83_FR_56329 83 FR 56111 - Toroso Investments, LLC and Tidal ETF Trust

83 FR 56111 - Toroso Investments, LLC and Tidal ETF Trust

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 218 (November 9, 2018)

Page Range56111-56113
FR Document2018-24509

Federal Register, Volume 83 Issue 218 (Friday, November 9, 2018) 
[Federal Register Volume 83, Number 218 (Friday, November 9, 2018)]
[Notices]
[Pages 56111-56113]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-24509]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33288; 812-14924]


Toroso Investments, LLC and Tidal ETF Trust

November 5, 2018.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    Notice of an application for an order under section 6(c) of the 
Investment Company Act of 1940 (the ``Act'') for an exemption from 
sections 2(a)(32), 5(a)(1), 22(d), and 22(e) of the Act and rule 22c-1 
under the Act, under sections 6(c) and 17(b) of the Act for an 
exemption from sections 17(a)(1) and 17(a)(2) of the Act, and under 
section 12(d)(1)(J) of the Act for an exemption from sections 
12(d)(1)(A) and 12(d)(1)(B) of the Act. The requested order would 
permit (a) actively-managed series of certain open-end management 
investment companies (``Funds'') to issue shares redeemable in large 
aggregations only (``Creation Units''); (b) secondary market 
transactions in Fund shares to occur at negotiated market prices rather 
than at net asset value (``NAV''); (c) certain Funds to pay redemption 
proceeds, under certain circumstances, more than seven days after the 
tender of shares for redemption; (d) certain affiliated persons of a 
Fund to deposit securities into, and receive securities from, the Fund 
in connection with the purchase and redemption of Creation Units; (e) 
certain registered management investment companies and unit investment 
trusts outside of the same group of investment companies as the Funds 
(``Funds of Funds'') to acquire shares of the Funds; (f) certain Funds 
(``Feeder Funds'') to create and redeem Creation Units in-kind in a 
master-feeder structure; and (g) the Funds to issue shares in less than 
Creation Unit size to investors participating in a distribution 
reinvestment program.

Applicants: Toroso Investments, LLC (``Initial Adviser''), a Delaware 
limited liability company that will be registered as an investment 
adviser under the Investment Advisers Act of 1940, and Tidal ETF Trust 
(``Trust''), a Delaware statutory trust that will be registered under 
the Act as an open-end management investment company with multiple 
series.

Filing Dates: The application was filed on June 22, 2018, and amended 
on October 16, 2018. Applicants have agreed to file an amendment during 
the notice period, the substance of which is reflected in this notice.

Hearing or Notification of Hearing: An order granting the requested 
relief will be issued unless the Commission orders a hearing. 
Interested persons may request a hearing by writing to the Commission's 
Secretary and serving applicants with a copy of the request, personally 
or by mail. Hearing requests should be received by the Commission by 
5:30 p.m. on November 30, 2018, and should be accompanied by proof of 
service on applicants, in the form of an affidavit, or for lawyers, a 
certificate of service. Pursuant to rule 0-5 under the Act, hearing 
requests should state the nature of the writer's interest, any facts 
bearing upon the desirability of a hearing on the matter, the reason 
for the request, and the issues contested. Persons who wish to be 
notified of a hearing may request notification by writing to the 
Commission's Secretary.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street 
NE, Washington, DC 20549-1090; Applicants, 898 N. Broadway, Suite 2, 
Massapequa, NY 11758.

FOR FURTHER INFORMATION CONTACT: Christine Y. Greenlees, Senior 
Counsel, at (202) 551-6879, or Andrea Ottomanelli Magovern, Branch 
Chief, at (202) 551-6821 (Division of Investment Management, Chief 
Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's website by searching for the file number, or for an 
applicant using the

[[Page 56112]]

Company name box, at http://www.sec.gov/search/search.htm or by calling 
(202) 551-8090.

Summary of the Application

    1. Applicants request an order that would allow Funds to operate as 
actively-managed exchange traded funds (``ETFs'').\1\ Fund shares will 
be purchased and redeemed at their NAV in Creation Units only (other 
than pursuant to a distribution reinvestment program described in the 
application). All orders to purchase Creation Units and all redemption 
requests will be placed by or through an ``Authorized Participant'' 
which will have signed a participant agreement with the Distributor. 
Shares will be listed and traded individually on a national securities 
exchange, where share prices will be based on the current bid/offer 
market. Certain Funds may operate as Feeder Funds in a master-feeder 
structure. Any order granting the requested relief would be subject to 
the terms and conditions stated in the application.
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    \1\ Applicants request that the order apply to the new series of 
the Trust described in the application, as well as to additional 
series of the Trust and any other open-end management investment 
companies or series thereof that currently exist or that may be 
created in the future (each, included in the term ``Fund''), each of 
which will operate as an actively-managed ETF. Any Fund will (a) be 
advised by the Initial Adviser or an entity controlling, controlled 
by, or under common control with the Initial Adviser (each such 
entity and any successor thereto is included in the term 
``Adviser'') and (b) comply with the terms and conditions of the 
application. For purposes of the requested Order, the term 
``successor'' is limited to an entity that results from a 
reorganization into another jurisdiction or a change in the type of 
business organization.
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    2. Each Fund will consist of a portfolio of securities and other 
assets and investment positions (``Portfolio Instruments''). Each Fund 
will disclose on its website the identities and quantities of the 
Portfolio Instruments that will form the basis for the Fund's 
calculation of NAV at the end of the day.
    3. Shares will be purchased and redeemed in Creation Units only and 
generally on an in-kind basis, or issued in less than Creation Unit 
size to investors participating in a distribution reinvestment program. 
Except where the purchase or redemption will include cash under the 
limited circumstances specified in the application, purchasers will be 
required to purchase Creation Units by depositing specified instruments 
(``Deposit Instruments''), and shareholders redeeming their shares will 
receive specified instruments (``Redemption Instruments''). The Deposit 
Instruments and the Redemption Instruments will each correspond pro 
rata to the positions in the Fund's portfolio (including cash 
positions) except as specified in the application.
    4. Because shares will not be individually redeemable, applicants 
request an exemption from section 5(a)(1) and section 2(a)(32) of the 
Act that would permit the Funds to register as open-end management 
investment companies and issue shares that are redeemable in Creation 
Units only.
    5. Applicants also request an exemption from section 22(d) of the 
Act and rule 22c-1 under the Act as secondary market trading in shares 
will take place at negotiated prices, not at a current offering price 
described in a Fund's prospectus, and not at a price based on NAV. 
Applicants state that (a) secondary market trading in shares does not 
involve a Fund as a party and will not result in dilution of an 
investment in shares, and (b) to the extent different prices exist 
during a given trading day, or from day to day, such variances occur as 
a result of third-party market forces, such as supply and demand. 
Therefore, applicants assert that secondary market transactions in 
shares will not lead to discrimination or preferential treatment among 
purchasers. Finally, applicants represent that share market prices will 
be disciplined by arbitrage opportunities, which should prevent shares 
from trading at a material discount or premium from NAV.
    6. With respect to Funds that hold non-U.S. Portfolio Instruments 
and that effect creations and redemptions of Creation Units in kind, 
applicants request relief from the requirement imposed by section 22(e) 
in order to allow such Funds to pay redemption proceeds within fifteen 
calendar days following the tender of Creation Units for redemption. 
Applicants assert that the requested relief would not be inconsistent 
with the spirit and intent of section 22(e) to prevent unreasonable, 
undisclosed or unforeseen delays in the actual payment of redemption 
proceeds.
    7. Applicants request an exemption to permit Funds of Funds to 
acquire Fund shares beyond the limits of section 12(d)(1)(A) of the 
Act; and the Funds, and any principal underwriter for the Funds, and/or 
any broker or dealer registered under the Exchange Act, to sell shares 
to Funds of Funds beyond the limits of section 12(d)(1)(B) of the Act. 
The application's terms and conditions are designed to, among other 
things, help prevent any potential (i) undue influence over a Fund 
through control or voting power, or in connection with certain 
services, transactions, and underwritings, (ii) excessive layering of 
fees, and (iii) overly complex fund structures, which are the concerns 
underlying the limits in sections 12(d)(1)(A) and (B) of the Act.
    8. Applicants request an exemption from sections 17(a)(1) and 
(a)(2) of the Act to permit persons that are affiliated persons, or 
second-tier affiliates, of the Funds, solely by virtue of certain 
ownership interests, to effectuate purchases and redemptions in-kind. 
The deposit procedures for in-kind purchases of Creation Units and the 
redemption procedures for in-kind redemptions of Creation Units will be 
the same for all purchases and redemptions and Deposit Instruments and 
Redemption Instruments will be valued in the same manner as those 
Portfolio Instruments currently held by the Funds. Applicants also seek 
relief from the prohibitions on affiliated transactions in section 
17(a) to permit a Fund to sell its shares to and redeem its shares from 
a Fund of Funds, and to engage in the accompanying in-kind transactions 
with the Fund of Funds.\2\ The purchase of Creation Units by a Fund of 
Funds directly from a Fund will be accomplished in accordance with the 
policies of the Fund of Funds and will be based on the NAVs of the 
Funds.
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    \2\ The requested relief would apply to direct sales of shares 
in Creation Units by a Fund to a Fund of Funds and redemptions of 
those shares. Applicants, moreover, are not seeking relief from 
section 17(a) for, and the requested relief will not apply to, 
transactions where a Fund could be deemed an Affiliated Person, or a 
Second-Tier Affiliate, of a Fund of Funds because an Adviser or an 
entity controlling, controlled by or under common control with an 
Adviser provides investment advisory services to that Fund of Funds.
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    9. Applicants also request relief to permit a Feeder Fund to 
acquire shares of another registered investment company managed by the 
Adviser having substantially the same investment objectives as the 
Feeder Fund (``Master Fund'') beyond the limitations in section 
12(d)(1)(A) and permit the Master Fund, and any principal underwriter 
for the Master Fund, to sell shares of the Master Fund to the Feeder 
Fund beyond the limitations in section 12(d)(1)(B).
    10. Section 6(c) of the Act permits the Commission to exempt any 
persons or transactions from any provision of the Act if such exemption 
is necessary or appropriate in the public interest and consistent with 
the protection of investors and the purposes fairly intended by the 
policy and provisions of the Act. Section 12(d)(1)(J) of the Act 
provides that the Commission may exempt any person, security, or 
transaction, or any class or classes of persons, securities, or 
transactions, from any provision of section 12(d)(1) if the

[[Page 56113]]

exemption is consistent with the public interest and the protection of 
investors. Section 17(b) of the Act authorizes the Commission to grant 
an order permitting a transaction otherwise prohibited by section 17(a) 
if it finds that (a) the terms of the proposed transaction are fair and 
reasonable and do not involve overreaching on the part of any person 
concerned; (b) the proposed transaction is consistent with the policies 
of each registered investment company involved; and (c) the proposed 
transaction is consistent with the general purposes of the Act.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-24509 Filed 11-8-18; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 83, No. 218 / Friday, November 9, 2018 / Notices 56111 interest and designates the proposed Washington, DC 20549 on official certain registered management rule change operative upon filing.14 business days between the hours of 10 investment companies and unit At any time within 60 days of the a.m. and 3 p.m. Copies of such filing investment trusts outside of the same filing of such proposed rule change, the also will be available for inspection and group of investment companies as the Commission summarily may copying at the principal office of the Funds (‘‘Funds of Funds’’) to acquire temporarily suspend such rule change if Exchange. All comments received will shares of the Funds; (f) certain Funds it appears to the Commission that such be posted without change. Persons (‘‘Feeder Funds’’) to create and redeem action is necessary or appropriate in the submitting comments are cautioned that Creation Units in-kind in a master- public interest, for the protection of we do not redact or edit personal feeder structure; and (g) the Funds to investors, or otherwise in furtherance of identifying information from comment issue shares in less than Creation Unit the purposes of the Act. If the submissions. You should submit only size to investors participating in a Commission takes such action, the information that you wish to make distribution reinvestment program. Commission shall institute proceedings available publicly. All submissions APPLICANTS: Toroso Investments, LLC under Section 19(b)(2)(B) 15 of the Act to should refer to File Number SR–Phlx– (‘‘Initial Adviser’’), a Delaware limited determine whether the proposed rule 2018–63, and should be submitted on or liability company that will be registered change should be approved or before November 30, 2018. as an investment adviser under the disapproved. For the Commission, by the Division of Investment Advisers Act of 1940, and IV. Solicitation of Comments Trading and Markets, pursuant to delegated Tidal ETF Trust (‘‘Trust’’), a Delaware authority.16 statutory trust that will be registered Interested persons are invited to Eduardo A. Aleman, submit written data, views, and under the Act as an open-end Assistant Secretary. management investment company with arguments concerning the foregoing, including whether the proposed rule [FR Doc. 2018–24523 Filed 11–8–18; 8:45 am] multiple series. change is consistent with the Act. BILLING CODE 8011–01–P FILING DATES: The application was filed Comments may be submitted by any of on June 22, 2018, and amended on the following methods: October 16, 2018. Applicants have SECURITIES AND EXCHANGE agreed to file an amendment during the Electronic Comments COMMISSION notice period, the substance of which is • Use the Commission’s internet [Investment Company Act Release No. reflected in this notice. comment form (http://www.sec.gov/ 33288; 812–14924] HEARING OR NOTIFICATION OF HEARING: An rules/sro.shtml); or order granting the requested relief will • Send an email to rule-comments@ Toroso Investments, LLC and Tidal be issued unless the Commission orders sec.gov. Please include File Number SR– ETF Trust a hearing. Interested persons may Phlx–2018–63 on the subject line. request a hearing by writing to the November 5, 2018. Paper Comments AGENCY: Securities and Exchange Commission’s Secretary and serving • Send paper comments in triplicate Commission (‘‘Commission’’). applicants with a copy of the request, to Secretary, Securities and Exchange ACTION: Notice. personally or by mail. Hearing requests Commission, 100 F Street NE, should be received by the Commission Notice of an application for an order by 5:30 p.m. on November 30, 2018, and Washington, DC 20549–1090. under section 6(c) of the Investment should be accompanied by proof of All submissions should refer to File Company Act of 1940 (the ‘‘Act’’) for an service on applicants, in the form of an Number SR–Phlx–2018–63. This file exemption from sections 2(a)(32), affidavit, or for lawyers, a certificate of number should be included on the 5(a)(1), 22(d), and 22(e) of the Act and service. Pursuant to rule 0–5 under the subject line if email is used. To help the rule 22c–1 under the Act, under Commission process and review your Act, hearing requests should state the sections 6(c) and 17(b) of the Act for an nature of the writer’s interest, any facts comments more efficiently, please use exemption from sections 17(a)(1) and only one method. The Commission will bearing upon the desirability of a 17(a)(2) of the Act, and under section hearing on the matter, the reason for the post all comments on the Commission’s 12(d)(1)(J) of the Act for an exemption internet website (http://www.sec.gov/ request, and the issues contested. from sections 12(d)(1)(A) and Persons who wish to be notified of a rules/sro.shtml). Copies of the 12(d)(1)(B) of the Act. The requested submission, all subsequent hearing may request notification by order would permit (a) actively- writing to the Commission’s Secretary. amendments, all written statements managed series of certain open-end with respect to the proposed rule ADDRESSES: Secretary, Securities and management investment companies change that are filed with the Exchange Commission, 100 F Street NE, (‘‘Funds’’) to issue shares redeemable in Commission, and all written Washington, DC 20549–1090; large aggregations only (‘‘Creation communications relating to the Applicants, 898 N. Broadway, Suite 2, Units’’); (b) secondary market proposed rule change between the Massapequa, NY 11758. transactions in Fund shares to occur at Commission and any person, other than negotiated market prices rather than at FOR FURTHER INFORMATION CONTACT: those that may be withheld from the net asset value (‘‘NAV’’); (c) certain Christine Y. Greenlees, Senior Counsel, public in accordance with the Funds to pay redemption proceeds, at (202) 551–6879, or Andrea provisions of 5 U.S.C. 552, will be under certain circumstances, more than Ottomanelli Magovern, Branch Chief, at available for website viewing and seven days after the tender of shares for (202) 551–6821 (Division of Investment khammond on DSK30JT082PROD with NOTICES printing in the Commission’s Public redemption; (d) certain affiliated Management, Chief Counsel’s Office). Reference Room, 100 F Street NE, persons of a Fund to deposit securities SUPPLEMENTARY INFORMATION: The into, and receive securities from, the following is a summary of the 14 For purposes only of waiving the operative Fund in connection with the purchase application. The complete application delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital and redemption of Creation Units; (e) may be obtained via the Commission’s formation. See 15 U.S.C. 78c(f). website by searching for the file 15 15 U.S.C. 78s(b)(2)(B). 16 17 CFR 200.30–3(a)(12). number, or for an applicant using the VerDate Sep<11>2014 17:36 Nov 08, 2018 Jkt 247001 PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 E:\FR\FM\09NON1.SGM 09NON1

56112 Federal Register / Vol. 83, No. 218 / Friday, November 9, 2018 / Notices Company name box, at http:// correspond pro rata to the positions in overly complex fund structures, which www.sec.gov/search/search.htm or by the Fund’s portfolio (including cash are the concerns underlying the limits calling (202) 551–8090. positions) except as specified in the in sections 12(d)(1)(A) and (B) of the application. Act. Summary of the Application 4. Because shares will not be 8. Applicants request an exemption 1. Applicants request an order that individually redeemable, applicants from sections 17(a)(1) and (a)(2) of the would allow Funds to operate as request an exemption from section Act to permit persons that are affiliated actively-managed exchange traded 5(a)(1) and section 2(a)(32) of the Act persons, or second-tier affiliates, of the funds (‘‘ETFs’’).1 Fund shares will be that would permit the Funds to register Funds, solely by virtue of certain purchased and redeemed at their NAV as open-end management investment ownership interests, to effectuate in Creation Units only (other than companies and issue shares that are purchases and redemptions in-kind. The pursuant to a distribution reinvestment redeemable in Creation Units only. deposit procedures for in-kind program described in the application). 5. Applicants also request an purchases of Creation Units and the All orders to purchase Creation Units exemption from section 22(d) of the Act redemption procedures for in-kind and all redemption requests will be and rule 22c–1 under the Act as redemptions of Creation Units will be placed by or through an ‘‘Authorized secondary market trading in shares will the same for all purchases and Participant’’ which will have signed a take place at negotiated prices, not at a redemptions and Deposit Instruments participant agreement with the current offering price described in a and Redemption Instruments will be Distributor. Shares will be listed and Fund’s prospectus, and not at a price valued in the same manner as those traded individually on a national based on NAV. Applicants state that (a) Portfolio Instruments currently held by securities exchange, where share prices secondary market trading in shares does the Funds. Applicants also seek relief will be based on the current bid/offer not involve a Fund as a party and will from the prohibitions on affiliated market. Certain Funds may operate as not result in dilution of an investment transactions in section 17(a) to permit a Feeder Funds in a master-feeder in shares, and (b) to the extent different Fund to sell its shares to and redeem its structure. Any order granting the prices exist during a given trading day, shares from a Fund of Funds, and to requested relief would be subject to the or from day to day, such variances occur engage in the accompanying in-kind terms and conditions stated in the as a result of third-party market forces, transactions with the Fund of Funds.2 application. such as supply and demand. Therefore, The purchase of Creation Units by a 2. Each Fund will consist of a applicants assert that secondary market Fund of Funds directly from a Fund will portfolio of securities and other assets transactions in shares will not lead to be accomplished in accordance with the and investment positions (‘‘Portfolio discrimination or preferential treatment policies of the Fund of Funds and will Instruments’’). Each Fund will disclose among purchasers. Finally, applicants be based on the NAVs of the Funds. on its website the identities and represent that share market prices will 9. Applicants also request relief to quantities of the Portfolio Instruments be disciplined by arbitrage permit a Feeder Fund to acquire shares that will form the basis for the Fund’s opportunities, which should prevent of another registered investment calculation of NAV at the end of the shares from trading at a material company managed by the Adviser day. discount or premium from NAV. having substantially the same 3. Shares will be purchased and 6. With respect to Funds that hold investment objectives as the Feeder redeemed in Creation Units only and non-U.S. Portfolio Instruments and that Fund (‘‘Master Fund’’) beyond the generally on an in-kind basis, or issued effect creations and redemptions of limitations in section 12(d)(1)(A) and in less than Creation Unit size to Creation Units in kind, applicants permit the Master Fund, and any investors participating in a distribution request relief from the requirement principal underwriter for the Master reinvestment program. Except where the imposed by section 22(e) in order to Fund, to sell shares of the Master Fund purchase or redemption will include allow such Funds to pay redemption to the Feeder Fund beyond the cash under the limited circumstances proceeds within fifteen calendar days limitations in section 12(d)(1)(B). specified in the application, purchasers following the tender of Creation Units 10. Section 6(c) of the Act permits the will be required to purchase Creation for redemption. Applicants assert that Commission to exempt any persons or Units by depositing specified the requested relief would not be transactions from any provision of the instruments (‘‘Deposit Instruments’’), inconsistent with the spirit and intent of Act if such exemption is necessary or and shareholders redeeming their shares section 22(e) to prevent unreasonable, appropriate in the public interest and will receive specified instruments undisclosed or unforeseen delays in the consistent with the protection of (‘‘Redemption Instruments’’). The actual payment of redemption proceeds. investors and the purposes fairly Deposit Instruments and the 7. Applicants request an exemption to intended by the policy and provisions of Redemption Instruments will each permit Funds of Funds to acquire Fund the Act. Section 12(d)(1)(J) of the Act shares beyond the limits of section provides that the Commission may 1 Applicants request that the order apply to the 12(d)(1)(A) of the Act; and the Funds, exempt any person, security, or new series of the Trust described in the application, and any principal underwriter for the transaction, or any class or classes of as well as to additional series of the Trust and any Funds, and/or any broker or dealer persons, securities, or transactions, from other open-end management investment companies or series thereof that currently exist or that may be registered under the Exchange Act, to any provision of section 12(d)(1) if the created in the future (each, included in the term sell shares to Funds of Funds beyond ‘‘Fund’’), each of which will operate as an actively- the limits of section 12(d)(1)(B) of the 2 The requested relief would apply to direct sales managed ETF. Any Fund will (a) be advised by the Act. The application’s terms and of shares in Creation Units by a Fund to a Fund of khammond on DSK30JT082PROD with NOTICES Initial Adviser or an entity controlling, controlled Funds and redemptions of those shares. Applicants, by, or under common control with the Initial conditions are designed to, among other moreover, are not seeking relief from section 17(a) Adviser (each such entity and any successor thereto things, help prevent any potential (i) for, and the requested relief will not apply to, is included in the term ‘‘Adviser’’) and (b) comply undue influence over a Fund through transactions where a Fund could be deemed an with the terms and conditions of the application. control or voting power, or in Affiliated Person, or a Second-Tier Affiliate, of a For purposes of the requested Order, the term Fund of Funds because an Adviser or an entity ‘‘successor’’ is limited to an entity that results from connection with certain services, controlling, controlled by or under common control a reorganization into another jurisdiction or a transactions, and underwritings, (ii) with an Adviser provides investment advisory change in the type of business organization. excessive layering of fees, and (iii) services to that Fund of Funds. 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Federal Register / Vol. 83, No. 218 / Friday, November 9, 2018 / Notices 56113 exemption is consistent with the public Options (‘‘FLEX Options’’) pilot A. Self-Regulatory Organization’s interest and the protection of investors. program regarding permissible exercise Statement of the Purpose of, and Section 17(b) of the Act authorizes the settlement values for FLEX Index Statutory Basis for, the Proposed Rule Commission to grant an order Options.5 Change permitting a transaction otherwise (additions are italicized; deletions are 1. Purpose prohibited by section 17(a) if it finds that (a) the terms of the proposed [bracketed]) On January 28, 2010, the Exchange transaction are fair and reasonable and * * * * * received approval of a rule change that, do not involve overreaching on the part among other things, established a pilot Rules of Cboe Exchange, Inc. program regarding permissible exercise of any person concerned; (b) the proposed transaction is consistent with * * * * * settlement values for FLEX Index the policies of each registered Options.6 The Exchange has extended Rule 24A.4. Terms of FLEX Options the pilot period seven times, which is investment company involved; and (c) the proposed transaction is consistent (a)–(c) (No change). currently set to expire on the earlier of with the general purposes of the Act. November 5, 2018 or the date on which . . . Interpretations and Policies: the pilot program is approved on a For the Commission, by the Division of Investment Management, under delegated .01 FLEX Index Option PM permanent basis.7 The purpose of this authority. Settlements Pilot Program: rule change filing is to extend the pilot Eduardo A. Aleman, Notwithstanding subparagraph (a)(2)(iv) program through the earlier of May 6, Assistant Secretary. above, for a pilot period ending the 2019 or the date on which the pilot earlier of [November 5, 2018] May 6, program is approved on a permanent [FR Doc. 2018–24509 Filed 11–8–18; 8:45 am] 2019 or the date on which the pilot basis. This filing simply seeks to extend BILLING CODE 8011–01–P program is approved on a permanent the operation of the pilot program and basis, a FLEX Index Option that expires 6 Securities Exchange Act Release No. 61439 SECURITIES AND EXCHANGE on an Expiration Friday may have any (January 28, 2010), 75 FR 5831 (February 4, 2010) COMMISSION exercise settlement value that is (SR–CBOE–2009–087) (‘‘Approval Order’’). The permissible pursuant to subparagraph initial pilot period was set to expire on March 28, [Release No. 34–84537; File No. SR–CBOE– 2011, which date was added to the rules in 2010. (b)(3) above. 2018–071] See Securities Exchange Act Release No. 61676 .02 (No change). (March 9, 2010), 75 FR 13191 (March 18, 2010) (SR– Self-Regulatory Organizations; Cboe * * * * * CBOE–2010–026). 7 See Securities Exchange Act Release Nos. 64110 Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed The text of the proposed rule change (March 23, 2011), 76 FR 17463 (March 29, 2011) is also available on the Exchange’s (SR–CBOE–2011–024) (extending the pilot program Rule Change To Extend the Operation through the earlier of March 30, 2012 or the date of Its Flexible Exchange Options Pilot website (http://www.cboe.com/ on which the pilot program is approved on the Program Regarding Permissible AboutCBOE/CBOELegal permanent basis); 66701 (March 30, 2012), 77 FR RegulatoryHome.aspx), at the 20673 (April 5, 2012) (SR–CBOE–2012–027) Exercise Settlement Values for Flexible (extending the pilot through the earlier of Exchange Index Options Exchange’s Office of the Secretary, and November 2, 2012 or the date on which the pilot at the Commission’s Public Reference program is approved on a permanent basis); 68145 November 5, 2018. Room. (November 2, 2012), 77 FR 67044 (November 8, Pursuant to Section 19(b)(1) of the 2012) (SR–CBOE–2012–102) (extending the pilot Securities Exchange Act of 1934 II. Self-Regulatory Organization’s program through the earlier of November 2, 2013 or Statement of the Purpose of, and the date on which the pilot program is approved on (‘‘Act’’),1 and Rule 19b–4 thereunder,2 a permanent basis); 70752 (October 24, 2013), 78 FR notice is hereby given that on November Statutory Basis for, the Proposed Rule 65023 (October 30, 2013) (SR–CBOE–2013–099) 2, 2018, Cboe Exchange, Inc. (the Change (extending the pilot program through the earlier of ‘‘Exchange’’ or ‘‘Cboe Options’’) filed November 3, 2014 or the date on which the pilot with the Securities and Exchange In its filing with the Commission, the program is approved on a permanent basis); 73460 Exchange included statements (October 29, 2014), 79 FR 65464 (November 4, 2014) Commission (‘‘Commission’’) the (SR–CBOE–2014–080) (extending the pilot program proposed rule change as described in concerning the purpose of and basis for through the earlier of May 3, 2016 or the date on Items I and II below, which Items have the proposed rule change and discussed which the pilot program is approved on a any comments it received on the permanent basis); 77742 (April 29, 2016), 81 FR been prepared by the Exchange. The 26857 (May 4, 2016) (SR–CBOE–2016–032) Exchange filed the proposal as a ‘‘non- proposed rule change. The text of these (extending the pilot program through the earlier of controversial’’ proposed rule change statements may be examined at the May 3, 2017 or the date on which the pilot program pursuant to Section 19(b)(3)(A)(iii) of places specified in Item IV below. The is approved on a permanent basis); 80443 (April 12, 2017), 82 FR 18331 (April 18, 2017) (SR–CBOE– the Act 3 and Rule 19b–4(f)(6) Exchange has prepared summaries, set 2017–032), 83 FR 21808 (May 10, 2018) (extending thereunder.4 The Commission is forth in sections A, B, and C below, of the pilot program through the earlier of May 3, 2018 publishing this notice to solicit the most significant aspects of such or the date on which the pilot program is approved statements. on a permanent basis); and 83175 (May 4, 2018), 83 comments on the proposed rule change FR 21808 (May 10, 2018) (SR–CBOE–2018–037). At from interested persons. the same time the permissible exercise settlement 5 FLEX Options provide investors with the ability values pilot was established for FLEX Index I. Self-Regulatory Organization’s to customize basic option features including size, Options, the Exchange also established a pilot Statement of the Terms of Substance of expiration date, exercise style, and certain exercise program eliminating the minimum value size the Proposed Rule Change prices. FLEX Options can be FLEX Index Options requirements for all FLEX Options. See Approval khammond on DSK30JT082PROD with NOTICES or FLEX Equity Options. In addition, other products Order, supra note 6. The pilot program eliminating Cboe Options proposes to extend the are permitted to be traded pursuant to the FLEX the minimum value size requirements was extended operation of its Flexible Exchange trading procedures. For example, credit options are twice pursuant to the same rule filings that eligible for trading as FLEX Options pursuant to the extended the permissible exercise settlement values 1 15 FLEX rules in Chapter XXIVA. See Cboe Options (for the same extended periods) and was approved U.S.C. 78s(b)(1). Rules 24A.1(e) and (f), 24A.4(b)(1) and (c)(1), and on a permanent basis in a separate rule change 2 17 CFR 240.19b–4. 29.18. The rules governing the trading of FLEX filing. See id. and Securities Exchange Act Release 3 15 U.S.C. 78s(b)(3)(A)(iii). Options on the FLEX Hybrid Trading System No. 67624 (August 8, 2012), 77 FR 48580 (August 4 17 CFR 240.19b–4(f)(6). platform are contained in Chapter XXIVA. 14, 2012) (SR–CBOE–2012–040). VerDate Sep<11>2014 17:36 Nov 08, 2018 Jkt 247001 PO 00000 Frm 00068 Fmt 4703 Sfmt 4703 E:\FR\FM\09NON1.SGM 09NON1


Document Created: 2018-11-09 03:33:56
Document Modified: 2018-11-09 03:33:56
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionNotice.
DatesThe application was filed on June 22, 2018, and amended on October 16, 2018. Applicants have agreed to file an amendment during the notice period, the substance of which is reflected in this notice.
ContactChristine Y. Greenlees, Senior Counsel, at (202) 551-6879, or Andrea Ottomanelli Magovern, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office).
FR Citation83 FR 56111 
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