83 FR 62939 - In the Matter of the NYSE Arca, Inc.; for an Order Granting the Approval of Proposed Rule Change To List and Trade Shares of the ForceShares Daily 4X US Market Futures Long Fund and ForceShares Daily 4X US Market Futures Short Fund Under Commentary .02 to NYSE Arca Equities Rule 8.200 (SR-NYSEArca-2016-120); Request for Additional Comment

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 234 (December 6, 2018)

Page Range		62939-62941
FR Document		2018-26403

Federal Register, Volume 83 Issue 234 (Thursday, December 6, 2018)

[Federal Register Volume 83, Number 234 (Thursday, December 6, 2018)]
[Notices]
[Pages 62939-62941]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2018-26403]

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SECURITIES AND EXCHANGE COMMISSION

[Securities Exchange Act of 1934; Release No. 34-84676/November 29,
2018]

In the Matter of the NYSE Arca, Inc.; for an Order Granting the
Approval of Proposed Rule Change To List and Trade Shares of the
ForceShares Daily 4X US Market Futures Long Fund and ForceShares Daily
4X US Market Futures Short Fund Under Commentary .02 to NYSE Arca
Equities Rule 8.200 (SR-NYSEArca-2016-120); Request for Additional
Comment

On October 17, 2016, NYSE Arca, Inc. (``NYSE Arca'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities

[[Page 62940]]

Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to list and trade shares of the ForceShares Daily
4X US Market Futures Long Fund and ForceShares Daily 4X US Market
Futures Short Fund (``ForceShares ETPs'') under Commentary .02 to NYSE
Arca Equities Rule 8.200. On November 4, 2016, the proposal was
published for comment in the Federal Register.\3\ On December 14, 2016,
the Division of Trading and Markets, for the Commission pursuant to
delegated authority, extended the time period for Commission action on
the proposed rule change.\4\ On February 1, 2017, the Division of
Trading and Markets, for the Commission pursuant to delegated
authority, instituted proceedings to determine whether to approve or
disapprove the proposed rule change.\5\ On April 20, 2017, NYSE Arca
submitted Amendment No. 3 to the proposed rule change, which replaced
and superseded the proposed rule change as modified by previous
amendments.\6\ No comments on the proposed rule change were received.
On May 2, 2017, the Division of Trading and Markets, for the Commission
pursuant to delegated authority,\7\ approved the proposed rule change,
as modified by Amendment No. 3 (``May 2, 2017 Order'').\8\
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 79201 (October 31,
2016), 81 FR 76977 (November 4, 2016) (SR-NYSEArca-2016-120).
\4\ See Securities Exchange Act Release No. 79550 (December 14,
2016), 81 FR 92892 (December 20, 2016).
\5\ See Securities Exchange Act Release No. 79914 (February 1,
2017), 82 FR 9625 (February 7, 2017).
\6\ Amendment No. 3 replaced and superseded the proposed rule
change as modified by Amendment No. 2. Amendment No. 2 had
previously replaced and superseded the proposed rule change as
modified by Amendment No. 1. Amendment No. 1 replaced and superseded
the original filing in its entirety.
\7\ 17 CFR 200.30-3(a)(12).
\8\ See Securities Exchange Act Release No. 80579 (May 2, 2017),
82 FR 21443 (May 8, 2017).
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On May 12, 2017, the Secretary of the Commission notified the
Exchange that pursuant to Rule 431 of the Commission's Rules of
Practice,\9\ the Commission would review the delegated action and that
the May 2, 2017 Order was stayed until the Commission ordered
otherwise.\10\ On May 25, 2017, the Commission issued an order
scheduling filing of statements on review (``May 25, 2017 Order''), in
which the Commission ordered that any party or other person may file
any additional statement by June 15, 2017. The Commission further
ordered that the May 2, 2017 Order shall remain stayed pending further
order of the Commission. The Commission received six comment letters in
response to the May 25, 2017 Order that support approval of the
proposed rule change.\11\
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\9\ 17 CFR 201.431.
\10\ See letter to Elizabeth King, General Counsel and Corporate
Secretary, New York Stock Exchange, from Brent J. Fields, Secretary,
Commission, dated May 12, 2017, available at https://www.sec.gov/rules/sro/nysearca/2017/34-80770-letter-from-secretary.pdf.
\11\ See letters to Brent J. Fields, Secretary, Commission, from
Boris Ilyevsky, dated June 5, 2017; Kris Wallace, Member,
ForceShares LLC, dated June 13, 2017; Douglas M. Yones, Head of
Exchange Traded Products, New York Stock Exchange, dated June 13,
2017; Jonathan Yao, CEO, SogoTrade, Inc., dated June 14, 2017; and
Kris Wallace, Member, ForceShares LLC, dated July 24, 2017
(``ForceShares Letter''); and letter to Commission, from James J.
Angel, Associate Professor of Finance, Georgetown University, dated
July 10, 2017.
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In response to the May 25, 2017 Order, one commenter cited a
working paper from staff of the Federal Reserve Board regarding the
impact of leveraged and inverse exchange-traded products (``ETPs'') on
the underlying market, and quoted the following statements from the
paper: (a) ``capital flows substantially reduce the need for ETFs to
rebalance when returns are large in magnitude and, therefore, mitigate
the potential for these products to amplify volatility. We also show
theoretically that flows can completely eliminate ETF rebalancing in
the limit'' and (b) ``[l]everaged and inverse ETFs have received heavy
criticism based on the belief that they exacerbate volatility in
financial markets. We show that concerns about these types of products
are likely exaggerated. Empirically, we find that capital flows
considerably reduce ETF rebalancing demand and, therefore, mitigate the
potential for ETFs to amplify volatility. Our analysis has relevant and
timely policy implications, as regulators are reportedly considering
changes to how ETFs are regulated.'' \12\
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\12\ See ForceShares Letter at 5 (quoting Ivan T. Ivanov and
Stephen L. Lenkey, Are Concerns About Leveraged ETFs Overblown?
(Finance and Economics Discussion Series, Divisions of Research &
Statistics and Monetary Affairs, Federal Reserve Board, Washington,
DC, Working Paper 2014-106) (``Ivanov and Lenkey Paper'')).
---------------------------------------------------------------------------

The Commission believes that questions and concerns remain
regarding the potential systemic impact of the ForceShares ETPs. In
particular, the amount of rebalancing activity for a leveraged or
inverse ETP increases significantly as the ETP's leverage ratio and net
assets increase. Moreover, the rebalancing activities of both leveraged
and inverse ETPs are in the same direction as the movement in the
reference asset (i.e., they sell when the market is going down and buy
when the market is going up), which could potentially further
exacerbate market movements, particularly during periods of high market
volatility. Because the ForceShares ETPs would have 4X and -4X
leverage, they would have greater rebalancing activities than existing
ETPs that have lower leverage ratios per dollar of net assets under
management. In particular, there are questions concerning whether
rebalancing activities of the ForceShares ETPs could potentially result
in significant additional market volatility as compared to existing
ETPs, and interfere with fair and orderly markets. This raises a
potential concern that the listing and trading of shares of the
ForceShares ETPs may not be consistent with Section 6(b)(5) of the Act,
which requires, among other things, that the rules of a national
securities exchange be designed to protect investors and the public
interest.
The Commission notes that another working paper from staff of the
Federal Reserve Board suggests that the rebalancing activities of
leveraged and inverse ETPs increase volatility in the underlying
securities.\13\ In particular, that working paper suggests that the
rebalancing activities of leveraged and inverse ETPs in response to a
large market move, especially in periods of high volatility, could pose
market risks.
---------------------------------------------------------------------------

\13\ See Tugkan Tuzun, Are Leveraged and Inverse ETFs the New
Portfolio Insurers? (Board of Governors of the Federal Reserve
System, Working Paper May 28, 2014) (``Tuzun Paper'').
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The Commission invites additional written views of interested
persons concerning whether the proposed rule change is consistent with
Section 6(b)(5) or any other provision of the Act, or the rules and
regulations thereunder. In particular, the Commission requests that
interested persons provide additional written submissions of their
views, data, and arguments with respect to the market impact issue
identified above (including the market impact issue discussed in the
Ivanov and Lenkey Paper and the Tuzun Paper), as well as any other
comments they wish to submit regarding the proposed rule change. In
particular, the Commission seeks comment, including, where relevant,
any specific data, statistics, or studies, on the following:
1. Would the rebalancing activities of the ForceShares ETPs impact
daily volatility of the portfolio holdings, the underlying index, or
the underlying names comprising the index (together ``underlying
assets'')? \14\ If so, how?
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\14\ As explained in Amendment No. 3 to the proposed rule
change, under normal market conditions, each ForceShares ETP may
invest in Standard & Poor's 500 Stock Price Index Futures contracts
(``Big S&P Contracts''), E-Mini S&P 500 Futures contracts (``E-
Minis'' and, together with Big S&P Contracts, ``Primary S&P
Interests''), swap agreements referencing Primary S&P Interests or
the S&P 500 Index, over-the-counter forward contracts referencing
Primary S&P Interests, options on Primary S&P Interests, and certain
``Cash Equivalents.'' For more information regarding the ForceShares
ETPs, see Amendment No. 3, available at https://www.sec.gov/comments/sr-nysearca-2016-120/nysearca2016120-1714666-150363.pdf.

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[[Page 62941]]

2. How much additional end-of-day trading volume in the underlying
assets would the ForceShares ETPs potentially add? How much volume has
existing leveraged and inverse ETPs added to end-of-day trading in
their underlying assets?
3. Would the trading activity relating to the ForceShares ETPs
exacerbate market movements or market volatility? Why or why not?
4. What type of hedging exposure is expected to arise from trading
activity in these products?
5. How would this hedging exposure change or otherwise react to
significant down market moves? For example, how might such hedging
exposure be adjusted?
6. Would the listing and trading of shares of the ForceShares ETPs
change the current leveraged and inverse ETP market? If so, how?
7. Do investors have access to information sufficient to fully
understand the operation and risks of the ForceShares ETPs?
It is ordered that by December 20, 2018, any party or other person
may file any additional statement.

By the Commission.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-26403 Filed 12-4-18; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 83, No. 234 / Thursday, December 6, 2018 / Notices 62939

promote just and equitable principles of the Commission waive the 30-day comments more efficiently, please use
trade, to remove impediments to and operative delay to allow the Exchange to only one method. The Commission will
perfect the mechanism of a free and immediately correct the errors in ISE post all comments on the Commission’s
open market and a national market Rule 722, Supplementary Material .07 internet website (http://www.sec.gov/
system, and, in general to protect and display Supplementary Material .07 rules/sro.shtml). Copies of the
investors and the public interest, by to Rule 722 as intended. The submission, all subsequent
correcting inadvertent errors within the Commission believes that waiver of the amendments, all written statements
rule text of Supplementary Material .07 30-day operative delay is consistent with respect to the proposed rule
to ISE Rule 722. Correcting this rule text with the protection of investors and the change that are filed with the
error will help to ensure the accuracy of public interest. As noted above, the Commission, and all written
the current Rulebook. This rule change proposal, which makes no substantive communications relating to the
is not substantive. changes to ISE’s rules, is designed to proposed rule change between the
correct inadvertent errors in the text of Commission and any person, other than
B. Self-Regulatory Organization’s
ISE Rule 722, Supplementary Material those that may be withheld from the
Statement on Burden on Competition
.07 and to assure that Supplementary public in accordance with the
The Exchange does not believe that Material .07 accurately reflects the provisions of 5 U.S.C. 552, will be
the proposed rule change will impose changes included in SR–ISE–2018–55 available for website viewing and
any burden on competition not and SR–ISE–2018–56.11 Accordingly, printing in the Commission’s Public
necessary or appropriate in furtherance the Commission waives the operative Reference Room, 100 F Street NE,
of the purposes of the Act. Specifically, delay and designates the proposed rule Washington, DC 20549 on official
the proposal does not impose a burden change operative upon filing.12 business days between the hours of
on intra-market or inter-market At any time within 60 days of the 10:00 a.m. and 3:00 p.m. Copies of the
competition, because the purpose of this filing of the proposed rule change, the filing also will be available for
rule change is to correct inadvertent rule Commission summarily may inspection and copying at the principal
text errors within Supplementary temporarily suspend such rule change if office of the Exchange. All comments
Material .07 to Rule 722. This rule it appears to the Commission that such received will be posted without change.
change is not substantive. action is necessary or appropriate in the Persons submitting comments are
C. Self-Regulatory Organization’s public interest, for the protection of cautioned that we do not redact or edit
Statement on Comments on the investors, or otherwise in furtherance of personal identifying information from
Proposed Rule Change Received From the purposes of the Act. If the comment submissions. You should
Members, Participants, or Others Commission takes such action, the submit only information that you wish
Commission shall institute proceedings to make available publicly. All
No written comments were either to determine whether the proposed rule
solicited or received. submissions should refer to File
change should be approved or Number SR–ISE–2018–95, and should
III. Date of Effectiveness of the disapproved. be submitted on or before December 26,
Proposed Rule Change and Timing for IV. Solicitation of Comments 2018.
Commission Action For the Commission, by the Division of
Interested persons are invited to
Because the foregoing proposed rule submit written data, views, and Trading and Markets, pursuant to delegated
change does not: (i) Significantly affect authority.13
arguments concerning the foregoing,
the protection of investors or the public including whether the proposed rule Eduardo A. Aleman,
interest; (ii) impose any significant change is consistent with the Act. Assistant Secretary.
burden on competition; and (iii) become Comments may be submitted by any of [FR Doc. 2018–26405 Filed 12–4–18; 8:45 am]
operative for 30 days from the date on the following methods: BILLING CODE 8011–01–P
which it was filed, or such shorter time
as the Commission may designate, it has Electronic Comments
become effective pursuant to Section • Use the Commission’s internet SECURITIES AND EXCHANGE
19(b)(3)(A) of the Act 7 and Rule 19b– comment form (http://www.sec.gov/ COMMISSION
4(f)(6) thereunder.8 rules/sro.shtml); or
A proposed rule change filed • Send an email to rule-comments@ [Securities Exchange Act of 1934; Release
pursuant to Rule 19b–4(f)(6) under the sec.gov. Please include File Number SR– No. 34–84676/November 29, 2018]
Act 9 normally does not become ISE–2018–95 on the subject line. In the Matter of the NYSE Arca, Inc.; for
operative for 30 days after the date of its
Paper Comments an Order Granting the Approval of
filing. However, Rule 19b–4(f)(6)(iii) 10
• Send paper comments in triplicate Proposed Rule Change To List and
permits the Commission to designate a
to Secretary, Securities and Exchange Trade Shares of the ForceShares Daily
shorter time if such action is consistent
Commission, 100 F Street NE, 4X US Market Futures Long Fund and
with the protection of investors and the
Washington, DC 20549–1090. ForceShares Daily 4X US Market
public interest. ISE has requested that
Futures Short Fund Under
All submissions should refer to File
Commentary .02 to NYSE Arca Equities
7 15 U.S.C. 78s(b)(3)(A). Number SR–ISE–2018–95. This file
8 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
Rule 8.200 (SR–NYSEArca–2016–120);
number should be included on the
4(f)(6)(iii) requires a self-regulatory organization to Request for Additional Comment
subject line if email is used. To help the
khammond on DSK30JT082PROD with NOTICES

give the Commission written notice of its intent to
file the proposed rule change, along with a brief Commission process and review your On October 17, 2016, NYSE Arca, Inc.
description and text of the proposed rule change, (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed
at least five business days prior to the date of filing 11 See notes 3 and 4, supra. with the Securities and Exchange
of the proposed rule change, or such shorter time 12 For purposes only of waiving the 30-day
as designated by the Commission. The Exchange
Commission (‘‘Commission’’), pursuant
operative delay, the Commission also has
has satisfied this requirement. considered the proposed rule’s impact on
to Section 19(b)(1) of the Securities
9 17 CFR 240.19b–4(f)(6).
efficiency, competition, and capital formation. See
10 17 CFR 240.19b–4(f)(6)(iii). 15 U.S.C. 78c(f). 13 17 CFR 200.30–3(a)(12).

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62940 Federal Register / Vol. 83, No. 234 / Thursday, December 6, 2018 / Notices

Exchange Act of 1934 (‘‘Act’’) 1 and Rule which the Commission ordered that any potentially further exacerbate market
19b–4 thereunder,2 a proposed rule party or other person may file any movements, particularly during periods
change to list and trade shares of the additional statement by June 15, 2017. of high market volatility. Because the
ForceShares Daily 4X US Market The Commission further ordered that ForceShares ETPs would have 4X and
Futures Long Fund and ForceShares the May 2, 2017 Order shall remain ¥4X leverage, they would have greater
Daily 4X US Market Futures Short Fund stayed pending further order of the rebalancing activities than existing ETPs
(‘‘ForceShares ETPs’’) under Commission. The Commission received that have lower leverage ratios per
Commentary .02 to NYSE Arca Equities six comment letters in response to the dollar of net assets under management.
Rule 8.200. On November 4, 2016, the May 25, 2017 Order that support In particular, there are questions
proposal was published for comment in approval of the proposed rule change.11 concerning whether rebalancing
the Federal Register.3 On December 14, In response to the May 25, 2017 activities of the ForceShares ETPs could
2016, the Division of Trading and Order, one commenter cited a working potentially result in significant
Markets, for the Commission pursuant paper from staff of the Federal Reserve additional market volatility as compared
to delegated authority, extended the Board regarding the impact of leveraged to existing ETPs, and interfere with fair
time period for Commission action on and inverse exchange-traded products and orderly markets. This raises a
the proposed rule change.4 On February (‘‘ETPs’’) on the underlying market, and potential concern that the listing and
1, 2017, the Division of Trading and quoted the following statements from trading of shares of the ForceShares
Markets, for the Commission pursuant the paper: (a) ‘‘capital flows ETPs may not be consistent with
to delegated authority, instituted substantially reduce the need for ETFs Section 6(b)(5) of the Act, which
proceedings to determine whether to to rebalance when returns are large in requires, among other things, that the
approve or disapprove the proposed magnitude and, therefore, mitigate the rules of a national securities exchange
rule change.5 On April 20, 2017, NYSE potential for these products to amplify be designed to protect investors and the
Arca submitted Amendment No. 3 to the volatility. We also show theoretically public interest.
proposed rule change, which replaced that flows can completely eliminate ETF The Commission notes that another
and superseded the proposed rule rebalancing in the limit’’ and (b) working paper from staff of the Federal
change as modified by previous ‘‘[l]everaged and inverse ETFs have Reserve Board suggests that the
amendments.6 No comments on the received heavy criticism based on the rebalancing activities of leveraged and
proposed rule change were received. On belief that they exacerbate volatility in inverse ETPs increase volatility in the
May 2, 2017, the Division of Trading financial markets. We show that underlying securities.13 In particular,
and Markets, for the Commission concerns about these types of products that working paper suggests that the
pursuant to delegated authority,7 are likely exaggerated. Empirically, we rebalancing activities of leveraged and
approved the proposed rule change, as find that capital flows considerably inverse ETPs in response to a large
modified by Amendment No. 3 (‘‘May 2, reduce ETF rebalancing demand and, market move, especially in periods of
2017 Order’’).8 therefore, mitigate the potential for ETFs high volatility, could pose market risks.
On May 12, 2017, the Secretary of the to amplify volatility. Our analysis has The Commission invites additional
Commission notified the Exchange that relevant and timely policy implications, written views of interested persons
pursuant to Rule 431 of the as regulators are reportedly considering concerning whether the proposed rule
Commission’s Rules of Practice,9 the changes to how ETFs are regulated.’’ 12 change is consistent with Section 6(b)(5)
Commission would review the The Commission believes that or any other provision of the Act, or the
delegated action and that the May 2, questions and concerns remain rules and regulations thereunder. In
2017 Order was stayed until the regarding the potential systemic impact particular, the Commission requests that
Commission ordered otherwise.10 On of the ForceShares ETPs. In particular, interested persons provide additional
May 25, 2017, the Commission issued the amount of rebalancing activity for a written submissions of their views, data,
an order scheduling filing of statements leveraged or inverse ETP increases and arguments with respect to the
on review (‘‘May 25, 2017 Order’’), in significantly as the ETP’s leverage ratio market impact issue identified above
and net assets increase. Moreover, the (including the market impact issue
1 15 U.S.C. 78s(b)(1). rebalancing activities of both leveraged discussed in the Ivanov and Lenkey
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 79201
and inverse ETPs are in the same Paper and the Tuzun Paper), as well as
(October 31, 2016), 81 FR 76977 (November 4, 2016) direction as the movement in the any other comments they wish to
(SR–NYSEArca–2016–120). reference asset (i.e., they sell when the submit regarding the proposed rule
4 See Securities Exchange Act Release No. 79550 market is going down and buy when the change. In particular, the Commission
(December 14, 2016), 81 FR 92892 (December 20, market is going up), which could seeks comment, including, where
2016).
5 See Securities Exchange Act Release No. 79914
relevant, any specific data, statistics, or
11 See letters to Brent J. Fields, Secretary,
(February 1, 2017), 82 FR 9625 (February 7, 2017). studies, on the following:
6 Amendment No. 3 replaced and superseded the
Commission, from Boris Ilyevsky, dated June 5, 1. Would the rebalancing activities of
2017; Kris Wallace, Member, ForceShares LLC,
proposed rule change as modified by Amendment dated June 13, 2017; Douglas M. Yones, Head of the ForceShares ETPs impact daily
No. 2. Amendment No. 2 had previously replaced Exchange Traded Products, New York Stock volatility of the portfolio holdings, the
and superseded the proposed rule change as
modified by Amendment No. 1. Amendment No. 1
Exchange, dated June 13, 2017; Jonathan Yao, CEO, underlying index, or the underlying
SogoTrade, Inc., dated June 14, 2017; and Kris names comprising the index (together
replaced and superseded the original filing in its Wallace, Member, ForceShares LLC, dated July 24,
entirety. 2017 (‘‘ForceShares Letter’’); and letter to ‘‘underlying assets’’)? 14 If so, how?
7 17 CFR 200.30–3(a)(12).
Commission, from James J. Angel, Associate
khammond on DSK30JT082PROD with NOTICES

8 See Securities Exchange Act Release No. 80579
Professor of Finance, Georgetown University, dated 13 See Tugkan Tuzun, Are Leveraged and Inverse
(May 2, 2017), 82 FR 21443 (May 8, 2017). July 10, 2017. ETFs the New Portfolio Insurers? (Board of
9 17 CFR 201.431. 12 See ForceShares Letter at 5 (quoting Ivan T. Governors of the Federal Reserve System, Working
10 See letter to Elizabeth King, General Counsel Ivanov and Stephen L. Lenkey, Are Concerns About Paper May 28, 2014) (‘‘Tuzun Paper’’).
and Corporate Secretary, New York Stock Exchange, Leveraged ETFs Overblown? (Finance and 14 As explained in Amendment No. 3 to the

from Brent J. Fields, Secretary, Commission, dated Economics Discussion Series, Divisions of Research proposed rule change, under normal market
May 12, 2017, available at https://www.sec.gov/ & Statistics and Monetary Affairs, Federal Reserve conditions, each ForceShares ETP may invest in
rules/sro/nysearca/2017/34-80770-letter-from- Board, Washington, DC, Working Paper 2014–106) Standard & Poor’s 500 Stock Price Index Futures
secretary.pdf. (‘‘Ivanov and Lenkey Paper’’)). contracts (‘‘Big S&P Contracts’’), E-Mini S&P 500

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Federal Register / Vol. 83, No. 234 / Thursday, December 6, 2018 / Notices 62941

2. How much additional end-of-day (‘‘Commission’’) a Form 1 application Comments may be submitted by any
trading volume in the underlying assets under the Securities Exchange Act of of the following methods:
would the ForceShares ETPs potentially 1934 (‘‘Exchange Act’’), seeking
Electronic Comments
add? How much volume has existing registration as a national securities
leveraged and inverse ETPs added to exchange under Section 6 of the • Use the Commission’s internet
end-of-day trading in their underlying Exchange Act. comment form (http://www.sec.gov/
assets? The Commission is publishing this rules/sro.shtml); or
3. Would the trading activity relating notice to solicit comments on LTSE’s
to the ForceShares ETPs exacerbate Form 1 application. The Commission • Send an email to rule-comments@
market movements or market volatility? will take any comments it receives into sec.gov. Please include File Number 10–
Why or why not? consideration in making its 234 on the subject line.
4. What type of hedging exposure is determination about whether to grant Paper Comments
expected to arise from trading activity in LTSE’s request to be registered as a
these products? national securities exchange. The • Send paper comments in triplicate
5. How would this hedging exposure Commission will grant the registration if to Secretary, Securities and Exchange
change or otherwise react to significant it finds that the requirements of the Commission, 100 F Street NE,
down market moves? For example, how Exchange Act and the rules and Washington, DC 20549–1090.
might such hedging exposure be regulations thereunder with respect to
LTSE are satisfied.1 All submissions should refer to File
adjusted? Number 10–234. This file number
6. Would the listing and trading of The Applicant’s Form 1 application
provides detailed information on how should be included on the subject line
shares of the ForceShares ETPs change if email is used. To help the
the current leveraged and inverse ETP LTSE proposes to satisfy the
requirements of the Exchange Act. The Commission process and review your
market? If so, how? comments more efficiently, please use
Form 1 application also provides that
7. Do investors have access to only one method. The Commission will
LTSE would operate a fully automated
information sufficient to fully post all comments on the Commission’s
electronic trading platform for the
understand the operation and risks of internet website (http://www.sec.gov/
trading of listed equities and would not
the ForceShares ETPs? rules/other.shtml). Copies of the
maintain a physical trading floor. It also
It is ordered that by December 20, submission, all subsequent
provides that liquidity would be derived
2018, any party or other person may file from orders to buy and orders to sell amendments, all written statements
any additional statement. submitted to LTSE electronically by its with respect to LTSE’S Form 1 filed
By the Commission. registered broker-dealer members, as with the Commission, and all written
Eduardo A. Aleman, well as from quotes submitted communications relating to the
Assistant Secretary. electronically by market makers. application between the Commission
[FR Doc. 2018–26403 Filed 12–4–18; 8:45 am] Further, the Form 1 application states and any person, other than those that
that LTSE would be wholly-owned by may be withheld from the public in
BILLING CODE 8011–01–P
its parent company, LTSE Holdings, Inc. accordance with the provisions of 5
(‘‘LTSEH’’). U.S.C. 552, will be available for website
SECURITIES AND EXCHANGE A more detailed description of the viewing and printing in the
COMMISSION manner of operation of LTSE’s proposed Commission’s Public Reference Room,
system can be found in Exhibit E to 100 F Street NE, Washington, DC 20549,
[Release No. 34–84709; File No. 10–234] LTSE’s Form 1 application. The on official business days between the
proposed rulebook for the proposed hours of 10:00 a.m. and 3:00 p.m. All
Long-Term Stock Exchange, Inc.; exchange can be found in Exhibit B to comments received will be posted
Notice of Filing of Application for LTSE’s Form 1 application, and the without change. Persons submitting
Registration as a National Securities governing documents for both LTSE and comments are cautioned that we do not
Exchange Under Section 6 of the LTSEH can be found in Exhibit A and redact or edit personal identifying
Securities Exchange Act of 1934 Exhibit C to LTSE’s Form 1 application, information from comment submissions.
November 30, 2018. respectively. A listing of the officers and You should submit only information
directors of LTSE can be found in that you wish to make publicly
On November 9, 2018, Long-Term
Exhibit J to LTSE’s Form 1 application. available. All submissions should refer
Stock Exchange, Inc. (‘‘LTSE’’ or
LTSE’s Form 1 application, including to File Number 10–234 and should be
‘‘Applicant’’) filed with the Securities
all of the Exhibits referenced above, is submitted on or before January 22, 2019.
and Exchange Commission
available online at www.sec.gov/rules/ For the Commission, by the Division of
Futures contracts (‘‘E-Minis’’ and, together with Big
other.shtml as well as in the Trading and Markets, pursuant to delegated
S&P Contracts, ‘‘Primary S&P Interests’’), swap Commission’s Public Reference Room. authority.2
agreements referencing Primary S&P Interests or the Interested persons are invited to submit
Eduardo A. Aleman,
S&P 500 Index, over-the-counter forward contracts written data, views, and arguments
referencing Primary S&P Interests, options on concerning LTSE’s Form 1, including Assistant Secretary.
Primary S&P Interests, and certain ‘‘Cash [FR Doc. 2018–26517 Filed 12–5–18; 8:45 am]
Equivalents.’’ For more information regarding the
whether the application is consistent
khammond on DSK30JT082PROD with NOTICES

ForceShares ETPs, see Amendment No. 3, available with the Exchange Act. BILLING CODE 8011–01–P

at https://www.sec.gov/comments/sr-nysearca-
2016-120/nysearca2016120-1714666-150363.pdf. 1 15 U.S.C. 78s(a). 2 17 CFR 200.30–3(a)(71)(i).

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Document Created: 2018-12-05 02:35:31
Document Modified: 2018-12-05 02:35:31

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 62939