82_FR_56116 82 FR 55891 - Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Designation of a Longer Period for Commission Action on a Proposed Rule Change To List and Trade Shares of the CBOE S&P 500® Dividend Aristocrats® Target Income Index ETF Under the ETF Series Solutions Trust, Under Exchange Rule 14.11(c)(3), Index Fund Shares

82 FR 55891 - Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Designation of a Longer Period for Commission Action on a Proposed Rule Change To List and Trade Shares of the CBOE S&P 500® Dividend Aristocrats® Target Income Index ETF Under the ETF Series Solutions Trust, Under Exchange Rule 14.11(c)(3), Index Fund Shares

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 225 (November 24, 2017)

Page Range55891-55892
FR Document2017-25346

Federal Register, Volume 82 Issue 225 (Friday, November 24, 2017)
[Federal Register Volume 82, Number 225 (Friday, November 24, 2017)]
[Notices]
[Pages 55891-55892]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-25346]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82115; File No. SR-BatsBZX-2017-58]


Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of 
Designation of a Longer Period for Commission Action on a Proposed Rule 
Change To List and Trade Shares of the CBOE S&P 500[supreg] Dividend 
Aristocrats[supreg] Target Income Index ETF Under the ETF Series 
Solutions Trust, Under Exchange Rule 14.11(c)(3), Index Fund Shares

November 17, 2017.
    On September 19, 2017, Bats BZX Exchange, Inc. (``Exchange'') filed 
with the Securities and Exchange Commission (``Commission''), pursuant 
to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') 
\1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to list and 
trade Shares of the CBOE S&P 500[supreg] Dividend Aristocrats[supreg] 
Target Income Index ETF under Exchange Rule 14.11(c)(3). The proposed 
rule change was published for comment in the Federal Register on 
October 11, 2017.\3\ The Commission received no comments on the 
proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 81815 (October 4, 
2017), 82 FR 47265.
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    Section 19(b)(2) of the Act \4\ provides that, within 45 days of 
the publication of notice of the filing of a proposed rule change, or 
within such longer period up to 90 days as the Commission may designate 
if it finds such longer period to be appropriate and publishes its 
reasons for so finding or as to which the

[[Page 55892]]

self-regulatory organization consents, the Commission shall either 
approve the proposed rule change, disapprove the proposed rule change, 
or institute proceedings to determine whether the proposed rule change 
should be disapproved. The 45th day after publication of the notice for 
this proposed rule change is November 25, 2017. The Commission is 
extending this 45-day time period.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

    The Commission finds that it is appropriate to designate a longer 
period within which to take action on the proposed rule change so that 
it has sufficient time to consider the proposed rule change. 
Accordingly, the Commission, pursuant to Section 19(b)(2) of the 
Act,\5\ designates January 9, 2018 as the date by which the Commission 
shall either approve or disapprove or institute proceedings to 
determine whether to disapprove the proposed rule change (File Number 
SR-BatsBZX-2017-58).
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    \5\ Id.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(31).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-25346 Filed 11-22-17; 8:45 am]
BILLING CODE 8011-01-P



                                                                            Federal Register / Vol. 82, No. 225 / Friday, November 24, 2017 / Notices                                                    55891

                                                circumstances specified in the                          registered under the Exchange Act, to                   Section 17(b) of the Act authorizes the
                                                application, purchasers will be required                sell shares to Funds of Funds beyond                    Commission to grant an order
                                                to purchase Creation Units by                           the limits of section 12(d)(1)(B) of the                permitting a transaction otherwise
                                                depositing specified instruments                        Act. The application’s terms and                        prohibited by section 17(a) if it finds
                                                (‘‘Deposit Instruments’’), and                          conditions are designed to, among other                 that (a) the terms of the proposed
                                                shareholders redeeming their shares                     things, help prevent any potential (i)                  transaction are fair and reasonable and
                                                will receive specified instruments                      undue influence over a Fund through                     do not involve overreaching on the part
                                                (‘‘Redemption Instruments’’). The                       control or voting power, or in                          of any person concerned; (b) the
                                                Deposit Instruments and the                             connection with certain services,                       proposed transaction is consistent with
                                                Redemption Instruments will each                        transactions, and underwritings, (ii)                   the policies of each registered
                                                correspond pro rata to the positions in                 excessive layering of fees, and (iii)                   investment company involved; and (c)
                                                the Fund’s portfolio (including cash                    overly complex fund structures, which                   the proposed transaction is consistent
                                                positions) except as specified in the                   are the concerns underlying the limits                  with the general purposes of the Act.
                                                application.                                            in sections 12(d)(1)(A) and (B) of the                    For the Commission, by the Division of
                                                   4. Because shares will not be                        Act.                                                    Investment Management, under delegated
                                                individually redeemable, applicants                        8. Applicants request an exemption                   authority.
                                                request an exemption from section                       from sections 17(a)(1) and 17(a)(2) of the              Eduardo A. Aleman,
                                                5(a)(1) and section 2(a)(32) of the Act                 Act to permit persons that are Affiliated               Assistant Secretary.
                                                that would permit the Funds to register                 Persons, or Second-Tier Affiliates, of the
                                                                                                                                                                [FR Doc. 2017–25359 Filed 11–22–17; 8:45 am]
                                                as open-end management investment                       Funds, solely by virtue of certain
                                                                                                                                                                BILLING CODE 8011–01–P
                                                companies and issue shares that are                     ownership interests, to effectuate
                                                redeemable in Creation Units only.                      purchases and redemptions in-kind. The
                                                   5. Applicants also request an                        deposit procedures for in-kind                          SECURITIES AND EXCHANGE
                                                exemption from section 22(d) of the Act                 purchases of Creation Units and the                     COMMISSION
                                                and rule 22c–1 under the Act as                         redemption procedures for in-kind
                                                secondary market trading in shares will                 redemptions of Creation Units will be                   [Release No. 34–82115; File No. SR–
                                                take place at negotiated prices, not at a               the same for all purchases and                          BatsBZX–2017–58]
                                                current offering price described in a                   redemptions and Deposit Instruments
                                                Fund’s prospectus, and not at a price                   and Redemption Instruments will be                      Self-Regulatory Organizations; Bats
                                                based on NAV. Applicants state that (a)                 valued in the same manner as those                      BZX Exchange, Inc.; Notice of
                                                secondary market trading in shares does                 investment positions currently held by                  Designation of a Longer Period for
                                                not involve a Fund as a party and will                  the Funds. Applicants also seek relief                  Commission Action on a Proposed
                                                not result in dilution of an investment                 from the prohibitions on affiliated                     Rule Change To List and Trade Shares
                                                in shares, and (b) to the extent different              transactions in section 17(a) to permit a               of the CBOE S&P 500® Dividend
                                                prices exist during a given trading day,                Fund to sell its shares to and redeem its               Aristocrats® Target Income Index ETF
                                                or from day to day, such variances occur                shares from a Fund of Funds, and to                     Under the ETF Series Solutions Trust,
                                                as a result of third-party market forces,               engage in the accompanying in-kind                      Under Exchange Rule 14.11(c)(3),
                                                such as supply and demand. Therefore,                   transactions with the Fund of Funds.3                   Index Fund Shares
                                                applicants assert that secondary market                 The purchase of Creation Units by a                     November 17, 2017.
                                                transactions in shares will not lead to                 Fund of Funds directly from a Fund will                   On September 19, 2017, Bats BZX
                                                discrimination or preferential treatment                be accomplished in accordance with the                  Exchange, Inc. (‘‘Exchange’’) filed with
                                                among purchasers. Finally, applicants                   policies of the Fund of Funds and will                  the Securities and Exchange
                                                represent that share market prices will                 be based on the NAVs of the Funds.                      Commission (‘‘Commission’’), pursuant
                                                be disciplined by arbitrage                                9. Section 6(c) of the Act permits the               to Section 19(b)(1) of the Securities
                                                opportunities, which should prevent                     Commission to exempt any persons or                     Exchange Act of 1934 (‘‘Act’’) 1 and Rule
                                                shares from trading at a material                       transactions from any provision of the                  19b–4 thereunder,2 a proposed rule
                                                discount or premium from NAV.                           Act if such exemption is necessary or                   change to list and trade Shares of the
                                                   6. With respect to Funds that effect                 appropriate in the public interest and                  CBOE S&P 500® Dividend Aristocrats®
                                                creations and redemptions of Creation                   consistent with the protection of
                                                                                                                                                                Target Income Index ETF under
                                                Units in kind and that are based on                     investors and the purposes fairly
                                                                                                                                                                Exchange Rule 14.11(c)(3). The
                                                certain Underlying Indexes that include                 intended by the policy and provisions of
                                                foreign securities, applicants request                                                                          proposed rule change was published for
                                                                                                        the Act. Section 12(d)(1)(J) of the Act
                                                relief from the requirement imposed by                                                                          comment in the Federal Register on
                                                                                                        provides that the Commission may
                                                section 22(e) in order to allow such                                                                            October 11, 2017.3 The Commission
                                                                                                        exempt any person, security, or
                                                Funds to pay redemption proceeds                                                                                received no comments on the proposed
                                                                                                        transaction, or any class or classes of
                                                within fifteen calendar days following                                                                          rule change.
                                                                                                        persons, securities, or transactions, from                Section 19(b)(2) of the Act 4 provides
                                                the tender of Creation Units for                        any provision of section 12(d)(1) if the
                                                                                                                                                                that, within 45 days of the publication
                                                redemption. Applicants assert that the                  exemption is consistent with the public
                                                                                                                                                                of notice of the filing of a proposed rule
                                                requested relief would not be                           interest and the protection of investors.
                                                                                                                                                                change, or within such longer period up
                                                inconsistent with the spirit and intent of
                                                                                                                                                                to 90 days as the Commission may
                                                section 22(e) to prevent unreasonable,                     3 The requested relief would apply to direct sales

                                                                                                        of shares in Creation Units by a Fund to a Fund of      designate if it finds such longer period
sradovich on DSK3GMQ082PROD with NOTICES




                                                undisclosed or unforeseen delays in the
                                                                                                        Funds and redemptions of those shares. Applicants,      to be appropriate and publishes its
                                                actual payment of redemption proceeds.                  moreover, are not seeking relief from section 17(a)
                                                   7. Applicants request an exemption to                                                                        reasons for so finding or as to which the
                                                                                                        for, and the requested relief will not apply to,
                                                permit Funds of Funds to acquire Fund                   transactions where a Fund could be deemed an              1 15
                                                                                                        Affiliated Person, or a Second-Tier Affiliate, of a            U.S.C. 78s(b)(1).
                                                shares beyond the limits of section                                                                               2 17 CFR 240.19b–4.
                                                                                                        Fund of Funds because an Adviser or an entity
                                                12(d)(1)(A) of the Act; and the Funds,                  controlling, controlled by or under common control        3 See Securities Exchange Act Release No. 81815
                                                and any principal underwriter for the                   with an Adviser provides investment advisory            (October 4, 2017), 82 FR 47265.
                                                Funds, and/or any broker or dealer                      services to that Fund of Funds.                           4 15 U.S.C. 78s(b)(2).




                                           VerDate Sep<11>2014   18:19 Nov 22, 2017   Jkt 244001   PO 00000   Frm 00093   Fmt 4703   Sfmt 4703   E:\FR\FM\24NON1.SGM     24NON1


                                                55892                         Federal Register / Vol. 82, No. 225 / Friday, November 24, 2017 / Notices

                                                self-regulatory organization consents,                  I. Self-Regulatory Organization’s                        Maker from meeting this quoting
                                                the Commission shall either approve the                 Statement of the Terms of Substance of                   requirement on a daily basis, nor does
                                                proposed rule change, disapprove the                    the Proposed Rule Change                                 it prohibit the Exchange from taking
                                                proposed rule change, or institute                         The Exchange proposes to amend                        disciplinary action against a Preferred
                                                proceedings to determine whether the                    Rule 7300. The text of the proposed rule                 Market Maker for failing to meet this
                                                proposed rule change should be                          change is available from the principal                   requirement each trading day.
                                                disapproved. The 45th day after                         office of the Exchange, at the                              Currently, the Exchange applies the
                                                publication of the notice for this                                                                               quoting requirements on a class-by-class
                                                                                                        Commission’s Public Reference Room
                                                proposed rule change is November 25,                                                                             basis. The Exchange is now proposing
                                                                                                        and also on the Exchange’s Internet Web
                                                2017. The Commission is extending this                                                                           that compliance with the quoting
                                                                                                        site at http://boxoptions.com.
                                                                                                                                                                 requirements apply to all of a Preferred
                                                45-day time period.
                                                                                                        II. Self-Regulatory Organization’s                       Market Maker’s classes for which it
                                                   The Commission finds that it is                      Statement of the Purpose of, and                         receives Preferenced Orders
                                                appropriate to designate a longer period                Statutory Basis for, the Proposed Rule                   collectively. This change is being
                                                within which to take action on the                      Change                                                   proposed as a competitive response to
                                                proposed rule change so that it has                        In its filing with the Commission, the                the rules of another exchange.6 The
                                                sufficient time to consider the proposed                self-regulatory organization included                    Exchange is not proposing any change
                                                rule change. Accordingly, the                           statements concerning the purpose of,                    to the actual quoting requirements, only
                                                Commission, pursuant to Section                         and basis for, the proposed rule change                  to how the requirements are applied to
                                                19(b)(2) of the Act,5 designates January                and discussed any comments it received                   Preferred Market Makers.
                                                9, 2018 as the date by which the                                                                                    The Exchange believes that applying
                                                                                                        on the proposed rule change. The text
                                                Commission shall either approve or                                                                               the continuous electronic quoting
                                                                                                        of these statements may be examined at
                                                disapprove or institute proceedings to                                                                           requirements for Preferred Market
                                                                                                        the places specified in Item IV below.
                                                determine whether to disapprove the                                                                              Makers collectively across all classes is
                                                                                                        The self-regulatory organization has
                                                proposed rule change (File Number SR–                                                                            a fair and efficient way for the Exchange
                                                                                                        prepared summaries, set forth in
                                                BatsBZX–2017–58).                                                                                                and market participants to evaluate
                                                                                                        Sections A, B, and C below, of the most
                                                                                                                                                                 compliance with the continuous
                                                  For the Commission, by the Division of                significant aspects of such statements.
                                                                                                                                                                 electronic quoting obligation. Applying
                                                Trading and Markets, pursuant to delegated              A. Self-Regulatory Organization’s                        the continuous electronic quoting
                                                authority.6                                             Statement of the Purpose of, and                         requirements collectively across all
                                                Eduardo A. Aleman,                                      Statutory Basis for, the Proposed Rule                   classes rather than on a class-by-class
                                                Assistant Secretary.                                    Change                                                   basis is beneficial to Preferred Market
                                                [FR Doc. 2017–25346 Filed 11–22–17; 8:45 am]                                                                     Makers by providing some flexibility to
                                                                                                        1. Purpose                                               choose which series in their appointed
                                                BILLING CODE 8011–01–P
                                                                                                           The Exchange proposes to amend                        classes they will continuously
                                                                                                        Rule 7300. Specifically, the Exchange is                 electronically quote—increasing the
                                                SECURITIES AND EXCHANGE                                 proposing to amend how the quoting                       continuous electronic quoting in the
                                                COMMISSION                                              requirements for Preferred Market                        series of one class while allowing for a
                                                                                                        Makers 3 are calculated. A Preferred                     decrease in the continuous electronic
                                                                                                        Market Maker must maintain a                             quoting in the series of another class.
                                                [Release No. 34–82113; File No. SR–BOX–                 continuous two-sided market, pursuant                    This flexibility, however, does not
                                                2017–35]                                                to Rule 8050(c)(1), throughout the                       diminish the Preferred Market Maker’s
                                                                                                        trading day, in 99% of the non-adjusted                  obligation to continuously electronically
                                                Self-Regulatory Organizations; BOX
                                                                                                        option series of each class for which it                 quote in a significant percentage of
                                                Options Exchange LLC; Notice of                                                                                  series for a significant part of the trading
                                                                                                        accepts Preferenced Orders,4 for 90% of
                                                Filing and Immediate Effectiveness of                                                                            day. This flexibility is especially
                                                                                                        the time the Exchange is open for
                                                a Proposed Rule Change To Amend                         trading in each such option class.5                      important for classes that have relatively
                                                Rule 7300                                               Compliance with the Preferred Market                     few series and may prevent a Preferred
                                                November 17, 2017.                                      Maker quoting requirement is                             Market Maker from reaching the
                                                                                                        determined on a monthly basis;                           continuous electronic quoting obligation
                                                   Pursuant to Section 19(b)(1) of the                  however, determining compliance with                     when failing to quote 90% of the trading
                                                Securities Exchange Act of 1934                         this requirement on a monthly basis                      day in more than one series in an
                                                (‘‘Act’’),1 and Rule 19b–4 thereunder,2                 does not relieve a Preferred Market                      appointed class. The Exchange believes
                                                notice is hereby given that on November                                                                          that the proposed rule change will not
                                                8, 2017, BOX Options Exchange LLC                         3 The term ‘‘Preferred Market Maker’’ means a          diminish, and may in fact increase,
                                                (the ‘‘Exchange’’) filed with the                       Market Maker designated as such by a Participant         market making activity on the Exchange,
                                                Securities and Exchange Commission                      with respect to an order submitted by such               by applying continuous electronic
                                                                                                        Participant to BOX. See Rule 7300(a)(2).
                                                (‘‘Commission’’) the proposed rule                        4 The term ‘‘Preferenced Order’’ means any order,      quoting obligations in a reasonable
                                                change as described in Items I and II                   whether on a single option instrument or on a            manner, which is already in place on
                                                below, which Items have been prepared                   Complex Order Strategy, for which a Preferred            other options exchanges.7
                                                by the self-regulatory organization. The                Market Maker is designated with respect to such
                                                                                                        order, upon submission of such order to BOX. See         2. Statutory Basis
sradovich on DSK3GMQ082PROD with NOTICES




                                                Commission is publishing this notice to                 Rule 7300(a)(1).
                                                solicit comments on the proposed rule                     5 For purposes of this requirement, a Preferred
                                                                                                                                                                    The Exchange believes that the
                                                from interested persons.                                Market Maker is not required to quote in intra-day       proposal is consistent with the
                                                                                                        add-on series or series that have a time to expiration
                                                                                                        of nine months or more in the classes for which it         6 See
                                                                                                                                                                       CBOE Rule 8.13(d).
                                                  5 Id.
                                                                                                        receives Preferenced Orders and a Market Maker             7 See
                                                                                                                                                                       e.g., Nasdaq ISE, LLC (‘‘ISE’’) Rule 713,
                                                  6 17 CFR 200.30–3(a)(31).                             may still be a Preferred Market Maker in any such        Supplementary Material .03 and Rule 804(e); and
                                                  1 15 U.S.C. 78s(b)(1).                                series if the Market Maker otherwise complies with       NYSE Arca, Inc. (‘‘NYSE Arca’’) Options Rule 6.88–
                                                  2 17 CFR 240.19b–4.                                   the requirements.                                        O.



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Document Created: 2017-11-22 23:33:39
Document Modified: 2017-11-22 23:33:39
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation82 FR 55891 

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