transactions in GCF Repo Securities between GSD Netting Members \12\ that participate in the GCF Repo Service and institutional counterparties (other than registered investment companies (``RICs'') under the Investment Company Act of 1940, as amended),\13\ where the institutional counterparties are the cash lenders in the transactions. --------------------------------------------------------------------------- \10\ Available at http://www.dtcc.com/legal/rules-and-procedures. \11\ CCIT is a trademark of The Depository Trust & Clearing Corporation, of which FICC is a subsidiary. FICC defines ``Centrally Cleared Institutional Tri-Party Service'' and ``CCIT Service'' as ``the service offered by the Corporation to clear institutional tri- party repurchase agreement transactions, as more fully described in Rule 3B.'' Proposed GSD Rule 1, Definitions. \12\ The term ``Netting Member'' is defined as a member of FICC's Comparison System (i.e., the system of reporting, validating, and matching the long and short sides of securities trades to ensure that the details of such trades are in agreement between the parties) and FICC's Netting System (i.e., the system for aggregating and matching offsetting obligations resulting from trades). GSD Rules, supra note 8. \13\ 15 U.S.C. 80a-1 et seq. According to FICC, the legal ability of such registered investment companies to participate in the proposed CCIT Service is uncertain in light of applicable regulatory requirements under the Investment Company Act of 1940 (including, for example, liquid asset requirements and counterparty diversification requirements). --------------------------------------------------------------------------- To effectuate the proposed CCIT Service, FICC proposes to create a new limited service membership category in GSD for institutional cash lenders. These new members would be referred to as CCIT members, and the GSD membership provisions that apply to the CCIT members would be addressed in proposed GSD Rule 3B. These new membership provisions include: \14\ --------------------------------------------------------------------------- \14\ For additional discussion of the membership provisions set forth in proposed GSD Rule 3B, see also Notice, 82 FR at 17054-64. ---------------------------------------------------------------------------Membership eligibility criteria, including minimum financial requirements, operational capabilities, and opinions of counsel; joint account ownership, in which one authorized entity would act as agent for two or more CCIT Members; membership application processes, including document provision and disclosure requirements, operational testing requirements, reporting requirements, FATCA compliance certification requirements,\15\ and the procedures for denying membership; --------------------------------------------------------------------------- \15\ FATCA is the Foreign Account Tax Compliance Act, 26 U.S.C. 1471 et seq. FATCA compliance means that an ``. . . FFI [foreign financial institution] Member has qualified under such procedures promulgated by the Internal Revenue Service . . . to establish exemption from withholding under FATCA such that [FICC] would not be required to withhold [anything] under FATCA . . . . '' GSD Rules 1, supra note 3. --------------------------------------------------------------------------- membership agreement terms describing rights and obligations; procedures for the voluntary termination of CCIT membership; and ongoing membership requirements, including (i) annual financial and other disclosure requirements; (ii) operational testing requirements and related reporting requirements; (iii) notification of GSD rule non-compliance; (iv) penalties for GSD rule non-compliance; (v) mandatory assurances in the event that FICC has reason to believe a member may fall into GSD rule non-compliance; (vi) requirements to comply with applicable tax, money laundering, and sanctions laws; (vii) audit provisions allowing FICC to access relevant books and records; and (viii) financial/operational monitoring. In addition to membership provisions, proposed Rule 3B also would set forth the applicable risk management provision relating to the new limited [[Page 20654]] service membership category, including: \16\ --------------------------------------------------------------------------- \16\ For additional discussion of the risk management provisions set forth in proposed GSD Rule 3B, see also Notice, 82 FR at 17055- 64. --------------------------------------------------------------------------- Non-mutualized loss allocation obligations of CCIT members, including FICC's perfected security interest in each CCIT member's underlying repo securities; a rules-based committed liquidity facility for CCIT members, in which CCIT members that have outstanding CCIT transactions with a defaulting member would be required to enter into CCIT master repurchase agreement transactions with FICC for specified periods of time; uncommitted liquidity repos between CCIT members and FICC; and application of certain other GSD Rules (e.g., comparison, netting, settlement, default, and other applicable provisions) to CCIT members and transactions. In addition to the proposed changes to the GSD Rules related to the proposed CCIT Service, the Advance Notice also contains other changes to the GSD Rules, unrelated to the CCIT proposal. These non-CCIT related changes generally are intended to update the GSD Rules and provide additional specificity, clarity, and transparency for members that rely on them.\17\ These non-CCIT related proposed rule changes include the following: --------------------------------------------------------------------------- \17\ For additional description and explanation of the non-CCIT- related changes included in the Advance Notice, see Notice, 82 FR at 17054-64. --------------------------------------------------------------------------- Clarifying that Comparison-Only Members must conform to FICC's operational conditions and requirements; \18\ --------------------------------------------------------------------------- \18\ GSD Members may be either Comparison-Only Members or Netting Members. Comparison-Only Members are members of the GSD Comparison System, which is the GSD system for reporting, validating, and in some cases, matching of securities trades. Netting Members are members of both the GSD Comparison System and the GSD Netting System, which is the GSD system for aggregating and matching offsetting obligations resulting from securities trades. Pursuant to GSD Rule 2A, FICC may require an entity to be a Comparison-Only Member for a period of time (during which FICC assess the entity's operational soundness) before the entity becomes eligible to apply for netting membership. --------------------------------------------------------------------------- clarifying the point of time in which a member is required to notify FICC that the member is no longer in compliance with a relevant membership qualification and standard; providing that a member's written notice of its membership termination is not effective until accepted by FICC; requiring all GCF Repo transactions to be fully collateralized by 9:00 a.m. New York Time; prohibiting a member that receives collateral in the GCF Repo process from withdrawing the securities or cash collateral received; specifying the steps that members must take in the event of FICC's default so that FICC may determine the net amount owed by or to each member; reflecting FICC's current practice of annual study and evaluation of FICC's internal accounting control system; and correcting several grammatical and out-of-date cross- references. In addition to the proposed changes listed above, the Advance Notice also includes a proposal for a non-CCIT related rule change that would provide FICC with access to the books and records of a RIC Netting Member's controlling management. The change is intended to enable FICC to determine whether the RIC has sufficient financial resources and monitor compliance with FICC's financial requirements on an ongoing basis. II. Discussion of Commission Findings Although the Clearing Supervision Act does not specify a standard of review for an advance notice, its stated purpose is instructive: To mitigate systemic risk in the financial system and promote financial stability by, among other things, promoting uniform risk management standards for systemically important financial market utilities and strengthening the liquidity of systemically important financial market utilities.\19\ Section 805(a)(2) of the Clearing Supervision Act authorizes the Commission to prescribe risk management standards for the payment, clearing, and settlement activities of designated clearing entities and financial institutions engaged in designated activities for which it is the Supervisory Agency or the appropriate financial regulator.\20\ Section 805(b) of the Clearing Supervision Act \21\ states that the objectives and principles for the risk management standards prescribed under Section 805(a) shall be to: --------------------------------------------------------------------------- \19\ 12 U.S.C. 5461(b). \20\ 12 U.S.C. 5464(a)(2). \21\ 12 U.S.C. 5464(b). --------------------------------------------------------------------------- Promote robust risk management; promote safety and soundness; reduce systemic risks; and support the stability of the broader financial system. The Commission has adopted risk management standards under Section 805(a)(2) of the Clearing Supervision Act \22\ and Section 17A of the Exchange Act (``Clearing Agency Standards'').\23\ The Clearing Agency Standards require registered clearing agencies to establish, implement, maintain, and enforce written policies and procedures that are reasonably designed to meet certain minimum requirements for their operations and risk management practices on an ongoing basis.\24\ Therefore, it is appropriate for the Commission to review proposed changes in advance notices against the objectives and principles of these risk management standards as described in Section 805(b) of the Clearing Supervision Act and in the Clearing Agency Standards.\25\ --------------------------------------------------------------------------- \22\ 12 U.S.C. 5464(a)(2). \23\ See 17 CFR 240.17Ad-22. \24\ Id. \25\ 12 U.S.C. 5464(b). --------------------------------------------------------------------------- A. Consistency With Section 805(b) of the Clearing Supervision Act As discussed below, the Commission believes that the changes proposed in the Advance Notice are consistent with Section 805(b) of the Clearing Supervision Act because they (i) are designed to reduce systemic risk, (ii) are designed to support the stability of the financial system, (iii) are designed to promote robust risk management, and (iv) are consistent with promoting safety and soundness. When considering the CCIT Service in its entirety, the Commission believes that the proposal could help to reduce systemic risk presented by FICC and a tri-party repo market member default, which in turn could help support the stability of the broader financial system. The CCIT Service would make the risk-reducing benefits of central clearing available to a wider range of types of repo transactions while at the same time ensuring that FICC is able to effectively manage the additional financial risk exposure. For example, as described above, the CCIT Service would enable a greater number of tri-party repo transactions to be eligible for netting and subject to guaranteed settlement, novation, and independent risk management through FICC, which would help decrease the settlement and operational risk of such transactions relative to those made outside of FICC, enhancing the stability of the tri-party repo market. Furthermore, by providing central clearing to a greater number of tri-party repo transactions, the CCIT Service would permit FICC to centralize and control the liquidation of a greater number of such positions in the event of a Netting Member's default, which in turn would help protect against the risk that an uncoordinated liquidation of the positions by multiple counterparties to a defaulting firm would cause a fire sale that destabilizes the broader financial system. Therefore, the Commission believes that the CCIT Service would help reduce systemic risks and support [[Page 20655]] the stability of the financial system, consistent with Section 805(b) of the Clearing Supervision Act. The Commission also believes that the CCIT Service designed by FICC is consistent with promoting robust risk management and safety and soundness at FICC and to the tri-party repo market. The CCIT Service includes certain risk management tools that facilitate FICC's management of credit, market, and liquidity risk arising from becoming a central counterparty to the new repo positions coming in via CCIT. For example, the CCIT Service would provide FICC with a perfected security interest in the underlying repo securities of a CCIT transaction and a built-in liquidity resource to support CCIT Service liquidity demands in the form of repo transactions under the CCIT Master Repurchase Agreement (``CCIT MRA'').\26\ Each of these elements of the CCIT Service would help FICC manage certain risks presented by the potential default of a CCIT member. Specifically, the perfected security interest would enable FICC, in the event of a Netting Member's default, to access the defaulter's collateral for the purposes of managing potential risks, such as credit risk, that may arise from the default. --------------------------------------------------------------------------- \26\ For additional details regarding the CCIT MRA, see Notice, 82 FR at 17060-61. --------------------------------------------------------------------------- In addition, the CCIT Service would enable FICC to manage instances where a default results in liquidity demands for FICC within the CCIT Service that exceed the level of financial resources FICC might otherwise have on hand (such as the defaulter's collateral) at the time of the default by requiring CCIT Members to engage in repo transactions to provide cash as a liquidity resource in such instances. In addition to the risk management tools described above, the CCIT Service also would establish initial and ongoing financial responsibility and operational capacity requirements for CCIT members, as well as requirements that would be applicable to Netting Members with respect to their participation in the proposed CCIT Service. Collectively, these requirements would enable FICC to monitor the likelihood of a CCIT member default and limit its counterparty risk by (i) ensuring that FICC only takes on exposure to entities that are creditworthy counterparties; and (ii) enabling FICC to monitor the ongoing capability of these members to perform their obligations to FICC. For these reasons, the Commission believes that the CCIT Service would help promote robust risk management and safety and soundness at FICC, consistent with Section 805(b) of the Clearing Supervision Act. In addition, the Commission believes that the CCIT Service is consistent with promoting robust risk management and safety and soundness to the tri-party repo market. As discussed above, the CCIT Service would make the risk-reducing benefits of central clearing available to a wider range of types of repo transactions, which would help decrease the settlement and operational risk of such transactions when made outside of FICC and thereby enhance stability for the tri- party repo market. Furthermore, the CCIT Service would enable a greater number of tri-party repo transactions to be subject to FICC's ability, in the event of a Netting Member's default, to centralize and control the liquidation of such positions at FICC, which in turn would help protect the tri-party repo market against the risk that a liquidation of the positions would cause a fire sale that destabilizes the broader financial system. Therefore, the Commission believes that the CCIT Service would help promote robust risk management and safety and soundness to the tri-party repo market, consistent with Section 805(b) of the Clearing Supervision Act. B. Consistency With Rules 17Ad-22(e)(1), (e)(4), and (e)(18) The Commission believes that the changes proposed in the Advance Notice are consistent with Rule 17Ad-22(e)(1) under the Act.\27\ Rule 17Ad-22(e)(1) requires, in part, that FICC ``establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [p]rovide for a well-founded, clear, transparent and enforceable legal basis for each aspect of its activities.'' \28\ As described above, FICC proposes a number of changes that are unrelated to the proposed CCIT Service and designed to make the GSD Rules more clear, consistent, and current for members that rely on them. The Commission believes that these non-CCIT related changes could make FICC's policies and procedures in the GSD Rules more clear, consistent, and transparent for members that rely on them, and therefore believes that the proposed changes would help support FICC's rules being clear and transparent, consistent with Rule 17Ad-22(e)(1), cited above. --------------------------------------------------------------------------- \27\ 17 CFR 240.17Ad-22(e)(2). \28\ Id. --------------------------------------------------------------------------- The Commission believes that the changes proposed in the Advance Notice are consistent with Rule 17Ad-22(e)(4)(iii) under the Act.\29\ Rule 17Ad-22(e)(4)(iii) requires, in part, that FICC ``establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [e]ffectively identify, measure, monitor, and manage its credit exposures to participants and those arising from [FICC's] payment, clearing, and settlement processes, including by . . . maintaining . . . financial resources at the minimum to enable [FICC] to cover a wide range of stress scenarios. . . .'' \30\ As discussed above, the CCIT Service includes risk management tools, such as the perfected security interest and the CCIT MRA liquidity resource. The Commission believes that these risk management tools would help facilitate FICC's management of credit, market, and liquidity risk that would arise from becoming a central counterparty to the new repo positions coming in via the proposed CCIT Service. Accordingly, the Commission believes that the proposed changes to its policies and procedures in the GSD Rules are designed to help effectively manage FICC's exposure, including its credit exposure to participants, arising from its payment, clearing, and settlement processes for the proposed CCIT transactions by providing for financial resources to help cover a wide range of foreseeable stress scenarios, consistent with Rule 17Ad- 22(e)(4)(iii), cited above. --------------------------------------------------------------------------- \29\ 17 CFR 240.17Ad-22(e)(4)(iii). \30\ Id. --------------------------------------------------------------------------- The Commission also believes that the proposal is consistent with Rule 17Ad-22(e)(18) under the Act.\31\ Rule 17Ad-22(e)(18) requires, in part, that FICC ``establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [e]stablish objective, risk-based, and publicly disclosed criteria for participation, which . . . require participants to have sufficient financial resources and robust operational capacity to meet obligations arising from participation in the clearing agency, and monitor compliance with such participation requirements on an ongoing basis.'' \32\ --------------------------------------------------------------------------- \31\ 17 CFR 240.17Ad-22(e)(18). \32\ Id. --------------------------------------------------------------------------- In connection with the establishment of the proposed CCIT Service, FICC would include provisions in the GSD rules to incorporate membership standards, requiring, for example, ongoing financial responsibility and operational capacity requirements, as well as the requirements that would be applicable to Netting Members with respect to their participation in the proposed CCIT Service. The [[Page 20656]] Commission believes that, by incorporating such requirements, FICC would establish in its policies and procedures objective, risk-based, and publicly disclosed criteria for participation in the CCIT Service, consistent with Rule 17Ad-22(e)(18). Similarly, in connection with the proposed non-CCIT related change to provide FICC with access to the books and records of a RIC Netting Member's controlling management, FICC would be authorized to review the financial information of the RIC. Because this would enable FICC to determine whether the RIC has sufficient financial resources and monitor compliance with FICC's financial requirements on an ongoing basis, the Commission believes this requirement is consistent with Rule 17Ad-22(e)(18). III. Conclusion It is therefore noticed, pursuant to Section 806(e)(1)(I) of the Clearing Supervision Act,\33\ that the Commission does not object to this advance notice proposal (SR-FICC-2017-803) and that FICC is authorized to implement the proposal as of the date of this notice or the date of an order by the Commission approving a proposed rule change that reflects rule changes that are consistent with this advance notice proposal (SR-FICC-2017-005), whichever is later. --------------------------------------------------------------------------- \33\ 12 U.S.C. 5465(e)(1)(I). By the Commission. Brent J. Fields, Secretary. [FR Doc. 2017-08903 Filed 5-2-17; 8:45 am] BILLING CODE 8011-01-P
![20652 Federal Register / Vol. 82, No. 84 / Wednesday, May 3, 2017 / Notices
(4) The issuer of a series of Managed IV. Accelerated Approval of provisions of 5 U.S.C. 552, will be
Fund Shares will be required to comply Amendment No. 1 available for Web site viewing and
with Rule 10A–3 under the Act for the As noted above, in Amendment No. 1, printing in the Commission’s Public
initial and continued listing of Managed the Exchange proposed to adopt certain Reference Room, 100 F Street NE.,
Fund Shares, as provided under the IEX continued listing requirements for Washington, DC 20549, on official
Rule Series 14.400; Managed Fund Shares. The Commission business days between the hours of
(5) The Exchange, on a periodic basis believes that the changes to the 10:00 a.m. and 3:00 p.m. Copies of the
and no less than annually, will review filing also will be available for
Managed Fund Shares listing standard
issues of Managed Fund Shares inspection and copying at the principal
proposed in Amendment No. 1: (1)
generically listed pursuant to Rule office of the Exchange. All comments
Clarify how the Exchange will interpret
16.135 and will provide a report to the received will be posted without change;
and administer its listing requirements;
Regulatory Oversight Committee of the the Commission does not edit personal
(2) make Managed Fund Shares listed
Exchange’s Board of Directors regarding identifying information from
on the Exchange less susceptible to
the Exchange’s findings; submissions. You should submit only
manipulation by adding the firewall
information that you wish to make
(6) The Exchange will provide the provision discussed above; and (3)
available publicly. All submissions
Commission staff with a report each enhance consistency between the
should refer to File Number SR–IEX–
calendar quarter that includes the Exchange’s Managed Fund Shares 2017–03 and should be submitted on or
following information for issues of listing criteria and the requirements for before May 24, 2017.
Managed Fund Shares listed during Managed Fund Shares recently adopted
such calendar quarter under Rule by other national securities exchanges. VI. Conclusion
16.135(b)(1): (a) Trading symbol and Accordingly, the Commission finds It is therefore ordered, pursuant to
date of listing on the Exchange; (b) the good cause, pursuant to Section 19(b)(2) Section 19(b)(2) of the Act,28 that the
number of active authorized of the Act, to approve the proposed rule proposed rule change (SR–IEX–2017–
participants and a description of any change, as modified by Amendment No. 03), as modified by Amendment No. 1,
failure of an issue of Managed Fund 1, on an accelerated basis. be, and it hereby is, approved on an
Shares or of an authorized participant to accelerated basis.29
V. Solicitation of Comments on
deliver shares, cash, or cash and
Amendment No. 1 For the Commission, by the Division of
financial instruments in connection Trading and Markets, pursuant to delegated
with creation or redemption orders; and Interested persons are invited to authority.
(c) a description of any failure of an submit written data, views, and Eduardo A. Aleman,
issue of Managed Fund Shares to arguments concerning whether
Assistant Secretary.
comply with Rule 16.135; Amendment No. 1 is consistent with the
[FR Doc. 2017–08902 Filed 5–2–17; 8:45 am]
(7) Prior to listing pursuant to Act. Comments may be submitted by
BILLING CODE 8011–01–P
proposed Rule 16.135(b)(1), an issuer any of the following methods:
would be required to represent to the Electronic Comments
Exchange that it will advise the SECURITIES AND EXCHANGE
• Use the Commission’s Internet
Exchange of any failure by a series of COMMISSION
comment form (http://www.sec.gov/
Managed Fund Shares to comply with
rules/sro.shtml); or [Release No. 34–80546; File No. SR–FICC–
the continued listing requirements;
• Send an email to rule-comments@ 2017–803]
(8) Pursuant to its obligations under sec.gov. Please include File Number SR–
Section 19(g)(1) of the Act, the Exchange IEX–2017–03 on the subject line. Self-Regulatory Organizations; Fixed
will monitor for compliance with the Income Clearing Corporation; Notice of
continued listing requirements; and Paper Comments No Objection To Advance Notice Filing
(9) If a managed fund is not in • Send paper comments in triplicate To Establish the Centrally Cleared
compliance with the applicable listing to Brent J. Fields, Secretary, Securities Institutional Triparty Service and Make
requirements, the Exchange will and Exchange Commission, 100 F Street Other Changes
commence delisting procedures under NE., Washington, DC 20549–1090. April 27, 2017.
IEX Rule Series 14.500. All submissions should refer to File On March 9, 2017, Fixed Income
This approval order is based on all of Number SR–IEX–2017–03. This file Clearing Corporation (‘‘FICC’’) filed
the Exchange’s representations, number should be included on the with the Securities and Exchange
including those set forth above and in subject line if email is used. To help the Commission (‘‘Commission’’) advance
Amendment No. 1. For the foregoing Commission process and review your notice SR–FICC–2017–803 (‘‘Advance
reasons, the Commission finds that the comments more efficiently, please use Notice’’) pursuant to Section 806(e)(1) of
proposed rule change, as modified by only one method. The Commission will the Payment, Clearing, and Settlement
Amendment No. 1, is consistent with post all comments on the Commission’s Supervision Act of 2010 (‘‘Clearing
Section 6(b)(5) of the Act 27 and the Internet Web site (http://www.sec.gov/ Supervision Act’’) 1 and Rule 19b–
rules and regulations thereunder rules/sro.shtml). Copies of the
applicable to a national securities submission, all subsequent 28 15 U.S.C. 78s(b)(2).
exchange. amendments, all written statements 29 17 CFR 200.30–3(a)(12).
1 12 U.S.C. 5465(e)(1). The Financial Stability
with respect to the proposed rule
nlaroche on DSK30NT082PROD with NOTICES
Oversight Council designated FICC a systemically
and expenses, as described in the applicable change that are filed with the important financial market utility on July 18, 2012.
registration statement, and will discuss any Commission, and all written Financial Stability Oversight Council 2012 Annual
exemptive, no-action, and interpretive relief granted communications relating to the Report, Appendix A, http://www.treasury.gov/
by the Commission from any rules under the Act. proposed rule change between the initiatives/fsoc/Documents/
Further, the Circular will disclose that the net asset 2012%20Annual%20Report.pdf. Therefore, FICC is
value for the Managed Fund Shares will be Commission and any person, other than required to comply with the Clearing Supervision
calculated after 4 p.m., ET, each trading day. those that may be withheld from the Act and file advance notices with the Commission.
27 15 U.S.C. 78f(b)(5). public in accordance with the 12 U.S.C. 5465(e).
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![Federal Register / Vol. 82, No. 84 / Wednesday, May 3, 2017 / Notices 20653
4(n)(1)(i) 2 under the Securities required under the terms of the repo counterparties are the cash lenders in
Exchange Act of 1934 (‘‘Exchange transaction. Cash lenders use tri-party the transactions.
Act’’).3 The Advance Notice was repos as investments that offer liquidity To effectuate the proposed CCIT
published for comment in the Federal maximization, principal protection, and Service, FICC proposes to create a new
Register on April 7, 2017.4 Although the a small positive return, while cash limited service membership category in
Commission received no comments to borrowers rely on them as a major GSD for institutional cash lenders.
the Advance Notice, it received one source of short-term funding.7 These new members would be referred
comment letter 5 to the Proposed Rule FICC currently provides central to as CCIT members, and the GSD
Change in support of the proposal.6 This clearing to a segment of the tri-party membership provisions that apply to the
publication serves as notice that the repo market through its general CCIT members would be addressed in
Commission does not object to the collateral finance repo service (‘‘GCF
proposed GSD Rule 3B. These new
changes set forth in the Advance Notice. Repo ® Service’’).8 The GCF Repo
membership provisions include: 14
Service is available to sell-side entities,
I. Description of the Advance Notice such as dealers, that enter into tri-party • Membership eligibility criteria,
Repurchase agreement (‘‘repo’’) repo transactions, in GCF Repo including minimum financial
transactions involve the sale of Securities, with each other.9 requirements, operational capabilities,
securities along with an agreement to The Advance Notice is a proposal by and opinions of counsel;
repurchase the securities on a later date. FICC to broaden the pool of entities that • joint account ownership, in which
Bilateral repo transactions involve a would be eligible to submit tri-party one authorized entity would act as agent
cash lender (e.g., a money market repo transactions for central clearing at for two or more CCIT Members;
mutual fund, pension fund, or other FICC. Specifically, FICC proposes to
• membership application processes,
entity with funds available for lending) amend its Government Securities
including document provision and
and a cash borrower (typically a broker- Division (‘‘GSD’’) Rulebook (‘‘GSD
disclosure requirements, operational
dealer, hedge fund, or other entity Rules’’) 10 to establish the ‘‘Centrally
testing requirements, reporting
seeking to finance securities that can be Cleared Institutional Tri-Party Service’’
requirements, FATCA compliance
used to collateralize the loan). In the or the ‘‘CCITTM Service.’’ 11 The
proposed CCIT Service would allow the certification requirements,15 and the
opening leg of the repo transaction, the procedures for denying membership;
cash borrower receives cash in exchange submission of tri-party repo transactions
for securities equal in value to the in GCF Repo Securities between GSD • membership agreement terms
amount of cash received, plus a haircut. Netting Members 12 that participate in describing rights and obligations;
In the closing leg of the repo the GCF Repo Service and institutional • procedures for the voluntary
transaction, the cash borrower pays back counterparties (other than registered termination of CCIT membership; and
investment companies (‘‘RICs’’) under
the cash plus interest in exchange for • ongoing membership requirements,
the securities posted as collateral. In tri- the Investment Company Act of 1940, as
including (i) annual financial and other
party repo transactions, a clearing bank amended),13 where the institutional
disclosure requirements; (ii) operational
tri-party agent provides to both the cash 7 See Federal Reserve Bank of New York, Tri-
testing requirements and related
lender and the cash borrower certain Party Repo Infrastructure Reform, https:// reporting requirements; (iii) notification
operational, custodial, collateral www.newyorkfed.org/banking/tpr_infr_reform.html of GSD rule non-compliance; (iv)
valuation, and other services to facilitate (last visited Mar. 6, 2017). penalties for GSD rule non-compliance;
8 The term ‘‘GCF Repo’’ is a registered trademark
the repo transactions. For example, the (v) mandatory assurances in the event
of FICC. The GCF Repo Service is a service offered
tri-party agent may facilitate and record by FICC to compare, net, and settle general that FICC has reason to believe a
the exchange of cash and securities on collateral repos. Notice, 82 FR at 17053. member may fall into GSD rule non-
a book-entry basis for each of the 9 GCF Repo Securities are securities issued or compliance; (vi) requirements to comply
counterparties to the repo transaction, guaranteed by the United States, a U.S. government with applicable tax, money laundering,
as well as effectuating the collection and agency or instrumentality, a U.S. government-
sponsored corporation (or otherwise approved by
and sanctions laws; (vii) audit
transfer of collateral that may be FICC’s Board of Directors), and such securities are provisions allowing FICC to access
only eligible for submission to FICC in connection relevant books and records; and (viii)
2 17 CFR 240.19b–4(n)(1)(i). with the comparison, netting and/or settlement of financial/operational monitoring.
3 15 U.S.C. 78s(b)(1). repo transactions involving generic CUSIP numbers
4 Securities Exchange Act Release No. 80361 (i.e., identifying numbers established for a category In addition to membership provisions,
(April 3, 2017), 82 FR 17053 (April 7, 2017) (SR– of securities, as opposed to a specific security). proposed Rule 3B also would set forth
FICC–2017–803) (‘‘Notice’’). FICC also filed a Notice, 82 FR at 17053. the applicable risk management
10 Available at http://www.dtcc.com/legal/rules-
proposed rule change with the Commission provision relating to the new limited
pursuant to Section 19(b)(1) of the Exchange Act and-procedures.
and Rule 19b–4 thereunder, seeking approval of 11 CCIT is a trademark of The Depository Trust &
changes to its rules necessary to implement the Clearing Corporation, of which FICC is a subsidiary. companies to participate in the proposed CCIT
proposal. 15 U.S.C. 78s(b)(1) and 17 CFR 240.19b– FICC defines ‘‘Centrally Cleared Institutional Tri- Service is uncertain in light of applicable regulatory
4, respectively. The proposed rule change was Party Service’’ and ‘‘CCIT Service’’ as ‘‘the service requirements under the Investment Company Act of
published for comment in the Federal Register on offered by the Corporation to clear institutional tri- 1940 (including, for example, liquid asset
March 30, 2017. Securities Exchange Act Release party repurchase agreement transactions, as more requirements and counterparty diversification
No. 80303 (March 24, 2017), 82 FR 15749 (March fully described in Rule 3B.’’ Proposed GSD Rule 1, requirements).
30, 2017) (SR–FICC–2017–803). Definitions. 14 For additional discussion of the membership
5 See letter from Thomas Wipf, Chief Financial 12 The term ‘‘Netting Member’’ is defined as a provisions set forth in proposed GSD Rule 3B, see
Officer, Morgan Stanley & Co. LLC, dated April 19, member of FICC’s Comparison System (i.e., the also Notice, 82 FR at 17054–64.
nlaroche on DSK30NT082PROD with NOTICES
2017, to Eduardo A. Aleman, Assistant Secretary, system of reporting, validating, and matching the 15 FATCA is the Foreign Account Tax
Commission, available at https://www.sec.gov/ long and short sides of securities trades to ensure Compliance Act, 26 U.S.C. 1471 et seq. FATCA
comments/sr-ficc-2017-005/ficc2017005.htm. that the details of such trades are in agreement compliance means that an ‘‘. . . FFI [foreign
6 Because the proposal contained in the Advance between the parties) and FICC’s Netting System financial institution] Member has qualified under
Notice was also filed as the Proposed Rule Change, (i.e., the system for aggregating and matching such procedures promulgated by the Internal
see supra note 3, the Commission is considering offsetting obligations resulting from trades). GSD Revenue Service . . . to establish exemption from
any comment received on the Proposed Rule Rules, supra note 8. withholding under FATCA such that [FICC] would
Change also to be a comment on the Advance 13 15 U.S.C. 80a–1 et seq. According to FICC, the not be required to withhold [anything] under
Notice. legal ability of such registered investment FATCA . . . . ’’ GSD Rules 1, supra note 3.
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![Federal Register / Vol. 82, No. 84 / Wednesday, May 3, 2017 / Notices 20655
the stability of the financial system, with Section 805(b) of the Clearing 22(e)(4)(iii) under the Act.29 Rule 17Ad–
consistent with Section 805(b) of the Supervision Act. 22(e)(4)(iii) requires, in part, that FICC
Clearing Supervision Act. In addition, the Commission believes ‘‘establish, implement, maintain and
The Commission also believes that the that the CCIT Service is consistent with enforce written policies and procedures
CCIT Service designed by FICC is promoting robust risk management and reasonably designed to . . . [e]ffectively
consistent with promoting robust risk safety and soundness to the tri-party identify, measure, monitor, and manage
management and safety and soundness repo market. As discussed above, the its credit exposures to participants and
at FICC and to the tri-party repo market. CCIT Service would make the risk- those arising from [FICC’s] payment,
The CCIT Service includes certain risk reducing benefits of central clearing clearing, and settlement processes,
management tools that facilitate FICC’s available to a wider range of types of including by . . . maintaining . . .
management of credit, market, and repo transactions, which would help financial resources at the minimum to
liquidity risk arising from becoming a decrease the settlement and operational enable [FICC] to cover a wide range of
central counterparty to the new repo risk of such transactions when made stress scenarios. . . .’’ 30 As discussed
positions coming in via CCIT. For outside of FICC and thereby enhance above, the CCIT Service includes risk
example, the CCIT Service would stability for the tri-party repo market. management tools, such as the perfected
provide FICC with a perfected security Furthermore, the CCIT Service would security interest and the CCIT MRA
interest in the underlying repo enable a greater number of tri-party repo liquidity resource. The Commission
securities of a CCIT transaction and a transactions to be subject to FICC’s believes that these risk management
built-in liquidity resource to support ability, in the event of a Netting tools would help facilitate FICC’s
CCIT Service liquidity demands in the Member’s default, to centralize and management of credit, market, and
form of repo transactions under the control the liquidation of such positions liquidity risk that would arise from
CCIT Master Repurchase Agreement at FICC, which in turn would help becoming a central counterparty to the
(‘‘CCIT MRA’’).26 Each of these elements protect the tri-party repo market against new repo positions coming in via the
of the CCIT Service would help FICC the risk that a liquidation of the proposed CCIT Service. Accordingly,
manage certain risks presented by the positions would cause a fire sale that the Commission believes that the
potential default of a CCIT member. destabilizes the broader financial proposed changes to its policies and
Specifically, the perfected security system. Therefore, the Commission procedures in the GSD Rules are
interest would enable FICC, in the event believes that the CCIT Service would designed to help effectively manage
of a Netting Member’s default, to access help promote robust risk management FICC’s exposure, including its credit
the defaulter’s collateral for the exposure to participants, arising from its
and safety and soundness to the tri-
purposes of managing potential risks, payment, clearing, and settlement
party repo market, consistent with
such as credit risk, that may arise from processes for the proposed CCIT
Section 805(b) of the Clearing
the default. transactions by providing for financial
In addition, the CCIT Service would Supervision Act.
resources to help cover a wide range of
enable FICC to manage instances where B. Consistency With Rules 17Ad– foreseeable stress scenarios, consistent
a default results in liquidity demands 22(e)(1), (e)(4), and (e)(18) with Rule 17Ad–22(e)(4)(iii), cited
for FICC within the CCIT Service that above.
exceed the level of financial resources The Commission believes that the
The Commission also believes that the
FICC might otherwise have on hand changes proposed in the Advance
proposal is consistent with Rule 17Ad–
(such as the defaulter’s collateral) at the Notice are consistent with Rule 17Ad–
22(e)(18) under the Act.31 Rule 17Ad–
time of the default by requiring CCIT 22(e)(1) under the Act.27 Rule 17Ad–
22(e)(18) requires, in part, that FICC
Members to engage in repo transactions 22(e)(1) requires, in part, that FICC
‘‘establish, implement, maintain and
to provide cash as a liquidity resource ‘‘establish, implement, maintain and
enforce written policies and procedures
in such instances. In addition to the risk enforce written policies and procedures
reasonably designed to . . . [e]stablish
management tools described above, the reasonably designed to . . . [p]rovide
objective, risk-based, and publicly
CCIT Service also would establish for a well-founded, clear, transparent
disclosed criteria for participation,
initial and ongoing financial and enforceable legal basis for each
which . . . require participants to have
responsibility and operational capacity aspect of its activities.’’ 28 As described
sufficient financial resources and robust
requirements for CCIT members, as well above, FICC proposes a number of
operational capacity to meet obligations
as requirements that would be changes that are unrelated to the
arising from participation in the clearing
applicable to Netting Members with proposed CCIT Service and designed to
agency, and monitor compliance with
respect to their participation in the make the GSD Rules more clear,
such participation requirements on an
proposed CCIT Service. Collectively, consistent, and current for members that
ongoing basis.’’ 32
these requirements would enable FICC rely on them. The Commission believes
In connection with the establishment
to monitor the likelihood of a CCIT that these non-CCIT related changes
of the proposed CCIT Service, FICC
member default and limit its could make FICC’s policies and
would include provisions in the GSD
counterparty risk by (i) ensuring that procedures in the GSD Rules more clear,
rules to incorporate membership
FICC only takes on exposure to entities consistent, and transparent for members
standards, requiring, for example,
that are creditworthy counterparties; that rely on them, and therefore believes
ongoing financial responsibility and
and (ii) enabling FICC to monitor the that the proposed changes would help
operational capacity requirements, as
ongoing capability of these members to support FICC’s rules being clear and
well as the requirements that would be
perform their obligations to FICC. For transparent, consistent with Rule 17Ad–
applicable to Netting Members with
nlaroche on DSK30NT082PROD with NOTICES
these reasons, the Commission believes 22(e)(1), cited above.
respect to their participation in the
that the CCIT Service would help The Commission believes that the proposed CCIT Service. The
promote robust risk management and changes proposed in the Advance
safety and soundness at FICC, consistent Notice are consistent with Rule 17Ad– 29 17 CFR 240.17Ad–22(e)(4)(iii).
30 Id.
26 For additional details regarding the CCIT MRA, 27 17 CFR 240.17Ad–22(e)(2). 31 17 CFR 240.17Ad–22(e)(18).
see Notice, 82 FR at 17060–61. 28 Id. 32 Id.
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![20656 Federal Register / Vol. 82, No. 84 / Wednesday, May 3, 2017 / Notices
Commission believes that, by (the ‘‘Commission’’) the proposed rule Managed Fund Shares.5 The Shares will
incorporating such requirements, FICC change as described in Items I and II be offered by the Franklin Templeton
would establish in its policies and below, which Items have been prepared ETF Trust (the ‘‘Trust’’), which is
procedures objective, risk-based, and by the self-regulatory organization. The registered with the Commission as an
publicly disclosed criteria for Commission is publishing this notice to open-end management investment
participation in the CCIT Service, solicit comments on the proposed rule company.6 Each Fund is a series of the
consistent with Rule 17Ad–22(e)(18). change from interested persons. Trust.
Similarly, in connection with the The investment adviser to each Fund
proposed non-CCIT related change to I. Self-Regulatory Organization’s will be Franklin Advisers, Inc. (the
provide FICC with access to the books Statement of the Terms of Substance of ‘‘Adviser’’). Franklin Templeton
and records of a RIC Netting Member’s the Proposed Rule Change Distributors, Inc. will serve as the
controlling management, FICC would be The Exchange proposes to list and distributor (the ‘‘Distributor’’) of each
authorized to review the financial trade shares of the Franklin Liberty Fund’s Shares on an agency basis.
information of the RIC. Because this Intermediate Municipal Opportunities Franklin Templeton Services, LLC will
would enable FICC to determine ETF and Franklin Liberty Municipal serve as the administrator and State
whether the RIC has sufficient financial Bond ETF (each a ‘‘Fund’’ and, Street Bank and Trust Company will
resources and monitor compliance with collectively, the ‘‘Funds’’) under NYSE serve as the sub-administrator,
FICC’s financial requirements on an Arca Equities Rule 8.600 (‘‘Managed custodian and transfer agent for each
ongoing basis, the Commission believes Fund Shares’’). The proposed change is Fund.
this requirement is consistent with Rule available on the Exchange’s Web site at Commentary .06 to Rule 8.600
17Ad–22(e)(18). www.nyse.com, at the principal office of provides that, if the investment adviser
the Exchange, and at the Commission’s to the investment company issuing
III. Conclusion Managed Fund Shares is affiliated with
Public Reference Room.
It is therefore noticed, pursuant to a broker-dealer, such investment adviser
Section 806(e)(1)(I) of the Clearing II. Self-Regulatory Organization’s shall erect a ‘‘fire wall’’ between the
Supervision Act,33 that the Commission Statement of the Purpose of, and investment adviser and the broker-
does not object to this advance notice Statutory Basis for, the Proposed Rule dealer with respect to access to
proposal (SR–FICC–2017–803) and that Change information concerning the composition
FICC is authorized to implement the In its filing with the Commission, the and/or changes to such investment
proposal as of the date of this notice or self-regulatory organization included company portfolio.7 In addition,
the date of an order by the Commission statements concerning the purpose of,
approving a proposed rule change that and basis for, the proposed rule change
5 A Managed Fund Share is a security that
reflects rule changes that are consistent and discussed any comments it received
represents an interest in an investment company
with this advance notice proposal (SR– registered under the Investment Company Act of
on the proposed rule change. The text 1940 (15 U.S.C. 80a–1) (‘‘1940 Act’’) organized as
FICC–2017–005), whichever is later. of those statements may be examined at an open-end investment company or similar entity
By the Commission. the places specified in Item IV below. that invests in a portfolio of securities selected by
its investment adviser consistent with its
Brent J. Fields, The Exchange has prepared summaries, investment objectives and policies. In contrast, an
Secretary. set forth in sections A, B, and C below, open-end investment company that issues
[FR Doc. 2017–08903 Filed 5–2–17; 8:45 am] of the most significant parts of such Investment Company Units, listed and traded on
the Exchange under NYSE Arca Equities Rule
BILLING CODE 8011–01–P statements. 5.2(j)(3), seeks to provide investment results that
A. Self-Regulatory Organization’s correspond generally to the price and yield
performance of a specific foreign or domestic stock
Statement of the Purpose of, and the index, fixed income securities index or combination
SECURITIES AND EXCHANGE Statutory Basis for, the Proposed Rule thereof.
COMMISSION Change 6 The Trust is registered under the 1940 Act. On
[Release No. 34–80541; File No. SR– March 23, 2017, the Trust filed with the
NYSEArca–2017–48] 1. Purpose Commission an amendment to its registration
statement on Form N–1A under the Securities Act
The Exchange proposes to list and of 1933 (15 U.S.C. 77a) (‘‘Securities Act’’), and
Self-Regulatory Organizations; NYSE trade shares (‘‘Shares’’) of each Fund under the 1940 Act relating to the Funds (File Nos.
Arca, Inc.; Notice of Filing of Proposed under NYSE Arca Equities Rule 8.600,4 333–208873 and 811–23124) (‘‘Registration
Rule Change Relating to the Listing Statement’’). The description of the operation of the
which governs the listing and trading of Trust and the Funds herein is based, in part, on the
and Trading of Shares of the Franklin Registration Statement. In addition, the
Liberty Intermediate Municipal 4 The Securities and Exchange Commission Commission has issued an order granting certain
Opportunities ETF and Franklin Liberty (‘‘Commission’’) has approved for Exchange listing exemptive relief to the Trust, Franklin Advisers,
Municipal Bond ETF Under NYSE Arca and trading shares of actively managed funds that Inc. and Franklin Templeton Distributors, Inc.
principally hold municipal bonds. See, e.g., under the 1940 Act. See Investment Company Act
Equities Rule 8.600 Securities Exchange Act Release Nos. 60981 Release No. 30350 (Jan. 15, 2013) (File No. 812–
(November 10, 2009), 74 FR 59594 (November 18, 14042) (‘‘Exemptive Order’’).
April 27, 2017.
2009) (SR–NYSEArca–2009–79) (order approving 7 An investment adviser to an open-end fund is
Pursuant to Section 19(b)(1) 1 of the listing and trading of shares of the PIMCO Short- required to be registered under the Investment
Securities Exchange Act of 1934 (the Term Municipal Bond Strategy Fund and PIMCO Advisers Act of 1940 (the ‘‘Advisers Act’’). As a
‘‘Act’’) 2 and Rule 19b–4 thereunder,3 Intermediate Municipal Bond Strategy Fund); 79293 result, the Adviser and its related personnel are
(November 10, 2016), 81 FR 81189 (November 17, subject to the provisions of Rule 204A–1 under the
notice is hereby given that, on April 24, 2016) (SR–NYSEArca–2016–107) (order approving Advisers Act relating to codes of ethics. This Rule
2017, NYSE Arca, Inc. (the ‘‘Exchange’’
nlaroche on DSK30NT082PROD with NOTICES
listing and trading of shares of Cumberland requires investment advisers to adopt a code of
or ‘‘NYSE Arca’’) filed with the Municipal Bond ETF under Rule 8.600). The ethics that reflects the fiduciary nature of the
Securities and Exchange Commission Commission also has approved listing and trading relationship to clients as well as compliance with
on the Exchange of shares of the SPDR Nuveen S&P other applicable securities laws. Accordingly,
33 12
High Yield Municipal Bond Fund under procedures designed to prevent the communication
U.S.C. 5465(e)(1)(I). Commentary .02 of NYSE Arca Equities Rule and misuse of non-public information by an
1 15 U.S.C. 78s(b)(1). 5.2(j)(3). See Securities Exchange Act Release No. investment adviser must be consistent with Rule
2 15 U.S.C. 78a.
63881 (February 9, 2011), 76 FR 9065 (February 16, 204A–1 under the Advisers Act. In addition, Rule
3 17 CFR 240.19b–4. 2011) (SR–NYSEArca–2010–120). 206(4)–7 under the Advisers Act makes it unlawful
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Document Created: 2018-11-08 08:36:43
Document Modified: 2018-11-08 08:36:43
| 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 20652 |
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