83 FR 28689 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating To Changes in the Description of the Investments of the USCF Canadian Crude Oil Index Fund
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 119 (June 20, 2018)
Federal Register Volume 83, Issue 119 (June 20, 2018)
| Page Range | 28689-28694 | |
| FR Document | 2018-13172 |
[Federal Register Volume 83, Number 119 (Wednesday, June 20, 2018)] [Notices] [Pages 28689-28694] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-13172] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83447; File No. SR-NYSEArca-2018-39] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating To Changes in the Description of the Investments of the USCF Canadian Crude Oil Index Fund June14, 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 May 31, 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 reflect changes in the description of the investments of the USCF Canadian Crude Oil Index Fund (the ``Fund''). [[Page 28690]] Shares of the Fund have been approved by the Securities and Exchange Commission (the ``Commission'') for listing and trading on the Exchange under NYSE Arca Rule 8.200-E, Commentary .02. The Fund's shares have not commenced trading on the Exchange. 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 a proposed rule change relating to listing and trading on the Exchange of shares (``Shares'') of the Fund under NYSE Arca Rule 8.200-E,\4\ which governs the listing and trading of Trust Issued Receipts.\5\ The Fund is a new series of the United States Commodity Index Funds Trust (the ``Trust'').\6\ The Fund's Shares have not commenced trading on the Exchange. --------------------------------------------------------------------------- \4\ See Securities Exchange Act Release No. 81655 (September 19, 2017), 82 FR 44678 (September 25, 2017) (Notice of Filing of Amendment No. 4, and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 4, Relating to the Listing and Trading of Shares of the USCF Canadian Crude Oil Index Fund Under NYSE Arca Rule 8.200-E) (``Prior Order''). See also Amendment No. 4 to SR-NYSEArca-2016-177, available at https://www.sec.gov/comments/sr-nysearca-2016-177/nysearca2016177-2228753-160788.pdf (``Prior Amendment''). All terms referenced but not defined herein are defined in the Prior Order and Prior Amendment. \5\ Commentary .02 to NYSE Arca Rule 8.200-E applies to Trust Issued Receipts 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. \6\ The Trust is registered under the Securities Act of 1933 (15 U.S.C. 77a) (``Securities Act''). On June 16, 2016, the Trust filed with the Commission a registration statement on Form S-1 under the Securities Act relating to the Fund (File No. 333-212089) (``Registration Statement''). Pre-Effective Amendment No. 2 to the Registration Statement was filed on April 9, 2018. The changes described herein will not be implemented until an amendment to the Registration Statement relating to such changes is effective and this proposed rule change is effective and operative. --------------------------------------------------------------------------- As stated in the Prior Amendment, according to the Registration Statement, the investment objective of the Fund is for the daily changes in percentage terms of per Share NAV to reflect the daily changes in percentage terms of the Canadian Crude Excess Return Index (the ``CCIER'' or ``Index''), plus interest income from the Fund's short-term fixed income holdings, less the Fund's expenses. The Prior Amendment stated as follows (included on pages 5-6 of the Prior Amendment): ``The Fund will seek to achieve its investment objective by first entering into cash-settled uncleared over-the- counter (``OTC'') total return swap and/or forward transactions based on, and intended to replicate the return of, the CCIER (``Benchmark OTC Derivatives Contracts'', as described further below), and, second, to the extent market conditions are more favorable for such futures as compared to Benchmark OTC Derivatives Contracts, investing in the Benchmark Component Futures Contracts that underlie the CCIER. It will support these investments and investments in any other OTC derivatives contracts by holding the amounts of its margin, collateral and other requirements relating to these obligations in short-term obligations of the United States of two years or less (``Treasuries''), cash and cash equivalents. [footnote 9] \7\ --------------------------------------------------------------------------- \7\ The Prior Amendment stated the following in footnote 9: ``For purposes of this filing, cash equivalents are short-term instruments with maturities of less than three months and shall include the following: (i) Certificates of deposit issued against funds deposited in a bank or savings and loan association; (ii) bankers' acceptances, which are short-term credit instruments used to finance commercial transactions; (iii) repurchase agreements and reverse repurchase agreements; (iv) bank time deposits, which are monies kept on deposit with banks or savings and loan associations for a stated period of time at a fixed rate of interest; (v) commercial paper, which are short-term unsecured promissory notes; and (vi) money market funds.'' --------------------------------------------------------------------------- Third, if constrained by regulatory requirements or in view of market conditions or if one or more of the other Benchmark Component Futures Contracts is not available, the Fund may next invest in exchange traded futures contracts that are economically identical or substantially similar to the Benchmark Component Futures Contracts, e.g., futures contracts that are based on changes in the price of WTI oil traded on the CME. When, in view of regulatory requirements and market conditions, the Fund has invested to the fullest extent possible in the Benchmark OTC Derivatives Contracts and exchange-traded futures contracts, the Fund may then invest in (i) cleared swap contracts based on the Benchmark Component Futures Contracts, (ii) uncleared OTC derivatives contracts (specifically, swaps, forwards and options) based on either the price of the Benchmark Component Futures Contracts or on the price of the crude oil underlying the Benchmark Component Futures Contracts, and (iii) exchange-traded options on the Benchmark Component Futures Contracts. The foregoing investments, together with the Benchmark Component Futures Contracts and other exchange-traded futures contracts that are economically identical or substantially similar to the Benchmark Component Futures Contracts are referred to collectively as `Other Crude Oil-Related Investments'. Market conditions that USCF currently anticipates could cause the Fund to invest in Other Crude Oil-Related Investments include those allowing the Fund to obtain greater liquidity, to execute transactions with more favorable pricing, or if the Fund or USCF exceeds position limits or accountability levels established by an exchange.'' The Exchange proposes to replace the representations in the four preceding paragraphs regarding the Fund's investments with the following: The Fund will seek to achieve its investment objective first by investing in the nearby futures contracts that comprise the CCIER, i.e., (i) the ICE Crude Diff--TMX WCS 1B Index Future (ICE symbol: TDX) (the ``WCS Future''); and (ii) the ICE WTI Crude Future (ICE symbol: T) (the ``WTI Future'') (the WCS Futures and WTI Futures that comprise the CCIER are referred to herein as ``Benchmark Component Futures Contracts'') and may also invest in exchange traded futures contracts that are economically identical or substantially similar to the Benchmark Component Futures Contracts, e.g., futures contracts that are based on changes in the price of WTI crude oil traded on the Chicago Mercantile Exchange (``CME''), (together with the Benchmark Component Futures Contracts, ``eligible futures contracts'').\8\ [[Page 28691]] Thereafter, in view of regulatory requirements and market conditions and if the Fund has invested to the fullest extent possible in the eligible futures contracts described above, the Fund may then enter into any of the following: (i) Cleared swap contracts based on eligible futures contracts, (ii) cash-settled, uncleared over-the-counter (``OTC'') derivatives contracts (specifically, swaps, forwards and options) based on the price of the Benchmark Component Futures Contracts, other eligible futures contracts, the return on the CCIER or on the price of the crude oil underlying the Benchmark Component Futures Contracts (``OTC derivatives contracts''), or (iii) exchange- traded options on the Benchmark Component Futures Contracts. The foregoing investments, other than eligible futures contracts, are referred to collectively as ``Other Crude Oil-Related Investments''. Market conditions that USCF currently anticipates could cause the Fund to invest in Other Crude-Oil Related Investments include those allowing the Fund to obtain greater liquidity, to execute transactions with more favorable pricing, or if the Fund or USCF exceeds position limits or accountability levels established by an exchange. The Fund will support the margin, collateral and other requirements relating to its investments in eligible futures contracts and Other Crude Oil-Related Investments by holding the remaining amounts of its assets in short- term obligations of the United States with maturities of two years or less (``Treasuries''), cash and cash equivalents.\9\ --------------------------------------------------------------------------- \8\ As noted in the Prior Amendment, not more than 10% of the net assets of the Fund in the aggregate invested in futures contracts, or options on futures shall consist of futures contracts, or options on futures whose principal market is not a member of the Intermarket Surveillance Group or is a market with which the Exchange does not have a comprehensive surveillance sharing agreement. \9\ The definition of ``cash equivalents'' is unchanged from the definition in the Prior Amendment. See note 7, supra. --------------------------------------------------------------------------- Deletion of References to Benchmark OTC Derivatives Contracts Because the Fund will not seek to achieve its investment objective by first entering into Benchmark OTC Derivatives Contracts, as stated in the Prior Amendment, and because the term ``Benchmark OTC Derivatives Contracts'' will not be used to describe the Fund's investments, the Exchange proposes to delete or modify references to Benchmark OTC Derivatives Contracts or to the Fund's significant use of OTC derivatives contracts in the Prior Amendment, as described below. The Exchange proposes to delete the following phrase from the second sentence of the last partial paragraph on page 6 of the Prior Amendment: ``Notwithstanding the Fund's significant use of OTC derivatives contracts. . .''. Thus such sentence would read: ``The Sponsor believes that market arbitrage opportunities will cause daily changes in the Fund's Share price on the NYSE Arca on a percentage basis to closely track the daily changes in the Fund's per Share NAV on a percentage basis.'' The Exchange proposes to delete the following phrase from the sentence comprising footnote 10 of the Prior Amendment: ``While the Fund will primarily be composed of, and therefore will be a measure of, the prices of the Benchmark OTC Derivatives Contracts based upon futures comprising the CCIER,''. The remainder of such sentence, beginning with ``there is expected to be a reasonable degree of correlation'', would be unchanged. The Prior Amendment stated as follows (included on page 7 of the Prior Amendment): ``According to the Registration Statement, the Fund will primarily invest in Benchmark OTC Derivatives Contracts that are based on the CCIER which is comprised of the Benchmark Component Futures Contracts and, in the opinion of the Sponsor, are traded in sufficient volume to permit the ready taking and liquidation of positions. Such Benchmark OTC Derivatives Contracts, as well as all other Other Crude Oil-Related Investments that are OTC derivatives, will be ``swaps'' for purposes of Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act that fall within the jurisdiction of the Commodity Futures Trading Commission.'' \10\ --------------------------------------------------------------------------- \10\ The caption ``Benchmark OTC Derivatives Contracts'' would be replaced by ``OTC Derivatives Contracts.'' --------------------------------------------------------------------------- The Exchange proposes to replace these statements with the following: ``In the opinion of the Sponsor, the Other Crude-Oil Related Investments are traded in sufficient volume to permit the ready taking and liquidation of positions. Such other Other Crude Oil-Related Investments that are cleared swaps and OTC derivatives contracts, will be ``swaps'' for purposes of Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act that fall within the jurisdiction of the Commodity Futures Trading Commission.'' The Prior Amendment stated as follows (included in the last paragraph on page 7 of the Prior Amendment): ``The OTC derivatives contracts, including the Benchmark OTC Derivatives Contracts, will be entered between two parties, outside of public exchanges, in private contracts. Unlike the exchange-traded Benchmark Component Futures Contracts and the other exchange traded futures contracts, each party to an OTC derivatives contract bears credit risk with respect to the other party.'' The Exchange proposes to replace these statements with the following: ``The OTC derivatives contracts will be entered between two parties, outside of public exchanges, in private contracts. Unlike the eligible futures contracts, each party to an OTC derivatives contract bears credit risk with respect to the other party.'' The first sentence on page 8 of the Prior Amendment states as follows: ``In accordance with the terms and conditions of the Fund's ISDA Master Agreements, pursuant to which the Fund's OTC derivatives contracts will be entered into, the Fund will be entitled to increase or decrease its notional exposure to the CCIER from time to time, to among other things, manage Share purchases and reinvestment of distributions, Fund Share redemptions and market repurchases of Shares, and meet other liquidity needs.'' The Exchange proposes to replace this sentence with the following: ``In accordance with the terms and conditions of the Fund's ISDA Master Agreements, pursuant to which the Fund's OTC derivatives contracts will be entered into, the Fund will be entitled to increase or decrease its notional exposure under the applicable OTC derivatives contracts to, among other things, manage Share purchases, Fund Share redemptions and market repurchases of Shares, and meet other liquidity needs.'' The Exchange proposes to delete the phrase ``, including the Benchmark OTC Derivatives Contracts,'' from the first full paragraph on page 8 of the Prior Amendment. The first two sentences of the second full paragraph on page 8 of the Prior Amendment state as follows: ``The daily marked-to-market value of a Benchmark OTC Derivatives Contract will be based upon the performance of a notional investment in the CCIER. In turn, the performance of the CCIER will be based upon the performance of the underlying Benchmark Component Futures Contracts.'' The Exchange proposes to replace these sentences with the following sentence: ``The daily marked-to-market value of a cleared swap contract or an OTC derivatives contract will be based upon the performance of Benchmark Component Futures Contracts, other eligible futures contracts, the return of the CCIER, or on the price of the crude [[Page 28692]] oil underlying Benchmark Component Futures Contracts.'' The third full paragraph on page 8 of the Prior Amendment states as follows: ``The Fund may also enter into multiple Benchmark OTC Derivatives Contracts for the purpose of achieving its investment objective. If a Benchmark OTC Derivatives Contract is terminated, the Fund may either pursue the same or other alternative investment strategies with an acceptable counterparty, or make direct investments in the Benchmark Component Futures Contracts or other investments described above that provide a similar return to investing in the Benchmark Component Futures Contracts.'' The Exchange proposes to replace this paragraph with the following: ``If an OTC derivatives contract is terminated, the Fund may either pursue the same or other alternative investments with another acceptable counterparty, or make direct investments in the eligible futures contracts or other investments described above.'' Because the Fund will seek to achieve its investment objective first by investing in the nearby futures contracts that comprise the CCIER rather than by first entering into Benchmark OTC Derivatives Contracts, as stated in the Prior Amendment, the Sponsor has determined that it is appropriate to establish a later cutoff time for placing purchase and redemption orders. The first full paragraph on page 10 of the Prior Amendment states as follows: ``Purchase orders and redemption orders must be placed by 10:30 a.m. E.T. or the close of regular trading on the NYSE Arca, whichever is earlier. [footnote 13]'' The Exchange proposes to replace the preceding sentence with the following: ``Purchase orders and redemption orders must be placed by noon E.T. or the close of regular trading on the NYSE Arca, whichever is earlier. [footnote 13]'' The first sentence of footnote 13 of the Prior Amendment states as follows: ``USCF represents that an Authorized Participant's arbitrage opportunities with respect to the price it must pay for a Creation Basket will not be materially impacted by the requirement that the purchase and redemption order must be received by 10:30 a.m. E.T. which is prior to the ICE Futures Europe closing time.'' The Exchange proposes to replace this sentence with the following: ``USCF represents that an Authorized Participant's arbitrage opportunities with respect to the price it must pay for a Creation Basket will not be materially impacted by the requirement that the purchase and redemption order must be received by noon E.T., which is prior to the ICE Futures Europe closing time.'' \11\ --------------------------------------------------------------------------- \11\ The Commission has previously approved the listing and trading on the Exchange of Trust Issued Receipts listed under NYSE Arca Rule 8.600-E [sic], Commentary .02 for which creation and redemption orders must be placed by noon, E.T. See, e.g., Securities Exchange Act Release No. 66466 (February 24, 2012), 77 FR 12631 (March 1, 2012) (SR-NYSEArca-2011-97) (Order Granting Approval of Proposed Rule Change Relating to Listing and Trading of Shares of the Teucrium Agriculture Fund under NYSE Arca Equities Rule 8.200). --------------------------------------------------------------------------- The Prior Amendment stated as follows (included on pages 8-9 of the Prior Amendment): ``The Fund may also enter into certain transactions where an OTC derivatives contract component is exchanged for a corresponding futures contract (an ``Exchange for Related Position'' or ``EFRP'' transaction).'' The Exchange proposes to replace this sentence with the following: ``The Fund may also enter into certain transactions where a cleared swap or an OTC derivatives contract component is exchanged for a corresponding futures contract (an ``Exchange for Related Position'' or ``EFRP'' transaction).'' The Prior Amendment stated as follows (included on pages 10-11 of the Prior Amendment, under ``Calculating Per Share NAV''): ``The Benchmark OTC Derivatives Contracts will be valued by the Administrator using the publicly available CCIER price. The CCIER is determined by the index calculation agent using, the last reported closing or settlement prices of the Benchmark Component Futures Contracts determined by ICE Futures Europe (determined as of 2:30 p.m. E.T. or the earlier close of such exchange that day) or, [footnote 14] in the case of a market disruption and no determination being made by ICE Futures Europe, the last traded price before 2:30 p.m. E.T. that day. For other futures contracts traded on exchanges the Administrator will use the closing or settlement price published by the applicable exchange or, in the case of a market disruption, the last traded price before settlement.'' The Exchange proposes to replace these sentences with the following: ``The Benchmark Component Futures Contracts will be valued by the Administrator using the publicly available last reported closing or settlement prices of the these futures contracts determined by ICE Futures Europe (determined as of 2:30 p.m. E.T. or the earlier close of such exchange that day) or, [footnote 14] in the case of a market disruption and no determination being made by ICE Futures Europe, the last traded price before 2:30 p.m. E.T. that day. For other futures contracts traded on exchanges the Administrator will use the closing or settlement price published by the applicable exchange or, in the case of a market disruption, the last traded price before settlement. In general, the values of a cleared swap contract or an OTC derivatives contract will be based on the performance of the Benchmark Component Futures Contracts, other eligible futures contracts, the return on the CCIER, or on the price of the crude oil underlying the Benchmark Component Futures Contracts. The value of the CCIER will be the value determined by the index calculation agent using the reported closing or settlement prices of the Benchmark Component Futures Contracts.'' Footnote 14 of the Prior Amendment stated as follows: ``The value of the CCIER for purposes of determining the Fund's end of day NAV and the purchase or redemption price for the shares by Authorized Participants will be determined as of 2:30 p.m. E.T. which is the designated time for determining the daily settlement price of the Benchmark Component Futures Contracts. The Benchmark Component Futures Contracts on ICE Futures Europe continue to trade past 2:30 p.m. E.T. and through the end of the NYSE Arca Core Trading Session at 4:00 p.m. E.T.'' The Exchange proposes to delete the first sentence of footnote 14 of the Prior Amendment so that such footnote reads as follows: ``The Benchmark Component Futures Contracts on ICE Futures Europe continue to trade past 2:30 p.m. E.T. and through the end of the NYSE Arca Core Trading Session at 4:00 p.m. E.T.'' The last sentence of the first full paragraph on page 16 of the Prior Amendment stated as follows: ``The Information Bulletin will also reference that the CFTC has regulatory jurisdiction over the trading of Benchmark Component Futures Contracts and the Benchmark OTC Derivatives Contracts.'' The Exchange proposes to replace this sentence with the following: ``The Information Bulletin will also reference that the CFTC has regulatory jurisdiction over the trading of Benchmark Component Futures Contracts, cleared swaps and certain OTC derivatives contracts.'' The Exchange proposes to add reference to cleared swap contracts in the description of portfolio holdings to be made available on the Fund's website, as described in the first full paragraph on page 12 of the Prior Amendment and the third paragraph on page 17 of the Prior Amendment. Therefore, the Exchange proposes to [[Page 28693]] state that website disclosure of portfolio holdings will be made daily and will include, as applicable, (i) the composite value of the total portfolio, (ii) the quantity and type (including maturity, effective date, ticker symbol or other identifier, if any) and other descriptive information, and value of each holding, including, in the case of cleared swap contracts or an OTC derivatives contract, the type of cleared swap contract or OTC derivatives contract, its notional value and the underlying instrument, index or asset on which the cleared swap contract or OTC derivatives contract is based, and, in the case of cleared swaps, the clearinghouse for such swaps, and, in the case of options, its strike price, (iii) the type (including maturity, effective date, ticker symbol or other identifier, if any) and value of each Treasury security and cash equivalent, and (iv) the amount of cash held in the Fund's portfolio. Except for the changes noted above, all other representations made in the Prior Amendment remain unchanged. 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 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 proposed rule change is designed to perfect the mechanism of a free and open market and, in general, to protect investors and the public interest. The Trust's ``Sponsor'', United States Commodity Funds LLC, represents that it has determined that, in satisfying the Fund's investment objective, it is preferable for the Fund first to invest in the futures contracts that comprise the CCIER or other eligible futures contracts, as described above, instead of first entering into cash- settled, uncleared OTC total return swap and/or forward transactions based on, and intended to replicate the return of, the CCIER. The Sponsor also represents that, in general, the futures markets are more liquid than OTC derivatives and more directly reflect the values of the futures contracts underlying the CCIER. The proposed deletions or changes to references to the term ``Benchmark OTC Derivatives Contracts'' as used in the Prior Amendment are appropriate in that, going forward, such term will not be used to describe the Fund's investments. The Fund will comply with all initial and continued listing requirements under NYSE Arca Rule 8.200-E and Commentary .02 thereto. Except for the changes noted above, all other representations made in the Prior Amendment remain unchanged. 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 purpose of the Act. The Exchange believes the proposed rule change relating to the Fund's investments will provide the Fund with the greater ability to utilize listed futures contracts and facilitate the Fund's ability to satisfy its investment objective, and will enhance market competition with respect to trading in the Fund's Shares. 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 \13\ and Rule 19b- 4(f)(6) thereunder.\14\ --------------------------------------------------------------------------- \13\ 15 U.S.C. 78s(b)(3)(A). \14\ 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 \15\ normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii) \16\ 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 Exchange states that the Shares have not commenced trading on the Exchange, and waiver of the operative delay would accommodate trading in the Shares on the Exchange before the 30-day delayed operative date. Moreover, according to the Exchange, the proposal would provide the Fund with greater ability to utilize listed futures contracts and facilitate the Fund's ability to satisfy its investment objective.\17\ 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.\18\ --------------------------------------------------------------------------- \15\ 17 CFR 240.19b-4(f)(6). \16\ 17 CFR 240.19b-4(f)(6)(iii). \17\ The Commission has previously approved the listing and trading of other Trust Issued Receipts under NYSE Arca Rule 8.200-E, Commentary .02 that primarily invest in oil futures contracts. See, e.g., Securities Exchange Act Release No. 80427 (April 11, 2017), 82 FR 18058 (April 14, 2017) (SR-NYSEArca-2016-173). \18\ For purposes only of waiving the 30-day operative delay, the Commission has also 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-2018-39 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange [[Page 28694]] Commission, 100 F Street NE, Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSEArca-2018-39. 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-2018-39 and should be submitted on or before July 11, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\19\ --------------------------------------------------------------------------- \19\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-13172 Filed 6-19-18; 8:45 am] BILLING CODE 8011-01-P
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of the purposes of the Act. Instead, the subparagraph (f)(2) of Rule 19b–4 12 Washington, DC 20549 on official
Exchange believes that the proposed thereunder, because it establishes a due, business days between the hours of
rule change would encourage the fee, or other charge imposed by the 10:00 a.m. and 3:00 p.m. Copies of the
submission of additional liquidity to a Exchange. filing also will be available for
public exchange, thereby promoting At any time within 60 days of the inspection and copying at the principal
price discovery and transparency and filing of such proposed rule change, the office of the Exchange. All comments
enhancing order execution Commission summarily may received will be posted without change;
opportunities for ETP Holders. The temporarily suspend such rule change if the Commission does not edit personal
Exchange believes that this could it appears to the Commission that such identifying information from
promote competition between the action is necessary or appropriate in the submissions. Persons submitting
Exchange and other execution venues, public interest, for the protection of comments are cautioned that we do not
including those that currently offer investors, or otherwise in furtherance of redact or edit personal identifying
similar order types and comparable the purposes of the Act. If the information from comment submissions.
transaction pricing, by encouraging Commission takes such action, the You should submit only information
additional orders to be sent to the Commission shall institute proceedings that you wish to make available
Exchange for execution. The Exchange under Section 19(b)(2)(B) 13 of the Act to publicly. All submissions should refer
also believes that the proposed rule is determine whether the proposed rule to File Number SR–NYSENAT–2018–13
designed to provide the public and change should be approved or and should be submitted on or before
investors with a Schedule of Fees and disapproved. July 11, 2018.
Rebates that is clear and consistent, For the Commission, by the Division of
thereby reducing burdens on the IV. Solicitation of Comments
Trading and Markets, pursuant to delegated
marketplace and facilitating investor Interested persons are invited to authority.14
protection. submit written data, views, and Eduardo A. Aleman,
Finally, the Exchange notes that it arguments concerning the foregoing, Assistant Secretary.
operates in a highly competitive market including whether the proposed rule [FR Doc. 2018–13166 Filed 6–19–18; 8:45 am]
in which market participants can change is consistent with the Act.
BILLING CODE 8011–01–P
readily favor competing venues if they Comments may be submitted by any of
deem fee levels at a particular venue to the following methods:
be excessive or rebate opportunities SECURITIES AND EXCHANGE
Electronic Comments
available at other venues to be more COMMISSION
favorable. In such an environment, the • Use the Commission’s internet
Exchange must continually adjust its comment form (http://www.sec.gov/ [Release No. 34–83447; File No. SR–
fees and rebates to remain competitive rules/sro.shtml); or NYSEArca–2018–39]
with other exchanges and with • Send an email to rule-comments@
sec.gov. Please include File Number SR– Self-Regulatory Organizations; NYSE
alternative trading systems that have
NYSENAT–2018–13 on the subject line. Arca, Inc.; Notice of Filing and
been exempted from compliance with
Immediate Effectiveness of Proposed
the statutory standards applicable to Paper Comments Rule Change Relating To Changes in
exchanges. Because competitors are free
to modify their own fees and credits in • Send paper comments in triplicate the Description of the Investments of
to Brent J. Fields, Secretary, Securities the USCF Canadian Crude Oil Index
response, and because market
and Exchange Commission, 100 F Street Fund
participants may readily adjust their
order routing practices, the Exchange NE, Washington, DC 20549–1090.
June14, 2018.
believes that the degree to which fee All submissions should refer to File Pursuant to Section 19(b)(1) 1 of the
changes in this market may impose any Number SR–NYSENAT–2018–13. This Securities Exchange Act of 1934
burden on competition is extremely file number should be included on the (‘‘Act’’) 2 and Rule 19b–4 thereunder,3
limited. As a result of all of these subject line if email is used. To help the notice is hereby given that, on May 31,
considerations, the Exchange does not Commission process and review your 2018, NYSE Arca, Inc. (‘‘Exchange’’ or
believe that the proposed changes will comments more efficiently, please use ‘‘NYSE Arca’’) filed with the Securities
impair the ability of ETP Holders or only one method. The Commission will and Exchange Commission
competing order execution venues to post all comments on the Commission’s (‘‘Commission’’) the proposed rule
maintain their competitive standing in internet website (http://www.sec.gov/ change as described in Items I and II
the financial markets. rules/sro.shtml). Copies of the below, which Items have been prepared
submission, all subsequent by the self-regulatory organization. The
C. Self-Regulatory Organization’s amendments, all written statements
Statement on Comments on the Commission is publishing this notice to
with respect to the proposed rule solicit comments on the proposed rule
Proposed Rule Change Received From change that are filed with the
Members, Participants, or Others change from interested persons.
Commission, and all written
No written comments were solicited communications relating to the I. Self-Regulatory Organization’s
or received with respect to the proposed proposed rule change between the Statement of the Terms of Substance of
rule change. Commission and any person, other than the Proposed Rule Change
those that may be withheld from the The Exchange proposes to reflect
III. Date of Effectiveness of the
sradovich on DSK3GMQ082PROD with NOTICES
public in accordance with the changes in the description of the
Proposed Rule Change and Timing for provisions of 5 U.S.C. 552, will be
Commission Action investments of the USCF Canadian
available for website viewing and Crude Oil Index Fund (the ‘‘Fund’’).
The foregoing rule change is effective printing in the Commission’s Public
upon filing pursuant to Section Reference Room, 100 F Street NE, 14 17 CFR 200.30–3(a)(12).
19(b)(3)(A) 11 of the Act and 1 15 U.S.C. 78s(b)(1).
12 17 CFR 240.19b–4(f)(2). 2 15 U.S.C. 78a.
11 15 U.S.C. 78s(b)(3)(A). 13 15 U.S.C. 78s(b)(2)(B). 3 17 CFR 240.19b–4.
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![28690 Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Notices
Shares of the Fund have been approved Shares have not commenced trading on When, in view of regulatory
by the Securities and Exchange the Exchange. requirements and market conditions, the
Commission (the ‘‘Commission’’) for As stated in the Prior Amendment, Fund has invested to the fullest extent
listing and trading on the Exchange according to the Registration Statement, possible in the Benchmark OTC
under NYSE Arca Rule 8.200–E, the investment objective of the Fund is Derivatives Contracts and exchange-
Commentary .02. The Fund’s shares for the daily changes in percentage traded futures contracts, the Fund may
have not commenced trading on the terms of per Share NAV to reflect the then invest in (i) cleared swap contracts
Exchange. The proposed rule change is daily changes in percentage terms of the based on the Benchmark Component
available on the Exchange’s website at Canadian Crude Excess Return Index Futures Contracts, (ii) uncleared OTC
www.nyse.com, at the principal office of (the ‘‘CCIER’’ or ‘‘Index’’), plus interest derivatives contracts (specifically,
the Exchange, and at the Commission’s income from the Fund’s short-term fixed swaps, forwards and options) based on
Public Reference Room. income holdings, less the Fund’s either the price of the Benchmark
expenses. Component Futures Contracts or on the
II. Self-Regulatory Organization’s The Prior Amendment stated as
Statement of the Purpose of, and price of the crude oil underlying the
follows (included on pages 5–6 of the Benchmark Component Futures
Statutory Basis for, the Proposed Rule Prior Amendment): ‘‘The Fund will seek
Change Contracts, and (iii) exchange-traded
to achieve its investment objective by options on the Benchmark Component
In its filing with the Commission, the first entering into cash-settled uncleared Futures Contracts. The foregoing
self-regulatory organization included over-the-counter (‘‘OTC’’) total return investments, together with the
statements concerning the purpose of, swap and/or forward transactions based Benchmark Component Futures
and basis for, the proposed rule change on, and intended to replicate the return Contracts and other exchange-traded
and discussed any comments it received of, the CCIER (‘‘Benchmark OTC futures contracts that are economically
on the proposed rule change. The text Derivatives Contracts’’, as described identical or substantially similar to the
of those statements may be examined at further below), and, second, to the Benchmark Component Futures
the places specified in Item IV below. extent market conditions are more Contracts are referred to collectively as
The Exchange has prepared summaries, favorable for such futures as compared ‘Other Crude Oil-Related Investments’.
set forth in sections A, B, and C below, to Benchmark OTC Derivatives
Market conditions that USCF
of the most significant parts of such Contracts, investing in the Benchmark
currently anticipates could cause the
statements. Component Futures Contracts that
Fund to invest in Other Crude Oil-
underlie the CCIER. It will support these
A. Self-Regulatory Organization’s Related Investments include those
investments and investments in any
Statement of the Purpose of, and the allowing the Fund to obtain greater
other OTC derivatives contracts by
Statutory Basis for, the Proposed Rule liquidity, to execute transactions with
holding the amounts of its margin,
Change more favorable pricing, or if the Fund or
collateral and other requirements
1. Purpose relating to these obligations in short- USCF exceeds position limits or
term obligations of the United States of accountability levels established by an
The Commission has approved a exchange.’’
proposed rule change relating to listing two years or less (‘‘Treasuries’’), cash
and cash equivalents. [footnote 9] 7 The Exchange proposes to replace the
and trading on the Exchange of shares representations in the four preceding
(‘‘Shares’’) of the Fund under NYSE Third, if constrained by regulatory
requirements or in view of market paragraphs regarding the Fund’s
Arca Rule 8.200–E,4 which governs the investments with the following:
listing and trading of Trust Issued conditions or if one or more of the other
Receipts.5 The Fund is a new series of Benchmark Component Futures The Fund will seek to achieve its
the United States Commodity Index Contracts is not available, the Fund may investment objective first by investing
Funds Trust (the ‘‘Trust’’).6 The Fund’s next invest in exchange traded futures in the nearby futures contracts that
contracts that are economically identical comprise the CCIER, i.e., (i) the ICE
4 See Securities Exchange Act Release No. 81655 or substantially similar to the Crude Diff—TMX WCS 1B Index Future
(September 19, 2017), 82 FR 44678 (September 25, Benchmark Component Futures (ICE symbol: TDX) (the ‘‘WCS Future’’);
2017) (Notice of Filing of Amendment No. 4, and Contracts, e.g., futures contracts that are and (ii) the ICE WTI Crude Future (ICE
Order Granting Accelerated Approval of a Proposed based on changes in the price of WTI oil symbol: T) (the ‘‘WTI Future’’) (the WCS
Rule Change, as Modified by Amendment No. 4,
Relating to the Listing and Trading of Shares of the traded on the CME. Futures and WTI Futures that comprise
USCF Canadian Crude Oil Index Fund Under NYSE the CCIER are referred to herein as
Arca Rule 8.200–E) (‘‘Prior Order’’). See also Amendment No. 2 to the Registration Statement ‘‘Benchmark Component Futures
Amendment No. 4 to SR–NYSEArca–2016–177, was filed on April 9, 2018. The changes described Contracts’’) and may also invest in
available at https://www.sec.gov/comments/sr- herein will not be implemented until an
nysearca-2016-177/nysearca2016177-2228753- amendment to the Registration Statement relating to
exchange traded futures contracts that
160788.pdf (‘‘Prior Amendment’’). All terms such changes is effective and this proposed rule are economically identical or
referenced but not defined herein are defined in the change is effective and operative. substantially similar to the Benchmark
Prior Order and Prior Amendment. 7 The Prior Amendment stated the following in
Component Futures Contracts, e.g.,
5 Commentary .02 to NYSE Arca Rule 8.200–E
footnote 9: ‘‘For purposes of this filing, cash futures contracts that are based on
applies to Trust Issued Receipts that invest in equivalents are short-term instruments with
‘‘Financial Instruments.’’ The term ‘‘Financial maturities of less than three months and shall changes in the price of WTI crude oil
Instruments,’’ as defined in Commentary .02(b)(4) to include the following: (i) Certificates of deposit traded on the Chicago Mercantile
NYSE Arca Rule 8.200–E, means any combination issued against funds deposited in a bank or savings Exchange (‘‘CME’’), (together with the
of investments, including cash; securities; options and loan association; (ii) bankers’ acceptances,
sradovich on DSK3GMQ082PROD with NOTICES
on securities and indices; futures contracts; options
Benchmark Component Futures
which are short-term credit instruments used to
on futures contracts; forward contracts; equity caps, finance commercial transactions; (iii) repurchase Contracts, ‘‘eligible futures contracts’’).8
collars, and floors; and swap agreements. agreements and reverse repurchase agreements; (iv)
6 The Trust is registered under the Securities Act bank time deposits, which are monies kept on 8 As noted in the Prior Amendment, not more
of 1933 (15 U.S.C. 77a) (‘‘Securities Act’’). On June deposit with banks or savings and loan associations than 10% of the net assets of the Fund in the
16, 2016, the Trust filed with the Commission a for a stated period of time at a fixed rate of interest; aggregate invested in futures contracts, or options
registration statement on Form S–1 under the (v) commercial paper, which are short-term on futures shall consist of futures contracts, or
Securities Act relating to the Fund (File No. 333– unsecured promissory notes; and (vi) money market options on futures whose principal market is not a
212089) (‘‘Registration Statement’’). Pre-Effective funds.’’ member of the Intermarket Surveillance Group or is
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![28692 Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Notices
oil underlying Benchmark Component received by noon E.T., which is prior to the Administrator will use the closing or
Futures Contracts.’’ the ICE Futures Europe closing time.’’ 11 settlement price published by the
The third full paragraph on page 8 of The Prior Amendment stated as applicable exchange or, in the case of a
the Prior Amendment states as follows: follows (included on pages 8–9 of the market disruption, the last traded price
‘‘The Fund may also enter into multiple Prior Amendment): before settlement. In general, the values
Benchmark OTC Derivatives Contracts ‘‘The Fund may also enter into certain of a cleared swap contract or an OTC
for the purpose of achieving its transactions where an OTC derivatives derivatives contract will be based on the
investment objective. If a Benchmark contract component is exchanged for a performance of the Benchmark
OTC Derivatives Contract is terminated, corresponding futures contract (an Component Futures Contracts, other
the Fund may either pursue the same or ‘‘Exchange for Related Position’’ or eligible futures contracts, the return on
other alternative investment strategies ‘‘EFRP’’ transaction).’’ the CCIER, or on the price of the crude
with an acceptable counterparty, or The Exchange proposes to replace this oil underlying the Benchmark
make direct investments in the sentence with the following: ‘‘The Fund Component Futures Contracts. The
Benchmark Component Futures may also enter into certain transactions value of the CCIER will be the value
Contracts or other investments where a cleared swap or an OTC determined by the index calculation
described above that provide a similar derivatives contract component is agent using the reported closing or
return to investing in the Benchmark exchanged for a corresponding futures settlement prices of the Benchmark
Component Futures Contracts.’’ contract (an ‘‘Exchange for Related Component Futures Contracts.’’
The Exchange proposes to replace this Position’’ or ‘‘EFRP’’ transaction).’’ Footnote 14 of the Prior Amendment
The Prior Amendment stated as stated as follows:
paragraph with the following: ‘‘If an
follows (included on pages 10–11 of the ‘‘The value of the CCIER for purposes
OTC derivatives contract is terminated,
Prior Amendment, under ‘‘Calculating of determining the Fund’s end of day
the Fund may either pursue the same or
Per Share NAV’’): ‘‘The Benchmark OTC NAV and the purchase or redemption
other alternative investments with
Derivatives Contracts will be valued by price for the shares by Authorized
another acceptable counterparty, or
the Administrator using the publicly Participants will be determined as of
make direct investments in the eligible
available CCIER price. The CCIER is 2:30 p.m. E.T. which is the designated
futures contracts or other investments
determined by the index calculation time for determining the daily
described above.’’
agent using, the last reported closing or settlement price of the Benchmark
Because the Fund will seek to achieve settlement prices of the Benchmark
its investment objective first by Component Futures Contracts. The
Component Futures Contracts Benchmark Component Futures
investing in the nearby futures contracts determined by ICE Futures Europe
that comprise the CCIER rather than by Contracts on ICE Futures Europe
(determined as of 2:30 p.m. E.T. or the continue to trade past 2:30 p.m. E.T. and
first entering into Benchmark OTC earlier close of such exchange that day)
Derivatives Contracts, as stated in the through the end of the NYSE Arca Core
or, [footnote 14] in the case of a market Trading Session at 4:00 p.m. E.T.’’
Prior Amendment, the Sponsor has disruption and no determination being
determined that it is appropriate to The Exchange proposes to delete the
made by ICE Futures Europe, the last first sentence of footnote 14 of the Prior
establish a later cutoff time for placing traded price before 2:30 p.m. E.T. that
purchase and redemption orders. The Amendment so that such footnote reads
day. For other futures contracts traded as follows:
first full paragraph on page 10 of the on exchanges the Administrator will use
Prior Amendment states as follows: ‘‘The Benchmark Component Futures
the closing or settlement price Contracts on ICE Futures Europe
‘‘Purchase orders and redemption orders published by the applicable exchange
must be placed by 10:30 a.m. E.T. or the continue to trade past 2:30 p.m. E.T. and
or, in the case of a market disruption, through the end of the NYSE Arca Core
close of regular trading on the NYSE the last traded price before settlement.’’
Arca, whichever is earlier. [footnote Trading Session at 4:00 p.m. E.T.’’
The Exchange proposes to replace The last sentence of the first full
13]’’ The Exchange proposes to replace these sentences with the following: paragraph on page 16 of the Prior
the preceding sentence with the ‘‘The Benchmark Component Futures Amendment stated as follows:
following: ‘‘Purchase orders and Contracts will be valued by the ‘‘The Information Bulletin will also
redemption orders must be placed by Administrator using the publicly reference that the CFTC has regulatory
noon E.T. or the close of regular trading available last reported closing or jurisdiction over the trading of
on the NYSE Arca, whichever is earlier. settlement prices of the these futures Benchmark Component Futures
[footnote 13]’’ contracts determined by ICE Futures Contracts and the Benchmark OTC
The first sentence of footnote 13 of the Europe (determined as of 2:30 p.m. E.T. Derivatives Contracts.’’
Prior Amendment states as follows: or the earlier close of such exchange The Exchange proposes to replace this
‘‘USCF represents that an Authorized that day) or, [footnote 14] in the case of sentence with the following:
Participant’s arbitrage opportunities a market disruption and no ‘‘The Information Bulletin will also
with respect to the price it must pay for determination being made by ICE reference that the CFTC has regulatory
a Creation Basket will not be materially Futures Europe, the last traded price jurisdiction over the trading of
impacted by the requirement that the before 2:30 p.m. E.T. that day. For other Benchmark Component Futures
purchase and redemption order must be futures contracts traded on exchanges Contracts, cleared swaps and certain
received by 10:30 a.m. E.T. which is OTC derivatives contracts.’’
prior to the ICE Futures Europe closing 11 The Commission has previously approved the The Exchange proposes to add
time.’’ The Exchange proposes to listing and trading on the Exchange of Trust Issued reference to cleared swap contracts in
sradovich on DSK3GMQ082PROD with NOTICES
replace this sentence with the following: Receipts listed under NYSE Arca Rule 8.600–E [sic],
Commentary .02 for which creation and redemption
the description of portfolio holdings to
‘‘USCF represents that an Authorized orders must be placed by noon, E.T. See, e.g., be made available on the Fund’s
Participant’s arbitrage opportunities Securities Exchange Act Release No. 66466 website, as described in the first full
with respect to the price it must pay for (February 24, 2012), 77 FR 12631 (March 1, 2012) paragraph on page 12 of the Prior
a Creation Basket will not be materially (SR–NYSEArca–2011–97) (Order Granting Approval
of Proposed Rule Change Relating to Listing and
Amendment and the third paragraph on
impacted by the requirement that the Trading of Shares of the Teucrium Agriculture page 17 of the Prior Amendment.
purchase and redemption order must be Fund under NYSE Arca Equities Rule 8.200). Therefore, the Exchange proposes to
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![28694 Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Notices
Commission, 100 F Street NE, ‘‘Act’’),1 and Rule 19b–4 thereunder,2 amend the NBBO Setter Tiers effective
Washington, DC 20549–1090. notice is hereby given that on June 1, June 1, 2018.
All submissions should refer to File 2018, Cboe BZX Exchange, Inc. (the The Exchange currently offers two
Number SR–NYSEArca–2018–39. This ‘‘Exchange’’ or ‘‘BZX’’) filed with the NBBO Setter Tiers under footnote 19,
file number should be included on the Securities and Exchange Commission which provide an additional rebate of
subject line if email is used. To help the (‘‘Commission’’) the proposed rule $0.00015 to $0.0004 per share for orders
Commission process and review your change as described in Items I, II and III that establish a new National Best Bid
comments more efficiently, please use below, which Items have been prepared or Offer (‘‘NBBO’’) and which are
only one method. The Commission will by the Exchange. The Exchange has appended with fee code B, V or Y. The
post all comments on the Commission’s designated the proposed rule change as Exchange notes that the proposed [sic]
internet website (http://www.sec.gov/ one establishing or changing a member the NBBO Setter Tiers are additive
rules/sro.shtml). Copies of the due, fee, or other charge imposed by the rebates, and thus, can be combined with
submission, all subsequent Exchange under Section 19(b)(3)(A)(ii) other incentives and structures offered
amendments, all written statements of the Act 3 and Rule 19b–4(f)(2) by the Exchange. The Exchange
with respect to the proposed rule thereunder,4 which renders the proposes to amend both NBBO Setter
change that are filed with the proposed rule change effective upon Tiers 1 and 2.
Commission, and all written filing with the Commission. The First, the Exchange proposes to
communications relating to the Commission is publishing this notice to amend NBBO Setter Tier 1. Currently, a
solicit comments on the proposed rule Member will receive a rebate of
proposed rule change between the
change from interested persons. $0.00015 per share where a Member has
Commission and any person, other than
a Setter Add TCV 6 of greater than or
those that may be withheld from the I. Self-Regulatory Organization’s equal to 0.10%. The Exchange proposes
public in accordance with the Statement of the Terms of Substance of to increase the rebate for NBBO Setter
provisions of 5 U.S.C. 552, will be the Proposed Rule Change Tier 1 from $0.00015 to $0.0003 per
available for website viewing and
The Exchange filed a proposal to share. The Exchange also proposes to
printing in the Commission’s Public amend the fee schedule applicable to increase the Setter Add TCV
Reference Room, 100 F Street NE, Members 5 and non-Members of the requirement from 0.10% to 0.15%.
Washington, DC 20549 on official Exchange pursuant to BZX Rules 15.1(a) Lastly, the Exchange proposes to
business days between the hours of and (c). OR [sic] amend NBBO Setter Tier 2. Currently, a
10:00 a.m. and 3:00 p.m. Copies of the The text of the proposed rule change Member will receive a rebate of $0.0004
filing also will be available for is available at the Exchange’s website at per share where a Member has a Setter
inspection and copying at the principal www.markets.cboe.com, at the principal Add TCV of greater than or equal to
office of the Exchange. All comments office of the Exchange, and at the 0.15%. The Exchange proposes to
received will be posted without change. Commission’s Public Reference Room. increase the Setter Add TCV
Persons submitting comments are requirement from 0.15% to 0.20%.
cautioned that we do not redact or edit II. Self-Regulatory Organization’s
personal identifying information from Statement of the Purpose of, and 2. Statutory Basis
comment submissions. You should Statutory Basis for, the Proposed Rule The Exchange believes that the
submit only information that you wish Change proposed rule changes are consistent
to make available publicly. All In its filing with the Commission, the with the objectives of Section 6 of the
submissions should refer to File Exchange included statements Act,7 in general, and furthers the
Number SR–NYSEArca–2018–39 and concerning the purpose of and basis for objectives of Section 6(b)(4),8 in
should be submitted on or before July the proposed rule change and discussed particular, as it is designed to provide
11, 2018. any comments it received on the for the equitable allocation of reasonable
For the Commission, by the Division of proposed rule change. The text of these dues, fees and other charges among its
Trading and Markets, pursuant to delegated statements may be examined at the Members and other persons using its
authority.19 places specified in Item IV below. The facilities. The Exchange also notes that
Eduardo A. Aleman, Exchange has prepared summaries, set it operates in a highly-competitive
Assistant Secretary. forth in Sections A, B, and C below, of market in which market participants can
[FR Doc. 2018–13172 Filed 6–19–18; 8:45 am]
the most significant parts of such readily direct order flow to competing
statements. venues if they deem fee levels at a
BILLING CODE 8011–01–P
(A) Self-Regulatory Organization’s particular venue to be excessive or
Statement of the Purpose of, and incentives to be insufficient. The
SECURITIES AND EXCHANGE Statutory Basis for, the Proposed Rule proposed rule changes reflect a
COMMISSION Change competitive pricing structure designed
to incentivize market participants to
[Release No. 34–83438; File No. SR– 1. Purpose direct their order flow to the Exchange.
CboeBZX–2018–039]
The Exchange proposes to amend its The Exchange believes the
Self-Regulatory Organizations; Cboe fee schedule applicable to its equities modification to the additional rebate
BZX Exchange, Inc.; Notice of Filing trading platform (‘‘BZX Equities’’). provided by the NBBO Setter Tier 1
and Immediate Effectiveness of a Particularly, the Exchange proposes to under footnote 19 is a reasonable means
sradovich on DSK3GMQ082PROD with NOTICES
Proposed Rule Change Related to Fees to encourage Members to not only
1 15 U.S.C. 78s(b)(1).
for Use on Cboe BZX Exchange, Inc. 2 17 CFR 240.19b–4. 6 ‘‘Setter Add TCV’’ [sic] means total consolidated
June 14, 2018. 3 15 U.S.C. 78s(b)(3)(A)(ii). volume calculated as the volume reported by all
4 17 CFR 240.19b–4(f)(2). exchanges and trade reporting facilities to a
Pursuant to Section 19(b)(1) of the 5 The term ‘‘Member’’ is defined as ‘‘any consolidated transaction reporting plan for the
Securities Exchange Act of 1934 (the registered broker or dealer that has been admitted month for which the fees apply.
7 15 U.S.C. 78f.
to membership in the Exchange.’’ See Exchange
19 17 CFR 200.30–3(a)(12). Rule 1.5(n). 8 15 U.S.C. 78f(b)(4).
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Document Created: 2018-06-20 00:19:38
Document Modified: 2018-06-20 00:19:38
| 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 28689 |
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