82 FR 46576 - Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 716(c) on the Block Order Mechanism
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 192 (October 5, 2017)
Federal Register Volume 82, Issue 192 (October 5, 2017)
| Page Range | 46576-46579 | |
| FR Document | 2017-21407 |
[Federal Register Volume 82, Number 192 (Thursday, October 5, 2017)] [Notices] [Pages 46576-46579] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-21407] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-81772; File No. SR-ISE-2017-84] Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 716(c) on the Block Order Mechanism September 29, 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 September 18, 2017, Nasdaq ISE, LLC (``ISE'' or ``Exchange'') 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 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 Rule 716(c) to more accurately describe the allocation methodology used in the Block Order Mechanism, add language regarding how the block execution price is determined, and describe the content of the broadcast message disseminated to members upon the entry of an order into the mechanism. 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 Block Order Mechanism is a process by which a member can obtain liquidity for the execution of block-sized orders,\3\ defined as orders for fifty contracts or more.\4\ When an order is entered in the Block Order Mechanism, that order is exposed to members who are given an opportunity to respond with the prices and sizes at which they would be willing to trade with the block-sized order.\5\ The exposure period is designated by the Exchange via circular, but must be no less than 100 milliseconds and no more than 1 second.\6\ At the conclusion of the exposure period, either an execution will occur at a single block execution price,\7\ or the order will be cancelled.\8\ The purpose of the proposed rule change is to amend Rule 716(c) to more accurately describe the allocation methodology used in the Block Order Mechanism, add language regarding how the block execution price is determined, and describe the content of the broadcast message disseminated to members upon the entry of an order into the mechanism. The Exchange believes that these changes will increase transparency around the operation of the Block Order Mechanism to the benefit of members and market participants. --------------------------------------------------------------------------- \3\ See Rule 716(c). \4\ See Rule 716(a). \5\ A ``Response'' is an electronic message that is sent by members in response to a broadcast message. See Rule 716(b). \6\ See Supplementary Material .04 to Rule 716. \7\ Responses and orders and quotes on the order book at the time the block order is executed that are priced better than the block execution price are executed at the block execution price. See Rule 716(c)(2)(i). \8\ See Rule 716(c)(2). --------------------------------------------------------------------------- Currently, Rule 716(c)(2)(ii) provides that Responses, quotes, and Professional [[Page 46577]] Orders \9\ at the block execution price will participate in the execution of the block-size order according to Rule 713(e)--i.e., the Exchange's regular allocation rule. As implemented today, however, interest that is executed in the Block Order Mechanism follows the customer priority pro-rata allocation methodology designed for the Exchange's auction mechanisms, including, for example, the Facilitation Mechanism,\10\ Solicited Order Mechanism,\11\ and Price Improvement Mechanism,\12\ with the exception that those two-sided auction mechanisms also allocate contracts against the contra order. This auction allocation methodology is similar to the Exchange's regular allocation methodology but does not provide enhanced allocations to the Primary Market Maker (``PMM'') pursuant to Rule 713(e) and Supplementary Material .01(b) to Rule 713.\13\ The Exchange therefore proposes to amend Rule 716(c)(2)(ii) to provide that, at the block execution price, Priority Customer Orders and Priority Customer Responses will be executed first in time priority, and then quotes, Professional Orders, and Professional Responses will participate in the execution of the block-size order based upon the percentage of the total number of contracts available at the block execution price that is represented by the size of the quote, Professional Order, or Professional Response. In addition, the Exchange proposes to specify in Rule 716(c)(2)(i) that interest that is priced better than the block execution price is executed in full. In particular, the Exchange proposes to amend this rule to state that bids (offers) on the Exchange at the time the block order is executed that are priced higher (lower) than the block execution price, as well as Responses that are priced higher (lower) than the block execution price, will be executed in full at the block execution price. Although Rule 716(c)(2)(ii) described above explains how allocations are handled at the block execution price, the Exchange believes that the additional clarity that interest that is priced better than the block execution price is executed in full would be helpful to members. With these two proposed changes, Rule 716(c) will more accurately describe the allocation methodology used in the Block Order Mechanism. --------------------------------------------------------------------------- \9\ The term ``Professional Order'' means an order that is for the account of a person or entity that is not a Priority Customer. See Rule 100(a)(37C). \10\ See Rule 716(d). \11\ See Rule 716(e). \12\ See Rule 723. \13\ Supplementary Material .01(b) to Rule 713 provides that, if the PMM is quoting at the best price, it has participation rights equal to the greater of the proportion of the total size at the best price represented by the size of its quote, or a percentage allocation entitlement based on the number of other Professional Orders and market maker quotations at the best price. --------------------------------------------------------------------------- Furthermore, the Exchange proposes to add language to Rule 716(c)(2)(i) that explains the price at which orders entered into the Block Order Mechanism are executed. In particular, the Exchange proposes to state that Responses, orders, and quotes will be executed at a single block execution price that is the price for the block-size order at which the maximum number of contracts can be executed consistent with the member's instruction. For example, if a member enters a block-sized order to buy 100 contracts at $1.00 into the Block Order Mechanism, and members enter Response A to sell 50 contracts at $0.90 and Response B to sell 40 contracts at $0.95, the block execution price would be $0.95 as this is the price at which the maximum number of contracts could be executed. The block-sized order and both Responses would then be executed at this single block execution price. Responses A and B would be executed in full since there is sufficient size to execute both Responses against the block-size order. In addition, if two other members also enter Responses C (Priority Customer) and D (non-Priority Customer) to sell at $0.98 for 10 contracts each, the block execution price would be $0.98 as additional contracts could be executed at that price. In that instance, Responses A and B, which are priced better than the block execution price, would be executed in full, while Responses B and C, which are priced at the block execution price, would participate in accordance with the allocation methodology described in this proposed rule change--i.e., the remaining 10 contracts would go to Response C, which is a Priority Customer Response. The Block Order Mechanism is designed to provide an opportunity for members to receive liquidity for their block-sized orders and therefore trades at a price that allows the maximum number of contracts of such order to be executed against Responses entered to trade against the block-size order and interest on the Exchange's order book. The Exchange believes that describing how the block execution price is determined in Rule 716(c)(2)(i) will increase transparency around pricing of executions in the Block Order Mechanism. Finally, the Exchange proposes to add language to Rule 716(c)(1) to describe the content of the broadcast message sent to members upon the entry of an order into the Block Order Mechanism. In particular, the Exchange proposes to specify that this broadcast message includes the series, and may include price, size and/or side, as specified by the member entering the order. Similar language is included in the Block Order Mechanism Rule on the Exchange's affiliates, Nasdaq GEMX, LLC (``GEMX'') and Nasdaq MRX, LLC (``MRX''), which operate in the same way as ISE's Block Order Mechanism.\14\ The Exchange therefore believes that this change will increase transparency around the content of the broadcast message and promote consistency across the rulebooks of its affiliated exchanges that offer identical functionality. --------------------------------------------------------------------------- \14\ See GEMX and MRX Rule 716(c)(1). --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.\15\ In particular, the proposal is consistent with Section 6(b)(5) of the Act,\16\ because it is designed to promote just and equitable principles of trade, 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. --------------------------------------------------------------------------- \15\ 15 U.S.C. 78f(b). \16\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes that the proposed changes to the allocation language in Rule 716(c)(2)(i)-(ii) are consistent with the protection of investors and the public interest as the proposed allocation language more accurately reflects the Exchange's process for allocating contracts executed in the Block Order Mechanism. Although the Exchange's allocation rule for the Block Order Mechanism currently references the allocation process for regular trading, the allocation methodology does not include certain parts of the regular allocation procedure. In particular, the Exchange does not grant any special allocation to the PMM for interest executed in the Block Order Mechanism. The Exchange believes that it is appropriate to not provide an enhanced allocation entitlement to the PMM for interest executed in the Block Order Mechanism, as the Block Order Mechanism provides an auction process that does not rely on market maker quoting and other obligations to source liquidity. Furthermore, the Exchange [[Page 46578]] believes that it is helpful to explain in this rule that interest that is priced better than the block execution price would be executed in full. The allocation process used for the Block Order Mechanism is similar to how the Exchange allocates contracts in other auction mechanisms, including, for example, the Facilitation Mechanism, Solicited Order Mechanism, and Price Improvement Mechanism, with the exception that those two-sided auction mechanisms also allocate contracts against the contra order.\17\ --------------------------------------------------------------------------- \17\ See supra notes 10-12 and accompanying text. --------------------------------------------------------------------------- The Exchange also believes that the proposed changes to describe how the block execution price is determined is consistent with the protection of investors and the public interest as this change will increase transparency around the price at which interest is executed in the Block Order Mechanism. As explained above, the Block Order Mechanism is designed to provide an opportunity for members to receive liquidity for their block-sized orders and therefore trades at a price that allows the maximum number of contracts of such order to be executed against Responses entered to trade against the block-size order and interest on the Exchange's order book. The Exchange believes that describing how the block execution price is determined in Rule 716(c)(2)(i) will increase transparency around pricing of executions in the Block Order Mechanism. Finally, the Exchange believes that the proposed change to Rule 716(c)(1) is consistent with the protection of investors and the public interest as it will provide transparency to members about the content of the broadcast message sent to members upon the entry of an order into the Block Order Mechanism. Currently, the broadcast message includes the series, and may include price, size and/or side, as specified by the member entering the order. The Exchange is not proposing any changes to the content of the broadcast message but wants to make this clear in its rules, which, with this change, will be consistent with the rules of its affiliates, GEMX and MRX.\18\ --------------------------------------------------------------------------- \18\ See supra note 14 and accompanying text. --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,\19\ 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. The proposed rule change is designed to correct the Exchange's rules to more accurately reflect the handling of auctions in the Block Order Mechanism. No changes are proposed to the operation of the Exchange's trading system, and no members will be impacted by the proposed rule, which merely reflects current functionality offered to members that trade in the Block Order Mechanism. The proposed rule change is therefore not designed to impose any significant burden on competition. --------------------------------------------------------------------------- \19\ 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 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)(iii) of the Act \20\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\21\ --------------------------------------------------------------------------- \20\ 15 U.S.C. 78s(b)(3)(A)(iii). \21\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file 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. The Exchange has satisfied this requirement. --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) \22\ normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b-4(f)(6)(iii),\23\ the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange requests that the Commission waive the 30-day operative delay. The Exchange notes that a waiver is consistent with the protection of investors and the public interest because it will allow the Exchange to correct its Block Order Mechanism rules to reflect the current functionality of the system without undue delay. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. Accordingly, the Commission hereby waives the 30-day operative delay and designates the proposed rule change operative upon filing.\24\ --------------------------------------------------------------------------- \22\ 17 CFR 240.19b-4(f)(6). \23\ 17 CFR 240.19b-4(f)(6)(iii). \24\ For purposes only of waiving the 30-day operative delay, the Commission has 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: (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. 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-2017-84 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-ISE-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., [[Page 46579]] 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-2017-84 and should be submitted on or before October 26, 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. 2017-21407 Filed 10-4-17; 8:45 am] BILLING CODE 8011-01-P
![46576 Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Notices
The Commission believes that the appropriate in furtherance of the II. Self-Regulatory Organization’s
Exchange has provided a sufficient basis purposes of the Act.17 Statement of the Purpose of, and
for its different treatment of Eligible Statutory Basis for, the Proposed Rule
IV. Conclusion
New Listings that list prior to October Change
1, 2017 and that this portion of the It is therefore ordered, pursuant to In its filing with the Commission, the
Exchange’s proposal meets the Section 19(b)(2) of the Act,18 that the Exchange included statements
requirements of the Act. In making this proposed rule change (SR–NYSEAMER– concerning the purpose of and basis for
determination, the Commission notes 2017–05), be, and hereby is, approved. the proposed rule change and discussed
that the provision of services under For the Commission, by the Division of any comments it received on the
Section 146 of the Company Guide is for Trading and Markets, pursuant to delegated proposed rule change. The text of these
a limited duration and that the authority.19 statements may be examined at the
Exchange has provided a reasonable Eduardo A. Aleman, places specified in Item IV below. The
basis for deciding to treat Eligible New Assistant Secretary. Exchange has prepared summaries, set
Listings that list prior to October 1, 2017 [FR Doc. 2017–21415 Filed 10–4–17; 8:45 am] forth in sections A, B, and C below, of
differently from other listed companies BILLING CODE 8011–01–P
the most significant aspects of such
going forward. The Commission notes statements.
that at the time such companies listed, A. Self-Regulatory Organization’s
they had an expectation, if they SECURITIES AND EXCHANGE Statement of the Purpose of, and
intended to utilize the corporate COMMISSION Statutory Basis for, the Proposed Rule
governance tools, to be able to do so for Change
the entire 24 month period as set forth [Release No. 34–81772; File No. SR–ISE–
in the current rule. To allow such 1. Purpose
2017–84]
companies listed prior to October 1, The Block Order Mechanism is a
2017 to finish utilizing corporate Self-Regulatory Organizations; Nasdaq process by which a member can obtain
governance tools for any remainder of ISE, LLC; Notice of Filing and liquidity for the execution of block-
their 24 month period appears to be Immediate Effectiveness of Proposed sized orders,3 defined as orders for fifty
reasonable, equitable, and not unfairly Rule Change To Amend Rule 716(c) on contracts or more.4 When an order is
discriminatory. In addition, the the Block Order Mechanism entered in the Block Order Mechanism,
Commission notes that the October 1, that order is exposed to members who
September 29, 2017.
2017 date, to curtail the offering of are given an opportunity to respond
corporate governance tools for Eligible Pursuant to Section 19(b)(1) of the with the prices and sizes at which they
New Listings that list on or after that Securities Exchange Act of 1934 would be willing to trade with the
date, was transparent and published for (‘‘Act’’),1 and Rule 19b–4 thereunder,2 block-sized order.5 The exposure period
comment in advance of approval by the notice is hereby given that on is designated by the Exchange via
Commission in the order discussed September 18, 2017, Nasdaq ISE, LLC circular, but must be no less than 100
herein. As noted above, the Commission (‘‘ISE’’ or ‘‘Exchange’’) filed with the milliseconds and no more than 1
Securities and Exchange Commission second.6 At the conclusion of the
received no comments on the proposal.
(‘‘Commission’’) the proposed rule exposure period, either an execution
Finally, the Commission has also
change as described in Items I and II, will occur at a single block execution
previously approved proposals
below, which Items have been prepared price,7 or the order will be cancelled.8
providing different services to newly-
by the Exchange. The Commission is The purpose of the proposed rule
listed issuers, including those
publishing this notice to solicit change is to amend Rule 716(c) to more
transferring their listing from another comments on the proposed rule change accurately describe the allocation
exchange, and has found this consistent from interested persons. methodology used in the Block Order
with Sections 6(b)(4) and 6(b)(5) of the Mechanism, add language regarding
Act.16 I. Self-Regulatory Organization’s
how the block execution price is
Accordingly, the Commission finds Statement of the Terms of Substance of
determined, and describe the content of
that the proposed rule change is the Proposed Rule Change the broadcast message disseminated to
consistent with the requirements of the The Exchange proposes to amend members upon the entry of an order into
Act and, in particular, that the products Rule 716(c) to more accurately describe the mechanism. The Exchange believes
and services provided under Section the allocation methodology used in the that these changes will increase
146 of the Company Guide are equitably Block Order Mechanism, add language transparency around the operation of
allocated among issuers consistent with regarding how the block execution price the Block Order Mechanism to the
Section 6(b)(4) of the Act, the proposed is determined, and describe the content benefit of members and market
rule change does not unfairly of the broadcast message disseminated participants.
discriminate among issuers consistent to members upon the entry of an order Currently, Rule 716(c)(2)(ii) provides
with Section 6(b)(5) of the Act, and the into the mechanism. that Responses, quotes, and Professional
proposed rule change is appropriate and The text of the proposed rule change 3 See Rule 716(c).
consistent with Section 6(b)(8) of the is available on the Exchange’s Web site 4 See Rule 716(a).
Act in that it does not impose any at www.ise.com, at the principal office 5 A ‘‘Response’’ is an electronic message that is
burden on competition not necessary or of the Exchange, and at the
ethrower on DSK3G9T082PROD with NOTICES
sent by members in response to a broadcast
Commission’s Public Reference Room. message. See Rule 716(b).
16 See Securities Exchange Act Release Nos. 6 See Supplementary Material .04 to Rule 716.
7 Responses and orders and quotes on the order
76127 (October 9, 2015), 80 FR 62584 (October 16, 17 15 U.S.C. 78f(b)(4), (5), and (8). book at the time the block order is executed that
2015) (order approving SR–NYSE–2015–36); 72669 18 15
(July 24, 2014), 79 FR 44234 (July 30, 2014) (order U.S.C. 78s(b)(2). are priced better than the block execution price are
19 17 CFR 200.30–3(a)(12).
approving SR–NASDAQ–2014–058); 65963 executed at the block execution price. See Rule
1 15 U.S.C. 78s(b)(1). 716(c)(2)(i).
(December 15, 2011), 76 FR 79262 (December 21,
2011) (order approving SR–NASDAQ–2011–122). 2 17 CFR 240.19b–4. 8 See Rule 716(c)(2).
VerDate Sep<11>2014 19:52 Oct 04, 2017 Jkt 244001 PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 E:\FR\FM\05OCN1.SGM 05OCN1](https://thefederalregister.org/doc/82_FR_46768/page/1.svg)
![Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Notices 46579
Washington, DC 20549, on official HEARING OR NOTIFICATION OF HEARING: An 12(d)(1)(B) of the Act.3 Applicants also
business days between the hours of order granting the requested relief will request an order of exemption under
10:00 a.m. and 3:00 p.m. Copies of the be issued unless the Commission orders sections 6(c) and 17(b) of the Act from
filing also will be available for a hearing. Interested persons may the prohibition on certain affiliated
inspection and copying at the principal request a hearing by writing to the transactions in section 17(a) of the Act
office of the Exchange. All comments Commission’s Secretary and serving to the extent necessary to permit the
received will be posted without change; applicants with a copy of the request, Underlying Funds to sell their shares to,
the Commission does not edit personal personally or by mail. Hearing requests and redeem their shares from, the
identifying information from should be received by the Commission Series.4 Applicants state that such
submissions. You should submit only by 5:30 p.m. on October 24, 2017 and transactions will be consistent with the
information that you wish to make should be accompanied by proof of policies of each Series and each
available publicly. All submissions service on the applicants, in the form of Underlying Fund and with the general
should refer to File Number SR–ISE– an affidavit, or, for lawyers, a certificate purposes of the Act and will be based
2017–84 and should be submitted on or of service. Pursuant to Rule 0–5 under on the net asset values of the
before October 26, 2017. the Act, hearing requests should state Underlying Funds.
the nature of the writer’s interest, any 2. Applicants agree that any order
For the Commission, by the Division of
Trading and Markets, pursuant to delegated facts bearing upon the desirability of a granting the requested relief will be
authority.25 hearing on the matter, the reason for the subject to the terms and conditions
request, and the issues contested. stated in the application. Such terms
Eduardo A. Aleman,
Persons who wish to be notified of a and conditions are designed to, among
Assistant Secretary.
hearing may request notification by other things, help prevent any potential
[FR Doc. 2017–21407 Filed 10–4–17; 8:45 am] (i) undue influence over an Underlying
writing to the Commission’s Secretary.
BILLING CODE 8011–01–P
ADDRESSES: Secretary, U.S. Securities Fund that is not in the same ‘‘group of
and Exchange Commission, 100 F Street investment companies’’ as the UIT
NE., Washington, DC 20549–1090. through control or voting power, or in
SECURITIES AND EXCHANGE connection with certain services,
COMMISSION Applicants: Olden Lane Securities LLC
and Olden Lane Trust, 200 Forrestal transactions, and underwritings, (ii)
[Investment Company Act Release No. Road, Suite 3B, Princeton, NJ 08540. excessive layering of fees, and (iii)
32845; File No. 812–14726] FOR FURTHER INFORMATION CONTACT: overly complex fund structures, which
Andrea Ottomanelli Magovern, Acting are the concerns underlying the limits
Olden Lane Securities LLC and Olden in sections 12(d)(1)(A), (B), and (C) of
Branch Chief, at (202) 551–6768 or
Lane Trust; Notice of Application the Act.
Nadya Roytblat, Assistant Chief
Counsel, at (202) 551–6821 (Division of 3. Section 12(d)(1)(J) of the Act
September 29, 2017.
Investment Management, Chief provides that the Commission may
AGENCY: Securities and Exchange exempt any person, security, or
Commission (‘‘Commission’’). Counsel’s Office).
transaction, or any class or classes of
ACTION: Notice of an application for an SUPPLEMENTARY INFORMATION: The
persons, securities, or transactions, from
order under section 12(d)(1)(J) of the following is a summary of the
any provision of section 12(d)(1) if the
Investment Company Act of 1940 (the application. The complete application
exemption is consistent with the public
‘‘Act’’) for an exemption from sections may be obtained via the Commission’s
interest and the protection of investors.
12(d)(1)(A), (B), and (C) of the Act and Web site by searching for the file
number, or for an applicant using the Section 17(b) of the Act authorizes the
under sections 6(c) and 17(b) of the Act Commission to grant an order
for an exemption from sections 17(a)(1) Company name box, at http://
www.sec.gov/search/search.htm, or by permitting a transaction otherwise
and (2) of the Act. The requested order prohibited by section 17(a) if it finds
would permit certain registered unit calling (202) 551–8090.
that (a) the terms of the proposed
investment trusts (‘‘UITs’’) to acquire Summary of the Application transaction are fair and reasonable and
shares of certain registered open-end do not involve overreaching on the part
1. Applicants request an order to
investment companies, registered of any person concerned; (b) the
permit (a) a Series 1 to acquire shares of
closed-end investment companies and proposed transaction is consistent with
Underlying Funds 2 in excess of the
registered UITs (collectively, the the policies of each registered
limits in sections 12(d)(1)(A) and (C) of
‘‘Underlying Funds’’) that are within investment company involved; and (c)
the Act and (b) the Underlying Funds
and outside the same group of the proposed transaction is consistent
that are registered open-end investment
investment companies as the acquiring with the general purposes of the Act.
companies, their principal underwriters
UITs, in excess of the limits in section
and any broker or dealer registered
12(d)(1) of the Act. under the Exchange Act to sell shares of 3 Applicants do not request relief for the Series to
invest in reliance on the order in closed-end
APPLICANTS: Olden Lane Trust (the the Underlying Funds to the Series in investment companies that are not listed and traded
‘‘Trust’’), a UIT that is registered under excess of the limits in section on a national securities exchange.
4 A Series generally would purchase and sell
the Act, and Olden Lane Securities 1 Applicants request that the order apply to each shares of an Underlying Fund that operates as an
(‘‘Olden Lane’’), a Delaware limited existing and future series of the Trust and to any ETF through secondary market transactions rather
liability company registered as a broker- future registered UIT and series thereof sponsored than through principal transactions with the
dealer under the Securities Exchange by Olden Lane or an entity controlling, controlled Underlying Fund. Applicants nevertheless request
ethrower on DSK3G9T082PROD with NOTICES
Act of 1934 (the ‘‘Exchange Act’’). by or under common control with Olden Lane (the relief from section 17(a) to permit a Series to
‘‘Series’’). purchase or redeem shares from the ETF. A Series
FILING DATES: The application was filed 2 Certain of the Underlying Funds may be will purchase and sell shares of an Underlying
on December 9, 2016 and amended on registered as an open-end investment company or Fund that is a closed-end fund through secondary
April 10, 2017, July 25, 2017 and a UIT, but have received exemptive relief from the market transactions at market prices rather than
Commission to permit their shares to be listed and through principal transactions with the closed-end
September 15, 2017. traded on a national securities exchange at fund. Accordingly, applicants are not requesting
negotiated prices and to operate as exchange-traded section 17(a) relief with respect to transactions in
25 17 CFR 200.30–3(a)(12). funds (‘‘ETFs’’). shares of closed-end funds.
VerDate Sep<11>2014 19:52 Oct 04, 2017 Jkt 244001 PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 E:\FR\FM\05OCN1.SGM 05OCN1](https://thefederalregister.org/doc/82_FR_46768/page/4.svg)
Document Created: 2017-10-05 00:53:56
Document Modified: 2017-10-05 00:53:56
| 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 46576 |
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