Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the LBMA Gold Price as a Replacement for the London Gold Fix for Certain Gold Related Exchange Traded Products, 15840-15845 [2015-06719]
Download as PDF
<![CDATA[
15840
Federal Register / Vol. 80, No. 57 / Wednesday, March 25, 2015 / Notices
The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Exchange stated that waiver
of this requirement will enable the
Exchange to, as soon as possible, have
the ability to compete with option
exchanges that have incorporated the
proposed rule change to their short term
option series programs. For this reason,
the Commission believes that the
proposed rule change presents no novel
issues and that waiver of the 30-day
operative delay is consistent with the
protection of investors and the public
interest. Therefore, the Commission
designates the proposed rule change to
be operative upon filing.21
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
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:
rljohnson on DSK3VPTVN1PROD with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSEARCA–2015–16 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSEARCA–2015–16. 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
21 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).
VerDate Sep<11>2014
15:26 Mar 24, 2015
Jkt 235001
Internet Web site (https://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 Web site 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;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NYSEARCA–2015–16 and should be
submitted on or before April 15, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
Brent J. Fields,
Secretary.
[FR Doc. 2015–06718 Filed 3–24–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74544; File No. SR–
NYSEArca–2015–19]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to the LBMA
Gold Price as a Replacement for the
London Gold Fix for Certain Gold
Related Exchange Traded Products
March 19, 2015.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on March
17, 2015, NYSE Arca, Inc. (the
‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
22 17
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00099
Fmt 4703
Sfmt 4703
been prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to (1) to
reflect a change to the value used by the
SPDR® Gold Trust, which is currently
listed on the Exchange under NYSE
Arca Equities Rule 5.2(j)(5); iShares
Gold Trust, ETFS Gold Trust, ETFS
Precious Metals Basket Trust, ETFS
Asian Gold Trust and Merk Gold Trust,
each of which is currently listed on the
Exchange under NYSE Arca Equities
Rule 8.201, with respect to calculation
of the net asset value of shares of each
trust; and (2) to reflect a change to the
underlying benchmark for ProShares
Ultra Gold and ProShares UltraShort
Gold, each of which is currently listed
on the Exchange under NYSE Arca
Equities Rule 8.200. The text of the
proposed rule change is available on the
Exchange’s Web site 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 Exchange proposes to amend the
Exchange listing rules applicable to nine
exchange-traded products, all of which
reference the ‘‘London Gold Fix’’, as
described further below. The exchangetraded products are listed and traded
pursuant to NYSE Arca Equities Rule
5.2(j)(5) for the Equity Gold Shares;
NYSE Arca Equities Rules 8.201, for
Commodity-Based Trust Shares, and
NYSE Arca Equities Rule 8.200, for
Trust Issued Receipts. The proposed
change would replace references to the
E:\FR\FM\25MRN1.SGM
25MRN1
Federal Register / Vol. 80, No. 57 / Wednesday, March 25, 2015 / Notices
‘‘London Gold Fix’’, as described below.
The London Gold Fix is a gold-price
mechanism that has been in existence
since 1919 and that will be
discontinued T [sic] the close of
business on March 19, 2015.4
rljohnson on DSK3VPTVN1PROD with NOTICES
Revised Procedures for the Gold Price
On November 8, 2014, the London
Bullion Market Association (‘‘LBMA’’)
announced that ICE Benchmark
Administration (‘‘IBA’’) 5 has been
selected to be the third-party
administrator for the ‘‘LBMA Gold
Price’’, which will replace the current
London Gold Fix. IBA, an independent
specialist benchmark administrator, will
provide the auction platform and
methodology as well as the overall
administration and governance for the
LBMA Gold Price benchmark.
On February 19, 2015, the
Intercontinental Exchange (‘‘ICE’’)
announced that the new LBMA Gold
Price will be launched on March 20,
2015. As the administrator for the
LBMA Gold Price benchmark and the
operator of the ‘‘IBA Gold Auction’’,
4 As described in the registration statement under
the Securities Act of 1933 (15 U.S.C. 77a) (‘‘1933
Act’’) for the SPDR® Gold Trust (formerly known
as the streetTRACKS Gold Trust) (see infra, note
13), twice daily during London trading hours there
is a fix (‘‘London Gold Fix’’) which provides
reference gold prices for that day’s trading. Many
long-term contracts will be priced on the basis of
either the morning (AM) or afternoon (PM) London
Gold Fix, and market participants will usually refer
to one or the other of these prices when looking for
a basis for valuations. The London Gold Fix is the
most widely used benchmark for daily gold prices
and is quoted by various financial information
sources. Membership in the London fix is
traditionally limited to banks that are bullion
dealers and members of the LBMA. The
chairmanship rotates annually among the four
member firms. The fix takes place by telephone and
the four member firms no longer meet face-to-face
as was previously the case. There is a morning
session at 10:30 a.m. London time and an afternoon
session at 3:00 p.m. London time. The current
members of the gold fixing are Bank of Nova
Scotia—ScotiaMocatta, Barclays Bank plc, HSBC
´ ´ ´ ´
Bank USA, N.A., and Societe Generale. Any other
market participant wishing to participate in the
trading on the fix is required to do so through one
of the four gold fixing members. Orders are placed
either with one of the four fixing members or with
another bullion dealer who will then be in contact
with a fixing member during the fixing. The fixing
members net-off all orders when communicating
their net interest at the fixing. The fix begins with
the fixing chairman suggesting an opening price,
reflecting the market price prevailing at the opening
of the fix. This is relayed by the fixing members to
their dealing rooms which have direct
communication with all interested parties. Any
market participant may enter the fixing process at
any time, or adjust or withdraw his order. The gold
price is adjusted up or down until all the buy and
sell orders are matched, at which time the price is
declared fixed. All fixing orders are transacted on
the basis of this fixed price, which is instantly
relayed to the market through various media.
5 IBA is a London-based company that was
created specifically to administer systemically
important benchmarks. Formed in 2013, IBA is part
of the Intercontinental Exchange (ICE).
VerDate Sep<11>2014
15:26 Mar 24, 2015
Jkt 235001
IBA will transition from the current
London Gold Fix procedures to a
physically settled, electronic and
tradeable auction, with the ability to
settle trades in U.S. Dollars (‘‘USD’’),
euros or British Pounds. Within the
process, aggregated gold bids and offers
will be updated in real-time with the
imbalance calculated and the price
updated at regular intervals (expected to
be at least every 45 seconds). IBA will
use ICE’s front-end system— WebICE—
as the technology platform that will
allow direct participants, as well as
sponsored clients of direct participants,
to manage their orders in the auction in
real time via their desktops.6
Participants in the auction will
include direct participants and
sponsored clients of direct participants.
Direct participants may enter orders on
their own behalf or on behalf of clients.
Sponsored clients also may manage
their own positions utilizing their own
trading screens; however, a sponsored
client’s orders would be backed by the
sponsoring direct participant. WebICE
allows sponsored clients to participate
in the auction process with the same
information and order management
capabilities as direct participants.
At the opening of each auction, the
auction chairman (‘‘Chairman’’) will
announce an opening price (in USD)
based on the current market conditions
and begin auction rounds, with an
expected duration of at least every 45
seconds each. During each auction
round, participants may enter the
volume they wish to buy or sell at that
price, and such orders will be part of the
price formation. All orders will be
routed through direct participants but
only direct participants will share the
final imbalance. Aggregate bid and offer
volume will be shown live on WebICE,
providing a level playing field for all
participants. At the end of each auction
round, the total net volume will be
calculated. If this ‘imbalance’ is larger
than the imbalance tolerance (currently
set at 20,000 oz) then the Chairman will
choose a new price 7 (based on the
current market conditions, and the
direction and magnitude of the
imbalance in the round) and begin a
new auction round. If the imbalance is
less than the tolerance, then the auction
is complete with all volume tradeable at
that price. The price will then be set in
USD and also converted into in euros
and British Pounds. Auctions will
6 The WebICE platform provides real-time order
management as well as separation of direct
participant and sponsored client orders, live credit
limit controls, audit history, advanced Excel
integration and automated deal notifications.
7 The Chairman will have significant experience
in the gold markets and will be employed by IBA.
PO 00000
Frm 00100
Fmt 4703
Sfmt 4703
15841
continue to be run at 10:30 and 15:00
(London time).
During the auction, the price at the
start of each round, and the volumes at
the end of each round will be available
through major market data vendors. As
soon as the auction finishes, the final
prices and volumes will be available
through major market data vendors. IBA
will also publish transparency reports,
detailing the prices, volumes and times
for each round of the auction. These
transparency reports will be available
through major market data vendors and
IBA when the auction finishes. The
process can also be observed real-time
through a WebICE screen. The auction
mechanism will provide a complete
audit trail.
The number of direct participants
initially expected to participate in the
auction process is not yet confirmed,
but is expected to equal or exceed the
number of market participants currently
determining the London Gold Fix.
Regulation of the LBMA Gold Price
As of April 1, 2015, the LBMA Gold
Price will be regulated by the Financial
Conduct Authority (‘‘FCA’’) in the
United Kingdom (‘‘UK’’).8 IBA is
already authorized as a regulated
benchmark administrator by the FCA.
Under the UK benchmark regulation,9
the governance structure for a regulated
benchmark must include an Oversight
Committee, made up of market
participants, industry bodies, direct
participant representatives,
8 The conduct of financial institutions is overseen
by the FCA, which was formed from the former
Financial Services Authority and is separate from
the Bank of England. The LBMA Gold Price will be
regulated under the FCA’s Market Conduct (MAR)
Sourcebook (MAR 8.3).
9 On June 12, 2014, the UK Chancellor of the
Exchequer announced steps to raise standards of
conduct in the financial system with a joint review
by the UK Treasury, the Bank of England and the
FCA into the way wholesale financial markets
operate. According to this announcement, the ‘‘Fair
and Effective Markets Review’’, led by Bank of
England Deputy Governor for Markets and Banking,
has been tasked with investigating those wholesale
markets, both regulated and unregulated, where
most of the recent concerns about misconduct have
arisen: Fixed-income, currency and commodity
markets, including associated derivatives and
benchmarks. It will make recommendations on:
principles to govern the operation of fair and
effective markets, focusing on fixed income,
currency and commodities; reforms to ensure
standards of behavior are in accordance with those
principles; tools to strengthen the oversight of
market conduct; whether the regulatory perimeter
for wholesale financial markets should be extended,
and to what extent international action is required;
and additional reforms in relation to benchmarks,
in order to strengthen market infrastructure. See
https://www.bankofengland.co.uk/markets/
Documents/femraug2014.pdf. On September 25,
2014, the Fair and Effective Markets Review
announced its proposal that the gold fixing process
may become regulated under UK benchmark
regulation, effective from April 2015.
E:\FR\FM\25MRN1.SGM
25MRN1
15842
Federal Register / Vol. 80, No. 57 / Wednesday, March 25, 2015 / Notices
infrastructure providers and the
administrator (i.e., IBA). 10 Through the
Oversight Committee, the LBMA will
continue to have significant
involvement in the oversight of the
auction process, including, among other
matters, changes to the methodology
and accreditation of direct
participants.11
The price discovery process for the
LBMA Gold Price will be subject to
surveillance by IBA. IBA is compliant
with the UK benchmark regulation
(MAR 8.3), regulated by the FCA, and
has been formally assessed against the
IOSCO Principles for Financial
Benchmarks (the ‘‘IOSCO
Principles’’).12 In order to meet the
IOSCO Principles, the price discovery
used for the LBMA Gold Price
benchmark will be auditable and
transparent.
Exchange-Listed Gold-Based Products
rljohnson on DSK3VPTVN1PROD with NOTICES
The Exchange lists and trades shares
of exchange traded products that
reference the London Gold Fix
10 The Oversight Committee is a key decision
making forum, with market representation that
includes participants, users and infrastructure
providers. The Oversight Committee’s
responsibilities include review of methodology and
process relating to the LBMA Gold Price;
implementation of a Code of Conduct applicable to
participants; expansion of membership; and
surveillance oversight, among other functions. The
Oversight Committee’s structure and
responsibilities is described in the Oversight
Committee Terms of Reference, available on the IBA
Web site.
11 The LBMA will continue to provide guidance
with respect to the LBMA Gold Price through the
Oversight Committee, which will facilitate
communication among representatives of all market
participants to ensure the process continues to fulfil
the needs of the market. The Oversight Committee
is responsible for decisions that affect the evolution
of the process based on changes in the market and
regulatory environments.
12 The IOSCO Principles are designed to enhance
the integrity, the reliability and the oversight of
benchmarks by establishing guidelines for
benchmark administrators and other relevant bodies
in the following areas: Governance: To protect the
integrity of the benchmark determination process
and to address conflicts of interest; Benchmark
quality: to promote the quality and integrity of
benchmark determinations through the application
of design factors; Quality of the methodology: to
promote the quality and integrity of methodologies
by setting out minimum information that should be
addressed within a methodology. These principles
also call for credible transition policies in case a
benchmark may cease to exist due to market
structure change. Accountability mechanisms: to
establish complaints processes, documentation
requirements and audit reviews. The IOSCO
Principles provide a framework of standards that
might be met in different ways, depending on the
specificities of each benchmark. In addition to a set
of high level principles, the framework offers a
subset of more detailed principles for benchmarks
having specific risks arising from their reliance on
submissions and/or their ownership structure. For
further information concerning the IOSCO
Principles, see https://www.iosco.org/library/
pubdocs/pdf/IOSCOPD415.pdf.
VerDate Sep<11>2014
15:26 Mar 24, 2015
Jkt 235001
benchmark for one or more purposes.
The Exchange lists and trades shares of
(1) the SPDR® Gold Trust,13 which is
currently listed on the Exchange under
NYSE Arca Equities Rule 5.2(j)(5); (2)
iShares Gold Trust,14 ETFS Gold
Trust,15 ETFS Precious Metals Basket
Trust,16 ETFS Asian Gold Trust,17 and
Merk Gold Trust,18 each of which is
currently listed on the Exchange under
NYSE Arca Equities Rule 8.201 (together
with the SPDR Gold Trust, the ‘‘Gold
Trusts’’). In addition, the Exchange lists
and trades shares of the Ultra Gold
ProShares and UltraShort Gold
ProShares 19 (together, the ‘‘Gold
13 See Securities Exchange Act Release Nos.
50603 (October 28, 2004), 69 FR 64614 (November
5, 2004) (SR–NYSE–2004–22) (order approving
listing of shares of the streetTRACKS Gold Trust
(now known as the SPDR® Gold Trust) on the New
York Stock Exchange); See Securities Exchange Act
Release Nos. 51245 (February 23, 2005), 70 FR
10731 (March 4, 2005) (SR–PCX–2004–117) (order
approving trading on the Exchange of shares of the
streetTRACKS Gold Trust pursuant to unlisted
trading privileges); 56224 (August 8, 2007), 72 FR
45850 (August 15, 2007) (SR–NYSEArca–2007–76)
(order approving listing on the Exchange of shares
of the streetTRACKS Gold Trust).
14 See Securities Exchange Act Release No. 63398
(November 30, 2010), 75 FR 76056 (December 7,
2010) (SR–NYSEArca–2010–105) (notice of filing
and immediate effectiveness of proposed rule
change relating to calculation of net asset value by
the iShares Gold Trust (formerly the iShares
COMEX Gold Trust)). See also Securities Exchange
Act Release No. 56041 (July 11, 2007), 72 FR 39114
(July 17, 2007) (SR–NYSEArca-2007–43) (order
approving listing on the Exchange of iShares
COMEX Gold Trust). 51058 (January 19, 2005), 70
FR 3749 (January 26, 2005) (SR–Amex–2004–38)
(order approving listing of iShares COMEX Gold
Trust on the American Stock Exchange LLC).
15 See Securities Exchange Act Release No. 59895
(May 8, 2009), 74 FR 22993 (May 15, 2009) (SR–
NYSEArca–2009–40) (notice of filing and order
granting accelerated approval of proposed rule
change relating to the listing and trading of shares
of the ETFS Gold Trust).
16 See Securities Exchange Act Release No. 62402
(June 29, 2010), 75 FR 39292 (July 8, 2010) (SR–
NYSEArca–2010–56) (notice of filing of proposed
rule change to list and trade shares of the ETFS
Precious Metals Basket Trust); 62692 (August 11,
2010), 75 FR 50789 (August 17, 2010) (order
approving proposed rule change to list and trade
shares of the ETFS Precious Metals Basket Trust).
17 See Securities Exchange Act Release No. 63267
(November 8, 2010), 75 FR 69494 (November 12,
2010) (notice of filing of proposed rule change to
list and trade shares of the ETFS Asian Gold Trust);
63464 (December 8, 2010), 75 FR 77926 (December
14, 2010) (SR–NYSEArca–2010–95) (order granting
accelerated approval of a proposed rule change to
list and trade shares of the ETFS Asian Gold Trust).
18 See Securities Exchange Act Release No. 71038
(December 11, 2013), 78 FR 76367 (December 17,
2013) (notice of filing of proposed rule change to
list and trade shares of the Merk Gold Trust) 71378
(January 23, 2014), 79 FR 4786 (January 29, 2014)
(SR–NYSEArca–2013–137) (order approving
proposed rule change to list and trade shares of the
Merk Gold Trust).
19 See Securities Exchange Act Release Nos.
58457 (September 3, 2008), (73 FR 52711
(September 10, 2008) (SR–NYSEArca–2008–91)
(notice of filing and order granting accelerated
approval of proposed rule change regarding listing
and trading of shares of 14 funds of the
PO 00000
Frm 00101
Fmt 4703
Sfmt 4703
Funds’’), each of which is currently
listed on the Exchange under NYSE
Arca Equities Rule 8.200.
With respect to the Gold Trusts, the
net asset value of shares of the
respective trusts is based on the London
Gold Fix, as described in the applicable
rule filings relating to listing and trading
of shares of each of the Gold Trusts and
in the registration statement under the
1933 Act relating to each such trust.20
After March 19, 2015, the London Gold
Fix will no longer exist and it is,
therefore, necessary for the Gold Trusts
to change the benchmark price that each
such trust uses for purposes of
calculating the net asset value of such
trust’s shares. The sponsors of the Gold
Trusts have indicated that, as of March
20, 2015, they intend to use the LBMA
Gold Price for purposes of determining
the net asset value of shares of the Gold
Trusts. Accordingly, the Exchange
proposes to change the benchmark price
used by the Gold Trusts for calculation
of the net asset value of shares of each
of such trust.
With respect to the Gold Funds, the
existing ‘‘Underlying Benchmark’’ for
each such fund is the U.S. dollar price
of gold bullion as measured by the
London Gold Fix.21 The Gold Funds,
Commodities and Currency Trust, now ProShares
Trust II); 58162 (July 15, 2008), 73 FR 42391 (July
21, 2008) (SR–NYSEArca–2008–73) (notice of filing
and immediate effectiveness of proposed rule
change relating to trading of shares of 14 funds of
the Commodities and Currency Trust pursuant to
unlisted trading privileges). See also Securities
Exchange Act Release Nos. 58161 (July 15, 2008),
73 FR 42380 (July 21, 2008) (SR–Amex–2008–39)
(order approving listing and trading on the
American Stock Exchange LLC of shares of 14 funds
of the Commodities and Currency Trust); 57932
(June 5, 2008), 73 FR 33467 (June 12, 2008) (notice
of proposed rule change regarding listing and
trading of shares of 14 funds of the Commodities
and Currency Trust).
20 See supra, notes 13–19 [sic]. See also the
registration statement on Form S–3 under the 1933
Act for the SPDR® Gold Trust dated April 26, 2012
(No. 333–180974); registration statement on Form
S–3 under the 1933 Act for the iShares Gold Trust,
dated May 10, 2014 (No. 333–199257); PostEffective Amendment No. 2 on Form S–3 under the
1933 Act for the ETFS Precious Metals Basket Trust,
filed with the Commission on November 25, 2014
(No. 333–195675); Registration Statement on Form
S–3 ASR under the 1933 Act for the ETFS Gold
Trust, filed with the Commission on April 11, 2014
(No. 333–195204); Registration Statement on Form
S–1 under the 1933 Act for the ETFS Asian Gold
Trust, filed with the Commission on May 12, 2014
(No. 333–195868); and Amendment No. 6 on Form
S–1 under the 1933 Act for the Merk Gold Trust,
dated May 13, 2014 (No. 333–180868).
21 ProShares Ultra Gold seeks daily investment
results, before fees and expenses, that correspond
to twice (200%) the daily performance of the
Underlying Benchmark. ProShares UltraShort Gold
seeks daily investment results, before fees and
expenses that correspond to twice the inverse (200%) of the daily performance of the Underlying
Benchmark. See Securities Exchange Act Release
No. 58161 (July 15, 2008), 73 FR 42380 (July 21,
2008) (SR-Amex-2008–39) (order approving listing
E:\FR\FM\25MRN1.SGM
25MRN1
Federal Register / Vol. 80, No. 57 / Wednesday, March 25, 2015 / Notices
rljohnson on DSK3VPTVN1PROD with NOTICES
therefore, similarly need to change the
Underlying Benchmark for each such
fund. The sponsor of the Gold Funds
represents that it intends to change the
Underlying Benchmark for the Gold
Funds to the LBMA Gold Price as of
March 20, 2015. Accordingly, the
Exchange proposes to reflect a change in
the Underlying Benchmark applicable to
the Gold Funds.
The LBMA Gold Price benchmark is
widely expected to be viewed as a full
and fair representation of all market
interest at the conclusion of the auction.
IBA’s electronic auction methodology is
similar to the non-electronic process
previously used to establish the London
Gold Fix where the London Gold Fix
process adjusted the gold price up or
down until all the buy and sell orders
are matched (within the imbalance
threshold), at which time the price was
declared fixed. Nevertheless, the LBMA
Gold Price has several advantages over
the previous London Gold Fix. IBA’s
auction process will be fully transparent
in real time to direct participants and
sponsored clients and, at the close of
each auction, to the general public. The
auction process also will be fully
auditable since an audit trail exists for
every change made in the process.
Moreover, the audit trail and active
surveillance of the auction process by
IBA, as well as FCA’s oversight of IBA,
will deter manipulative and abusive
conduct in establishing each day’s
LBMA Gold Price.
The Exchange believes the new LBMA
Gold Price benchmark will serve as an
appropriate replacement to the London
Gold Fix for purposes of determining
the net asset value of shares of the Gold
Trusts or as the Underlying Benchmark
applicable to the Gold Funds because of
the transparency of the auction process,
the anticipated participation of an
increased number of market participants
compared to the London Gold Fix, and
the auditability of the gold pricing
mechanism.
In connection with this proposed rule
change, (1) the sponsors of the Gold
Trusts will each issue a press release
informing the public of the date a trust
will first use the LBMA Gold Price to
value the gold held by a trust; (2) the
sponsor of the Gold Funds will issue a
press release informing the public of the
and trading of shares of fourteen funds of the
Commodities and Currency Trust); Securities
Exchange Act Release No. 58457 (September 3,
2008) (73 FR 52711) (September 10, 2008) (SR–
NYSEArca–2008–91) (notice of filing and order
granting accelerated approval of proposed rule
change regarding listing and trading of shares of 14
funds of ProShares Trust II). See also, registration
statement for ProShares Trust II on Form S–3 under
the 1933 Act, filed with the Commission on October
28, 2014 (No. 333–199641).
VerDate Sep<11>2014
15:26 Mar 24, 2015
Jkt 235001
date the Gold Funds will first use the
LBMA Gold Price as the basis for their
respective Underlying Benchmark; (3)
the sponsors will each file the
applicable press release with the
Commission by means of Form 8–K,
which will be available on the
applicable Gold Trust’s or Gold Fund’s
Web site; and (4) the sponsors will each
file an amendment to the applicable
registration statement relating to the
proposed change.22
The sponsors for the Gold Trusts and
the Gold Funds represent that there is
no change to the investment objective of
the applicable Gold Trust or the Gold
Funds from that described in the
applicable proposed rule change.23 The
Gold Trusts and the Gold Funds will
comply with all initial and continued
listing requirements with respect to
NYSE Arca Equities Rule 5.2(j)(5), 8.201
or 8.200, respectively.
Except for the changes noted above,
all other facts presented and
representations made in the proposed
rule changes referenced above remain
unchanged.
All terms referenced but not defined
herein are defined in the applicable
proposed rule change referenced
above.24
2. Statutory Basis
The basis under the Act for this
proposed rule change is the requirement
under Section 6(b)(5) 25 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.
The Exchange believes that the
proposed rule change is designed to
prevent fraudulent and manipulative
acts and practices in that the new LBMA
Gold Price benchmark will be based on
an auction that is electronic and
auditable and is produced from
tradeable volumes. The Exchange
believes the new LBMA Gold Price
benchmark will serve as an appropriate
replacement to the London Gold Fix for
purposes of determining the net asset
value of shares of the Gold Trusts or as
the Underlying Benchmark applicable to
22 The sponsors for the Gold Trusts and the Gold
Funds represent that they will manage the Gold
Trusts and the Gold Funds in the manner described
in the applicable proposed rule change (see supra,
notes 13–19), and will not implement the changes
described herein until the instant proposed rule
change is operative.
23 See supra, notes 13–19.
24 See supra, notes 13–19.
25 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00102
Fmt 4703
Sfmt 4703
15843
the Gold Funds because of the
transparency and auditability of the
auction process, and the prospective
participation of an increased number of
market participants compared to the
London Gold Fix. In addition, the
LBMA Gold Price and the transparency
reports showing the prices, timings and
total volumes for each round will be
available electronically instantly after
the conclusion of the auction, as
described above.
The proposed change will permit the
Gold Trusts and Gold Funds to continue
to function as gold-based exchangetraded products by utilizing a new gold
benchmark to replace the London Gold
Fix, which is not expected to be
available after March 19, 2015, and that
will provide a sound and reasonable
basis for calculation of net asset value
or will provide a suitable Underlying
Benchmark, as applicable. Such price
will be widely disseminated by one or
more major market data vendors and/or
exchanges. Prior to or following the
effectiveness of this proposed rule
change, (1) the sponsors of the Gold
Trusts will each issue a press release
informing the public of the date a trust
will first use the LBMA Gold Price to
value the gold held by a trust; (2) the
sponsor of the Gold Funds will issue a
press release informing the public of the
date the Gold Funds will first use the
LBMA Gold Price as the basis for their
respective Underlying Benchmark; (3)
the sponsors of the Gold Trusts and
Gold Funds will each file the applicable
press release with the Commission by
means of Form 8–K, which will be
available on the applicable Gold Trust’s
or Gold Fund’s Web site; and (4) the
sponsors of the Gold Trusts and Gold
Funds will each file an amendment to
the applicable registration statement
under the 1933 Act relating to the
proposed change. Such press releases
and registration statement amendments
will protect investors and the public
interest by providing notification to
investors of the new gold price
benchmark prior to the use of the LBMA
Gold Price by the Gold Trusts and Gold
Funds. The sponsors for the Gold Trusts
and Gold Funds represent that there is
no change to the investment objective of
the applicable trust or the Gold Funds
from that described in the applicable
proposed rule change. The Gold Trusts
and Gold Funds will comply with all
initial and continued listing
requirements relating to NYSE Arca
Equities Rules 5.2(j)(5), 8.201 or 8.200,
respectively. Except for the changes
noted above, all other facts presented
and representations made in proposed
E:\FR\FM\25MRN1.SGM
25MRN1
15844
Federal Register / Vol. 80, No. 57 / Wednesday, March 25, 2015 / Notices
rule changes referenced above remain
unchanged.
The proposed rule change is designed
to perfect the mechanism of a free and
open market price discovery process
and, in general, to protect investors and
the public interest in that the gold
auction will be transparent, auditable,
and operated by a regulated benchmark
administrator (IBA). The audit trail
records every change made in the
process and IBA has regulatory
obligations to run surveillance on the
activity in the process to deter and
identify manipulative and abusive
conduct in establishing each day’s
LBMA Gold Price. The new LBMA Gold
Price, as administered by IBA, is
designed to be a benchmark that meets
the needs of the market and regulators
(including the IOSCO Principles 26). The
Gold Trusts and Gold Funds will
continue to be listed and traded on the
Exchange pursuant to the initial and
continued listing criteria relating to
NYSE Arca Equities Rules 5.2(j)(5),
8.201 and 8.200, respectively. Except for
the changes noted above, all other facts
presented and representations made in
proposed rule changes referenced above
remain unchanged.27
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed change will permit the Gold
Trusts and Gold Funds to continue to
function as gold-based exchange-traded
products by utilizing a new gold price
benchmark to replace the London Gold
Fix, which will not be available after
March 19, 2015, and that will provide
a sound and reasonable basis for
calculation of net asset value or will
provide a suitable Underlying
Benchmark, as applicable.
rljohnson on DSK3VPTVN1PROD with NOTICES
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 proposed rule change
does not (i) significantly affect the
protection of investors or the public
interest; (ii) impose any significant
26 See
27 See
supra, note 12.
supra, notes 13–19.
VerDate Sep<11>2014
15:26 Mar 24, 2015
Jkt 235001
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, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 28 and Rule 19b–4(f)(6)
thereunder.29
The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Exchange states that the
proposed change will provide
additional transparency to gold pricing
compared to the previous London Gold
Fix for several reasons. The Exchange
represents that IBA’s auction process
will be fully transparent in real time to
direct participants and sponsored
clients and, at the close of each auction,
to the general public. The Exchange
represents that IBA’s auction process
will be fully auditable because an audit
trail exists of every change that is made
during the auction. Moreover, the
Exchange states that there will be active
surveillance of the activity in the
auction process by IBA. The Exchange
represents that the number of gold
participants that initially are expected
to participate in the auction process
equals or exceeds the number of market
participants currently determining the
London Gold Fix, and will contribute to
the integrity and reliability of the
pricing process.
The Commission believes that waiver
of the operative delay is consistent with
the protection of investors and the
public interest. Waiver of the operative
delay will allow the Gold Trusts and the
Gold Funds, whose shares are actively
traded, to use the LBMA Gold Price as
the basis for calculating the NAV or as
an Underlying Benchmark, as
applicable, by March 20, 2015, thereby
facilitating the transition to the new
price mechanism without disruption in
trading. Therefore, the Commission
designates the proposed rule change to
be operative upon filing.30
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
28 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). As required under Rule
19b–4(f)(6)(iii), the Exchange provided the
Commission with written notice of its intent to file
the proposed rule change, along with a brief
description and the 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.
30 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
29 17
PO 00000
Frm 00103
Fmt 4703
Sfmt 4703
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
under Section 19(b)(2)(B) 31 of the Act 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 Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSEArca–2015–19 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSEArca–2015–19. 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 Web site (https://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 Web site 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 such
filing will also be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
31 15
E:\FR\FM\25MRN1.SGM
U.S.C. 78s(b)(2)(B).
25MRN1
Federal Register / Vol. 80, No. 57 / Wednesday, March 25, 2015 / Notices
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NYSEArca-2015–19 and should be
submitted on or before April 15, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.32
Brent J. Fields,
Secretary.
[FR Doc. 2015–06719 Filed 3–24–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74537; File No. SR–OCC–
2015–04]
Self-Regulatory Organizations; The
Options Clearing Corporation; Order
Approving Proposed Rule Change, as
Modified by Amendment 1 Thereto, To
Expand the Officers Who May Declare
That a Clearing Member Is Summarily
Suspended
March 19, 2015.
rljohnson on DSK3VPTVN1PROD with NOTICES
On January 23, 2015, The Options
Clearing Corporation (‘‘OCC’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change SR–OCC–2015–04
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder.2
The proposed rule change was
published for comment in the Federal
Register on February 11, 2015.3 The
Commission did not receive any
comments on the proposed rule change.
This order approves the proposed rule
change, as modified by Amendment 1.
I. Description
OCC is amending its Rules to permit
OCC to expand the officers who may
declare that a clearing member is
summarily suspended from OCC.
Currently, OCC Rule 1102 provides that
only OCC’s Board of Directors (‘‘Board’’)
and its Executive Chairman may
summarily suspend a clearing member.
OCC believes that, given the time
sensitive nature of managing a clearing
member default, it is prudent risk
management to expand the number of
officers with the authority to summarily
suspend a clearing member so that OCC
may begin its default management
process and, in turn, take protective
action as soon as possible.
32 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Securities Exchange Act Release No. 74212
(February 5, 2015), 80 FR 7668 (February 11, 2015)
(SR–OCC–2015–04).
1 15
VerDate Sep<11>2014
15:26 Mar 24, 2015
Jkt 235001
Pursuant to OCC Rule 1102, OCC’s
Board and Executive Chairman have the
authority to summarily suspend a
clearing member. As set forth in
Interpretation and Policy .01 of Rule
1102, such action constitutes a
‘‘default’’ with respect to the clearing
member. OCC’s ability to timely and
effectively begin its clearing member
default management process serves a
key role in protecting OCC, nondefaulting clearing members and the
public from potential consequential
damage(s) that may be caused by the
default of a clearing member. In order to
provide OCC with the necessary tools to
manage a clearing member default,
Chapter XI of OCC’s Rules provides
OCC with the authority to take certain
protective action(s) once a clearing
member has been summarily suspended
(and declared to be in default).4 While
OCC believes that the authority
provided to it in Chapter XI of its Rules
is sufficiently robust to manage a
clearing member default, OCC may not
exercise such authority unless and until
a clearing member has been summarily
suspended by either the Board or the
Executive Chairman.
In order to provide greater assurance
that OCC will be able to timely and
effectively manage a clearing member
default, pursuant to its proposal as
approved, OCC is amending Rule 1102
to expand the list of officers who may
summarily suspend a clearing member
to include OCC’s President or a designee
of the Executive Chairman 5 or President
of the rank of Senior Vice President or
higher (each a ‘‘Designed Officer’’).6
OCC believes that the change will
provide it with additional operational
flexibility because more individuals will
be able to timely summarily suspend a
clearing member and thereby allow OCC
to exercise its authority to manage a
clearing member default. OCC’s clearing
member default management process is
designed to protect OCC, non-defaulting
clearing members and the public from
the defaulting clearing member without
materially impacting financial markets.7
By providing additional officers with
4 For example, OCC Rule 1106(a) provides OCC
with significant flexibility with respect actions it
may take in order to close out a defaulting clearing
member’s open long positions.
5 OCC filed Amendment No. 1 in order to correct
an inadvertent grammatical error. Specifically, a
comma after the word ‘‘Executive Chairman’’ was
removed because it caused the description of the
proposed rule change to not be consistent with the
text of the proposed rule change.
6 OCC’s proposal is similar to the summary
suspension process employed by the National
Securities Clearing Corporation (‘‘NSCC’’). See
NSCC Rule 46, Section 3.
7 A description of OCC’s default management
process is located at: https://www.theocc.com/riskmanagement/default-rules/>
PO 00000
Frm 00104
Fmt 4703
Sfmt 4703
15845
the authority to summarily suspend a
clearing member, and thereby allow
OCC to begin its default management
processes, there will be greater
assurance that OCC will timely take
action(s) necessary to protect itself, nondefaulting clearing members, and the
public from a defaulting clearing
member. OCC also is amending Rule
1102 to require notification to the Board
as soon as practicable should a
Designated Officer summarily suspend a
clearing member.8 The addition of such
a requirement will ensure that the Board
is timely informed of such suspensions.
Furthermore, pursuant to this rule
change as approved, OCC is making
conforming amendments consistent
with the above to Article VI, Section 25
of its By-Laws and OCC Rule 707, which
concern the summary suspension of
clearing members that participate in
OCC’s cross-margining programs.
Specifically, Article VI, Section of
OCC’s By-Laws and OCC Rule 707 will
explicitly state that the Board of
Directors or a Designated Officer may
summarily suspend a clearing member
based on a cross-margining related
default.
Except for the changes described
above, no other changes are proposed to
OCC’s suspension or default
management processes as set forth in
the Rules, including a clearing
member’s right to appeal a summary
suspension in accordance with OCC
Rule 1110.
II. Discussion and Commission
Findings
Section 19(b)(2)(C) of the Act 9 directs
the Commission to approve a proposed
rule change of a self-regulatory
organization if it finds that the proposed
rule change is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
such organization.
The Commission finds that the
proposed rule change is consistent with
Section 17A(b)(3)(F) of the Act, which
requires, among other things, that the
rules of a clearing agency are designed
to assure the safeguarding of securities
and funds which are in the custody or
control of the clearing agency or for
which it is responsible.10 By expanding
the list of officers with the authority to
summarily suspend a clearing member,
OCC will be better able to ensure that
has the ability to timely begin the
clearing member default management
processes. In turn, timely beginning the
8 OCC staff will notify the Board within two hours
of the summary suspension.
9 15 U.S.C. 78s(b)(2)(C).
10 15 U.S.C. 78q–1(b)(3)(F).
E:\FR\FM\25MRN1.SGM
25MRN1
]]>Agencies
[Federal Register Volume 80, Number 57 (Wednesday, March 25, 2015)]
[Notices]
[Pages 15840-15845]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-06719]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74544; File No. SR-NYSEArca-2015-19]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Relating to the
LBMA Gold Price as a Replacement for the London Gold Fix for Certain
Gold Related Exchange Traded Products
March 19, 2015.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on March 17, 2015, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') filed with the Securities and Exchange Commission (the
``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 (1) to reflect a change to the value used
by the SPDR[supreg] Gold Trust, which is currently listed on the
Exchange under NYSE Arca Equities Rule 5.2(j)(5); iShares Gold Trust,
ETFS Gold Trust, ETFS Precious Metals Basket Trust, ETFS Asian Gold
Trust and Merk Gold Trust, each of which is currently listed on the
Exchange under NYSE Arca Equities Rule 8.201, with respect to
calculation of the net asset value of shares of each trust; and (2) to
reflect a change to the underlying benchmark for ProShares Ultra Gold
and ProShares UltraShort Gold, each of which is currently listed on the
Exchange under NYSE Arca Equities Rule 8.200. The text of the proposed
rule change is available on the Exchange's Web site 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 Exchange proposes to amend the Exchange listing rules
applicable to nine exchange-traded products, all of which reference the
``London Gold Fix'', as described further below. The exchange-traded
products are listed and traded pursuant to NYSE Arca Equities Rule
5.2(j)(5) for the Equity Gold Shares; NYSE Arca Equities Rules 8.201,
for Commodity-Based Trust Shares, and NYSE Arca Equities Rule 8.200,
for Trust Issued Receipts. The proposed change would replace references
to the
[[Page 15841]]
``London Gold Fix'', as described below. The London Gold Fix is a gold-
price mechanism that has been in existence since 1919 and that will be
discontinued T [sic] the close of business on March 19, 2015.\4\
---------------------------------------------------------------------------
\4\ As described in the registration statement under the
Securities Act of 1933 (15 U.S.C. 77a) (``1933 Act'') for the
SPDR[supreg] Gold Trust (formerly known as the streetTRACKS Gold
Trust) (see infra, note 13), twice daily during London trading hours
there is a fix (``London Gold Fix'') which provides reference gold
prices for that day's trading. Many long-term contracts will be
priced on the basis of either the morning (AM) or afternoon (PM)
London Gold Fix, and market participants will usually refer to one
or the other of these prices when looking for a basis for
valuations. The London Gold Fix is the most widely used benchmark
for daily gold prices and is quoted by various financial information
sources. Membership in the London fix is traditionally limited to
banks that are bullion dealers and members of the LBMA. The
chairmanship rotates annually among the four member firms. The fix
takes place by telephone and the four member firms no longer meet
face-to-face as was previously the case. There is a morning session
at 10:30 a.m. London time and an afternoon session at 3:00 p.m.
London time. The current members of the gold fixing are Bank of Nova
Scotia--ScotiaMocatta, Barclays Bank plc, HSBC Bank USA, N.A., and
Soci[eacute]t[eacute] G[eacute]n[eacute]rale. Any other market
participant wishing to participate in the trading on the fix is
required to do so through one of the four gold fixing members.
Orders are placed either with one of the four fixing members or with
another bullion dealer who will then be in contact with a fixing
member during the fixing. The fixing members net-off all orders when
communicating their net interest at the fixing. The fix begins with
the fixing chairman suggesting an opening price, reflecting the
market price prevailing at the opening of the fix. This is relayed
by the fixing members to their dealing rooms which have direct
communication with all interested parties. Any market participant
may enter the fixing process at any time, or adjust or withdraw his
order. The gold price is adjusted up or down until all the buy and
sell orders are matched, at which time the price is declared fixed.
All fixing orders are transacted on the basis of this fixed price,
which is instantly relayed to the market through various media.
---------------------------------------------------------------------------
Revised Procedures for the Gold Price
On November 8, 2014, the London Bullion Market Association
(``LBMA'') announced that ICE Benchmark Administration (``IBA'') \5\
has been selected to be the third-party administrator for the ``LBMA
Gold Price'', which will replace the current London Gold Fix. IBA, an
independent specialist benchmark administrator, will provide the
auction platform and methodology as well as the overall administration
and governance for the LBMA Gold Price benchmark.
---------------------------------------------------------------------------
\5\ IBA is a London-based company that was created specifically
to administer systemically important benchmarks. Formed in 2013, IBA
is part of the Intercontinental Exchange (ICE).
---------------------------------------------------------------------------
On February 19, 2015, the Intercontinental Exchange (``ICE'')
announced that the new LBMA Gold Price will be launched on March 20,
2015. As the administrator for the LBMA Gold Price benchmark and the
operator of the ``IBA Gold Auction'', IBA will transition from the
current London Gold Fix procedures to a physically settled, electronic
and tradeable auction, with the ability to settle trades in U.S.
Dollars (``USD''), euros or British Pounds. Within the process,
aggregated gold bids and offers will be updated in real-time with the
imbalance calculated and the price updated at regular intervals
(expected to be at least every 45 seconds). IBA will use ICE's front-
end system-- WebICE-- as the technology platform that will allow direct
participants, as well as sponsored clients of direct participants, to
manage their orders in the auction in real time via their desktops.\6\
---------------------------------------------------------------------------
\6\ The WebICE platform provides real-time order management as
well as separation of direct participant and sponsored client
orders, live credit limit controls, audit history, advanced Excel
integration and automated deal notifications.
---------------------------------------------------------------------------
Participants in the auction will include direct participants and
sponsored clients of direct participants. Direct participants may enter
orders on their own behalf or on behalf of clients. Sponsored clients
also may manage their own positions utilizing their own trading
screens; however, a sponsored client's orders would be backed by the
sponsoring direct participant. WebICE allows sponsored clients to
participate in the auction process with the same information and order
management capabilities as direct participants.
At the opening of each auction, the auction chairman (``Chairman'')
will announce an opening price (in USD) based on the current market
conditions and begin auction rounds, with an expected duration of at
least every 45 seconds each. During each auction round, participants
may enter the volume they wish to buy or sell at that price, and such
orders will be part of the price formation. All orders will be routed
through direct participants but only direct participants will share the
final imbalance. Aggregate bid and offer volume will be shown live on
WebICE, providing a level playing field for all participants. At the
end of each auction round, the total net volume will be calculated. If
this `imbalance' is larger than the imbalance tolerance (currently set
at 20,000 oz) then the Chairman will choose a new price \7\ (based on
the current market conditions, and the direction and magnitude of the
imbalance in the round) and begin a new auction round. If the imbalance
is less than the tolerance, then the auction is complete with all
volume tradeable at that price. The price will then be set in USD and
also converted into in euros and British Pounds. Auctions will continue
to be run at 10:30 and 15:00 (London time).
---------------------------------------------------------------------------
\7\ The Chairman will have significant experience in the gold
markets and will be employed by IBA.
---------------------------------------------------------------------------
During the auction, the price at the start of each round, and the
volumes at the end of each round will be available through major market
data vendors. As soon as the auction finishes, the final prices and
volumes will be available through major market data vendors. IBA will
also publish transparency reports, detailing the prices, volumes and
times for each round of the auction. These transparency reports will be
available through major market data vendors and IBA when the auction
finishes. The process can also be observed real-time through a WebICE
screen. The auction mechanism will provide a complete audit trail.
The number of direct participants initially expected to participate
in the auction process is not yet confirmed, but is expected to equal
or exceed the number of market participants currently determining the
London Gold Fix.
Regulation of the LBMA Gold Price
As of April 1, 2015, the LBMA Gold Price will be regulated by the
Financial Conduct Authority (``FCA'') in the United Kingdom
(``UK'').\8\ IBA is already authorized as a regulated benchmark
administrator by the FCA. Under the UK benchmark regulation,\9\ the
governance structure for a regulated benchmark must include an
Oversight Committee, made up of market participants, industry bodies,
direct participant representatives,
[[Page 15842]]
infrastructure providers and the administrator (i.e., IBA). \10\
Through the Oversight Committee, the LBMA will continue to have
significant involvement in the oversight of the auction process,
including, among other matters, changes to the methodology and
accreditation of direct participants.\11\
---------------------------------------------------------------------------
\8\ The conduct of financial institutions is overseen by the
FCA, which was formed from the former Financial Services Authority
and is separate from the Bank of England. The LBMA Gold Price will
be regulated under the FCA's Market Conduct (MAR) Sourcebook (MAR
8.3).
\9\ On June 12, 2014, the UK Chancellor of the Exchequer
announced steps to raise standards of conduct in the financial
system with a joint review by the UK Treasury, the Bank of England
and the FCA into the way wholesale financial markets operate.
According to this announcement, the ``Fair and Effective Markets
Review'', led by Bank of England Deputy Governor for Markets and
Banking, has been tasked with investigating those wholesale markets,
both regulated and unregulated, where most of the recent concerns
about misconduct have arisen: Fixed-income, currency and commodity
markets, including associated derivatives and benchmarks. It will
make recommendations on: principles to govern the operation of fair
and effective markets, focusing on fixed income, currency and
commodities; reforms to ensure standards of behavior are in
accordance with those principles; tools to strengthen the oversight
of market conduct; whether the regulatory perimeter for wholesale
financial markets should be extended, and to what extent
international action is required; and additional reforms in relation
to benchmarks, in order to strengthen market infrastructure. See
https://www.bankofengland.co.uk/markets/Documents/femraug2014.pdf. On
September 25, 2014, the Fair and Effective Markets Review announced
its proposal that the gold fixing process may become regulated under
UK benchmark regulation, effective from April 2015.
\10\ The Oversight Committee is a key decision making forum,
with market representation that includes participants, users and
infrastructure providers. The Oversight Committee's responsibilities
include review of methodology and process relating to the LBMA Gold
Price; implementation of a Code of Conduct applicable to
participants; expansion of membership; and surveillance oversight,
among other functions. The Oversight Committee's structure and
responsibilities is described in the Oversight Committee Terms of
Reference, available on the IBA Web site.
\11\ The LBMA will continue to provide guidance with respect to
the LBMA Gold Price through the Oversight Committee, which will
facilitate communication among representatives of all market
participants to ensure the process continues to fulfil the needs of
the market. The Oversight Committee is responsible for decisions
that affect the evolution of the process based on changes in the
market and regulatory environments.
---------------------------------------------------------------------------
The price discovery process for the LBMA Gold Price will be subject
to surveillance by IBA. IBA is compliant with the UK benchmark
regulation (MAR 8.3), regulated by the FCA, and has been formally
assessed against the IOSCO Principles for Financial Benchmarks (the
``IOSCO Principles'').\12\ In order to meet the IOSCO Principles, the
price discovery used for the LBMA Gold Price benchmark will be
auditable and transparent.
---------------------------------------------------------------------------
\12\ The IOSCO Principles are designed to enhance the integrity,
the reliability and the oversight of benchmarks by establishing
guidelines for benchmark administrators and other relevant bodies in
the following areas: Governance: To protect the integrity of the
benchmark determination process and to address conflicts of
interest; Benchmark quality: to promote the quality and integrity of
benchmark determinations through the application of design factors;
Quality of the methodology: to promote the quality and integrity of
methodologies by setting out minimum information that should be
addressed within a methodology. These principles also call for
credible transition policies in case a benchmark may cease to exist
due to market structure change. Accountability mechanisms: to
establish complaints processes, documentation requirements and audit
reviews. The IOSCO Principles provide a framework of standards that
might be met in different ways, depending on the specificities of
each benchmark. In addition to a set of high level principles, the
framework offers a subset of more detailed principles for benchmarks
having specific risks arising from their reliance on submissions
and/or their ownership structure. For further information concerning
the IOSCO Principles, see https://www.iosco.org/library/pubdocs/pdf/IOSCOPD415.pdf.
---------------------------------------------------------------------------
Exchange-Listed Gold-Based Products
The Exchange lists and trades shares of exchange traded products
that reference the London Gold Fix benchmark for one or more purposes.
The Exchange lists and trades shares of (1) the SPDR[supreg] Gold
Trust,\13\ which is currently listed on the Exchange under NYSE Arca
Equities Rule 5.2(j)(5); (2) iShares Gold Trust,\14\ ETFS Gold
Trust,\15\ ETFS Precious Metals Basket Trust,\16\ ETFS Asian Gold
Trust,\17\ and Merk Gold Trust,\18\ each of which is currently listed
on the Exchange under NYSE Arca Equities Rule 8.201 (together with the
SPDR Gold Trust, the ``Gold Trusts''). In addition, the Exchange lists
and trades shares of the Ultra Gold ProShares and UltraShort Gold
ProShares \19\ (together, the ``Gold Funds''), each of which is
currently listed on the Exchange under NYSE Arca Equities Rule 8.200.
---------------------------------------------------------------------------
\13\ See Securities Exchange Act Release Nos. 50603 (October 28,
2004), 69 FR 64614 (November 5, 2004) (SR-NYSE-2004-22) (order
approving listing of shares of the streetTRACKS Gold Trust (now
known as the SPDR[supreg] Gold Trust) on the New York Stock
Exchange); See Securities Exchange Act Release Nos. 51245 (February
23, 2005), 70 FR 10731 (March 4, 2005) (SR-PCX-2004-117) (order
approving trading on the Exchange of shares of the streetTRACKS Gold
Trust pursuant to unlisted trading privileges); 56224 (August 8,
2007), 72 FR 45850 (August 15, 2007) (SR-NYSEArca-2007-76) (order
approving listing on the Exchange of shares of the streetTRACKS Gold
Trust).
\14\ See Securities Exchange Act Release No. 63398 (November 30,
2010), 75 FR 76056 (December 7, 2010) (SR-NYSEArca-2010-105) (notice
of filing and immediate effectiveness of proposed rule change
relating to calculation of net asset value by the iShares Gold Trust
(formerly the iShares COMEX Gold Trust)). See also Securities
Exchange Act Release No. 56041 (July 11, 2007), 72 FR 39114 (July
17, 2007) (SR-NYSEArca-2007-43) (order approving listing on the
Exchange of iShares COMEX Gold Trust). 51058 (January 19, 2005), 70
FR 3749 (January 26, 2005) (SR-Amex-2004-38) (order approving
listing of iShares COMEX Gold Trust on the American Stock Exchange
LLC).
\15\ See Securities Exchange Act Release No. 59895 (May 8,
2009), 74 FR 22993 (May 15, 2009) (SR-NYSEArca-2009-40) (notice of
filing and order granting accelerated approval of proposed rule
change relating to the listing and trading of shares of the ETFS
Gold Trust).
\16\ See Securities Exchange Act Release No. 62402 (June 29,
2010), 75 FR 39292 (July 8, 2010) (SR-NYSEArca-2010-56) (notice of
filing of proposed rule change to list and trade shares of the ETFS
Precious Metals Basket Trust); 62692 (August 11, 2010), 75 FR 50789
(August 17, 2010) (order approving proposed rule change to list and
trade shares of the ETFS Precious Metals Basket Trust).
\17\ See Securities Exchange Act Release No. 63267 (November 8,
2010), 75 FR 69494 (November 12, 2010) (notice of filing of proposed
rule change to list and trade shares of the ETFS Asian Gold Trust);
63464 (December 8, 2010), 75 FR 77926 (December 14, 2010) (SR-
NYSEArca-2010-95) (order granting accelerated approval of a proposed
rule change to list and trade shares of the ETFS Asian Gold Trust).
\18\ See Securities Exchange Act Release No. 71038 (December 11,
2013), 78 FR 76367 (December 17, 2013) (notice of filing of proposed
rule change to list and trade shares of the Merk Gold Trust) 71378
(January 23, 2014), 79 FR 4786 (January 29, 2014) (SR-NYSEArca-2013-
137) (order approving proposed rule change to list and trade shares
of the Merk Gold Trust).
\19\ See Securities Exchange Act Release Nos. 58457 (September
3, 2008), (73 FR 52711 (September 10, 2008) (SR-NYSEArca-2008-91)
(notice of filing and order granting accelerated approval of
proposed rule change regarding listing and trading of shares of 14
funds of the Commodities and Currency Trust, now ProShares Trust
II); 58162 (July 15, 2008), 73 FR 42391 (July 21, 2008) (SR-
NYSEArca-2008-73) (notice of filing and immediate effectiveness of
proposed rule change relating to trading of shares of 14 funds of
the Commodities and Currency Trust pursuant to unlisted trading
privileges). See also Securities Exchange Act Release Nos. 58161
(July 15, 2008), 73 FR 42380 (July 21, 2008) (SR-Amex-2008-39)
(order approving listing and trading on the American Stock Exchange
LLC of shares of 14 funds of the Commodities and Currency Trust);
57932 (June 5, 2008), 73 FR 33467 (June 12, 2008) (notice of
proposed rule change regarding listing and trading of shares of 14
funds of the Commodities and Currency Trust).
---------------------------------------------------------------------------
With respect to the Gold Trusts, the net asset value of shares of
the respective trusts is based on the London Gold Fix, as described in
the applicable rule filings relating to listing and trading of shares
of each of the Gold Trusts and in the registration statement under the
1933 Act relating to each such trust.\20\ After March 19, 2015, the
London Gold Fix will no longer exist and it is, therefore, necessary
for the Gold Trusts to change the benchmark price that each such trust
uses for purposes of calculating the net asset value of such trust's
shares. The sponsors of the Gold Trusts have indicated that, as of
March 20, 2015, they intend to use the LBMA Gold Price for purposes of
determining the net asset value of shares of the Gold Trusts.
Accordingly, the Exchange proposes to change the benchmark price used
by the Gold Trusts for calculation of the net asset value of shares of
each of such trust.
---------------------------------------------------------------------------
\20\ See supra, notes 13-19 [sic]. See also the registration
statement on Form S-3 under the 1933 Act for the SPDR[supreg] Gold
Trust dated April 26, 2012 (No. 333-180974); registration statement
on Form S-3 under the 1933 Act for the iShares Gold Trust, dated May
10, 2014 (No. 333-199257); Post-Effective Amendment No. 2 on Form S-
3 under the 1933 Act for the ETFS Precious Metals Basket Trust,
filed with the Commission on November 25, 2014 (No. 333-195675);
Registration Statement on Form S-3 ASR under the 1933 Act for the
ETFS Gold Trust, filed with the Commission on April 11, 2014 (No.
333-195204); Registration Statement on Form S-1 under the 1933 Act
for the ETFS Asian Gold Trust, filed with the Commission on May 12,
2014 (No. 333-195868); and Amendment No. 6 on Form S-1 under the
1933 Act for the Merk Gold Trust, dated May 13, 2014 (No. 333-
180868).
---------------------------------------------------------------------------
With respect to the Gold Funds, the existing ``Underlying
Benchmark'' for each such fund is the U.S. dollar price of gold bullion
as measured by the London Gold Fix.\21\ The Gold Funds,
[[Page 15843]]
therefore, similarly need to change the Underlying Benchmark for each
such fund. The sponsor of the Gold Funds represents that it intends to
change the Underlying Benchmark for the Gold Funds to the LBMA Gold
Price as of March 20, 2015. Accordingly, the Exchange proposes to
reflect a change in the Underlying Benchmark applicable to the Gold
Funds.
---------------------------------------------------------------------------
\21\ ProShares Ultra Gold seeks daily investment results, before
fees and expenses, that correspond to twice (200%) the daily
performance of the Underlying Benchmark. ProShares UltraShort Gold
seeks daily investment results, before fees and expenses that
correspond to twice the inverse (-200%) of the daily performance of
the Underlying Benchmark. See Securities Exchange Act Release No.
58161 (July 15, 2008), 73 FR 42380 (July 21, 2008) (SR-Amex-2008-39)
(order approving listing and trading of shares of fourteen funds of
the Commodities and Currency Trust); Securities Exchange Act Release
No. 58457 (September 3, 2008) (73 FR 52711) (September 10, 2008)
(SR-NYSEArca-2008-91) (notice of filing and order granting
accelerated approval of proposed rule change regarding listing and
trading of shares of 14 funds of ProShares Trust II). See also,
registration statement for ProShares Trust II on Form S-3 under the
1933 Act, filed with the Commission on October 28, 2014 (No. 333-
199641).
---------------------------------------------------------------------------
The LBMA Gold Price benchmark is widely expected to be viewed as a
full and fair representation of all market interest at the conclusion
of the auction. IBA's electronic auction methodology is similar to the
non-electronic process previously used to establish the London Gold Fix
where the London Gold Fix process adjusted the gold price up or down
until all the buy and sell orders are matched (within the imbalance
threshold), at which time the price was declared fixed. Nevertheless,
the LBMA Gold Price has several advantages over the previous London
Gold Fix. IBA's auction process will be fully transparent in real time
to direct participants and sponsored clients and, at the close of each
auction, to the general public. The auction process also will be fully
auditable since an audit trail exists for every change made in the
process. Moreover, the audit trail and active surveillance of the
auction process by IBA, as well as FCA's oversight of IBA, will deter
manipulative and abusive conduct in establishing each day's LBMA Gold
Price.
The Exchange believes the new LBMA Gold Price benchmark will serve
as an appropriate replacement to the London Gold Fix for purposes of
determining the net asset value of shares of the Gold Trusts or as the
Underlying Benchmark applicable to the Gold Funds because of the
transparency of the auction process, the anticipated participation of
an increased number of market participants compared to the London Gold
Fix, and the auditability of the gold pricing mechanism.
In connection with this proposed rule change, (1) the sponsors of
the Gold Trusts will each issue a press release informing the public of
the date a trust will first use the LBMA Gold Price to value the gold
held by a trust; (2) the sponsor of the Gold Funds will issue a press
release informing the public of the date the Gold Funds will first use
the LBMA Gold Price as the basis for their respective Underlying
Benchmark; (3) the sponsors will each file the applicable press release
with the Commission by means of Form 8-K, which will be available on
the applicable Gold Trust's or Gold Fund's Web site; and (4) the
sponsors will each file an amendment to the applicable registration
statement relating to the proposed change.\22\
---------------------------------------------------------------------------
\22\ The sponsors for the Gold Trusts and the Gold Funds
represent that they will manage the Gold Trusts and the Gold Funds
in the manner described in the applicable proposed rule change (see
supra, notes 13-19), and will not implement the changes described
herein until the instant proposed rule change is operative.
---------------------------------------------------------------------------
The sponsors for the Gold Trusts and the Gold Funds represent that
there is no change to the investment objective of the applicable Gold
Trust or the Gold Funds from that described in the applicable proposed
rule change.\23\ The Gold Trusts and the Gold Funds will comply with
all initial and continued listing requirements with respect to NYSE
Arca Equities Rule 5.2(j)(5), 8.201 or 8.200, respectively.
---------------------------------------------------------------------------
\23\ See supra, notes 13-19.
---------------------------------------------------------------------------
Except for the changes noted above, all other facts presented and
representations made in the proposed rule changes referenced above
remain unchanged.
All terms referenced but not defined herein are defined in the
applicable proposed rule change referenced above.\24\
---------------------------------------------------------------------------
\24\ See supra, notes 13-19.
---------------------------------------------------------------------------
2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \25\ 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.
---------------------------------------------------------------------------
\25\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices in that the new
LBMA Gold Price benchmark will be based on an auction that is
electronic and auditable and is produced from tradeable volumes. The
Exchange believes the new LBMA Gold Price benchmark will serve as an
appropriate replacement to the London Gold Fix for purposes of
determining the net asset value of shares of the Gold Trusts or as the
Underlying Benchmark applicable to the Gold Funds because of the
transparency and auditability of the auction process, and the
prospective participation of an increased number of market participants
compared to the London Gold Fix. In addition, the LBMA Gold Price and
the transparency reports showing the prices, timings and total volumes
for each round will be available electronically instantly after the
conclusion of the auction, as described above.
The proposed change will permit the Gold Trusts and Gold Funds to
continue to function as gold-based exchange-traded products by
utilizing a new gold benchmark to replace the London Gold Fix, which is
not expected to be available after March 19, 2015, and that will
provide a sound and reasonable basis for calculation of net asset value
or will provide a suitable Underlying Benchmark, as applicable. Such
price will be widely disseminated by one or more major market data
vendors and/or exchanges. Prior to or following the effectiveness of
this proposed rule change, (1) the sponsors of the Gold Trusts will
each issue a press release informing the public of the date a trust
will first use the LBMA Gold Price to value the gold held by a trust;
(2) the sponsor of the Gold Funds will issue a press release informing
the public of the date the Gold Funds will first use the LBMA Gold
Price as the basis for their respective Underlying Benchmark; (3) the
sponsors of the Gold Trusts and Gold Funds will each file the
applicable press release with the Commission by means of Form 8-K,
which will be available on the applicable Gold Trust's or Gold Fund's
Web site; and (4) the sponsors of the Gold Trusts and Gold Funds will
each file an amendment to the applicable registration statement under
the 1933 Act relating to the proposed change. Such press releases and
registration statement amendments will protect investors and the public
interest by providing notification to investors of the new gold price
benchmark prior to the use of the LBMA Gold Price by the Gold Trusts
and Gold Funds. The sponsors for the Gold Trusts and Gold Funds
represent that there is no change to the investment objective of the
applicable trust or the Gold Funds from that described in the
applicable proposed rule change. The Gold Trusts and Gold Funds will
comply with all initial and continued listing requirements relating to
NYSE Arca Equities Rules 5.2(j)(5), 8.201 or 8.200, respectively.
Except for the changes noted above, all other facts presented and
representations made in proposed
[[Page 15844]]
rule changes referenced above remain unchanged.
The proposed rule change is designed to perfect the mechanism of a
free and open market price discovery process and, in general, to
protect investors and the public interest in that the gold auction will
be transparent, auditable, and operated by a regulated benchmark
administrator (IBA). The audit trail records every change made in the
process and IBA has regulatory obligations to run surveillance on the
activity in the process to deter and identify manipulative and abusive
conduct in establishing each day's LBMA Gold Price. The new LBMA Gold
Price, as administered by IBA, is designed to be a benchmark that meets
the needs of the market and regulators (including the IOSCO Principles
\26\). The Gold Trusts and Gold Funds will continue to be listed and
traded on the Exchange pursuant to the initial and continued listing
criteria relating to NYSE Arca Equities Rules 5.2(j)(5), 8.201 and
8.200, respectively. Except for the changes noted above, all other
facts presented and representations made in proposed rule changes
referenced above remain unchanged.\27\
---------------------------------------------------------------------------
\26\ See supra, note 12.
\27\ See supra, notes 13-19.
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed change will
permit the Gold Trusts and Gold Funds to continue to function as gold-
based exchange-traded products by utilizing a new gold price benchmark
to replace the London Gold Fix, which will not be available after March
19, 2015, and that will provide a sound and reasonable basis for
calculation of net asset value or will provide a suitable Underlying
Benchmark, as applicable.
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 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, the proposed rule change has become effective
pursuant to Section 19(b)(3)(A) of the Act \28\ and Rule 19b-4(f)(6)
thereunder.\29\
---------------------------------------------------------------------------
\28\ 15 U.S.C. 78s(b)(3)(A).
\29\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and the 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 asked the Commission to waive the 30-day operative
delay so that the proposal may become operative immediately upon
filing. The Exchange states that the proposed change will provide
additional transparency to gold pricing compared to the previous London
Gold Fix for several reasons. The Exchange represents that IBA's
auction process will be fully transparent in real time to direct
participants and sponsored clients and, at the close of each auction,
to the general public. The Exchange represents that IBA's auction
process will be fully auditable because an audit trail exists of every
change that is made during the auction. Moreover, the Exchange states
that there will be active surveillance of the activity in the auction
process by IBA. The Exchange represents that the number of gold
participants that initially are expected to participate in the auction
process equals or exceeds the number of market participants currently
determining the London Gold Fix, and will contribute to the integrity
and reliability of the pricing process.
The Commission believes that waiver of the operative delay is
consistent with the protection of investors and the public interest.
Waiver of the operative delay will allow the Gold Trusts and the Gold
Funds, whose shares are actively traded, to use the LBMA Gold Price as
the basis for calculating the NAV or as an Underlying Benchmark, as
applicable, by March 20, 2015, thereby facilitating the transition to
the new price mechanism without disruption in trading. Therefore, the
Commission designates the proposed rule change to be operative upon
filing.\30\
---------------------------------------------------------------------------
\30\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
At any time within 60 days of the filing of such 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 under
Section 19(b)(2)(B) \31\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\31\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
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 Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSEArca-2015-19 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2015-19. 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 Web site (https://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 Web site 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 such filing will also be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only
[[Page 15845]]
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSEArca-2015-19 and should be submitted
on or before April 15, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\32\
---------------------------------------------------------------------------
\32\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Brent J. Fields,
Secretary.
[FR Doc. 2015-06719 Filed 3-24-15; 8:45 am]
BILLING CODE 8011-01-P
