83 FR 15659 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the ProShares Short VIX Short-Term Futures ETF and ProShares Ultra VIX Short-Term Futures ETF
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 70 (April 11, 2018)
Federal Register Volume 83, Issue 70 (April 11, 2018)
| Page Range | 15659-15662 | |
| FR Document | 2018-07406 |
[Federal Register Volume 83, Number 70 (Wednesday, April 11, 2018)] [Notices] [Pages 15659-15662] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-07406] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83000; File No. SR-NYSEArca-2018-17] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the ProShares Short VIX Short-Term Futures ETF and ProShares Ultra VIX Short-Term Futures ETF April 5, 2018. Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that on March 23, 2018, NYSE Arca, Inc. (``Exchange'' or ``NYSE Arca'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to make changes to certain representations made in the proposed rule change previously filed with the Commission pursuant to Rule 19b-4 relating to ProShares Short VIX Short-Term Futures ETF and ProShares Ultra VIX Short-Term Futures ETF, shares of which currently are listed and traded under NYSE Arca Rule 8.200-E, Commentary .02. The proposed rule change is available on the Exchange's website at www.nyse.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Commission has approved the listing and trading on the Exchange of shares (``Shares'') of the ProShares Short VIX Short-Term Futures ETF (the ``Short Fund'') and ProShares Ultra VIX Short-Term Futures ETF (the ``Ultra Fund'' and, together with the Short Fund, the ``Funds'') under NYSE Arca Rule 8.200-E, Commentary .02 (formerly NYSE Arca Equities Rule 8.200, Commentary .02), which governs the listing and trading of Trust Issued Receipts.\4\ Shares of the Funds are currently listed and traded on the Exchange under NYSE Arca Rule 8.200-E, Commentary .02.\5\ Other than Shares of the Short Fund and the Ultra Fund, shares of the ProShares ETFs approved for listing and trading in the Prior Order are not listed and traded on the Exchange.\6\ --------------------------------------------------------------------------- \4\ Commentary .02 to NYSE Arca Rule 8.200-E applies to TIRs that invest in ``Financial Instruments''. The term ``Financial Instruments'', as defined in Commentary .02(b)(4) to NYSE Arca Rule 8.200-E, means any combination of investments, including cash; securities; options on securities and indices; futures contracts; options on futures contracts; forward contracts; equity caps, collars and floors; and swap agreements. \5\ The Commission previously approved the listing and trading of the Shares of the Funds on the Exchange. See Securities Exchange Act Release Nos. 65134 (August 15, 2011), 76 FR 52034 (August 19, 2011) (SR-NYSEArca-2011-23) (Order Granting Approval of Proposed Rule Change To List and Trade Shares of ProShares Short VIX Short- Term Futures ETF, ProShares Short VIX Mid-Term Futures ETF, ProShares Ultra VIX Short-Term Futures ETF, ProShares Ultra VIX Mid- Term Futures ETF, ProShares UltraShort VIX Short-Term Futures ETF, and ProShares UltraShort VIX Mid-Term Futures ETF Under NYSE Arca Equities Rule 8.200, Commentary .02) (the ``Prior Order''); 64470 (May 11, 2011), 76 FR 28493 (May 17, 2011) (SR-NYSEArca-2011-23) (Notice of Filing of Proposed Rule Change To List and Trade Shares of the Funds Under NYSE Arca Equities Rule 8.200, Commentary .02.) (the ``Prior Notice''). \6\ On February 28, 2018, the Exchange appended a ``.BC'' (below compliance) indicator to the trading symbols for the Funds (SVXY for the Short Fund and UVXY for the Ultra Fund), signifying non- compliance with certain representations in the Prior Notice and Prior Order. --------------------------------------------------------------------------- The Shares are issued by ProShares Trust II (the ``Trust''). ProShare Capital Management LLC (``Sponsor'') serves as the Trust's Sponsor. In this proposed rule change, the Exchange proposes to amend certain representations made in the Prior Notice relating to each Fund's investment [[Page 15660]] objective, in order to reflect recent changes to the investment objective of each Fund, as described below.\7\ --------------------------------------------------------------------------- \7\ The Funds have a filed registration statement on Form S-3 under the Securities Act of 1933 (File No. 333-220688). The Funds' prospectus containing the previous investment objectives for the Funds was filed pursuant to Rule 424(b)(3) on February 15, 2018. A prospectus containing the new objectives, as described herein, was filed pursuant to Rule 424(b)(3) on February 28, 2018 (``Registration Statement''). The description of the Funds and the Shares contained herein are based on the Registration Statement. The change to each Fund's investment objective as described herein was implemented effective as of the close of business on February 27, 2018. The Sponsor issued a press release dated February 26, 2018 regarding the Sponsor's plans to reduce the target exposure for the Funds. See http://www.proshares.com/news/proshare_capital_management_llc_plans_to_reduce_target_exposure_on_two_etfs.html. --------------------------------------------------------------------------- The Sponsor believes the change to each Fund's investment objective (as described herein) is appropriate and consistent with the best interest of each Fund and Fund shareholders in light of recent extreme changes in the value of the S&P 500 [supreg] VIX Short-Term Futures Index (the ``Index''). As a result of the change to each Fund's investment objective, the Sponsor expects the risk profile and volatility of each Fund to be significantly reduced. As stated in the Prior Notice, each Fund seeks, on a daily basis, to provide investment results (before fees and expenses) that correspond to the inverse of the daily performance or a multiple of the daily performance of a benchmark (i.e., the Index) that seeks to offer exposure to market volatility through publicly traded futures markets. Specifically, the prior investment objective of the Short Fund was to seek results (before fees and expenses) that correspond to the inverse (-1x) of the performance of the Index for a single day. The prior investment objective of the Ultra Fund was to seek results (before fees and expenses) that correspond to two times (2x) the performance of the Index for a single day.\8\ Each Fund seeks to achieve its investment objective by investing under normal market conditions in VIX Futures Contracts.\9\ --------------------------------------------------------------------------- \8\ According to the Registration Statement, for these purposes, a ``single day'' is measured from the time a Fund calculates its net asset value (``NAV'') to the time of the Fund's next NAV calculation. \9\ The term ``under normal conditions'' includes, but is not limited to, the absence of extreme volatility or trading halts in the futures markets or the financial markets generally; operational issues causing dissemination of inaccurate market information; or force majeure type events such as systems failure, natural or man- made disaster, act of God, armed conflict, act of terrorism, riot or labor disruption or any similar intervening circumstance. --------------------------------------------------------------------------- If the Short Fund is successful in meeting its objective, its value (before fees and expenses) should gain approximately as much on a percentage basis as its Index when the Index declines on a given day. Conversely, its value (before fees and expenses) should lose approximately as much on a percentage basis as its Index when the Index rises on a given day. If the Ultra Fund is successful in meeting its objective, its value (before fees and expenses) should gain approximately twice as much on a percentage basis as its Index when the Index rises on a given day. Conversely, its value (before fees and expenses) should lose approximately twice as much on a percentage basis as its Index when the Index declines on a given day. As of the close of business on February 27, 2018, the Short Fund changed its investment objective to seek results (before fees and expenses) that correspond to one-half the inverse (-0.5x) of the performance of the Index for a single day. The Ultra Fund changed its investment objective to seek results (before fees and expenses) that correspond to one and one-half times (1.5x) of the performance of the Index for a single day. As a result of the change to each Fund's investment objective, the Exchange proposes to amend the representations in the Prior Notice described in the preceding two paragraphs as follows. If the Short Fund is successful in meeting its objective, its value (before fees and expenses) should gain approximately half as much on a percentage basis as its Index when the Index declines on a given day. Conversely, its value (before fees and expenses) should lose approximately half as much on a percentage basis as the Index when the Index rises on a given day. If the Ultra Fund is successful in meeting its objective, its value (before fees and expenses) should gain approximately 1.5 times as much on a percentage basis as its Index when the Index rises on a given day. Conversely, its value (before fees and expenses) should lose approximately 1.5 times as much on a percentage basis as its Index when the Index declines on a given day. The Prior Notice stated that the Funds do not seek to achieve their stated investment objective over a period of time greater than one day because mathematical compounding prevents the Funds from perfectly achieving such results. Accordingly, as noted in the Prior Notice, results over periods of time greater than one day typically will not be a simple inverse correlation (-100%) or multiple correlation (+200%) of the period return of the Index and may differ significantly. As a result of the change to each Fund's investment objective, the Exchange proposes to amend the representations in the preceding paragraph with respect to the Short Fund and the Ultra Fund as described below. The Funds do not seek to achieve their stated investment objective over a period of time greater than one day because mathematical compounding prevents the Funds from perfectly achieving such results. Accordingly, results over periods of time greater than one day typically will not be a simple one-half of the inverse correlation (- 50%) or multiple correlation (+150%) of the period return of the Index and may differ significantly. The Prior Notice stated that NYSE Arca will calculate and disseminate every 15 seconds throughout the NYSE Arca Core Trading Session (9:30 a.m. to 4:00 p.m. E.T.) an updated Intraday Optimized Portfolio Value (``IOPV''). The Prior Notice also stated that the IOPV will be calculated by the NYSE Arca using the prior day's closing net assets of a Fund as a base and updating throughout the trading day changes in the value of such Fund's holdings. The Exchange proposes to amend these representations to state that the IOPV will be calculated and widely disseminated by one or more major market data vendors every 15 seconds throughout the NYSE Arca Core Trading Session, and that the IOPV will be calculated using the prior day's closing net assets of a Fund as a base and updating throughout the trading day changes in the value of such Fund's holdings, consistent with the Exchange's previous proposed rule change regarding calculation of the Intraday Indicative Value for specified Exchange-Traded Products.\10\ --------------------------------------------------------------------------- \10\ See Securities Exchange Act Release No. 81985 (October 31, 2017) (SR-NYSEArca-2017-127) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Exchange Calculation of the Intraday Indicative Value for Specified Exchange-Traded Products). --------------------------------------------------------------------------- Except for the changes noted above, all other statements and representations made in the Prior Notice remain unchanged.\11\ The Funds will comply with all continued listing requirements under NYSE Arca Rule 8.200-E, Commentary .02. --------------------------------------------------------------------------- \11\ See note 5, supra. --------------------------------------------------------------------------- 2. Statutory Basis The basis under the Act for this proposed rule change is the requirement under Section 6(b)(5) \12\ that an exchange have rules that are designed to prevent fraudulent and manipulative [[Page 15661]] acts and practices, to promote just and equitable principles of trade, to remove impediments to, and perfect the mechanism of a free and open market and, in general, to protect investors and the public interest. --------------------------------------------------------------------------- \12\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes that the proposed rule change is designed to prevent fraudulent and manipulative acts and practices, and is designed to promote just and equitable principles of trade and to protect investors and the public interest. Consistent with the representations in the Prior Notice, each Fund will continue to seek to achieve its investment objective by investing under normal market conditions in VIX Futures Contracts. As a result of the change to each Fund's investment objective, the Exchange is proposing to amend representations in the Prior Notice regarding the correlation of the value of the Shares of the Short Fund and the Ultra Fund with the Index. The Short Fund previously had an investment objective to seek results (before fees and expenses) that correspond to the inverse (-1x) of the performance of the Index for a single day. As of February 27, 2018, the Fund's objective was changed to seek results (before fees and expenses) that correspond to one-half of the inverse (-0.5x) of the performance of the Index for a single day. The Ultra Fund previously had an investment objective to seek results (before fees and expenses) that correspond to two times (2x) the performance of the Index for a single day. As of the close of business on February 27, 2018, the Fund's objective was changed to seek results (before fees and expenses) that correspond to one and one-half times (1.5x) of the performance of the Index for a single day. The Sponsor believes the change to each Fund's investment objective is appropriate and consistent with the best interest of each Fund and Fund shareholders in light of recent extreme changes in the value of the Index. As a result of the change to each Fund's investment objective, the Sponsor expects the risk profile and volatility of each Fund to be significantly reduced. The Exchange's proposal to amend the representations in the Prior Notice regarding the IOPV calculation and dissemination as described above reflects changes that are consistent with the Exchange's previous proposed rule change regarding calculation of the Intraday Indicative Value for specified Exchange-Traded Products.\13\ --------------------------------------------------------------------------- \13\ See note 10, supra. --------------------------------------------------------------------------- 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 believes the proposed rule change will enhance competition and benefit investors and the marketplace by permitting continued listing and trading of Shares of the Funds with their revised investment objectives, as described above. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act \14\ and Rule 19b- 4(f)(6) thereunder.\15\ --------------------------------------------------------------------------- \14\ 15 U.S.C. 78s(b)(3)(A). \15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. --------------------------------------------------------------------------- A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act \16\ normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii) \17\ permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the 30-day operative delay so that the proposed rule change may become operative upon filing. The Commission notes that, as a result of the change to each Fund's investment objective,\18\ the risk profile and volatility of each Fund is expected to be reduced. Moreover, the proposed changes to the representations in the Prior Notice regarding IOPV calculation and dissemination are consistent with the Exchange's previous proposed rule change regarding calculation of the Intraday Indicative Value for specified Exchange-Traded Products. The Commission notes that, except for the changes in this proposed rule change, all other statements and representations made in the Prior Notice remain unchanged, and the Funds will comply with all continued listing requirements under NYSE Arca Rule 8.200-E, Commentary .02. The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. Accordingly, the Commission hereby waives the operative delay and designates the proposed rule change operative upon filing.\19\ --------------------------------------------------------------------------- \16\ 17 CFR 240.19b-4(f)(6). \17\ 17 CFR 240.19b-4(f)(6)(iii). \18\ As noted above, the change to each Fund's investment objective was implemented effective as of the close of business on February 27, 2018. On February 28, 2018, the Exchange appended a ``.BC'' indicator to the trading symbols for the Funds, signifying non-compliance with certain representations in the Prior Notice and Prior Order. \19\ For purposes only of waiving the 30-day operative delay, the Commission also 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 necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-NYSEArca-2018-17 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange [[Page 15662]] Commission, 100 F Street NE, Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSEArca-2018-17. 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 website (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 website 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. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEArca-2018-17 and should be submitted on or before May 2, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\20\ --------------------------------------------------------------------------- \20\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-07406 Filed 4-10-18; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 83, No. 70 / Wednesday, April 11, 2018 / Notices 15659
support fee for calendar year 2018.2 In By the Commission. of those statements may be examined at
connection with its review, the Brent J. Fields, the places specified in Item IV below.
Commission also reviewed the budget Secretary. The Exchange has prepared summaries,
for the FAF and the FASB for calendar [FR Doc. 2018–07363 Filed 4–10–18; 8:45 am] set forth in sections A, B, and C below,
year 2018. BILLING CODE 8011–01–P
of the most significant parts of such
statements.
Section 109 of the Act also provides
that the standard setting body can have A. Self-Regulatory Organization’s
SECURITIES AND EXCHANGE Statement of the Purpose of, and the
additional sources of revenue for its
COMMISSION Statutory Basis for, the Proposed Rule
activities, such as earnings from sales of
publications, provided that each [Release No. 34–83000; File No. SR– Change
additional source of revenue shall not NYSEArca–2018–17]
1. Purpose
jeopardize, in the judgment of the
Self-Regulatory Organizations; NYSE The Commission has approved the
Commission, the actual or perceived Arca, Inc.; Notice of Filing and listing and trading on the Exchange of
independence of the standard setter. In Immediate Effectiveness of Proposed shares (‘‘Shares’’) of the ProShares Short
this regard, the Commission also Rule Change Relating to the ProShares VIX Short-Term Futures ETF (the ‘‘Short
considered the interrelation of the Short VIX Short-Term Futures ETF and Fund’’) and ProShares Ultra VIX Short-
operating budgets of the FAF, the FASB, ProShares Ultra VIX Short-Term Term Futures ETF (the ‘‘Ultra Fund’’
and the Governmental Accounting Futures ETF and, together with the Short Fund, the
Standards Board (‘‘GASB’’), the FASB’s ‘‘Funds’’) under NYSE Arca Rule 8.200–
sister organization, which sets April 5, 2018. E, Commentary .02 (formerly NYSE
accounting standards used by state and Pursuant to Section 19(b)(1) 1 of the Arca Equities Rule 8.200, Commentary
local government entities. The Securities Exchange Act of 1934 .02), which governs the listing and
Commission has been advised by the (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 trading of Trust Issued Receipts.4 Shares
FAF that neither the FAF, the FASB, nor notice is hereby given that on March 23, of the Funds are currently listed and
the GASB accept contributions from the 2018, NYSE Arca, Inc. (‘‘Exchange’’ or traded on the Exchange under NYSE
‘‘NYSE Arca’’) filed with the Securities Arca Rule 8.200–E, Commentary .02.5
accounting profession.
and Exchange Commission Other than Shares of the Short Fund and
The Commission understands that the (‘‘Commission’’) the proposed rule the Ultra Fund, shares of the ProShares
Office of Management and Budget change as described in Items I and II ETFs approved for listing and trading in
(‘‘OMB’’) has determined the FASB’s below, which Items have been prepared the Prior Order are not listed and traded
spending of the 2018 accounting by the self-regulatory organization. The on the Exchange.6
support fee is sequestrable under the Commission is publishing this notice to The Shares are issued by ProShares
Budget Control Act of 2011.3 So long as solicit comments on the proposed rule Trust II (the ‘‘Trust’’). ProShare Capital
sequestration is applicable, we change from interested persons. Management LLC (‘‘Sponsor’’) serves as
anticipate that the FAF will work with I. Self-Regulatory Organization’s the Trust’s Sponsor.
the Commission and Commission staff In this proposed rule change, the
Statement of the Terms of Substance of
as appropriate regarding its Exchange proposes to amend certain
the Proposed Rule Change
implementation of sequestration. representations made in the Prior Notice
The Exchange proposes to make relating to each Fund’s investment
The Commission requests that the changes to certain representations made
FAF and the FASB continue to provide in the proposed rule change previously 4 Commentary .02 to NYSE Arca Rule 8.200–E
the Commission with quarterly updates filed with the Commission pursuant to applies to TIRs that invest in ‘‘Financial
of their activities, including but not Rule 19b–4 relating to ProShares Short Instruments’’. The term ‘‘Financial Instruments’’, as
defined in Commentary .02(b)(4) to NYSE Arca Rule
limited to their efforts to include a VIX Short-Term Futures ETF and 8.200–E, means any combination of investments,
wide-range of views from investors, ProShares Ultra VIX Short-Term Futures including cash; securities; options on securities and
preparers, auditors, academics, and ETF, shares of which currently are listed indices; futures contracts; options on futures
other constituent groups, and their contracts; forward contracts; equity caps, collars
and traded under NYSE Arca Rule and floors; and swap agreements.
efforts to improve the selection process 8.200–E, Commentary .02. The proposed 5 The Commission previously approved the
for FASB and FAF members. rule change is available on the listing and trading of the Shares of the Funds on
After its review, the Commission Exchange’s website at www.nyse.com, at the Exchange. See Securities Exchange Act Release
the principal office of the Exchange, and Nos. 65134 (August 15, 2011), 76 FR 52034 (August
determined that the 2018 annual 19, 2011) (SR–NYSEArca–2011–23) (Order Granting
at the Commission’s Public Reference Approval of Proposed Rule Change To List and
accounting support fee for the FASB is
Room. Trade Shares of ProShares Short VIX Short-Term
consistent with Section 109 of the Act. Futures ETF, ProShares Short VIX Mid-Term
Accordingly, II. Self-Regulatory Organization’s Futures ETF, ProShares Ultra VIX Short-Term
It is ordered, pursuant to Section 109 Statement of the Purpose of, and Futures ETF, ProShares Ultra VIX Mid-Term
Statutory Basis for, the Proposed Rule Futures ETF, ProShares UltraShort VIX Short-Term
of the Act, that the FASB may act in Futures ETF, and ProShares UltraShort VIX Mid-
accordance with this determination of Change Term Futures ETF Under NYSE Arca Equities Rule
the Commission. In its filing with the Commission, the 8.200, Commentary .02) (the ‘‘Prior Order’’); 64470
(May 11, 2011), 76 FR 28493 (May 17, 2011) (SR–
self-regulatory organization included NYSEArca-2011–23) (Notice of Filing of Proposed
2 The Financial Accounting Foundation’s Board statements concerning the purpose of, Rule Change To List and Trade Shares of the Funds
amozie on DSK30RV082PROD with NOTICES
of Trustees approved the FASB’s budget on and basis for, the proposed rule change Under NYSE Arca Equities Rule 8.200, Commentary
November 14, 2017. The FAF submitted the and discussed any comments it received .02.) (the ‘‘Prior Notice’’).
approved budget to the Commission on November 6 On February 28, 2018, the Exchange appended
17, 2017.
on the proposed rule change. The text
a ‘‘.BC’’ (below compliance) indicator to the trading
3 See ‘‘OMB Report Pursuant to the Sequestration symbols for the Funds (SVXY for the Short Fund
1 15 U.S.C. 78s(b)(1).
Transparency Act of 2012’’ (P.L. 112–155), page 222 and UVXY for the Ultra Fund), signifying non-
2 15 U.S.C. 78a.
of 224 at: http://www.whitehouse.gov/sites/default/ compliance with certain representations in the Prior
files/omb/assets/legislative_reports/stareport.pdf. 3 17 CFR 240.19b–4. Notice and Prior Order.
VerDate Sep<11>2014 17:17 Apr 10, 2018 Jkt 244001 PO 00000 Frm 00110 Fmt 4703 Sfmt 4703 E:\FR\FM\11APN1.SGM 11APN1](https://thefederalregister.org/doc/83_FR_15729/page/1.svg)
![15662 Federal Register / Vol. 83, No. 70 / Wednesday, April 11, 2018 / Notices
Commission, 100 F Street NE, SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s
Washington, DC 20549–1090. COMMISSION Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
All submissions should refer to File
[Release No. 34–82999; File No. SR–ISE– Change
Number SR–NYSEArca–2018–17. This
file number should be included on the 2018–28] 1. Purpose
subject line if email is used. To help the
Self-Regulatory Organizations; Nasdaq The purpose of the proposed rule
Commission process and review your
ISE, LLC; Notice of Filing and change is to amend the Exchange’s
comments more efficiently, please use Immediate Effectiveness of Proposed
only one method. The Commission will Schedule of Fees to provide greater
Rule Change To Amend the clarity as to how the Exchange currently
post all comments on the Commission’s Exchange’s Schedule of Fees To
internet website (http://www.sec.gov/ charges complex orders executed during
Clarify the Fees and Rebates for the an Exposure Auction pursuant to Rule
rules/sro.shtml). Copies of the Complex Order Exposure Auction
submission, all subsequent 722(b)(3)(iii). An Exposure Auction is
Pursuant to Rule 722(b)(3)(iii) automatically initiated when a member
amendments, all written statements
with respect to the proposed rule April 5, 2018. submits an eligible complex order that
change that are filed with the is marked for price improvement.3
Pursuant to Section 19(b)(1) of the Because Exposure Auctions are initiated
Commission, and all written Securities Exchange Act of 1934
communications relating to the by complex orders entered on the
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 complex order book, they are charged
proposed rule change between the notice is hereby given that on March 23,
based on the same maker/taker scheme
Commission and any person, other than 2018, Nasdaq ISE, LLC (‘‘ISE’’ or
as is applicable to other complex orders
those that may be withheld from the ‘‘Exchange’’) filed with the Securities
that are executed on the complex order
public in accordance with the and Exchange Commission
(‘‘Commission’’) the proposed rule book rather than the separate pricing
provisions of 5 U.S.C. 552, will be
change as described in Items I and II defined for Crossing Orders.4
available for website viewing and
below, which Items have been prepared Specifically, the Exchange treats the
printing in the Commission’s Public
by the Exchange. The Commission is originating side of Exposure Auction
Reference Room, 100 F Street NE,
publishing this notice to solicit orders as adding liquidity, and the
Washington, DC 20549 on official
comments on the proposed rule change contra side as taking liquidity, for the
business days between the hours of
from interested persons. purpose of determining applicable fees
10:00 a.m. and 3:00 p.m. Copies of the
and rebates. Since the Schedule of Fees
filing also will be available for I. Self-Regulatory Organization’s does not currently indicate the manner
inspection and copying at the principal Statement of the Terms of Substance of in which the Exchange treats the
office of the Exchange. All comments the Proposed Rule Change originating or contra side of Exposure
received will be posted without change. Auction orders, the Exchange proposes
Persons submitting comments are The Exchange proposes to amend the
Exchange’s Schedule of Fees to provide to add the following language in Section
cautioned that we do not redact or edit II: ‘‘During an ‘‘exposure’’ auction
personal identifying information from greater clarity as to how the Exchange
currently charges complex orders pursuant to Rule 722(b)(3)(iii), the
comment submissions. You should originating side of the auction order will
submit only information that you wish executed during an exposure auction
pursuant to Rule 722(b)(3)(iii) be assessed the applicable maker fee or
to make available publicly. All rebate, and the contra side will be
submissions should refer to File (‘‘Exposure Auction’’).
assessed the applicable taker fee or
Number SR–NYSEArca–2018–17 and The text of the proposed rule change
rebate.’’
should be submitted on or before May is available on the Exchange’s website at
2, 2018. http://ise.cchwallstreet.com/, at the Thus, based on current rates, the
principal office of the Exchange, and at Exchange charges the originating side of
For the Commission, by the Division of the Commission’s Public Reference Non-Priority Customer 5 Exposure
Trading and Markets, pursuant to delegated Room. Auction orders that trade against other
authority.20 Non-Priority Customer orders a maker
Eduardo A. Aleman, II. Self-Regulatory Organization’s fee of $0.10 per contract in Select
Assistant Secretary. Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
[FR Doc. 2018–07406 Filed 4–10–18; 8:45 am] 3 Pursuant to Rule 722(b)(3)(iii), the marked
Change complex order is exposed for a period of up to one-
BILLING CODE 8011–01–P
second. When the Exchange first adopted Rule
In its filing with the Commission, the 722(b)(3)(iii), it indicated that this exposure period,
Exchange included statements which provided members an opportunity for price
concerning the purpose of and basis for improvement, was not considered an ‘‘auction.’’ See
Securities Exchange Act Release No. 57706 (April
the proposed rule change and discussed 24, 2008), 73 FR 23517 (April 30, 2008) (SR–ISE–
any comments it received on the 2007–77) (‘‘2007 Filing’’). Notwithstanding the 2007
proposed rule change. The text of these Filing, this feature would be considered an auction
statements may be examined at the today.
4 A ‘‘Crossing Order’’ is an order executed in the
places specified in Item IV below. The
Exchange’s Facilitation Mechanism, Solicited Order
amozie on DSK30RV082PROD with NOTICES
Exchange has prepared summaries, set Mechanism, Price Improvement Mechanism (PIM)
forth in sections A, B, and C below, of or submitted as a Qualified Contingent Cross order.
the most significant aspects of such For purposes of the Fee Schedule, orders executed
statements. in the Block Order Mechanism are also considered
Crossing Orders.
5 Non-Priority Customer includes Market Maker,
1 15 U.S.C. 78s(b)(1). Non-Nasdaq ISE Market Maker, Firm Proprietary,
20 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4. Broker-Dealer, and Professional Customer.
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Document Created: 2018-04-10 23:59:15
Document Modified: 2018-04-10 23:59:15
| 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 | 83 FR 15659 |
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