82 FR 22042 - Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To List and Trade Shares of Direxion Daily Crude Oil Bull 3x Shares and Direxion Daily Crude Oil Bear 3x Shares Under NYSE Arca Equities Rule 8.200
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 90 (May 11, 2017)
Federal Register Volume 82, Issue 90 (May 11, 2017)
| Page Range | 22042-22044 | |
| FR Document | 2017-09522 |
[Federal Register Volume 82, Number 90 (Thursday, May 11, 2017)] [Notices] [Pages 22042-22044] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-09522] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80606; File No. SR-NYSEArca-2017-05] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To List and Trade Shares of Direxion Daily Crude Oil Bull 3x Shares and Direxion Daily Crude Oil Bear 3x Shares Under NYSE Arca Equities Rule 8.200 May 5, 2017. I. Introduction On January 23, 2017, NYSE Arca, Inc. (``Exchange'' or ``NYSE Arca'') filed with the Securities and Exchange Commission (``Commission''), pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ a proposed rule change to list and trade shares (``Shares'') of Direxion Daily Crude Oil Bull 3x Shares and Direxion Daily Crude Oil Bear 3x Shares (each a ``Fund,'' and collectively the ``Funds'') under NYSE Arca Equities Rule 8.200. The proposed rule change was published for comment in the Federal Register on February 7, 2017.\4\ On March 16, 2017, pursuant to Section 19(b)(2) of the Act,\5\ the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.\6\ The Commission has received no comments on the proposed rule change. This order institutes proceedings under Section 19(b)(2)(B) of the Act \7\ to determine whether to approve or disapprove the proposed rule change. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. \4\ See Securities Exchange Act Release No. 79916 (February 1, 2017), 82 FR 9608 (``Notice''). \5\ 15 U.S.C. 78s(b)(2). \6\ See Securities Exchange Act Release No. 80265 (March 22, 2017), 82 FR 14778. The Commission designated May 8, 2017 as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change. \7\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- II. Exchange's Description of the Proposal The Exchange proposes to list and trade Shares of the Funds under NYSE Arca Equities Rule 8.200, Commentary .02, which governs the listing and trading of Trust Issued Receipts.\8\ Each Fund is a series of the Direxion Shares ETF Trust II (``Trust''), a Delaware statutory trust.\9\ The Trust and the Funds are managed and controlled by Direxion Asset Management, LLC (``Sponsor'').\10\ Bank of New York Mellon will be the custodian and transfer agent for the Funds. U.S. Bancorp Fund Services, LLC is the administrator for the Funds. Foreside Fund Services, LLC serves as the distributor of the Shares. --------------------------------------------------------------------------- \8\ Commentary .02 to NYSE Arca Equities Rule 8.200 applies to Trust Issued Receipts that invest in ``Financial Instruments.'' The term ``Financial Instruments,'' as defined in Commentary .02(b)(4) to NYSE Arca Equities Rule 8.200, means any combination of investments, including cash; securities; options on securities and indices; futures contracts; options on futures contracts; forward contracts; equity caps, collars, and floors; and swap agreements. \9\ According to the Exchange, on December 14, 2016, the Trust filed with the Commission a registration statement on Form S-1 under the Securities Act of 1933, as amended, relating to the Funds (File No. 333-215091) (``Registration Statement''). \10\ According to the Exchange, the Sponsor is registered as a commodity pool operator with the Commodity Futures Trading Commission and is a member of the National Futures Association. See Notice, supra note 4, 82 FR at 9608. --------------------------------------------------------------------------- The Exchange has made the following representations and statements in describing the Funds and their investment strategies, including the Funds' portfolio holdings and investment restrictions.\11\ --------------------------------------------------------------------------- \11\ The Commission notes that additional information regarding the Trust, the Funds, and the Shares, including investment strategies, risks, net asset value (``NAV'') calculation, creation and redemption procedures, fees, availability of information, trading rules and halts, surveillance, information bulletins, distributions, and taxes, among other information, is included in the Notice and the Registration Statement, as applicable. See Notice and Registration Statement, supra notes 4 and 9, respectively. --------------------------------------------------------------------------- A. Investment Objectives of the Funds The investment objective of the Direxion Daily Crude Oil Bull 3X Shares is to seek, on a daily basis,\12\ investment results that correspond (before fees and expenses) to a multiple three times (3x) of the daily performance of the Bloomberg WTI Crude Oil Subindex\SM\ (a subindex of the Bloomberg Commodity Index\SM\) (``Benchmark'').\13\ The investment objective of the Direxion Daily Crude Oil Bear 3X Shares is to seek, on a daily basis,\14\ investment results that correspond (before fees and expenses) to three times (3x) the inverse of the performance of the Benchmark. The Benchmark is intended to reflect the performance of crude oil as measured by the price of West Texas Intermediate crude oil futures contracts traded on the New York Mercantile Exchange (which is part of the Chicago Mercantile Exchange), including the impact of rolling,\15\ without regard to income earned on cash positions. According to the Exchange, the Funds will not be directly linked to the ``spot'' price of crude oil.\16\ --------------------------------------------------------------------------- \12\ According to the Exchange, the Funds do not seek to achieve their investment objectives over a period greater than a single trading day. The Exchange states that a single trading day is measured from the time a Fund calculates its NAV to the time of a Fund's next NAV calculation. The Exchange states that the return of a Fund for a period longer than a single trading day is the result of its return for each day compounded over the period and thus will usually differ from a Fund's multiple times the return of the Benchmark for the same period. See Notice, supra note 4, 82 FR at 9609. \13\ According to the Exchange, the Benchmark is a ``rolling index,'' which means that the index does not take physical possession of any commodities. See id. at 9609 n.7. \14\ See supra note 12. \15\ The Exchange states that futures contracts held by the Funds near expiration are generally closed out and replaced by contracts with a later expiration as required by the Benchmark. The Exchange states that this process is referred to as ``rolling,'' and that the Funds do not intend to hold futures contracts through expiration, but instead to ``roll'' their respective positions. See Notice, supra note 4, 82 FR at 9609 n.8. \16\ See id. at 9609. --------------------------------------------------------------------------- B. Investments of the Funds In seeking to achieve the Funds' investment objectives, the Exchange states that the Sponsor will utilize a mathematical approach to determine the type, quantity, and mix of investment positions that the Sponsor believes, in combination, should produce daily returns consistent with the Funds' respective objectives.\17\ The Sponsor would rely on a pre-determined model to generate orders that result in repositioning the Funds' investments in accordance with their respective investment objectives. --------------------------------------------------------------------------- \17\ See id. --------------------------------------------------------------------------- According to the Exchange, each Fund will seek to achieve its investment objectives by investing, under normal market conditions,\18\ substantially all of [[Page 22043]] its assets in oil futures contracts traded in the U.S. and listed options on such contracts (such futures contracts and options are collectively referred to as ``Futures Contracts''). The Funds' investments in Futures Contracts will be used to produce economically ``leveraged'' or ``inverse leveraged'' investment results for the Funds. --------------------------------------------------------------------------- \18\ The Exchange states that the term ``normal market conditions'' includes, but is not limited to, the absence of trading halts in the applicable financial markets generally; operational issues (e.g., systems failure) causing dissemination of inaccurate market information; or force majeure type events such as natural or manmade disaster, act of God, armed conflict, act of terrorism, riot or labor disruption or any similar intervening circumstance. See id. at 9609 n.11. --------------------------------------------------------------------------- In the event position or accountability limits are reached with respect to Futures Contracts,\19\ each Fund may obtain exposure to the Benchmark through investment in swap transactions and forward contracts referencing the Benchmark or other benchmarks the Sponsor believes should be closely correlated to the performance of each Fund's benchmark, such as the Energy Select Sector Index or the S&P Oil & Gas Exploration & Production Select Industry Index (such swap transactions and forward contracts are collectively referred to as ``Financial Instruments''). To the extent that the Trust invests in Financial Instruments, it would first make use of exchange-traded Financial Instruments, if available. If an investment in exchange-traded Financial Instruments is unavailable, then the Trust would invest in Financial Instruments that clear through derivatives clearing organizations that satisfy the Trust's criteria, if available. If an investment in cleared Financial Instruments is unavailable, then the Trust would invest in other Financial Instruments, including uncleared Financial Instruments in the over-the-counter (``OTC'') market. The Funds may also invest in Financial Instruments if the market for a specific futures contract experiences emergencies (e.g., natural disaster, terrorist attack, or an act of God) or disruptions (e.g., a trading halt or a flash crash) that prevent or make it impractical for a Fund to obtain the appropriate amount of investment exposure using Futures Contracts. --------------------------------------------------------------------------- \19\ According to the Exchange, U.S. futures exchanges have established accountability levels and position limits on the maximum net long or net short Futures Contracts in commodity interests that any person or group of persons under common trading control (other than as a hedge, which an investment by a Fund is not) may hold, own, or control. These levels and position limits apply to the Futures Contracts that each Fund would invest in to meet its investment objective. According to the Exchange, in addition to accountability levels and position limits, U.S. futures exchanges also set daily price fluctuation limits on Futures Contracts. The daily price fluctuation limit establishes the maximum amount that the price of a Futures Contract may vary either up or down from the previous day's settlement price. See id. at 9609. --------------------------------------------------------------------------- The Funds will invest such that each Fund's exposure to the Benchmark will consist substantially of Futures Contracts. The Funds' remaining net assets may be invested in cash or cash equivalents and/or U.S. Treasury securities or other high credit quality, short-term fixed-income or similar securities (such as shares of money market funds and collateralized repurchase agreements) for direct investment or as collateral for the Funds' investments. The Funds do not intend to hold Futures Contracts through expiration, but instead to ``roll'' their respective positions.\20\ --------------------------------------------------------------------------- \20\ The Exchange states that when the market for these contracts is such that the prices are higher in the more distant delivery months than in the nearer delivery months, the sale during the course of the ``rolling process'' of the more nearby contract would take place at a price that is lower than the price of the more distant contract. This pattern of higher futures prices for longer expiration Futures Contracts is referred to as ``contango.'' Alternatively, when the market for these contracts is such that the prices are higher in the nearer months than in the more distant months, the sale during the course of the ``rolling process'' of the more nearby contract would take place at a price that is higher than the price of the more distant contract. This pattern of higher futures prices for shorter expiration futures contracts is referred to as ``backwardation.'' According to the Exchange, the presence of contango in certain Futures Contracts at the time of rolling could adversely affect a Fund with long positions, and positively affect a Fund with short positions. Similarly, the presence of backwardation in certain futures contracts at the time of rolling such contracts could adversely affect a Fund with short positions and positively affect a Fund with long positions. See id. --------------------------------------------------------------------------- The Exchange states that the Funds do not expect to have leveraged exposure greater than three times (3x) the Funds' net assets. Thus, the maximum margin held at a Future Commission Merchant would not exceed three times the margin requirement for either Fund.\21\ --------------------------------------------------------------------------- \21\ See id. --------------------------------------------------------------------------- The Exchange represents that not more than 10% of the net assets of a Fund in the aggregate invested in Futures Contracts shall consist of Futures Contracts whose principal market is not a member of the Intermarket Surveillance Group or is a market with which the Exchange does not have in place a comprehensive surveillance sharing agreement. III. Proceedings To Determine Whether To Approve or Disapprove SR- NYSEArca-2017-05 and Grounds for Disapproval Under Consideration The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act \22\ to determine whether the proposed rule change should be approved or disapproved. Institution of such proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, as described below, the Commission seeks and encourages interested persons to provide comments on the proposed rule change. --------------------------------------------------------------------------- \22\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- Pursuant to Section 19(b)(2)(B) of the Act,\23\ the Commission is providing notice of the grounds for disapproval under consideration. The Commission is instituting proceedings to allow for additional analysis of the proposed rule change's consistency with Section 6(b)(5) of the Act, which requires, among other things, that the rules of a national securities exchange be ``designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade,'' and ``to protect investors and the public interest.'' \24\ --------------------------------------------------------------------------- \23\ Id. \24\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- Under the proposal, each Fund will seek to achieve its investment objective by investing in Financial Instruments, which, according to the Exchange, could include uncleared OTC swap transactions and forward contracts.\25\ The Exchange states that each Fund's total portfolio composition will be disclosed each business day that the Exchange is open for trading on the Funds' Web site. The Web site disclosure will include, with respect to the Futures Contracts and Financial Instruments, their name, percentage weighting, and value. The Commission seeks commenters' views on the sufficiency of the information that would be provided with respect to each Fund's Financial Instruments, and whether the information will allow market participants to value these interests intraday. --------------------------------------------------------------------------- \25\ See Notice, supra note 4, at 9609. --------------------------------------------------------------------------- In addition, under the proposal, the investment objective of the Direxion Daily Crude Oil Bull 3X Shares is to seek, on a daily basis, investment results that correspond (before fees and expenses) to a multiple three times (3x) of the daily performance of the Benchmark, and the investment objective of the Direxion Daily Crude Oil Bear 3X Shares is to seek, on a daily basis, investment results that correspond (before fees and expenses) to three times (3x) the inverse of the performance of the Benchmark. The Exchange's filing does not address whether the value of the Benchmark will be publicly disseminated, and, if [[Page 22044]] so, by whom and how often. The Commission seeks commenters' views on the sufficiency of the Exchange's discussion regarding dissemination of the value of the Benchmark on which the investment objectives of the Funds are based. Furthermore, in its filing the Exchange fails to include a representation that all statements and representations in the proposal regarding the applicability of Exchange listing rules specified in the proposal shall constitute continued listing requirements for listing the Shares on the Exchange.\26\ The Commission seeks commenter's views on whether the Exchange's statements in the filing relating to the applicability of continued listing requirements for listing and trading of the Shares on the Exchange are sufficient to support a determination that the listing and trading of the Shares would be consistent with Section 6(b)(5) of the Act. --------------------------------------------------------------------------- \26\ The Commission notes that the Exchange has made this representation in other proposed rule changes to list and trade Trust Issued Receipts. See, e.g., Amendment No. 1 to Securities Exchange Act Release No. 79917 (February 1, 2017), 82 FR 9620 (February 7, 2017) (SR-NYSEArca-2017-07), available at: https://www.sec.gov/comments/sr-nysearca-2017-07/nysearca201707-1630210-137426.pdf; Amendment No. 2 to Securities Exchange Act Release No. 79742 (January 5, 2017), 82 FR 3366 (January 11, 2017) (SR-NYSEArca- 2016-173), available at: https://www.sec.gov/comments/sr-nysearca-2016-173/nysearca2016173-1678044-149322.pdf. --------------------------------------------------------------------------- IV. Procedure: Request for Written Comments The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the proposal. In particular, the Commission invites the written views of interested persons concerning whether the proposal is consistent with Section 6(b)(5) or any other provision of the Act, or the rules and regulations thereunder. Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b-4, any request for an opportunity to make an oral presentation.\27\ --------------------------------------------------------------------------- \27\ Section 19(b)(2) of the Act, as amended by the Securities Act Amendments of 1975, Pub. L. 94-29 (June 4, 1975), grants the Commission flexibility to determine what type of proceeding--either oral or notice and opportunity for written comments--is appropriate for consideration of a particular proposal by a self-regulatory organization. See Securities Act Amendments of 1975, Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). --------------------------------------------------------------------------- Interested persons are invited to submit written data, views, and arguments regarding whether the proposal should be approved or disapproved by June 12, 2017. Any person who wishes to file a rebuttal to any other person's submission must file that rebuttal by June 26, 2017. The Commission asks that commenters address the sufficiency of the Exchange's statements in support of the proposal, which are set forth in the Notice,\28\ in addition to any other comments they may wish to submit about the proposed rule change. --------------------------------------------------------------------------- \28\ See supra note 4. --------------------------------------------------------------------------- Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-NYSEArca-2017-05 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Numbers SR-NYSEArca-2017-05. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEArca-2017-05 and should be submitted on or before June 12, 2017 Rebuttal comments should be submitted by June 26, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\29\ --------------------------------------------------------------------------- \29\ 17 CFR 200.30-3(a)(57). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-09522 Filed 5-10-17; 8:45 am] BILLING CODE 8011-01-P
![22042 Federal Register / Vol. 82, No. 90 / Thursday, May 11, 2017 / Notices
Nos. 2, 3, and 4, be, and it hereby is, the Act 7 to determine whether to results that correspond (before fees and
approved. approve or disapprove the proposed expenses) to a multiple three times (3x)
For the Commission, by the Division of rule change. of the daily performance of the
Trading and Markets, pursuant to delegated Bloomberg WTI Crude Oil SubindexSM
II. Exchange’s Description of the
authority.35 (a subindex of the Bloomberg
Proposal
Eduardo A. Aleman, Commodity IndexSM) (‘‘Benchmark’’).13
Assistant Secretary. The Exchange proposes to list and The investment objective of the
trade Shares of the Funds under NYSE Direxion Daily Crude Oil Bear 3X
[FR Doc. 2017–09530 Filed 5–10–17; 8:45 am]
Arca Equities Rule 8.200, Commentary Shares is to seek, on a daily basis,14
BILLING CODE 8011–01–P
.02, which governs the listing and investment results that correspond
trading of Trust Issued Receipts.8 Each (before fees and expenses) to three times
SECURITIES AND EXCHANGE Fund is a series of the Direxion Shares (3x) the inverse of the performance of
COMMISSION ETF Trust II (‘‘Trust’’), a Delaware the Benchmark. The Benchmark is
statutory trust.9 The Trust and the intended to reflect the performance of
[Release No. 34–80606; File No. SR– Funds are managed and controlled by crude oil as measured by the price of
NYSEArca-2017–05] Direxion Asset Management, LLC West Texas Intermediate crude oil
(‘‘Sponsor’’).10 Bank of New York futures contracts traded on the New
Self-Regulatory Organizations; NYSE Mellon will be the custodian and York Mercantile Exchange (which is
Arca, Inc.; Order Instituting transfer agent for the Funds. U.S. part of the Chicago Mercantile
Proceedings To Determine Whether To Bancorp Fund Services, LLC is the Exchange), including the impact of
Approve or Disapprove a Proposed administrator for the Funds. Foreside rolling,15 without regard to income
Rule Change To List and Trade Shares Fund Services, LLC serves as the earned on cash positions. According to
of Direxion Daily Crude Oil Bull 3x distributor of the Shares. the Exchange, the Funds will not be
Shares and Direxion Daily Crude Oil The Exchange has made the following directly linked to the ‘‘spot’’ price of
Bear 3x Shares Under NYSE Arca representations and statements in crude oil.16
Equities Rule 8.200 describing the Funds and their
investment strategies, including the B. Investments of the Funds
May 5, 2017.
Funds’ portfolio holdings and In seeking to achieve the Funds’
I. Introduction investment restrictions.11 investment objectives, the Exchange
On January 23, 2017, NYSE Arca, Inc. states that the Sponsor will utilize a
A. Investment Objectives of the Funds
(‘‘Exchange’’ or ‘‘NYSE Arca’’) filed mathematical approach to determine the
with the Securities and Exchange The investment objective of the type, quantity, and mix of investment
Commission (‘‘Commission’’), pursuant Direxion Daily Crude Oil Bull 3X Shares positions that the Sponsor believes, in
to Section 19(b)(1) 1 of the Securities is to seek, on a daily basis,12 investment combination, should produce daily
Exchange Act of 1934 (‘‘Act’’) 2 and Rule returns consistent with the Funds’
7 15 U.S.C. 78s(b)(2)(B).
19b–4 thereunder,3 a proposed rule respective objectives.17 The Sponsor
8 Commentary .02 to NYSE Arca Equities Rule
change to list and trade shares would rely on a pre-determined model
8.200 applies to Trust Issued Receipts that invest
(‘‘Shares’’) of Direxion Daily Crude Oil in ‘‘Financial Instruments.’’ The term ‘‘Financial to generate orders that result in
Bull 3x Shares and Direxion Daily Instruments,’’ as defined in Commentary .02(b)(4) to repositioning the Funds’ investments in
Crude Oil Bear 3x Shares (each a NYSE Arca Equities Rule 8.200, means any accordance with their respective
combination of investments, including cash; investment objectives.
‘‘Fund,’’ and collectively the ‘‘Funds’’) securities; options on securities and indices; futures
under NYSE Arca Equities Rule 8.200. contracts; options on futures contracts; forward According to the Exchange, each
The proposed rule change was contracts; equity caps, collars, and floors; and swap Fund will seek to achieve its investment
published for comment in the Federal agreements. objectives by investing, under normal
9 According to the Exchange, on December 14,
Register on February 7, 2017.4 On market conditions,18 substantially all of
2016, the Trust filed with the Commission a
March 16, 2017, pursuant to Section registration statement on Form S–1 under the
19(b)(2) of the Act,5 the Commission Securities Act of 1933, as amended, relating to the of its return for each day compounded over the
Funds (File No. 333–215091) (‘‘Registration period and thus will usually differ from a Fund’s
designated a longer period within which multiple times the return of the Benchmark for the
Statement’’).
to approve the proposed rule change, 10 According to the Exchange, the Sponsor is same period. See Notice, supra note 4, 82 FR at
disapprove the proposed rule change, or registered as a commodity pool operator with the
9609.
13 According to the Exchange, the Benchmark is
institute proceedings to determine Commodity Futures Trading Commission and is a
a ‘‘rolling index,’’ which means that the index does
whether to disapprove the proposed member of the National Futures Association. See
not take physical possession of any commodities.
rule change.6 The Commission has Notice, supra note 4, 82 FR at 9608.
11 The Commission notes that additional See id. at 9609 n.7.
received no comments on the proposed information regarding the Trust, the Funds, and the
14 See supra note 12.
rule change. This order institutes Shares, including investment strategies, risks, net
15 The Exchange states that futures contracts held
proceedings under Section 19(b)(2)(B) of asset value (‘‘NAV’’) calculation, creation and by the Funds near expiration are generally closed
redemption procedures, fees, availability of out and replaced by contracts with a later
35 17 information, trading rules and halts, surveillance, expiration as required by the Benchmark. The
CFR 200.30–3(a)(12). Exchange states that this process is referred to as
1 15 information bulletins, distributions, and taxes,
U.S.C. 78s(b)(1). ‘‘rolling,’’ and that the Funds do not intend to hold
2 15 U.S.C. 78a.
among other information, is included in the Notice
and the Registration Statement, as applicable. See futures contracts through expiration, but instead to
asabaliauskas on DSK3SPTVN1PROD with NOTICES
3 17 CFR 240.19b–4. ‘‘roll’’ their respective positions. See Notice, supra
Notice and Registration Statement, supra notes 4
4 See Securities Exchange Act Release No. 79916
and 9, respectively. note 4, 82 FR at 9609 n.8.
(February 1, 2017), 82 FR 9608 (‘‘Notice’’). 12 According to the Exchange, the Funds do not 16 See id. at 9609.
5 15 U.S.C. 78s(b)(2). 17 See id.
seek to achieve their investment objectives over a
6 See Securities Exchange Act Release No. 80265 period greater than a single trading day. The 18 The Exchange states that the term ‘‘normal
(March 22, 2017), 82 FR 14778. The Commission Exchange states that a single trading day is market conditions’’ includes, but is not limited to,
designated May 8, 2017 as the date by which the measured from the time a Fund calculates its NAV the absence of trading halts in the applicable
Commission shall either approve or disapprove, or to the time of a Fund’s next NAV calculation. The financial markets generally; operational issues (e.g.,
institute proceedings to determine whether to Exchange states that the return of a Fund for a systems failure) causing dissemination of inaccurate
disapprove, the proposed rule change. period longer than a single trading day is the result market information; or force majeure type events
VerDate Sep<11>2014 16:52 May 10, 2017 Jkt 241001 PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 E:\FR\FM\11MYN1.SGM 11MYN1](https://thefederalregister.org/doc/82_FR_22132/page/1.svg)
![22044 Federal Register / Vol. 82, No. 90 / Thursday, May 11, 2017 / Notices
so, by whom and how often. The Interested persons are invited to should refer to File Number SR–
Commission seeks commenters’ views submit written data, views, and NYSEArca–2017–05 and should be
on the sufficiency of the Exchange’s arguments regarding whether the submitted on or before June 12, 2017
discussion regarding dissemination of proposal should be approved or Rebuttal comments should be submitted
the value of the Benchmark on which disapproved by June 12, 2017. Any by June 26, 2017.
the investment objectives of the Funds person who wishes to file a rebuttal to For the Commission, by the Division of
are based. any other person’s submission must file Trading and Markets, pursuant to delegated
Furthermore, in its filing the that rebuttal by June 26, 2017. The authority.29
Exchange fails to include a Commission asks that commenters Eduardo A. Aleman,
representation that all statements and address the sufficiency of the Assistant Secretary.
representations in the proposal Exchange’s statements in support of the [FR Doc. 2017–09522 Filed 5–10–17; 8:45 am]
regarding the applicability of Exchange proposal, which are set forth in the BILLING CODE 8011–01–P
listing rules specified in the proposal Notice,28 in addition to any other
shall constitute continued listing comments they may wish to submit
requirements for listing the Shares on about the proposed rule change. SECURITIES AND EXCHANGE
the Exchange.26 The Commission seeks Comments may be submitted by any COMMISSION
commenter’s views on whether the of the following methods:
Exchange’s statements in the filing [Release No. 34–80610; File No. SR–MSRB–
Electronic Comments 2017–01]
relating to the applicability of continued
listing requirements for listing and • Use the Commission’s Internet
comment form (http://www.sec.gov/ Self-Regulatory Organizations;
trading of the Shares on the Exchange Municipal Securities Rulemaking
are sufficient to support a determination rules/sro.shtml); or
that the listing and trading of the Shares • Send an email to rule-comments@ Board; Notice of Withdrawal of a
sec.gov. Please include File Number SR– Proposed Rule Change To Add New
would be consistent with Section 6(b)(5) MSRB Rule G–49, on Transactions
NYSEArca–2017–05 on the subject line.
of the Act. Below the Minimum Denomination of
Paper Comments an Issue, to the Rules of the MSRB,
IV. Procedure: Request for Written
Comments • Send paper comments in triplicate and To Rescind Paragraph (f), on
to Secretary, Securities and Exchange Minimum Denominations, From MSRB
The Commission requests that Rule G–15
Commission, 100 F Street NE.,
interested persons provide written
Washington, DC 20549–1090.
submissions of their views, data, and May 5, 2017.
arguments with respect to the issues All submissions should refer to File On January 24, 2017, the Municipal
identified above, as well as any other Numbers SR–NYSEArca–2017–05. This Securities Rulemaking Board (‘‘MSRB’’)
concerns they may have with the file number should be included on the filed with the Securities and Exchange
proposal. In particular, the Commission subject line if email is used. To help the Commission (‘‘Commission’’), pursuant
invites the written views of interested Commission process and review your to Section 19(b)(1) of the Securities
comments more efficiently, please use
persons concerning whether the Exchange Act of 1934 (the ‘‘Exchange
only one method. The Commission will
proposal is consistent with Section Act’’ or ‘‘Act’’) 1 and Rule 19b–4
post all comments on the Commission’s
6(b)(5) or any other provision of the Act, thereunder,2 a proposed rule change to
Internet Web site (http://www.sec.gov/
or the rules and regulations thereunder. add new MSRB Rule G–49, on
rules/sro.shtml). Copies of the
Although there do not appear to be any transactions below the minimum
submission, all subsequent
issues relevant to approval or denomination of an issue, to the rules of
amendments, all written statements
disapproval that would be facilitated by the MSRB, and, in MSRB Rule G–15, on
with respect to the proposed rule
an oral presentation of views, data, and confirmation, clearance, settlement, and
change that are filed with the
arguments, the Commission will other uniform practice requirements
Commission, and all written
consider, pursuant to Rule 19b-4, any with respect to transactions with
communications relating to the
request for an opportunity to make an customers, to rescind paragraph (f), on
proposed rule change between the
oral presentation.27 minimum denominations. The proposed
Commission and any person, other than
rule change was published for comment
those that may be withheld from the
26 The Commission notes that the Exchange has
in the Federal Register on February 9,
made this representation in other proposed rule public in accordance with the
2017.3 The Commission received four
changes to list and trade Trust Issued Receipts. See, provisions of 5 U.S.C. 552, will be
e.g., Amendment No. 1 to Securities Exchange Act comment letters on the proposal.4 On
available for Web site viewing and
Release No. 79917 (February 1, 2017), 82 FR 9620 March 21, 2017, pursuant to Section
printing in the Commission’s Public
(February 7, 2017) (SR–NYSEArca-2017–07), 19(b)(2) of the Exchange Act,5 the MSRB
available at: https://www.sec.gov/comments/sr- Reference Room, 100 F Street NE.,
nysearca-2017-07/nysearca201707-1630210- Washington, DC 20549, on official 29 17 CFR 200.30–3(a)(57).
137426.pdf; Amendment No. 2 to Securities business days between the hours of 1 15
Exchange Act Release No. 79742 (January 5, 2017), U.S.C. 78s(b)(1).
82 FR 3366 (January 11, 2017) (SR–NYSEArca–
10:00 a.m. and 3:00 p.m. Copies of the 2 17 CFR 240.19b–4.
2016–173), available at: https://www.sec.gov/ filing also will be available for 3 See Securities Exchange Act Release No. 79978
comments/sr-nysearca-2016-173/nysearca2016173- inspection and copying at the principal (February 6, 2017), 82 FR 10123.
1678044-149322.pdf. 4 See letters from Leslie M. Norwood, Managing
office of the Exchange. All comments
asabaliauskas on DSK3SPTVN1PROD with NOTICES
27 Section 19(b)(2) of the Act, as amended by the Director and Associate General Counsel, Securities
received will be posted without change; Industry and Financial Markets Association, dated
Securities Act Amendments of 1975, Pub. L. 94–29
(June 4, 1975), grants the Commission flexibility to the Commission does not edit personal March 2, 2017; Mike Nichols, Chief Executive
determine what type of proceeding—either oral or identifying information from Officer, Bond Dealers of America, dated March 2,
notice and opportunity for written comments—is submissions. You should submit only 2017; Paige W. Pierce, President and Chief
appropriate for consideration of a particular Executive Officer, RW Smith, dated March 3, 2017;
information that you wish to make and James J. Angel, Associate Professor of Finance,
proposal by a self-regulatory organization. See
Securities Act Amendments of 1975, Senate Comm. available publicly. All submissions Georgetown University, McDonough School of
on Banking, Housing & Urban Affairs, S. Rep. No. Business, dated March 7, 2017.
75, 94th Cong., 1st Sess. 30 (1975). 28 See supra note 4. 5 15 U.S.C. 78s(b)(2).
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Document Created: 2017-05-11 00:15:18
Document Modified: 2017-05-11 00:15:18
| 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 22042 |
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