82 FR 48560 - Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Provide Interpretation With Respect to the Meaning, Administration, or Enforcement of Rule 14.11, Other Securities, and Rule 14.12, Failure To Meet Listing Standards
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 200 (October 18, 2017)
Federal Register Volume 82, Issue 200 (October 18, 2017)
| Page Range | 48560-48562 | |
| FR Document | 2017-22539 |
[Federal Register Volume 82, Number 200 (Wednesday, October 18, 2017)] [Notices] [Pages 48560-48562] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-22539] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-81864; File No. SR-BatsBZX-2017-61] Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Provide Interpretation With Respect to the Meaning, Administration, or Enforcement of Rule 14.11, Other Securities, and Rule 14.12, Failure To Meet Listing Standards October 12, 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 29, 2017, Bats BZX Exchange, Inc. (``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. --------------------------------------------------------------------------- [[Page 48561]] I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal to provide interpretation with respect to the meaning, administration, or enforcement of Rule 14.11 and 14.12. The text of the proposed rule change is also available on the Exchange's Web site (www.bats.com), at the Exchange's Office of the Secretary, 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 Background On November 18, 2016 the Exchange filed a proposed rule change, as subsequently amended by Amendments No. 1 and 2 thereto (as amended, the ``Continued Listing Standards''), to adopt certain changes to Exchange Rules 14.11 and 14.12 to add additional continued listing standards for exchange-traded products (``ETP'') as well as clarify the procedures that the Exchange will undertake when an ETP is noncompliant with applicable rules, which was approved by the Commission on March 7, 2017. The Exchange submits this proposal in order to provide interpretive guidance as it relates to ETP issuers complying with the changes upon implementation. Testing and Exchange Notification The Continued Listing Standards include language in numerous places that would require certain criteria related to index composition, portfolio holdings, or reference assets to be met ``upon initial listing and on a continual basis'' and that delisting proceedings will be initiated where ''any of the requirements set forth in this rule are not continuously met.'' As such, any instance of noncompliance reported to or discovered by the Exchange will be subject to delisting proceedings pursuant to Rule 14.12. If at any point during delisting proceedings the ETP regains compliance, such delisting proceedings will be terminated. The Exchange notes that, unless otherwise specified within the rule text, issuers of index-based ETPs listed on the Exchange should test for compliance with such criteria upon any index rebalance, reconstitution, or other material change to the index components (collectively, a ``Material Index Change''), as applicable, and no less frequently than on a quarterly basis. Similarly, unless otherwise specified within the rule text, issuers of Managed Fund Shares, as defined in Rule 14.11(i), listed on the Exchange should test for compliance with such criteria upon any material change to the portfolio's holdings (collectively with Material Index Change, a ``Material Change''), as applicable, and no less frequently than on a quarterly basis. Any test conducted as part of a Material Change would satisfy the testing requirement for the applicable quarter. For purposes of this interpretation, the issuer may set the quarterly schedule, whether based on the fiscal year end of a fund, the calendar quarters, or otherwise. At no point should there be a period of greater than four months during which such a test for compliance has not been conducted. Nothing in this proposal should be construed as restricting the frequency with which an issuer may test for compliance. The Continued Listing Standards also include language in numerous places that would require the Exchange to initiate delisting proceedings for an ETP listed pursuant to a proposal submitted by the Exchange pursuant to Section 19(b) that has become effective or has been approved by the Commission where ``any of the applicable Continued Listing Representations \3\ are not continuously met.'' Similarly, to the extent that any Continued Listing Representations for index-based ETPs or Managed Fund Shares relate to index composition, portfolio holdings, or reference assets, issuers of ETPs listed on the Exchange should test for compliance with such criteria upon any Material Change, as applicable, and no less frequently than on a quarterly basis. The Exchange notes that it will also be independently reviewing ETPs listed on the Exchange for compliance with the Continued Listing Standards. --------------------------------------------------------------------------- \3\ Pursuant to Rule 14.11(a) of the Continued Listing Standards, the term ``Continued Listing Representations'' shall mean any of the statements or representations regarding the index composition, the description of the portfolio or reference assets, limitations on portfolio holdings or reference assets, dissemination and availability of index, reference asset, and intraday indicative values (as applicable), or the applicability of Exchange rules specified in any filing to list a series of Other Securities. --------------------------------------------------------------------------- Issuers shall provide annual attestations affirming that such tests are being conducted and that the issuer is not aware of any undisclosed instances of noncompliance. To the extent that an issuer believes that it will not be able to comply with the Continued Listing Standards, the Exchange encourages issuers to proactively reach out to the Listing Qualifications Department to work on a proposal to submit pursuant to 19(b) of the Act. If managed proactively, the Exchange believes that such issues can be managed without interruption to the listing of the ETP on the Exchange. 2. Statutory Basis The Exchange believes that its proposal 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.\4\ In particular, the Exchange believes the proposed change furthers the objectives of Section 6(b)(5) of the Act,\5\ in that it is designed to prevent fraudulent and manipulative acts and practices, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system by providing interpretations for issuers of ETPs to comply with the Continued Listing Standards. The Exchange believes that such interpretive guidance will provide issuers with the clarity needed to dedicate the resources necessary to build adequate compliance systems in furtherance of the protection of investors and the public interest. --------------------------------------------------------------------------- \4\ 15 U.S.C. 78f(b). \5\ 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 that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange notes that the proposed rule change will facilitate ETP issuers' ability to monitor and evidence compliance with the Continued Listing Standards by providing interpretation that will provide additional clarity and certainty around the Continued Listing Standards on which issuers will be able to rely. [[Page 48562]] C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act \6\ and Rule 19b-4(f)(1) thereunder.\7\ 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 will institute proceedings to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \6\ 15 U.S.C. 78s(b)(3)(A). \7\ 17 CFR 240.19b-4(f)(1). --------------------------------------------------------------------------- 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-BatsBZX-2017-61 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-BatsBZX-2017-61. 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-BatsBZX-2017-61 and should be submitted on or before November 8, 2017. --------------------------------------------------------------------------- \8\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\8\ Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-22539 Filed 10-17-17; 8:45 am] BILLING CODE 8011-01-P
![48560 Federal Register / Vol. 82, No. 200 / Wednesday, October 18, 2017 / Notices
the provisions of rule 18f–3 as if it were distribution costs. Applicants represent purchased. Finally, applicants state that
an open-end investment company. that any early withdrawal charge the Funds’ imposition of asset-based
imposed by the Funds will comply with distribution and/or service fees is
Early Withdrawal Charges
rule 6c–10 under the 1940 Act as if the consistent with the provisions, policies
1. Section 23(c) of the 1940 Act rule were applicable to closed-end and purposes of the 1940 Act and does
provides, in relevant part, that no investment companies. Each Future not involve participation on a basis
registered closed-end investment Fund will disclose early withdrawal different from or less advantageous than
company shall purchase securities of charges in accordance with the that of other participants.
which it is the issuer, except: (a) On a requirements of Form N–1A concerning
securities exchange or other open CDSCs. Applicants’ Condition
market; (b) pursuant to tenders, after
Asset-Based Distribution and/or Service Applicants agree that any order
reasonable opportunity to submit
Fees granting the requested relief will be
tenders given to all holders of securities
of the class to be purchased; or (c) under 1. Section 17(d) of the 1940 Act and subject to the following condition:
other circumstances as the Commission rule 17d–1 under the 1940 Act prohibit Each Fund relying on the order will
may permit by rules and regulations or an affiliated person of a registered comply with the provisions of rules 6c–
orders for the protection of investors. investment company, or an affiliated 10, 12b–1, 17d–3, 18f–3, 22d–1, and,
2. Rule 23c–3 under the 1940 Act person of such person, acting as where applicable, 11a–3 under the 1940
permits an ‘‘interval fund’’ to make principal, from participating in or Act, as amended from time to time, as
repurchase offers of between five and effecting any transaction in connection if those rules applied to closed-end
twenty-five percent of its outstanding with any joint enterprise or joint management investment companies,
shares at net asset value at periodic arrangement in which the investment and will comply with the FINRA Rule
intervals pursuant to a fundamental company participates unless the 2341, as amended from time to time, as
policy of the interval fund. Rule 23c– Commission issues an order permitting if that rule applied to all closed-end
3(b)(1) under the 1940 Act permits an the transaction. In reviewing management investment companies.
interval fund to deduct from repurchase applications submitted under section For the Commission, by the Division of
proceeds only a repurchase fee, not to 17(d) and rule 17d–1, the Commission Investment Management, under delegated
exceed two percent of the proceeds, that considers whether the participation of authority.
is paid to the interval fund and is the investment company in a joint Eduardo A. Aleman,
reasonably intended to compensate the enterprise or joint arrangement is
fund for expenses directly related to the Assistant Secretary.
consistent with the provisions, policies
repurchase. [FR Doc. 2017–22517 Filed 10–17–17; 8:45 am]
and purposes of the 1940 Act, and the
3. Section 23(c)(3) provides that the extent to which the participation is on BILLING CODE 8011–01–P
Commission may issue an order that a basis different from or less
would permit a closed-end investment advantageous than that of other
company to repurchase its shares in participants. SECURITIES AND EXCHANGE
circumstances in which the repurchase 2. Rule 17d–3 under the 1940 Act COMMISSION
is made in a manner or on a basis that provides an exemption from section
does not unfairly discriminate against 17(d) and rule 17d–1 to permit open- [Release No. 34–81864; File No. SR-
any holders of the class or classes of end investment companies to enter into BatsBZX–2017–61]
securities to be purchased. distribution arrangements pursuant to
4. Applicants request relief under rule 12b–1 under the 1940 Act. Self-Regulatory Organizations; Bats
section 6(c), discussed above, and Applicants request an order under BZX Exchange, Inc.; Notice of Filing
section 23(c)(3) from rule 23c–3 to the section 17(d) and rule 17d–1 under the and Immediate Effectiveness of a
extent necessary for the Future Funds to 1940 Act to the extent necessary to Proposed Rule Change To Provide
impose early withdrawal charges, which permit the Fund to impose asset-based Interpretation With Respect to the
are distribution-related fees payable to distribution and service fees. Applicants Meaning, Administration, or
the distributor, on Shares of the Funds have agreed to comply with rules 12b– Enforcement of Rule 14.11, Other
submitted for repurchase that have been 1 and 17d–3 as if those rules applied to Securities, and Rule 14.12, Failure To
held for less than a specified period. closed-end investment companies, Meet Listing Standards
5. Applicants state that the early which they believe will resolve any
October 12, 2017.
withdrawal charges they intend to concerns that might arise in connection
impose are functionally similar to with a Fund financing the distribution Pursuant to Section 19(b)(1) of the
CDSCs imposed by open-end of its Shares through asset-based Securities Exchange Act of 1934
investment companies under rule 6c–10 distribution fees. (‘‘Act’’),1 and Rule 19b–4 thereunder,2
under the 1940 Act. Rule 6c–10 permits 3. For the reasons stated above, notice is hereby given that on
open-end investment companies to applicants submit that the exemptions September 29, 2017, Bats BZX
impose CDSCs, subject to certain requested under section 6(c) are Exchange, Inc. (‘‘Exchange’’) filed with
conditions. Applicants note that rule necessary and appropriate in the public the Securities and Exchange
6c–10 is grounded in policy interest and are consistent with the Commission (‘‘Commission’’) the
considerations supporting the protection of investors and the purposes proposed rule change as described in
employment of CDSCs where there are fairly intended by the policy and Items I and II below, which Items have
ethrower on DSK3G9T082PROD with NOTICES
adequate safeguards for the investor and provisions of the 1940 Act. Applicants been prepared by the Exchange. The
state that the same policy considerations further submit that the relief requested Commission is publishing this notice to
support imposition of early withdrawal pursuant to section 23(c)(3) will be solicit comments on the proposed rule
charges in the interval fund context. In consistent with the protection of change from interested persons.
addition, applicants state that early investors and will insure that applicants
withdrawal charges may be necessary do not unfairly discriminate against any 1 15 U.S.C. 78s(b)(1).
for the distributor to recover holders of the class of securities to be 2 17 CFR 240.19b–4.
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![48562 Federal Register / Vol. 82, No. 200 / Wednesday, October 18, 2017 / Notices
C. Self-Regulatory Organization’s proposed rule change between the FOR FURTHER INFORMATION CONTACT: A.
Statement on Comments on the Commission and any person, other than Escobar, Office of Disaster Assistance,
Proposed Rule Change Received From those that may be withheld from the U.S. Small Business Administration,
Members, Participants, or Others public in accordance with the 409 3rd Street SW., Suite 6050,
Written comments were neither provisions of 5 U.S.C. 552, will be Washington, DC 20416, (202) 205–6734.
solicited nor received. available for Web site viewing and SUPPLEMENTARY INFORMATION: Notice is
printing in the Commission’s Public hereby given that as a result of the
III. Date of Effectiveness of the Reference Room, 100 F Street NE., President’s major disaster declaration on
Proposed Rule Change and Timing for Washington, DC 20549 on official 10/07/2017, Private Non-Profit
Commission Action business days between the hours of organizations that provide essential
The foregoing proposed rule change 10:00 a.m. and 3:00 p.m. Copies of the services of a governmental nature may
has become effective pursuant to filing also will be available for file disaster loan applications at the
Section 19(b)(3)(A) of the Act 6 and Rule inspection and copying at the principal address listed above or other locally
19b–4(f)(1) thereunder.7 At any time office of the Exchange. All comments announced locations.
within 60 days of the filing of the received will be posted without change; The following areas have been
proposed rule change, the Commission the Commission does not edit personal determined to be adversely affected by
summarily may temporarily suspend identifying information from the disaster:
such rule change if it appears to the submissions. You should submit only Primary Counties: Buffalo, Crawford,
Commission that such action is information that you wish to make Grant, Iowa, Jackson, La Crosse,
necessary or appropriate in the public available publicly. All submissions Lafayette, Monroe, Richland,
interest, for the protection of investors, should refer to File Number SR– Trempealeau, Vernon
or otherwise in furtherance of the BatsBZX–2017–61 and should be The Interest Rates are:
purposes of the Act. If the Commission submitted on or before November 8,
takes such action, the Commission will 2017. Percent
institute proceedings to determine For the Commission, by the Division of
whether the proposed rule change Trading and Markets, pursuant to delegated For Physical Damage:
should be approved or disapproved. authority.8 Non-Profit Organizations With
Credit Available Elsewhere ... 2.500
IV. Solicitation of Comments Eduardo A. Aleman,
Non-Profit Organizations With-
Assistant Secretary. out Credit Available Else-
Interested persons are invited to
submit written data, views, and [FR Doc. 2017–22539 Filed 10–17–17; 8:45 am] where ..................................... 2.500
arguments concerning the foregoing, BILLING CODE 8011–01–P For Economic Injury:
Non-Profit Organizations With-
including whether the proposed rule out Credit Available Else-
change is consistent with the Act. where ..................................... 2.500
Comments may be submitted by any of SMALL BUSINESS ADMINISTRATION
the following methods: The number assigned to this disaster
[Disaster Declaration #15350 and #15351;
Electronic Comments Wisconsin Disaster Number WI–00063]
for physical damage is 15350B and for
economic injury is 153510.
• Use the Commission’s Internet
comment form (http://www.sec.gov/ Presidential Declaration of a Major (Catalog of Federal Domestic Assistance
rules/sro.shtml); or Disaster for Public Assistance Only for Number 59008)
• Send an email to rule-comments@ the State of Wisconsin
James E. Rivera,
sec.gov. Please include File Number SR– AGENCY: U.S. Small Business Associate Administrator for Disaster
BatsBZX–2017–61 on the subject line. Administration. Assistance.
Paper Comments ACTION: Notice. [FR Doc. 2017–22521 Filed 10–17–17; 8:45 am]
• Send paper comments in triplicate BILLING CODE 8025–01–P
SUMMARY: This is a Notice of the
to Secretary, Securities and Exchange
Presidential declaration of a major
Commission, 100 F Street NE., SMALL BUSINESS ADMINISTRATION
disaster for Public Assistance Only for
Washington, DC 20549–1090.
the State of Wisconsin (FEMA–4343– [Disaster Declaration #15348 and #15349;
All submissions should refer to File DR), dated 10/07/2017.
Number SR–BatsBZX–2017–61. This file Idaho Disaster Number ID–00071]
Incident: Severe Storms, Straight-line
number should be included on the Winds, Flooding, Landslides, and Presidential Declaration of a Major
subject line if email is used. To help the Mudslides. Disaster for Public Assistance Only for
Commission process and review your Incident Period: 07/19/2017 through the State of Idaho
comments more efficiently, please use 07/23/2017.
only one method. The Commission will AGENCY: U.S. Small Business
DATES: Issued on 10/07/2017.
post all comments on the Commission’s Administration.
Internet Web site (http://www.sec.gov/ Physical Loan Application Deadline
ACTION: Notice.
rules/sro.shtml). Copies of the Date: 12/06/2017.
submission, all subsequent Economic Injury (EIDL) Loan SUMMARY: This is a Notice of the
amendments, all written statements Application Deadline Date: 07/09/2018. Presidential declaration of a major
ethrower on DSK3G9T082PROD with NOTICES
with respect to the proposed rule ADDRESSES: Submit completed loan disaster for Public Assistance Only for
change that are filed with the applications to: U.S. Small Business the State of Idaho (FEMA–4342–DR),
Commission, and all written Administration, Processing and dated 10/07/2017.
communications relating to the Disbursement Center, 14925 Kingsport Incident: Flooding.
Road, Fort Worth, TX 76155. Incident Period: 03/29/2017 through
6 15 U.S.C. 78s(b)(3)(A). 06/15/2017.
7 17 CFR 240.19b–4(f)(1). 8 17 CFR 200.30–3(a)(12). DATES: Issued on 10/07/2017.
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Document Created: 2017-10-18 01:38:03
Document Modified: 2017-10-18 01:38:03
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 82 FR 48560 |
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