82 FR 32734 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Nasdaq Rule 5705(b) To Provide for the Inclusion of Cash in an Index or Portfolio Underlying a Series of Index Fund Shares
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 135 (July 17, 2017)
Federal Register Volume 82, Issue 135 (July 17, 2017)
| Page Range | 32734-32737 | |
| FR Document | 2017-14890 |
[Federal Register Volume 82, Number 135 (Monday, July 17, 2017)] [Notices] [Pages 32734-32737] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-14890] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-81120; File No. SR-NASDAQ-2017-062] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Nasdaq Rule 5705(b) To Provide for the Inclusion of Cash in an Index or Portfolio Underlying a Series of Index Fund Shares July 11, 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 June 30, 2017, The NASDAQ Stock Market LLC (``Nasdaq'' 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. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Nasdaq Rule 5705(b) to provide for the inclusion of cash in an index or portfolio underlying a series of Index Fund Shares. This filing is substantively identical to a NYSE Arca, Inc. filing previously approved by the Commission (SR-NYSEArca- 2017-30, as amended).\3\ --------------------------------------------------------------------------- \3\ See Securities Exchange Act Release No. 80777 (May 25, 2017), 82 FR 25378 (June 1, 2017) (SR-NYSEArca-2017-30). --------------------------------------------------------------------------- The text of the proposed rule change is available on the Exchange's Web site at http://nasdaq.cchwallstreet.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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Nasdaq Rule 5705(b)(3) and 5705(b)(4) to provide for the inclusion of cash in an index or portfolio underlying a series of Index Fund Shares.\4\ Nasdaq Rule 5705(b) provides ``generic'' criteria permitting listing and trading of Index Fund Shares pursuant to Rule 19b-4(e) under the Act \5\ when the underlying index or portfolio satisfies the criteria set forth in Nasdaq Rule 5705(b). --------------------------------------------------------------------------- \4\ See Nasdaq Rule 5705(b)(1)(A) and (B). \5\ 17 CFR 240.19b-4(e). --------------------------------------------------------------------------- The Exchange understands that certain index providers have included, or intend to include, cash as a component in indexes or portfolios that also include equity or fixed income securities components. An index provider may, for example, provide a certain index weighting allocation to cash or may periodically change an allocation to cash based on the index provider's assessment of market risk associated with other asset classes in the applicable index.\6\ --------------------------------------------------------------------------- \6\ The Exchange notes that shares of the following exchange- traded funds based on indexes or portfolios that include cash as a component are currently listed and traded on the BATS BZX Exchange, Inc.: QuantX Risk Managed Growth ETF; QuantX Risk Managed Multi- Asset Income ETF; QuantX Risk Managed Multi-Asset Total Return ETF; and QuantX Risk Managed Real Return ETF. --------------------------------------------------------------------------- [[Page 32735]] Accordingly, the Exchange proposes to amend Nasdaq Rule 5705(b)(3) and 5705(b)(4) to permit listing and trading of Index Fund Shares based on an index or portfolio that includes cash as a component. While open- end investment companies, like mutual funds, will generally hold an amount of cash, Nasdaq Rule 5705(b) currently provides that components of an index or portfolio underlying a series of Index Fund Shares consist of securities--namely, U.S. Component Stocks, Non-U.S. Component Stocks, Fixed Income Securities or a combination thereof. As described below, the proposed amendments to Nasdaq Rule 5705(b)(3) and 5705(b)(4) would permit inclusion of cash as an index or portfolio component. Currently, Nasdaq Rule 5705(b)(3)(A)(i) provides that an underlying index or portfolio of U.S. Component Stocks \7\ must meet specified criteria. The Exchange proposes to amend Nasdaq Rule 5705(b)(3) to provide that the components of an index or portfolio underlying a series of Index Fund Shares may also include cash. In addition, the percentage weighting criteria in Nasdaq Rule 5705(b)(3)(A)(i)a.-d. each would be amended to make clear that such criteria would be applied only to the U.S. Component Stocks portion of an index or portfolio. For example, in applying the criteria in proposed Nasdaq Rule 5705(b)(3)(A)(i)a.,\8\ if 85% of the weight of an index consists of U.S. Component Stocks and 15% of the index weight is cash, the requirement that component stocks accounting for 90% of the weight of the index or portfolio each have a minimum market value of $75 million minimum would be applied only to the 85% portion consisting of U.S. Component Stocks. --------------------------------------------------------------------------- \7\ Nasdaq Rule 5705(b)(1)(D) defines ``U.S. Component Stock'' as an equity security that is registered under Sections 12(b) or 12(g) of the Act or an American Depositary Receipt, the underlying equity security of which is registered under Sections 12(b) or 12(g) of the Act. \8\ Nasdaq Rule 5705(b)(3)(A)(i)a. would provide that component stocks (excluding Derivative Securities Products) that in the aggregate account for at least 90% of the weight of the U.S. Component Stocks portion of the index or portfolio (excluding such Derivative Securities Products) each shall have a minimum market value of at least $75 million. --------------------------------------------------------------------------- Nasdaq Rule 5705(b)(3)(A)(ii), which relates to international or global indexes or portfolios, would be amended to provide that components of an index or portfolio underlying a series of Index Fund Shares may consist of (a) only Non-U.S. Component Stocks, (b) Non-U.S. Component Stocks and cash, (c) both U.S. Component Stocks and Non-U.S. Component Stocks, or (d) U.S. Component Stocks, Non-U.S. Component Stocks and cash. In addition, the percentage weighting criteria in Nasdaq Rule 5705(b)(3)(A)(ii)a.-d. each would be amended to make clear that such criteria would be applied only to the U.S. and Non-U.S. Component Stocks portions of an index or portfolio. Nasdaq Rule 5705(b)(4) provides generic criteria applicable to listing and trading of Index Fund Shares whose underlying index or portfolio includes Fixed Income Securities.\9\ Currently, Nasdaq Rule 5705(b)(4)(A)(i) provides that an underlying index or portfolio must consist of Fixed Income Securities. The Exchange proposes to amend Nasdaq Rule 5705(b)(4)(A)(i) to provide that the index or portfolio may also include cash. In addition, the percentage weighting criteria in Nasdaq Rule 5705(b)(4)(A)(ii), 5705(b)(4)(A)(iv) and 5705(b)(4)(A)(vi) each would be amended to make clear that such criteria would be applied only to the Fixed Income Securities portion of an index or portfolio. For example, in applying the criteria in proposed Nasdaq Rule 5705(b)(4)(A)(ii),\10\ if 90% of the weight of an index or portfolio consists of Fixed Income Securities and 10% of the index weight is cash, the requirement that Fixed Income Securities accounting for at least 75% of the weight of the index or portfolio each have a minimum original principal amount outstanding of $100 million would be applied only to the 90% portion consisting of Fixed Income Securities. --------------------------------------------------------------------------- \9\ As defined in Nasdaq Rule 5705(b)(4), Fixed Income Securities are debt securities that are notes, bonds, debentures or evidence of indebtedness that include, but are not limited to, U.S. Department of Treasury securities (``Treasury Securities''), government-sponsored entity securities (``GSE Securities''), municipal securities, trust preferred securities, supranational debt and debt of a foreign country or a subdivision thereof. \10\ Nasdaq Rule 5705(b)(4)(A)(ii) would provide that Fixed Income Security components that in aggregate account for at least 75% of the Fixed Income Securities portion of the weight of the index or portfolio each shall have a minimum original principal amount outstanding of $100 million or more. --------------------------------------------------------------------------- The Exchange notes that the Commission has previously approved Exchange rules allowing portfolios held by issues of Managed Fund Shares (actively managed exchange-traded funds) under Nasdaq Rule 5735 to include cash.\11\ Like the provision in Nasdaq Rule 5735, which states that there is no limit to cash holdings by an issue of Managed Fund Shares listed under the rule, there is no proposed limit to the weighting of cash in an index or portfolio underlying a series of Index Fund Shares. The Exchange believes this is appropriate in that cash does not, in itself, impose investment or market risk. --------------------------------------------------------------------------- \11\ See Nasdaq Rule 5735. --------------------------------------------------------------------------- The Exchange believes the proposed amendments, by permitting inclusion of cash as a component of indexes or portfolios underlying series of Index Fund Shares, would provide issuers of Index Fund Shares with additional choice in indexes or portfolios permitted to underlie Index Fund Shares that are permitted to list and trade on the Exchange pursuant to Rule 19b-4(e), which would enhance competition among market participants, to the benefit of investors and the marketplace. In addition, the proposed amendments would provide investors with greater ability to hold Index Fund Shares based on underlying indexes or portfolios that may accord more closely with an investor's assessment of market risk, in that some investors may view cash as a desirable component of an underlying index or portfolio under certain market conditions. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\12\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\13\ in particular, because it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general, to protect investors and the public interest and because it is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \12\ 15 U.S.C. 78f(b). \13\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange has in place surveillance procedures that are adequate to properly monitor trading in Index Fund Shares in all trading sessions and to deter and detect violations of Exchange rules and applicable federal securities laws. The Exchange notes that, as described above, the percentage weighting criteria in Nasdaq Rule 5705(b)(3)(A)(i)a.-d. and Nasdaq Rule 5705(b)(3)(A)(ii)a.-d. each would be amended to make clear that such criteria would be applied only to the U.S. and Non-U.S. Component [[Page 32736]] Stocks portions of an index or portfolio. The percentage weighting criteria in Nasdaq Rule 5705(b)(4)(A)(ii), 5705(b)(4)(A)(iv) and 5705(b)(4)(A)(vi) each would be amended to make clear that such criteria would be applied only to the Fixed Income Securities portion of an index or portfolio. Such applications of the proposed amendments would assure that the weighting requirements in Nasdaq Rule 5705(b)(3) and 5705(b)(4) would continue to be applied only to securities in an index or portfolio, and would not be diluted as a result of inclusion of a cash component. In addition, the addition of cash as a permitted component of indexes or portfolios underlying Index Fund Shares listed and traded on the Exchange pursuant to Rule 19b-4(e) does not raise regulatory issues because cash does not, in itself, impose investment or market risk and is generally not susceptible to manipulation. The Exchange believes the proposed amendments, by permitting inclusion of cash as a component of indexes or portfolios underlying series of Index Fund Shares, would provide issuers of Index Fund Shares with additional choice in indexes or portfolios permitted to underlie Index Fund Shares that are permitted to list and trade on the Exchange pursuant to Rule 19b-4(e), which would enhance competition among market participants, to the benefit of investors and the marketplace. In addition, the proposed amendments would provide investors with greater ability to hold Index Fund Shares based on underlying indexes or portfolios that may accord more closely with an investor's assessment of market risk. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change would permit Exchange listing and trading under Rule 19b-4(e) of Index Fund Shares based on indexes or portfolios that include cash as a component, which would enhance competition among market participants, to the benefit of investors and the marketplace. Additionally, since the Commission has already approved a substantively identical filing by NYSE Arca, Inc.\14\ this filing may serve to enhance competition among the exchanges. --------------------------------------------------------------------------- \14\ Supra note 3. --------------------------------------------------------------------------- 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 Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act \15\ and Rule 19b- 4(f)(6) thereunder.\16\ --------------------------------------------------------------------------- \15\ 15 U.S.C. 78s(b)(3)(A). \16\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b- 4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) normally does not become operative prior to 30 days after the date of filing. However, Rule 19b-4(f)(6)(iii) \17\ permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. As noted above, the Exchange believes that the proposed rule change would provide additional choices to issuers of Index Fund Shares and investors in Index Fund Shares. The Exchange also noted that the Commission has approved a substantively identical proposal by NYSE Arca, Inc.,\18\ and this proposed rule change may enhance competition between the exchanges. The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. Therefore, the Commission hereby waives the 30-day operative delay and designates the proposed rule change to be operative upon filing.\19\ --------------------------------------------------------------------------- \17\ 17 CFR 240.19b-4(f)(6)(iii). \18\ See supra note 3. \19\ For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule change should be approved or disapproved. 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 rule-comments@sec.gov. Please include File Number SR-NASDAQ-2017-062 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-NASDAQ-2017-062. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing will also 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 [[Page 32737]] available publicly. All submissions should refer to File Number SR- NASDAQ-2017-062 and should be submitted on or before August 7, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\20\ --------------------------------------------------------------------------- \20\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Jill M. Peterson, Assistant Secretary. [FR Doc. 2017-14890 Filed 7-14-17; 8:45 am] BILLING CODE 8011-01-P
![32734 Federal Register / Vol. 82, No. 135 / Monday, July 17, 2017 / Notices
C. Self-Regulatory Organization’s those that may be withheld from the inclusion of cash in an index or
Statement on Comments on the public in accordance with the portfolio underlying a series of Index
Proposed Rule Change Received From provisions of 5 U.S.C. 552, will be Fund Shares. This filing is substantively
Members, Participants, or Others available for Web site viewing and identical to a NYSE Arca, Inc. filing
No written comments were either printing in the Commission’s Public previously approved by the Commission
solicited or received. Reference Room, 100 F Street NE., (SR–NYSEArca–2017–30, as amended).3
Washington, DC 20549, on official The text of the proposed rule change
III. Date of Effectiveness of the business days between the hours of is available on the Exchange’s Web site
Proposed Rule Change and Timing for 10:00 a.m. and 3:00 p.m. Copies of the at http://nasdaq.cchwallstreet.com, at
Commission Action filing also will be available for the principal office of the Exchange, and
The foregoing rule change has become inspection and copying at the principal at the Commission’s Public Reference
effective pursuant to Section office of the Exchange. All comments Room.
19(b)(3)(A)(ii) of the Act.12 received will be posted without change; II. Self-Regulatory Organization’s
At any time within 60 days of the the Commission does not edit personal Statement of the Purpose of, and
filing of the proposed rule change, the identifying information from Statutory Basis for, the Proposed Rule
Commission summarily may submissions. You should submit only Change
temporarily suspend such rule change if information that you wish to make
it appears to the Commission that such available publicly. All submissions In its filing with the Commission, the
action is: (i) Necessary or appropriate in should refer to File Number SR– Exchange included statements
the public interest; (ii) for the protection NASDAQ–2017–067 and should be concerning the purpose of and basis for
of investors; or (iii) otherwise in submitted on or before August 7, 2017. the proposed rule change and discussed
furtherance of the purposes of the Act. any comments it received on the
For the Commission, by the Division of
If the Commission takes such action, the Trading and Markets, pursuant to delegated proposed rule change. The text of these
Commission shall institute proceedings authority.13 statements may be examined at the
to determine whether the proposed rule Jill M. Peterson, places specified in Item IV below. The
should be approved or disapproved. Assistant Secretary.
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
IV. Solicitation of Comments [FR Doc. 2017–14891 Filed 7–14–17; 8:45 am]
the most significant aspects of such
BILLING CODE 8011–01–P
Interested persons are invited to statements.
submit written data, views, and A. Self-Regulatory Organization’s
arguments concerning the foregoing, SECURITIES AND EXCHANGE Statement of the Purpose of, and the
including whether the proposed rule COMMISSION Statutory Basis for, the Proposed Rule
change is consistent with the Act.
[Release No. 34–81120; File No. SR– Change
Comments may be submitted by any of
the following methods: NASDAQ–2017–062] 1. Purpose
Electronic Comments Self-Regulatory Organizations; The The Exchange proposes to amend
NASDAQ Stock Market LLC; Notice of Nasdaq Rule 5705(b)(3) and 5705(b)(4)
• Use the Commission’s Internet
Filing and Immediate Effectiveness of to provide for the inclusion of cash in
comment form (http://www.sec.gov/
Proposed Rule Change To Amend an index or portfolio underlying a series
rules/sro.shtml); or
Nasdaq Rule 5705(b) To Provide for the of Index Fund Shares.4 Nasdaq Rule
• Send an email to rule-comments@
sec.gov. Please include File Number SR– Inclusion of Cash in an Index or 5705(b) provides ‘‘generic’’ criteria
NASDAQ–2017–067 on the subject line. Portfolio Underlying a Series of Index permitting listing and trading of Index
Fund Shares Fund Shares pursuant to Rule 19b–4(e)
Paper Comments under the Act 5 when the underlying
July 11, 2017. index or portfolio satisfies the criteria
• Send paper comments in triplicate
Pursuant to Section 19(b)(1) of the set forth in Nasdaq Rule 5705(b).
to Secretary, Securities and Exchange
Securities Exchange Act of 1934 The Exchange understands that
Commission, 100 F Street NE.,
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 certain index providers have included,
Washington, DC 20549–1090.
notice is hereby given that on June 30, or intend to include, cash as a
All submissions should refer to File 2017, The NASDAQ Stock Market LLC
Number SR–NASDAQ–2017–067. This component in indexes or portfolios that
(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the also include equity or fixed income
file number should be included on the Securities and Exchange Commission
subject line if email is used. To help the securities components. An index
(‘‘SEC’’ or ‘‘Commission’’) the proposed provider may, for example, provide a
Commission process and review your rule change as described in Items I and
comments more efficiently, please use certain index weighting allocation to
II below, which Items have been cash or may periodically change an
only one method. The Commission will prepared by the Exchange. The
post all comments on the Commission’s allocation to cash based on the index
Commission is publishing this notice to provider’s assessment of market risk
Internet Web site (http://www.sec.gov/ solicit comments on the proposed rule
rules/sro.shtml). Copies of the associated with other asset classes in the
change from interested persons. applicable index.6
submission, all subsequent
I. Self-Regulatory Organization’s
asabaliauskas on DSKBBXCHB2PROD with NOTICES
amendments, all written statements 3 See Securities Exchange Act Release No. 80777
with respect to the proposed rule Statement of the Terms of Substance of (May 25, 2017), 82 FR 25378 (June 1, 2017) (SR–
change that are filed with the the Proposed Rule Change NYSEArca–2017–30).
Commission, and all written The Exchange proposes to amend 4 See Nasdaq Rule 5705(b)(1)(A) and (B).
5 17 CFR 240.19b–4(e).
communications relating to the Nasdaq Rule 5705(b) to provide for the 6 The Exchange notes that shares of the following
proposed rule change between the
exchange-traded funds based on indexes or
Commission and any person, other than 13 17 CFR 200.30–3(a)(12). portfolios that include cash as a component are
1 15 U.S.C. 78s(b)(1). currently listed and traded on the BATS BZX
12 15 U.S.C. 78s(b)(3)(A)(ii). 2 17 CFR 240.19b–4. Exchange, Inc.: QuantX Risk Managed Growth ETF;
VerDate Sep<11>2014 17:45 Jul 14, 2017 Jkt 241001 PO 00000 Frm 00059 Fmt 4703 Sfmt 4703 E:\FR\FM\17JYN1.SGM 17JYN1](https://thefederalregister.org/doc/82_FR_32869/page/1.svg)
![Federal Register / Vol. 82, No. 135 / Monday, July 17, 2017 / Notices 32737
available publicly. All submissions change, or within such longer period up notice to solicit comments on the
should refer to File Number SR– to 90 days as the Commission may proposed rule change from interested
NASDAQ–2017–062 and should be designate if it finds such longer period persons.
submitted on or before August 7, 2017. to be appropriate and publishes its
reasons for so finding or as to which the I. Self-Regulatory Organization’s
For the Commission, by the Division of
self-regulatory organization consents, Statement of the Terms of Substance of
Trading and Markets, pursuant to delegated
authority.20 the Commission shall either approve the the Proposed Rule Change
Jill M. Peterson, proposed rule change, disapprove the
The Exchange is filing a proposal to
Assistant Secretary. proposed rule change, or institute
amend Exchange Rule 524, Reporting of
[FR Doc. 2017–14890 Filed 7–14–17; 8:45 am]
proceedings to determine whether the
proposed rule change should be Matched Trades to Clearing
BILLING CODE 8011–01–P
disapproved. The 45th day after Corporation.
publication of the notice for this The text of the proposed rule change
SECURITIES AND EXCHANGE proposed rule change is July 17, 2017. is available on the Exchange’s Web site
COMMISSION The Commission is extending this 45- at http://www.miaxoptions.com/rule-
day time period. filings/pearl at MIAX PEARL’s principal
[Release No. 34–81123; File No. SR– The Commission finds that it is office, and at the Commission’s Public
NASDAQ–2017–038] appropriate to designate a longer period Reference Room.
within which to take action on the
Self-Regulatory Organizations; The II. Self-Regulatory Organization’s
proposed rule change so that it has
NASDAQ Stock Market LLC; Notice of Statement of the Purpose of, and
sufficient time to consider the proposed
Designation of a Longer Period for Statutory Basis for, the Proposed Rule
rule change. Accordingly, the
Commission Action on a Proposed Change
Commission, pursuant to Section
Rule Change, as Modified by
19(b)(2) of the Act,6 designates August
Amendment No. 1, Relating to the First In its filing with the Commission, the
31, 2017, as the date by which the
Trust Municipal High Income ETF Exchange included statements
Commission shall either approve or
July 11, 2017. disapprove or institute proceedings to concerning the purpose of and basis for
On May 16, 2017, The NASDAQ determine whether to disapprove the the proposed rule change and discussed
Stock Market LLC (‘‘Nasdaq’’ or proposed rule change (File Number SR– any comments it received on the
‘‘Exchange’’) filed with the Securities NASDAQ–2017–038). proposed rule change. The text of these
and Exchange Commission statements may be examined at the
For the Commission, by the Division of
(‘‘Commission’’), pursuant to Section Trading and Markets, pursuant to delegated places specified in Item IV below. The
19(b)(1) of the Securities Exchange Act authority.7 Exchange has prepared summaries, set
of 1934 (‘‘Act’’) 1 and Rule 19b–4 Jill M. Peterson, forth in sections A, B, and C below, of
thereunder,2 a proposed rule change Assistant Secretary. the most significant aspects of such
relating to the First Trust Municipal [FR Doc. 2017–14893 Filed 7–14–17; 8:45 am]
statements.
High Income ETF (‘‘Fund’’) of First BILLING CODE 8011–01–P A. Self-Regulatory Organization’s
Trust Exchange-Traded Fund III, the
Statement of the Purpose of, and the
shares of which have been approved by
Statutory Basis for, the Proposed Rule
the Commission for listing and trading SECURITIES AND EXCHANGE
under Nasdaq Rule 5735. The proposed Change
COMMISSION
rule change was published for comment 1. Purpose
in the Federal Register on June 2, 2017.3 [Release No. 34–81119; File No. SR–
PEARL–2017–31] The Exchange proposes to amend
On July 10, 2017, the Exchange filed
Amendment No. 1 to the proposed rule Self-Regulatory Organizations; MIAX Exchange Rule 524, Reporting of
change.4 The Commission has received PEARL, LLC; Notice of Filing and Matched Trades to Clearing
no comment letters on the proposed rule Immediate Effectiveness of a Proposed Corporation, to adopt Interpretations
change. Rule Change To Amend MIAX PEARL and Policies .01, to state that post-trade
Section 19(b)(2) of the Act 5 provides Rule 524, Reporting of Matched Trades adjustments that do not affect the
that, within 45 days of the publication to Clearing Corporation contractual terms of a trade are to be
of notice of the filing of a proposed rule performed by the Exchange Member 3
July 11, 2017. via an Exchange approved electronic
20 17 CFR 200.30–3(a)(12). Pursuant to the provisions of Section interface. The Exchange will notify
1 15 U.S.C. 78s(b)(1).
19(b)(1) of the Securities Exchange Act Members of the approved electronic
2 17 CFR 240.19b–4.
of 1934 (‘‘Act’’) 1 and Rule 19b–4 interface via Regulatory Circular. The
3 See Securities Exchange Act Release No. 80802
(May 26, 2017), 82 FR 25648 (June 2, 2017).
thereunder,2 notice is hereby given that, Exchange notes that an identical filing
4 In Amendment No. 1, which amended and on June 28, 2017, MIAX PEARL, LLC has been submitted by its affiliate,
replaced the proposed rule change in its entirety, (‘‘MIAX PEARL’’ or ‘‘Exchange’’) filed MIAX Options. In order to ensure
Nasdaq (a) deleted references to the ‘‘Liquidity with the Securities and Exchange consistent operation of both MIAX
Rule,’’ and (b) made certain changes to the Commission (‘‘Commission’’) a PEARL and MIAX Options through
asabaliauskas on DSKBBXCHB2PROD with NOTICES
percentages to the Fund’s investments in Municipal
Securities that are, at the time of investment, rated proposed rule change as described in having consistent rules, the Exchange
investment grade and below investment grade. Items I, II, and III below, which Items proposes to amend MIAX PEARL Rule
Because Amendment No. 1 does not materially alter have been prepared by the Exchange. 524 as described below.
the substance of the proposed rule change or raise The Commission is publishing this
unique or novel regulatory issues, Amendment No.
1 is not subject to notice and comment. Amendment 3 The term ‘‘Member’’ means an individual or
6 Id.
No. 1 to the proposed rule change is available at: organization approved to exercise the trading rights
7 17 CFR 200.30–3(a)(31).
https://www.sec.gov/comments/sr-nasdaq-2017- associate with a Trading Permit. Members are
038/nasdaq2017038-1841718-155073.pdf. 1 15 U.S.C. 78s (b)(1). deemed ‘‘members’’ under the Exchange Act. See
5 15 U.S.C. 78s(b)(2). 2 17 CFR 240.19b–4. Exchange Rule 100.
VerDate Sep<11>2014 17:45 Jul 14, 2017 Jkt 241001 PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 E:\FR\FM\17JYN1.SGM 17JYN1](https://thefederalregister.org/doc/82_FR_32869/page/4.svg)
Document Created: 2017-07-15 03:45:42
Document Modified: 2017-07-15 03:45:42
| 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 32734 |
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