82 FR 39929 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change To Extend the Implementation Date for Certain Changes to the NYSE Arca Rule 5 and Rule 8 Series

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 161 (August 22, 2017)

[Federal Register Volume 82, Number 161 (Tuesday, August 22, 2017)]
[Notices]
[Pages 39929-39930]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-17687]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81411; File No. SR-NYSEArca-2017-84]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change To Extend the Implementation Date for Certain 
Changes to the NYSE Arca Rule 5 and Rule 8 Series

August 16, 2017.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on August 3, 2017, NYSE Arca, Inc. (``Exchange'' or ``NYSE Arca'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the self-regulatory organization. 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\ 15 U.S.C. 78a.
    \3\ 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 extend the date on which certain changes 
to the NYSE Arca Rule 5 and Rule 8 series are implemented. The proposed 
change is available on the Exchange's Web site at www.nyse.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 self-regulatory organization 
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 those 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 parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On January 6, 2017, the Exchange filed a proposed rule change, as 
subsequently amended by Amendments No. 1 and 2 thereto (as amended, the 
``Proposed Rule Change''), to adopt certain changes to the NYSE Arca 
Rules 5 and 8 series to add additional continued listing standards for 
exchange-traded funds (``ETFs'') as well as clarify the procedures that 
the Exchange will undertake when an ETF is noncompliant with applicable 
rules. Given the scope of the amendments specified in the Proposed Rule 
Change, the Exchange proposed that such amendments not be implemented 
until October 1, 2017. On March 9, 2017, the Commission granted 
accelerated approval of the Proposed Rule Change, including the October 
1, 2017 implementation date.\4\ The Exchange now proposes to extend the 
implementation date of the amendments specified in the Proposed Rule 
Change to July 1, 2018.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 80189 (March 9, 
2017), 82 FR 13889 (March 15, 2017) (SR-NYSEArca-2017-01).
---------------------------------------------------------------------------

    Since the Proposed Rule Change was approved, the Exchange has 
engaged in extensive conversations with issuers of listed ETFs, 
industry advocacy groups and index providers to discuss the new rule 
requirements and offer guidance on rule interpretation and application. 
As a result of these conversations, ETF issuers have expressed concern 
about their ability to have in place systems and procedures to ensure 
compliance by the current October 1, 2017 implementation date. In 
particular, listed ETF issuers, and industry advocacy groups on their 
behalf, have explained that issuers will require time to design and 
test new compliance systems as well as engage in discussions with 
third-party providers to source and track new data elements required 
for rule compliance.\5\
---------------------------------------------------------------------------

    \5\ See, for example, Letter, dated July 11, 2017, from Dorothy 
Donohue, Acting General Counsel, Investment Company Institute to 
Brent J. Fields, Secretary, Securities and Exchange Commission, 
available at https://www.sec.gov/comments/sr-nasdaq-2016-135/nasdaq2016135-1846208-5175.pdf. [sic]
---------------------------------------------------------------------------

    The Exchange believes it is appropriate to extend the 
implementation date of the Proposed Rule Change to July 1, 2018 to 
provide listed ETF issuers with the time needed to develop and test 
their compliance procedures. In support of its proposal, the Exchange 
notes that the Proposed Rule Change imposes significant new compliance 
requirements on issuers that they have not been subject to previously. 
To meet these new compliance requirements, issuers must develop 
internal systems as well as coordinate with third-party service 
providers, such as index providers, to

[[Page 39930]]

develop procedures by which they can obtain essential data. Listed 
issuers have informed the Exchange that they are unable to complete 
this extensive project by the pending October 1, 2017 implementation 
date. The Exchange believes that it is critical for listed ETFs issuers 
to have the appropriate procedures and systems in place to monitor and 
evidence ETF compliance with the new continued listing rules before 
such rules are implemented. Therefore, the Exchange proposes to extend 
the implementation date for the Proposed Rule Change until July 1, 
2018.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\6\ in general, and furthers the 
objectives of Sections [sic] 6(b)(5) \7\ of the Act, in particular, in 
that it is designed 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 mechanism of a free and open market and a national 
market system, and, in general, to protect investors and the public 
interest. The Exchange believes that the proposed amendment is 
consistent with the protection of investors because it will enable 
listed issuers to have the systems and procedures needed to monitor and 
evidence compliance with the Proposed Rule Change prior to such rule 
being implemented. Providing listed issuers with additional time to 
ensure that they have adequate compliance systems in place furthers the 
protection of investors and the public interest because it will enhance 
investor confidence that listed issuers are complying with Exchange 
rules.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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, as amended. The Exchange notes 
that the proposed rule change will facilitate listed issuer ability to 
monitor and evidence compliance with approved continued listing rules 
by providing issuers with additional time to develop and test their 
internal systems and procedures prior to the implementation date.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange received a copy of a letter from the Investment 
Company Institute, on behalf of listed ETF issuers, to the Securities 
and Exchange Commission.\8\ As described in Item 3 [sic], above, the 
Investment Company Institute detailed challenges that listed ETF 
issuers are facing in developing compliance systems to address the 
amendments contained in the Proposed Rule Change and have requested 
that the implementation date for such amendments be extended to July 1, 
2018.
---------------------------------------------------------------------------

    \8\ See Footnote 5, supra.
---------------------------------------------------------------------------

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be 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 Comments

     Use 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-2017-84 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-NYSEArca-2017-84. 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-2017-84 and should 
be submitted on or before September 12, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017-17687 Filed 8-21-17; 8:45 am]
BILLING CODE 8011-01-P