82 FR 21837 - Self-Regulatory Organizations; The Depository Trust Company; Order Granting Approval of Proposed Rule Change To Establish a Sub-Account for Use With the DTCC Euroclear Global Collateral Ltd Collateral Management Service and Provide for the Authorization of a Representative To Receive Information About the Sub-Account
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 89 (May 10, 2017)
Federal Register Volume 82, Issue 89 (May 10, 2017)
| Page Range | 21837-21839 | |
| FR Document | 2017-09426 |
[Federal Register Volume 82, Number 89 (Wednesday, May 10, 2017)] [Notices] [Pages 21837-21839] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-09426] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80598; File No. SR-DTC-2017-001] Self-Regulatory Organizations; The Depository Trust Company; Order Granting Approval of Proposed Rule Change To Establish a Sub- Account for Use With the DTCC Euroclear Global Collateral Ltd Collateral Management Service and Provide for the Authorization of a Representative To Receive Information About the Sub-Account May 4, 2017. On March 9, 2017, The Depository Trust Company (``DTC'') filed with the Securities and Exchange Commission (``Commission'') proposed rule change SR-DTC-2017-001 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder.\2\ The proposed rule change was published for comment in the Federal Register on March 24, 2017.\3\ The Commission did not receive any comment letters on the proposed rule change. For the reasons discussed below, the Commission is granting approval of the proposed rule change. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ See Securities Exchange Act Release No. 80280 (March 20, 2017), 82 FR 15081 (March 24, 2017) (SR-DTC-2017-001) (``Notice''). --------------------------------------------------------------------------- I. Description of the Proposed Rule Change The proposed rule change consists of amendments to the Rules, By- Laws and Organization Certificate of The Depository Trust Company (``DTC Rules'') \4\ in order to add new Rule 35 (CMS Reporting). The proposed rule would provide that any DTC participant that is, or is acting on behalf of, a user of certain collateral management services (``CMS'') \5\ of DTCC Euroclear Global Collateral Ltd. (``DEGCL'') \6\ may establish one or more sub-Accounts at DTC in connection with CMS (each, a ``CMS Sub-Account''). A DTC participant that establishes a CMS Sub-Account pursuant to the proposed rule (``CMS Participant'') would thereby: (i) Authorize DEGCL to receive account and transactional information and reports with respect to the CMS Sub-Account, and (ii) direct DTC to provide such information and reports to DEGCL, as described below. --------------------------------------------------------------------------- \4\ Available at http://www.dtcc.com/legal/rules-and-procedures.aspx. \5\ In particular, there would be a CMS option authorizing DEGCL, on behalf of the CMS User, to propose collateral allocations to satisfy counterparty obligations of the CMS User, referred to by DEGCL as the ``Allocation Option'' and further explained below. \6\ DEGCL is a joint venture of The Depository Trust & Clearing Corporation (``DTCC''), the corporate parent of DTC, and Euroclear S.A./N.V. (``Euroclear''), the corporate parent of Euroclear Bank, described further below. DTC understands that CMS will be operated by Euroclear Bank and other entities in the Euroclear group, as service providers to DEGCL, in accordance with appropriate agreements between them. --------------------------------------------------------------------------- A. DEGCL Background DTC states that DEGCL performs information and record-keeping services for CMS users that have entered into user agreements with DEGCL for this purpose (``CMS Users'').\7\ CMS Users are financial institutions that are counterparties to agreements establishing obligations between them to provide securities collateral with respect to swaps or other types of financing transactions.\8\ These bilateral swap or other financing agreements are entered into by such counterparties outside and independent of DEGCL or DTC.\9\ --------------------------------------------------------------------------- \7\ Notice, 82 FR at 15082. \8\ Id. \9\ DTC states that a CMS User will typically be a major financial institution or buy-side investor that is a bank, broker dealer, or investment company. CMS Users will enter into a Collateral Management Service Agreement with DEGCL, which includes general terms of conditions and operating procedures (``CMS Agreement''). Id. --------------------------------------------------------------------------- This proposed rule change relates to one of the services that DEGCL proposes to offer, the DEGCL ``Allocation Option'' (also referred to as ``auto-select''). DTC states that the Allocation Option would only be used with DTC eligible securities held in a CMS Sub-Account by a CMS Participant (``CMS [[Page 21838]] Securities'').\10\ The Allocation Option is dependent on DEGCL receiving certain information from DTC for the applicable CMS Sub- Account of the applicable CMS Participant.\11\ The proposed rule change would provide a mechanism for a CMS Participant to authorize DEGCL as the CMS Participant's ``CMS Representative'' to receive the necessary information from DTC, and to direct DTC to provide DEGCL with that information, as described below. --------------------------------------------------------------------------- \10\ Id. \11\ The CMS Participant may be a CMS User acting for itself or a DTC participant acting on behalf of a CMS User as the CMS Participant. Id. --------------------------------------------------------------------------- B. The Proposed Rule Change The proposed rule change would allow a CMS Participant to establish one or more CMS Sub-Accounts. Upon doing so, a CMS Participant would be able to instruct DTC to transfer securities to the CMS Participant's CMS Sub-Account. Such securities (i.e., CMS Securities) would then be available for allocation by DEGCL for delivery or pledge by book-entry at DTC in accordance with DTC Rules and Procedures (including risk management controls),\12\ in satisfaction of the various collateral obligations of the CMS Participant or the CMS User on behalf of which the CMS Participant is acting.\13\ --------------------------------------------------------------------------- \12\ DTC states that its risk management controls, including Collateral Monitor and Net Debit Cap (as defined in Rule 1, Section 1 of the DTC Rules, supra note 4), are designed so that DTC may complete system-wide settlement notwithstanding the failure to settle of its largest participant or affiliated family of participants. The Collateral Monitor tests whether a DTC participant has sufficient collateral for DTC to pledge or liquidate if that participant were to fail to meet its settlement obligation. Id. Pursuant to these controls under applicable DTC Rules and Procedures, any delivery instruction order to a CMS Sub-Account that would cause the CMS Participant to exceed its Net Debit Cap or to have insufficient DTC Collateral to secure its obligations to DTC, would not be processed by DTC. Id. Deliveries would be processed in the same order and with the same priority as otherwise provided in the DTC Rules and Procedures, i.e., such deliveries would not take precedence over any other type of delivery in the DTC system. Id. \13\ Id. at 15082-83. --------------------------------------------------------------------------- By establishing a CMS Sub-Account, a CMS Participant would be (i) authorizing DEGCL, as its CMS Representative, to receive in report form, the information defined below regarding CMS Securities credited to the CMS Sub-Account at the time of the report (``CMS Report''), and regarding any delivery or pledge from, or delivery or release to, the CMS Sub-Account (``CMS Delivery Information''); \14\ (ii) representing and warranting that it is duly authorized to instruct DTC to provide the CMS Reports and CMS Delivery Information about such CMS Sub-Account to DEGCL; (iii) directing DTC to provide the CMS Reports and CMS Delivery Information to DEGCL; \15\ and (iv) representing and warranting that it would conduct business in such CMS Sub-Account as provided in proposed Rule 35, and otherwise pursuant to the DTC Rules and Procedures, and in compliance with applicable law. --------------------------------------------------------------------------- \14\ Each CMS Participant would continue to be liable as principal for the actions of its CMS Representative and would indemnify DTC against any claim or loss arising from any act or omission of its CMS Representative, or arising from DTC's provision of the CMS Report and CMS Delivery Information to DEGCL or the receipt and use thereof by DEGCL, except to the extent caused directly by DTC's gross negligence or willful misconduct. Id. at 15083. \15\ The CMS Report and CMS Delivery Information would be transmitted to DEGCL using DTCC's existing Common Data Transfer Service (``CDTS'') over a dedicated BT Radianz link. See CDTS User Guide and Schemas, available at http://www.dtcc.com/~/media/Files/ Downloads/Settlement-Asset-Services/Underwriting/CDTS.zip. BT Radianz is an existing DTCC network service provider. CDTS is DTCC's proprietary file input and output management system. Id. It enables DTCC to securely and reliably automate the exchange of files over a network link with its Participants, Members, and third-parties. Id. --------------------------------------------------------------------------- The CMS Report would include, with respect to the CMS Securities credited to a CMS Sub-Account of such CMS Participant at the time of such report, (i) the Committee on Uniform Securities Identification Procedures (``CUSIP'') number, International Securities Identification Number (``ISIN''), or other identification number of the CMS Securities; and (ii) the number of shares or other units or principal amount of the CMS Securities. CMS Delivery Information would be provided in real time, and would include, with respect to each delivery or pledge of CMS Securities from, or delivery or release of CMS Securities to a CMS Sub-Account, a copy of any delivery, pledge, or release message with respect to the CMS Sub-Account, including (i) the CUSIP, ISIN, or other identification number of such CMS Securities, and (ii) the number of shares or other units or principal amount of such CMS Securities. II. Discussion and Commission Findings Section 19(b)(2)(C) of the Act \16\ directs the Commission to approve a proposed rule change of a self-regulatory organization if it finds that such proposed rule change is consistent with the requirements of the Act and rules and regulations thereunder applicable to such organization. The Commission believes the proposal is consistent with the Act, specifically Section 17A(b)(3)(F) of the Act and Rule 17Ad-22(e)(20) under the Act, as discussed below.\17\ --------------------------------------------------------------------------- \16\ 15 U.S.C. 78s(b)(2)(C). \17\ 15 U.S.C. 78q-1(b)(3)(F); 17 CFR 240.17Ad-22(20). --------------------------------------------------------------------------- A. Consistency With Section 17A Section 17A(b)(3)(F) of the Act requires, among other things, that the rules of the clearing agency be designed to promote the prompt and accurate clearance and settlement of securities transactions.\18\ As described above, the proposed rule change would permit a CMS Participant (i.e., a DTC participant acting for itself or on behalf of a CMS User) to establish a CMS Sub-Account at DTC. Securities transferred to the CMS Sub-Account would then be available for allocation by DEGCL, via DTC, to satisfy various collateral obligations through the DEGCL Allocation Option. By monitoring transactions of a CMS User with multiple counterparties, the Allocation Option could offer efficiency by automating the selection of appropriate securities collateral to satisfy applicable collateral obligations. The proposed rule change could allow CMS Participants to avail themselves of the efficiency of the Allocation Option, such as not needing to transmit delivery and position information to DEGCL, by providing a mechanism for DTC to provide information on behalf of CMS Participants to DEGCL. Therefore, the Commission believes that the proposed rule change could help streamline the settlement of collateral transactions, thereby promoting the prompt and accurate clearance and settlement, consistent Section 17A(b)(3)(F), cited above. --------------------------------------------------------------------------- \18\ 15 U.S.C. 78q-1(b)(3)(F). --------------------------------------------------------------------------- B. Consistency With Rule 17Ad-22(e)(20) Rule 17Ad-22(e)(20) under the Act requires a clearing agency, such as DTC, to establish, implement, maintain and enforce written policies and procedures reasonably designed to identify, monitor, and manage risks related to any link DTC establishes with one or more other clearing agencies, financial market utilities, or trading markets.\19\ In developing the proposed rule change, DTC states that it evaluated the risks that could arise by establishing a link with DEGCL.\20\ In particular, DTC identified the risk of data error from the communication link or the external communication of a CMS Participant's proprietary information.\21\ DTC determined that the identified risks could be mitigated because (i) the [[Page 21839]] Allocation Option would not require any material change to DTC's settlement framework, technology, or operating procedures including existing settlement cycles and risk management controls; (ii) DTCC's Technology Risk Management existing control procedures could manage data integrity and authorization provisioning to mitigate information and technology risk; and (iii) DEGCL is only receiving CMS Reports and CMS Delivery Information from a CMS Sub-Account specifically designated for this purpose by a CMS Participant.\22\ Therefore, the Commission believes that DTC has sought to identify, monitor, and manage the relevant risks associated with the proposed rule change, consistent with Rule 17Ad-22(e)(20), cited above. --------------------------------------------------------------------------- \19\ 17 CFR 240.17Ad-22(e)(20). \20\ Notice, 82 FR at 15084. \21\ Id. \22\ Id. --------------------------------------------------------------------------- III. Conclusion On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act, in particular the requirements of Section 17A of the Act \23\ and the rules and regulations thereunder. --------------------------------------------------------------------------- \23\ 15 U.S.C. 78q-1. --------------------------------------------------------------------------- It is therefore ordered, pursuant to Section 19(b)(2) of the Act, that proposed rule change SR-DTC-2017-001 be, and hereby is, approved.\24\ --------------------------------------------------------------------------- \24\ In approving the proposed rule change, the Commission considered the proposal's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). \25\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\25\ Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-09426 Filed 5-9-17; 8:45 am] BILLING CODE P
![Federal Register / Vol. 82, No. 89 / Wednesday, May 10, 2017 / Notices 21837
Commission to consider matters related Public Representative: Katalin K. Depository Trust Company (‘‘DTC
to negotiated service agreement(s). The Clendenin; Comments Due: May 12, Rules’’) 4 in order to add new Rule 35
request(s) may propose the addition or 2017. (CMS Reporting). The proposed rule
removal of a negotiated service 3. Docket No(s).: MC2017–128 and would provide that any DTC participant
agreement from the market dominant or CP2017–181; Filing Title: Request of the that is, or is acting on behalf of, a user
the competitive product list, or the United States Postal Service to Add of certain collateral management
modification of an existing product Priority Mail Contract 316 to services (‘‘CMS’’) 5 of DTCC Euroclear
currently appearing on the market Competitive Product List and Notice of Global Collateral Ltd. (‘‘DEGCL’’) 6 may
dominant or the competitive product Filing (Under Seal) of Unredacted establish one or more sub-Accounts at
list. Governors’ Decision, Contract, and DTC in connection with CMS (each, a
Section II identifies the docket Supporting Data; Filing Acceptance ‘‘CMS Sub-Account’’). A DTC
number(s) associated with each Postal Date: May 4, 2017; Filing Authority: 39 participant that establishes a CMS Sub-
Service request, the title of each Postal U.S.C. 3642 and 39 CFR 3020.30 et seq.; Account pursuant to the proposed rule
Service request, the request’s acceptance Public Representative: Katalin K. (‘‘CMS Participant’’) would thereby: (i)
date, and the authority cited by the Clendenin; Comments Due: May 12, Authorize DEGCL to receive account
Postal Service for each request. For each 2017. and transactional information and
request, the Commission appoints an This notice will be published in the reports with respect to the CMS Sub-
officer of the Commission to represent Federal Register. Account, and (ii) direct DTC to provide
the interests of the general public in the such information and reports to DEGCL,
proceeding, pursuant to 39 U.S.C. 505 Stacy L. Ruble,
as described below.
(Public Representative). Section II also Secretary.
establishes comment deadline(s) [FR Doc. 2017–09445 Filed 5–9–17; 8:45 am] A. DEGCL Background
pertaining to each request. BILLING CODE 7710–FW–P
The public portions of the Postal DTC states that DEGCL performs
Service’s request(s) can be accessed via information and record-keeping services
the Commission’s Web site (http:// for CMS users that have entered into
SECURITIES AND EXCHANGE user agreements with DEGCL for this
www.prc.gov). Non-public portions of COMMISSION
the Postal Service’s request(s), if any, purpose (‘‘CMS Users’’).7 CMS Users are
can be accessed through compliance [Release No. 34–80598; File No. SR–DTC– financial institutions that are
with the requirements of 39 CFR 2017–001] counterparties to agreements
3007.40. establishing obligations between them
The Commission invites comments on Self-Regulatory Organizations; The to provide securities collateral with
whether the Postal Service’s request(s) Depository Trust Company; Order respect to swaps or other types of
in the captioned docket(s) are consistent Granting Approval of Proposed Rule financing transactions.8 These bilateral
with the policies of title 39. For Change To Establish a Sub-Account swap or other financing agreements are
request(s) that the Postal Service states for Use With the DTCC Euroclear entered into by such counterparties
concern market dominant product(s), Global Collateral Ltd Collateral outside and independent of DEGCL or
applicable statutory and regulatory Management Service and Provide for DTC.9
requirements include 39 U.S.C. 3622, 39 the Authorization of a Representative This proposed rule change relates to
U.S.C. 3642, 39 CFR part 3010, and 39 To Receive Information About the Sub- one of the services that DEGCL proposes
CFR part 3020, subpart B. For request(s) Account to offer, the DEGCL ‘‘Allocation Option’’
that the Postal Service states concern May 4, 2017. (also referred to as ‘‘auto-select’’). DTC
competitive product(s), applicable states that the Allocation Option would
On March 9, 2017, The Depository
statutory and regulatory requirements only be used with DTC eligible
Trust Company (‘‘DTC’’) filed with the
include 39 U.S.C. 3632, 39 U.S.C. 3633, securities held in a CMS Sub-Account
Securities and Exchange Commission
39 U.S.C. 3642, 39 CFR part 3015, and by a CMS Participant (‘‘CMS
(‘‘Commission’’) proposed rule change
39 CFR part 3020, subpart B. Comment
SR–DTC–2017–001 pursuant to Section
deadline(s) for each request appear in 4 Available at http://www.dtcc.com/legal/rules-
19(b)(1) of the Securities Exchange Act
section II. and-procedures.aspx.
of 1934 (‘‘Act’’),1 and Rule 19b–4 5 In particular, there would be a CMS option
II. Docketed Proceeding(s) thereunder.2 The proposed rule change authorizing DEGCL, on behalf of the CMS User, to
1. Docket No(s).: CP2014–1; Filing was published for comment in the propose collateral allocations to satisfy
Federal Register on March 24, 2017.3 counterparty obligations of the CMS User, referred
Title: Notice of United States Postal to by DEGCL as the ‘‘Allocation Option’’ and further
Service of Amendment to Parcel Select The Commission did not receive any explained below.
and Parcel Return Service Contract 5; comment letters on the proposed rule 6 DEGCL is a joint venture of The Depository
Filing Acceptance Date: May 4, 2017; change. For the reasons discussed Trust & Clearing Corporation (‘‘DTCC’’), the
Filing Authority: 39 CFR 3015.5; Public below, the Commission is granting corporate parent of DTC, and Euroclear S.A./N.V.
approval of the proposed rule change. (‘‘Euroclear’’), the corporate parent of Euroclear
Representative: Gregory Stanton; Bank, described further below. DTC understands
Comments Due: May 12, 2017. I. Description of the Proposed Rule that CMS will be operated by Euroclear Bank and
2. Docket No(s).: MC2017–127 and Change other entities in the Euroclear group, as service
CP2017–180; Filing Title: Request of the providers to DEGCL, in accordance with
The proposed rule change consists of appropriate agreements between them.
United States Postal Service to Add
jstallworth on DSK7TPTVN1PROD with NOTICES
7 Notice, 82 FR at 15082.
Priority Mail Contract 315 to amendments to the Rules, By-Laws and
8 Id.
Competitive Product List and Notice of Organization Certificate of The 9 DTC states that a CMS User will typically be a
Filing (Under Seal) of Unredacted 1 15
major financial institution or buy-side investor that
U.S.C. 78s(b)(1). is a bank, broker dealer, or investment company.
Governors’ Decision, Contract, and 2 17 CFR 240.19b–4. CMS Users will enter into a Collateral Management
Supporting Data; Filing Acceptance 3 See Securities Exchange Act Release No. 80280 Service Agreement with DEGCL, which includes
Date: May 4, 2017; Filing Authority: 39 (March 20, 2017), 82 FR 15081 (March 24, 2017) general terms of conditions and operating
U.S.C. 3642 and 39 CFR 3020.30 et seq.; (SR–DTC–2017–001) (‘‘Notice’’). procedures (‘‘CMS Agreement’’). Id.
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![Federal Register / Vol. 82, No. 89 / Wednesday, May 10, 2017 / Notices 21839
Allocation Option would not require (‘‘Commission’’), pursuant to Section received no comments on the proposed
any material change to DTC’s settlement 19(b)(1) of the Securities Exchange Act rule change. This order grants approval
framework, technology, or operating of 1934 (‘‘Act’’) 1 and Rule 19b–4 of the proposed rule change, as
procedures including existing thereunder,2 a proposed rule change to modified by Amendment Nos. 3 and 4.
settlement cycles and risk management list and trade common shares (‘‘Shares’’)
controls; (ii) DTCC’s Technology Risk of the Hartford Global Impact II. Exchange’s Description of the
Management existing control NextSharesTM Fund (‘‘Fund’’) under Proposed Rule Change
procedures could manage data integrity Nasdaq Rule 5745. The proposed rule
The Exchange proposes to list and
and authorization provisioning to change was published for comment in
mitigate information and technology the Federal Register on March 20, trade the Shares of the Fund under
risk; and (iii) DEGCL is only receiving 2017.3 On April 13, 2017, the Exchange Nasdaq Rule 5745, which governs the
CMS Reports and CMS Delivery filed Amendment No. 3 to the proposed listing and trading of Exchange-Traded
Information from a CMS Sub-Account rule change and, on May 3, 2017, the Managed Fund Shares, as defined in
specifically designated for this purpose Exchange filed Amendment No. 4 to the Nasdaq Rule 5745(c)(1). The Fund is a
by a CMS Participant.22 Therefore, the proposed rule change.4 The Commission series of Hartford Funds NextShares
Commission believes that DTC has Trust (‘‘Trust’’).5 The Exchange
sought to identify, monitor, and manage 1 15 U.S.C. 78s(b)(1). represents that the Trust will be
the relevant risks associated with the 2 17 CFR 240.19b–4. registered with the Commission as an
3 See Securities Exchange Act Release No. 80237
proposed rule change, consistent with open-end investment company and that
(March 14, 2017), 82 FR 14395 (‘‘Notice’’).
Rule 17Ad–22(e)(20), cited above. 4 On April 4, 2017, the Exchange filed it has filed a registration statement on
III. Conclusion Amendment No. 1 to the proposed rule change and, Form N–1A (‘‘Registration Statement’’)
on April 18, 2017, the Exchange withdrew with the Commission.6
On the basis of the foregoing, the Amendment No. 1. On April 12, 2017, the Exchange
Commission finds that the proposal is filed Amendment No. 2 to the proposed rule change Hartford Funds Management
and, on April 13, 2017, the Exchange withdrew Company, LLC (‘‘Adviser’’) will be the
consistent with the requirements of the Amendment No. 2. Amendment No. 3 to the
Act, in particular the requirements of proposed rule change replaces and supersedes the adviser to the Fund and Wellington
Section 17A of the Act 23 and the rules original filing in its entirety. In Amendment No. 3, Management Company LLP will the
and regulations thereunder. the Exchange: (a) Represents that neither the sub-adviser to the Fund (‘‘Sub-
Adviser nor the Sub-Adviser (as defined herein) is
It is therefore ordered, pursuant to a registered broker-dealer; however, it represents Adviser’’). ALPS Distributors, Inc. will
Section 19(b)(2) of the Act, that that each of the Adviser and the Sub-Adviser is be the principal underwriter and
proposed rule change SR–DTC–2017– affiliated with a broker-dealer, and each of the distributor of the Fund’s Shares.
001 be, and hereby is, approved.24 Adviser and the Sub-Adviser has implemented and
will maintain a fire wall with respect to its affiliated Hartford Funds Management Company,
For the Commission, by the Division of broker-dealer regarding access to information LLC will act as the administrator and
Trading and Markets, pursuant to delegated concerning the composition of, and/or changes to, accounting agent to the Fund. State
authority.25 the Fund’s portfolio; (b) represents that personnel
who make decisions on the Fund’s portfolio Street Bank and Trust Company will act
Eduardo A. Aleman, composition must be subject to procedures as sub-administrator, sub-accounting
Assistant Secretary. designed to prevent the use and dissemination of agent, transfer agent, and custodian to
material, non-public information regarding the
[FR Doc. 2017–09426 Filed 5–9–17; 8:45 am]
Fund’s portfolio; (c) represents that, in the event the Fund.
BILLING CODE P that the Adviser or the Sub-Adviser registers as a The Exchange has made the following
broker-dealer or becomes newly affiliated with a
broker-dealer, or any new adviser or a sub-adviser representations and statements in
SECURITIES AND EXCHANGE to the Fund is a registered broker-dealer or becomes describing the Fund.7
affiliated with a broker-dealer, such new adviser or
COMMISSION sub-adviser will implement and maintain a fire wall
5 According to the Exchange, the Commission has
with respect to its relevant personnel and/or such
[Release No. 34–80591; File No. SR– broker-dealer affiliate, if applicable, regarding issued an order granting the Trust and certain
NASDAQ–2017–025] access to information concerning the composition affiliates of the Trust exemptive relief under the
of, and/or changes to, the Fund’s portfolio, and will Investment Company Act of 1940 (‘‘1940 Act’’). See
Self-Regulatory Organizations; The be subject to procedures designed to prevent the use Investment Company Act Release No. 31607 (May
NASDAQ Stock Market LLC; Order and dissemination of material non-public 19, 2015) (File No. 812–14439). The Exchange
Granting Approval of Proposed Rule information regarding such portfolio; (d) provides represents that, in compliance with Nasdaq Rule
additional detail regarding the investments and 5745(b)(5), which applies to Shares based on an
Change, as Modified by Amendment operation of the Fund and the Master Portfolio (as international or global portfolio, the Trust’s
Nos. 3 and 4, To List and Trade Shares defined herein); (e) clarifies the public Web sites on application for exemptive relief under the 1940 Act
of the Hartford Global Impact which certain information about the Fund would be
states that the Trust will comply with the federal
available; (f) modifies the continued listing
NextSharesTM Fund Under Nasdaq representations to conform to Nasdaq rules; and (g) securities laws in accepting securities for deposits
Rule 5745 makes other technical, non-substantive corrections and satisfying redemptions with securities,
in the proposed rule change. Amendment No. 3 is including that the securities accepted for deposits
May 4, 2017. available at: https://www.sec.gov/comments/sr- and the securities used to satisfy redemption
nasdaq-2017-025/nasdaq2017025-1701702- requests are sold in transactions that would be
I. Introduction 149977.pdf. Amendment No. 4 to the proposed rule exempt from registration under the Securities Act
On March 1, 2017, The NASDAQ change is a partial amendment in which the of 1933, as amended.
Exchange clarifies that the Reporting Authority (as 6 See Registration Statement on Form N–1A for
Stock Market LLC (‘‘Nasdaq’’ or defined in Nasdaq Rule 5745) will implement and the Trust dated November 30, 2016 (File Nos. 333–
‘‘Exchange’’) filed with the Securities maintain, or ensure that the Composition File (as 214842 and 811–23215).
and Exchange Commission defined in Nasdaq Rule 5745) will be subject to,
jstallworth on DSK7TPTVN1PROD with NOTICES
7 The Commission notes that additional
procedures designed to prevent the use and
information regarding the Trust, the Fund, and the
22 Id.
dissemination of material non-public information
regarding the Fund’s portfolio positions and Shares, including investment strategies, risks,
23 15 U.S.C. 78q–1. creation and redemption procedures, calculation of
changes in the positions. Because Amendment Nos.
24 In approving the proposed rule change, the 3 and 4 to the proposed rule change do not net asset value (‘‘NAV’’), fees, distributions, and
Commission considered the proposal’s impact on materially alter the substance of the proposed rule taxes, among other things, can be found in the
efficiency, competition, and capital formation. 15 change or raise unique or novel regulatory issues, Notice, Amendment Nos. 3 and 4, and Registration
U.S.C. 78c(f). Amendment Nos. 3 and 4 are not subject to notice Statement, as applicable. See supra notes 3, 4, and
25 17 CFR 200.30–3(a)(12). and comment. 6, respectively, and accompanying text.
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Document Created: 2017-05-10 00:01:03
Document Modified: 2017-05-10 00:01:03
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 82 FR 21837 |
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