82 FR 24753 - Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees To Decrease Member Order Routing Program Rebates
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 102 (May 30, 2017)
Federal Register Volume 82, Issue 102 (May 30, 2017)
| Page Range | 24753-24755 | |
| FR Document | 2017-10972 |
[Federal Register Volume 82, Number 102 (Tuesday, May 30, 2017)] [Notices] [Pages 24753-24755] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-10972] [[Page 24753]] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80744; File No. SR-ISE-2017-47] Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees To Decrease Member Order Routing Program Rebates May 23, 2017. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on May 16, 2017, Nasdaq ISE, LLC (``ISE'' or ``Exchange'') filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') the proposed rule change as described in Items I and II, below, which Items have been prepared by the Exchange.\3\ The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ The Exchange initially filed the proposed rule change as SR- ISE-2017-38 on April 27, 2017. On May 5, 2017, the Exchange withdrew SR-ISE-2017-38 and submitted SR-ISE-2017-43 as a replacement. On May 16, 2017, the Exchange withdrew SR-ISE-2017-43 and submitted this filing. The Exchange has designated the proposed changes to be operative on May 1, 2017. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its Schedule of Fees to decrease rebates for members that participate in the Member Order Routing Program. The text of the proposed rule change is available on the Exchange's Web site at www.ise.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange operates the Member Order Routing Program (``MORP''),\4\ which is a program that provides enhanced rebates to order routing firms that select the Exchange as the default routing destination for unsolicited Crossing Orders.\5\ On March 10, 2017, the Exchange made changes to the program to allow members to opt in to MORP for specific sessions rather than on a member-wide basis, and to increase MORP rebates for members that participate in the program.\6\ As described in more detail below, the Exchange now proposes to decrease MORP rebates consistent with the previous rebates provided prior to that proposed rule change.\7\ Members will continue to be able to opt in to MORP for specific sessions rather than on a member-wide basis. --------------------------------------------------------------------------- \4\ See Securities Exchange Act Release No. 74706 (April 10, 2016), 80 FR 20522 (April 16, 2016) (SR-ISE-2015-11). \5\ A ``Crossing Order'' is an order executed in the Exchange's Facilitation Mechanism, Solicited Order Mechanism, Price Improvement Mechanism (``PIM'') or submitted as a Qualified Contingent Cross (``QCC'') order. For purposes of the fee schedule, orders executed in the Block Order Mechanism are also considered Crossing Orders. \6\ See Securities Exchange Act Release No. 80267 (March 17, 2017), 82 FR 14929 (March 23, 2017) (SR-ISE-2017-24). As provided in the above filing, a member may designate one or more sessions to be eligible for MORP. A session is connection to the exchange over which a member submits orders. See Section V.C. of the Schedule of Fees. If a session is designated as eligible for MORP all requirements for the program must be met for that session. To be eligible to participate in MORP an EAM must: (1) Designate, in writing, to the Exchange which sessions are MORP eligible according to the criteria below; (2) provide to its clients, systems that enable the electronic routing of option orders to all of the U.S. options exchanges, including ISE; (3) interface with ISE to access the Exchange's electronic options trading platform; (4) offer to its clients a customized interface and routing functionality such that ISE will be the default destination for all unsolicited Crossing Orders entered by the EAM, provided that market conditions allow the Crossing Order to be executed on ISE; (5) configure its own option order routing functionality such that ISE will be the default destination for all unsolicited Crossing Orders, provided that market conditions allow the Crossing Order to be executed on ISE, with respect to all option orders as to which the EAM has routing discretion; and (6) ensure that the default routing functionality permits users submitting option orders through such system to manually override the ISE as the default destination on an order-by- order basis. On the Schedule of Fees, the requirement to designate which sessions are MORP eligible ends in a period. As a non-substantive conforming change, the Exchange proposes to change this to a semi- colon. \7\ The Exchange initially filed the proposed pricing changes on April 27, 2017 (SR-ISE-2017-38). On May 5, 2017, the Exchange withdrew that filing and submitted this filing [sic]. --------------------------------------------------------------------------- Rebate for Unsolicited Crossing Orders Currently, an EAM that is MORP eligible receives a rebate for all unsolicited Crossing Orders of $0.065 per originating contract side, provided that the member executes a minimum average daily volume (``ADV'') in unsolicited Crossing Orders of at least 30,000 originating contract sides though their MORP designated sessions. This rebate is increased to $0.07 per originating contract side, provided that the member executes a higher ADV in unsolicited Crossing Orders of 100,000 originating contract sides.\8\ The Exchange proposes to decrease the MORP rebate for eligible members that execute from 30,000 to 99,999 originating contract sides to $0.05 per originating contract side. The MORP rebate for eligible members that execute 100,000 or more originating contract sides will remain $0.07 per originating contract side. --------------------------------------------------------------------------- \8\ The rebate for the highest tier achieved is applied retroactively to all eligible contracts traded in a given month. For purposes of determining whether the member meets the above ADV thresholds, any day that the Exchange is not open for the entire trading day or the Exchange instructs members in writing to route their orders to other markets may be excluded from such calculation; provided that the Exchange will only remove the day for members that would have a lower ADV with the day included. --------------------------------------------------------------------------- Facilitation and Solicitation Break-Up Rebate In addition, any EAM that qualifies for the MORP rebate by executing an ADV of 30,000 originating contract sides or more on their MORP designated sessions is also eligible for increased Facilitation and Solicitation break-up rebates \9\ for their Non-ISE Market Maker,\10\ Firm Proprietary,\11\ Broker-Dealer,\12\ Professional Customer,\13\ and [[Page 24754]] Priority Customer orders.\14\ Currently, MORP eligible members that execute a qualifying ADV in unsolicited Crossing Orders of at least 30,000 originating contract sides, receive a Facilitation and Solicitation break-up rebate that is $0.42 per contract for regular and complex orders in Select Symbols,\15\ $0.20 per contract for regular orders in Non-Select Symbols,\16\ $1.08 per contract for complex orders in Non-Select Symbols, and $0.15 per contract for regular and complex orders in foreign exchange option classes (``FX Options''). The Exchange proposes to decrease these Facilitation and Solicitation break-up rebates for MORP-eligible members to $0.35 per contract for regular and complex orders in Select Symbols, $0.15 per contract for regular orders in Non-Select Symbols, and $0.80 per contract for complex orders in Non-Select Symbols. Regular and complex orders in FX Options will continue to receive a Facilitation and Solicitation break- up rebate of $0.15 per contract. --------------------------------------------------------------------------- \9\ Break-up rebates are provided for contracts that are submitted to the Facilitation and Solicited Order Mechanisms that do not trade with their contra order except when those contracts trade against pre-existing orders and quotes on the Exchange's orderbooks. The applicable fee for Crossing Orders is applied to any contracts for which a rebate is provided. \10\ A ``Non-ISE Market Maker'' is a market maker as defined in Section 3(a)(38) of the Securities Exchange Act of 1934, as amended, registered in the same options class on another options exchange. \11\ A ``Firm Proprietary'' order is an order submitted by a member for its own proprietary account. \12\ A ``Broker-Dealer'' order is an order submitted by a member for a broker-dealer account that is not its own proprietary account. \13\ A ``Professional Customer'' is a person or entity that is not a broker/dealer and is not a Priority Customer. \14\ A ``Priority Customer'' is a person or entity that is not a broker/dealer in securities, and does not place more than 390 orders in listed options per day on average during a calendar month for its own beneficial account(s), as defined in ISE Rule 100(a)(37A). \15\ ``Select Symbols'' are options overlying all symbols listed on the ISE that are in the Penny Pilot Program. \16\ ``Non-Select Symbols'' are options overlying all symbols excluding Select Symbols. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\17\ in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\18\ in particular, in that it provides for the equitable allocation of reasonable dues, fees, and other charges among members and issuers and other persons using any facility, and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \17\ 15 U.S.C. 78f(b). \18\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- The Exchange believes the proposed decreases to MORP rebates, including the rebate for unsolicited Crossing Orders, and the Facilitation and Solicitation break-up rebate, are reasonable and equitable because the proposed rebates are set at amounts previously offered and will continue to be attractive to members that participate in the program.\19\ Under MORP, which is a voluntary rebate program, the Exchange currently provides enhanced rebates to EAMs that connect directly to the Exchange and provide their clients with order routing functionality that includes all U.S. options exchanges, including ISE. Although the Exchange proposes to decrease the rebates, the Exchange still believes that members will continue to be incentivized to participate in the program. The Exchange believes that the proposed rebates will be attractive to members to opt in to MORP. --------------------------------------------------------------------------- \19\ See supra note 3. --------------------------------------------------------------------------- In addition, the Exchange believes that the proposed rebates are not unfairly discriminatory as they apply to all EAMs that meet the program requirements and opt in to the program. Any EAM that participates in the program will be provided the rebates on an equal and non-discriminatory basis based on the order flow executed on the Exchange. While MORP is targeted towards unsolicited Crossing Order flow, the Exchange offers other incentive programs to promote and encourage growth in other business areas, including, for example, rebates for Market Makers that routinely quote at the national best bid or offer,\20\ and volume-based Priority Customer complex order rebates.\21\ Furthermore, solicited Crossing Orders benefit from the QCC and Solicitation Rebate, which applies to all QCC and/or other solicited Crossing Orders, including solicited orders executed in the Solicitation, Facilitation or Price Improvement Mechanisms. The Exchange believes that MORP is appropriately tailored to the order flow that the Exchange is seeking to attract, and will benefit all market participants that trade on ISE by encouraging additional liquidity. --------------------------------------------------------------------------- \20\ See Schedule of Fees, Section I, Regular Order Fees and Rebates, Market Maker Plus. \21\ See Schedule of Fees, Section II, Complex Order Fees and Rebates. --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,\22\ the Exchange does not believe that the proposed rule change will impose any burden on intermarket or intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. Order routing firms that participate in MORP and select the Exchange as the default routing destination for unsolicited Crossing Orders will continue to receive enhanced rebates that are set at levels consistent with those previously offered on ISE. The Exchange operates in a highly competitive market in which market participants can readily direct their order flow to competing venues. In such an environment, the Exchange must continually review, and consider adjusting, its fees and rebates to remain competitive with other exchanges. For the reasons described above, the Exchange believes that the proposed fee changes reflect this competitive environment. --------------------------------------------------------------------------- \22\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act,\23\ and Rule 19b-4(f)(2) \24\ thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. --------------------------------------------------------------------------- \23\ 15 U.S.C. 78s(b)(3)(A)(ii). \24\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-ISE-2017-47 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-ISE-2017-47. 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 [[Page 24755]] 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-ISE-2017-47 and should be submitted on or before June 20, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\25\ --------------------------------------------------------------------------- \25\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-10972 Filed 5-26-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 102 / Tuesday, May 30, 2017 / Notices 24753
SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s for specific sessions rather than on a
COMMISSION Statement of the Purpose of, and member-wide basis.
Statutory Basis for, the Proposed Rule
Change Rebate for Unsolicited Crossing Orders
[Release No. 34–80744; File No. SR–ISE–
2017–47] 1. Purpose Currently, an EAM that is MORP
eligible receives a rebate for all
Self-Regulatory Organizations; Nasdaq The Exchange operates the Member unsolicited Crossing Orders of $0.065
ISE, LLC; Notice of Filing and Order Routing Program (‘‘MORP’’),4 per originating contract side, provided
Immediate Effectiveness of Proposed which is a program that provides that the member executes a minimum
Rule Change To Amend the Schedule enhanced rebates to order routing firms average daily volume (‘‘ADV’’) in
of Fees To Decrease Member Order that select the Exchange as the default unsolicited Crossing Orders of at least
Routing Program Rebates routing destination for unsolicited 30,000 originating contract sides though
May 23, 2017. Crossing Orders.5 On March 10, 2017, their MORP designated sessions. This
the Exchange made changes to the rebate is increased to $0.07 per
Pursuant to Section 19(b)(1) of the
program to allow members to opt in to originating contract side, provided that
Securities Exchange Act of 1934
MORP for specific sessions rather than the member executes a higher ADV in
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
on a member-wide basis, and to increase unsolicited Crossing Orders of 100,000
notice is hereby given that on May 16,
MORP rebates for members that originating contract sides.8 The
2017, Nasdaq ISE, LLC (‘‘ISE’’ or
‘‘Exchange’’) filed with the Securities participate in the program.6 As Exchange proposes to decrease the
and Exchange Commission (‘‘SEC’’ or described in more detail below, the MORP rebate for eligible members that
‘‘Commission’’) the proposed rule Exchange now proposes to decrease execute from 30,000 to 99,999
change as described in Items I and II, MORP rebates consistent with the originating contract sides to $0.05 per
below, which Items have been prepared previous rebates provided prior to that originating contract side. The MORP
by the Exchange.3 The Commission is proposed rule change.7 Members will rebate for eligible members that execute
publishing this notice to solicit continue to be able to opt in to MORP 100,000 or more originating contract
comments on the proposed rule change sides will remain $0.07 per originating
4 See Securities Exchange Act Release No. 74706
from interested persons. contract side.
(April 10, 2016), 80 FR 20522 (April 16, 2016) (SR–
I. Self-Regulatory Organization’s ISE–2015–11).
Facilitation and Solicitation Break-Up
5 A ‘‘Crossing Order’’ is an order executed in the
Statement of the Terms of Substance of Rebate
Exchange’s Facilitation Mechanism, Solicited Order
the Proposed Rule Change Mechanism, Price Improvement Mechanism
(‘‘PIM’’) or submitted as a Qualified Contingent In addition, any EAM that qualifies
The Exchange proposes to amend its Cross (‘‘QCC’’) order. For purposes of the fee for the MORP rebate by executing an
Schedule of Fees to decrease rebates for schedule, orders executed in the Block Order ADV of 30,000 originating contract sides
members that participate in the Member Mechanism are also considered Crossing Orders.
or more on their MORP designated
6 See Securities Exchange Act Release No. 80267
Order Routing Program.
(March 17, 2017), 82 FR 14929 (March 23, 2017) sessions is also eligible for increased
The text of the proposed rule change (SR–ISE–2017–24). As provided in the above filing, Facilitation and Solicitation break-up
is available on the Exchange’s Web site a member may designate one or more sessions to
rebates 9 for their Non-ISE Market
at www.ise.com, at the principal office be eligible for MORP. A session is connection to the
exchange over which a member submits orders. See Maker,10 Firm Proprietary,11 Broker-
of the Exchange, and at the Section V.C. of the Schedule of Fees. If a session Dealer,12 Professional Customer,13 and
Commission’s Public Reference Room. is designated as eligible for MORP all requirements
for the program must be met for that session. To be
II. Self-Regulatory Organization’s eligible to participate in MORP an EAM must: (1)
8 The rebate for the highest tier achieved is
Statement of the Purpose of, and Designate, in writing, to the Exchange which applied retroactively to all eligible contracts traded
sessions are MORP eligible according to the criteria in a given month. For purposes of determining
Statutory Basis for, the Proposed Rule whether the member meets the above ADV
below; (2) provide to its clients, systems that enable
Change the electronic routing of option orders to all of the thresholds, any day that the Exchange is not open
U.S. options exchanges, including ISE; (3) interface for the entire trading day or the Exchange instructs
In its filing with the Commission, the with ISE to access the Exchange’s electronic options members in writing to route their orders to other
Exchange included statements trading platform; (4) offer to its clients a customized markets may be excluded from such calculation;
provided that the Exchange will only remove the
concerning the purpose of and basis for interface and routing functionality such that ISE
day for members that would have a lower ADV with
the proposed rule change and discussed will be the default destination for all unsolicited
Crossing Orders entered by the EAM, provided that the day included.
any comments it received on the market conditions allow the Crossing Order to be
9 Break-up rebates are provided for contracts that
proposed rule change. The text of these executed on ISE; (5) configure its own option order are submitted to the Facilitation and Solicited
statements may be examined at the routing functionality such that ISE will be the Order Mechanisms that do not trade with their
default destination for all unsolicited Crossing contra order except when those contracts trade
places specified in Item IV below. The against pre-existing orders and quotes on the
Orders, provided that market conditions allow the
Exchange has prepared summaries, set Crossing Order to be executed on ISE, with respect Exchange’s orderbooks. The applicable fee for
forth in sections A, B, and C below, of to all option orders as to which the EAM has Crossing Orders is applied to any contracts for
the most significant aspects of such routing discretion; and (6) ensure that the default which a rebate is provided.
10 A ‘‘Non-ISE Market Maker’’ is a market maker
statements. routing functionality permits users submitting
option orders through such system to manually as defined in Section 3(a)(38) of the Securities
override the ISE as the default destination on an Exchange Act of 1934, as amended, registered in the
1 15 U.S.C. 78s(b)(1). order-by-order basis. same options class on another options exchange.
sradovich on DSK3GMQ082PROD with NOTICES
2 17 11 A ‘‘Firm Proprietary’’ order is an order
CFR 240.19b–4. On the Schedule of Fees, the requirement to
3 The Exchange initially filed the proposed rule designate which sessions are MORP eligible ends in submitted by a member for its own proprietary
change as SR–ISE–2017–38 on April 27, 2017. On a period. As a non-substantive conforming change, account.
the Exchange proposes to change this to a semi- 12 A ‘‘Broker-Dealer’’ order is an order submitted
May 5, 2017, the Exchange withdrew SR–ISE–2017–
38 and submitted SR–ISE–2017–43 as a colon. by a member for a broker-dealer account that is not
replacement. On May 16, 2017, the Exchange 7 The Exchange initially filed the proposed its own proprietary account.
withdrew SR–ISE–2017–43 and submitted this pricing changes on April 27, 2017 (SR–ISE–2017– 13 A ‘‘Professional Customer’’ is a person or entity
filing. The Exchange has designated the proposed 38). On May 5, 2017, the Exchange withdrew that that is not a broker/dealer and is not a Priority
changes to be operative on May 1, 2017. filing and submitted this filing [sic]. Customer.
VerDate Sep<11>2014 19:59 May 26, 2017 Jkt 241001 PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 E:\FR\FM\30MYN1.SGM 30MYN1](https://thefederalregister.org/doc/82_FR_24855/page/1.svg)
![Federal Register / Vol. 82, No. 102 / Tuesday, May 30, 2017 / Notices 24755
amendments, all written statements Rule 5735. The proposed rule change First Trust Advisors L.P. will serve as
with respect to the proposed rule was published for comment in the the investment adviser (‘‘Adviser’’) to
change that are filed with the Federal Register on April 10, 2017.3 On the Fund. First Trust Portfolios L.P. will
Commission, and all written May 12, 2017, the Exchange filed serve as the principal underwriter and
communications relating to the Amendment No. 1 to the proposed rule distributor (‘‘Distributor’’) of the Fund’s
proposed rule change between the change.4 On May 16, 2017, the Shares.7 Brown Brothers Harriman & Co.
Commission and any person, other than Exchange filed Amendment No. 2 to the will act as the administrator, accounting
those that may be withheld from the proposed rule change.5 The Commission agent, custodian, and transfer agent to
public in accordance with the has received no comments on the the Fund.
provisions of 5 U.S.C. 552, will be proposal. The Commission is granting The Exchange has made the following
available for Web site viewing and approval of the proposed rule change, as representations and statements in
printing in the Commission’s Public modified by Amendments No. 1 and 2. describing the Fund and its investment
Reference Room, 100 F Street NE., strategies, including the Fund’s
II. Exchange’s Description of the
Washington, DC 20549, on official portfolio holdings and investment
Proposed Rule Change
business days between the hours of restrictions.8
10:00 a.m. and 3:00 p.m. Copies of the The Exchange proposes to list and
filing also will be available for trade the Shares of the Fund under A. Exchange’s Description of the Fund’s
inspection and copying at the principal Nasdaq Rule 5735, which governs the Principal Investments
office of the Exchange. All comments listing and trading of Managed Fund According to the Exchange, the
received will be posted without change; Shares on the Exchange. The Fund will primary investment objective of the
the Commission does not edit personal be an actively-managed exchange-traded Fund will be to seek to provide current
identifying information from fund (‘‘ETF’’). The Trust, which was income that is exempt from regular
submissions. You should submit only established as a Massachusetts business federal income taxes and California
information that you wish to make trust on January 9, 2008 and is income taxes, and its secondary
available publicly. All submissions registered with the Commission as an objective will be long-term capital
should refer to File Number SR–ISE– investment company, has filed with the appreciation. Under normal market
2017–47 and should be submitted on or Commission a registration statement on conditions,9 the Fund will seek to
before June 20, 2017. Form N–1A (‘‘Registration Statement’’).6
Commission under the Investment Company Act of
For the Commission, by the Division of 3 See Securities Exchange Act Release No. 80369 1940 (‘‘1940 Act’’). See Investment Company Act
Trading and Markets, pursuant to delegated (April 4, 2017), 82 FR 17314. Release No. 30029 (April 10, 2002) (File No. 812–
authority.25 4 In Amendment No. 1, which amended and 13795).
Eduardo A. Aleman, replaced the proposed rule change in its entirety, 7 The Exchange represents that, while the Adviser
Assistant Secretary. the Exchange: (a) Clarified the scope and definition is not a broker dealer, it is affiliated with the
of Municipal Securities (defined herein) and other Distributor, a broker dealer. The Exchange states
[FR Doc. 2017–10972 Filed 5–26–17; 8:45 am] municipal securities in which the Fund may invest; that the Adviser has implemented and will
BILLING CODE 8011–01–P (b) represented that to the extent the Fund invests maintain a fire wall between the Adviser and the
in Municipal Securities (as defined herein) that are Distributor with respect to access to information
asset-backed and mortgage-backed, those concerning the composition of, and changes to, the
investments will not account, in the aggregate, for Fund’s portfolio. In the event (a) the Adviser or any
SECURITIES AND EXCHANGE more than 20% of the fixed-income portion of the sub adviser registers as a broker dealer or becomes
COMMISSION Fund’s portfolio; (c) stated that the Fund may invest newly affiliated with a broker dealer, or (b) any new
up to 20% of its net assets in the aggregate in OTC adviser or sub adviser is a registered broker dealer
[Release No. 34–80745; File No. SR– Derivatives (as defined herein) and represented that or becomes affiliated with another broker dealer, it
NASDAQ–2017–033] the Fund will only enter into transactions in OTC will implement and maintain a fire wall with
Derivatives with counterparties that the Adviser respect to its relevant personnel and/or such broker
Self-Regulatory Organizations; The reasonably believes are capable of performing under dealer affiliate, as applicable, regarding access to
NASDAQ Stock Market LLC; Order the applicable contract or agreement; and (d) made information concerning the composition of, and/or
Granting Approval of a Proposed Rule certain technical amendments. Because changes to, the portfolio and will be subject to
Amendment No. 1 makes clarifying changes and procedures designed to prevent the use and
Change, as Modified by Amendments does not unique or novel regulatory issues, it is not dissemination of material, non-public information
No. 1 and 2, To List and Trade Shares subject to notice and comment. Amendment No. 1 regarding such portfolio.
of the First Trust California Municipal to the proposed rule change is available at: https:// 8 The Commission notes that additional
High Income ETF www.sec.gov/comments/sr-nasdaq-2017-033/ information regarding the Trust, the Fund, and the
nasdaq2017033-1749423-151718.pdf. Shares, including investment strategies, risks, net
5 In Amendment No. 2, which partially amended asset value (‘‘NAV’’) calculation, creation and
May 23, 2017.
the proposed rule change, as modified by redemption procedures, fees, Fund holdings
I. Introduction Amendment No. 1, the Exchange clarified that all disclosure policies, distributions, and taxes, among
statements and representations made in the filing other information, is included in the proposed rule
On March 24, 2017, The NASDAQ regarding (a) the description of the portfolio or change, as modified by Amendments No. 1 and 2,
Stock Market LLC (‘‘Exchange’’ or reference assets, (b) limitations on portfolio and the Registration Statement, as applicable. See
‘‘Nasdaq’’) filed with the Securities and holdings or reference assets, (c) dissemination and Amendments No. 1 and 2 and Registration
availability of the reference asset or intraday Statement, supra notes 4, 5, and 6, respectively, and
Exchange Commission (‘‘Commission’’), indicative values, or (d) the applicability of accompanying text.
pursuant to Section 19(b)(1) of the Exchange listing rules shall constitute continued 9 The term ‘‘under normal market conditions’’ for
Securities Exchange Act of 1934 listing requirements for listing the Shares on the purposes of the filing, includes, but is not limited
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a Exchange. Because Amendment No. 2 does not to, the absence of adverse market, economic,
materially alter the substance of the proposed rule political or other conditions, including extreme
proposed rule change to list and trade change or raise unique or novel regulatory issues, volatility or trading halts in the fixed income
sradovich on DSK3GMQ082PROD with NOTICES
shares (‘‘Shares’’) of the First Trust it is not subject to notice and comment. markets or the financial markets generally;
California Municipal High Income ETF Amendment No. 2 to the proposed rule change is operational issues causing dissemination of
(‘‘Fund’’) of First Trust Exchange- available at: https://www.sec.gov/comments/sr- inaccurate market information; or force majeure
nasdaq-2017-033/nasdaq2017033.htm. type events such as systems failure, natural or man-
Traded Fund III (‘‘Trust’’) under Nasdaq 6 See Post-Effective Amendment No. 65 to the made disaster, act of God, armed conflict, act of
Registration Statement for the Trust, dated March terrorism, riot or labor disruption or any similar
25 17 CFR 200.30–3(a)(12). 24, 2017 (File Nos. 333–176976 and 811–22245). intervening circumstance. The Exchange represents
1 15 U.S.C. 78s(b)(1). The Exchange represents that the Trust has that, on a temporary basis, including for defensive
2 17 CFR 240.19b–4. obtained certain exemptive relief from the Continued
VerDate Sep<11>2014 19:59 May 26, 2017 Jkt 241001 PO 00000 Frm 00097 Fmt 4703 Sfmt 4703 E:\FR\FM\30MYN1.SGM 30MYN1](https://thefederalregister.org/doc/82_FR_24855/page/3.svg)
Document Created: 2018-11-08 08:54:43
Document Modified: 2018-11-08 08:54:43
| 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 24753 |
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