Securities Investor Protection Corporation; Notice of Filing of Proposed Bylaw Amendments Relating to Assessment of SIPC Members, 41358-41359 [C1-2016-14499]
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sradovich on DSK3GDR082PROD with NOTICES
41358
Federal Register / Vol. 81, No. 122 / Friday, June 24, 2016 / Notices
members in an Information Circular of
the special characteristics and risks
associated with trading the Shares. The
Exchange represents that trading of the
Shares through the Exchange will be
subject to the Exchange’s surveillance
procedures for derivative products,
including Managed Fund Shares, and
such surveillance procedures are
adequate to properly monitor the
trading of the Shares on the Exchange
during all trading sessions and to deter
and detect violations of Exchange rules
and the applicable federal securities
laws.
The Exchange represents that it deems
the Shares to be equity securities, thus
rendering trading in the Shares subject
to the Exchange’s existing rules
governing the trading of equity
securities. In support of this proposal,
the Exchange has made the following
representations:
(1) The Shares will be subject to
BATS Rule 14.11(i), which sets forth the
initial and continued listing criteria
applicable to Managed Fund Shares.
(2) The Exchange has appropriate
rules to facilitate transactions in the
Shares during all trading sessions.
(3) The Exchange may obtain
information regarding trading in the
Shares and the underlying futures,
including futures contracts held by the
Subsidiary, via the Intermarket
Surveillance Group (‘‘ISG’’) from other
exchanges who are members or affiliates
of the ISG or with which the Exchange
has entered into a comprehensive
surveillance sharing agreement. In
addition, the Exchange is able to access,
as needed, trade information for certain
fixed income instruments reported to
FINRA’s Trade Reporting and
Compliance Engine.
(4) All of the futures contracts in the
Disclosed Portfolio for the Fund
(including those held by the Subsidiary)
will trade on markets that are a member
or affiliate of ISG or with which the
Exchange has in place a comprehensive
surveillance sharing agreement.
(5) Prior to the commencement of
trading, the Exchange will inform its
members in an Information Circular of
the special characteristics and risks
associated with trading the Shares.
Specifically, the Information Circular
will discuss the following: (a) The
procedures for purchases and
redemptions of Shares in creation units
(and that Shares are not individually
redeemable); (b) BATS Rule 3.7, which
imposes suitability obligations on
Exchange members with respect to
recommending transactions in the
Shares to customers; (c) how
information regarding the Intraday
Indicative Value and Disclosed Portfolio
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are disseminated; (d) the risks involved
in trading the Shares during the PreOpening and After Hours Trading
Sessions (as defined in the Exchange’s
rules) when an updated Intraday
Indicative Value will not be calculated
or publicly disseminated; (e) the
requirement that members deliver a
prospectus to investors purchasing
newly issued Shares prior to or
concurrently with the confirmation of a
transaction; and (f) trading information.
(6) For initial and continued listing,
the Fund must be in compliance with
Rule 10A–3 under the Exchange Act.27
(7) Aside from the Fund’s investments
in the Subsidiary, neither the Fund nor
the Subsidiary will invest in non-U.S.
equity securities.
(8) Neither the Fund nor the
Subsidiary will invest in derivatives
other than Commodity Futures.
(9) The Fund may hold up to an
aggregate amount of 15% of its net
assets in illiquid assets (calculated at
the time of investment) deemed illiquid
by the Adviser under the 1940 Act. The
Fund will monitor its portfolio liquidity
on an ongoing basis to determine
whether, in light of current
circumstances, an adequate level of
liquidity is being maintained, and will
consider taking appropriate steps in
order to maintain adequate liquidity if,
through a change in values, net assets,
or other circumstances, more than 15%
of the Fund’s net assets are held in
illiquid assets.
(10) The Fund’s investments will be
consistent with the Fund’s investment
objective and will not be used to
achieve leveraged or inverse leveraged
returns.
(11) A minimum of 100,000 Shares
will be outstanding at the
commencement of trading on the
Exchange.
The Exchange represents that all
statements and representations made in
the filing regarding (a) the description of
the portfolio, (b) limitations on portfolio
holdings or reference assets, or (c) the
applicability of Exchange rules and
surveillance procedures constitute
continued listing requirements for
listing the Shares on the Exchange. In
addition, the issuer has represented to
the Exchange that it will advise the
Exchange of any failure by the Fund to
comply with the continued listing
requirements, and, pursuant to its
obligations under Section 19(g)(1) of the
Exchange Act, the Exchange will surveil
for compliance with the continued
listing requirements. If the Fund is not
in compliance with the applicable
listing requirements, the Exchange will
27 See
PO 00000
17 CFR 240.10A–3.
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Fmt 4703
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commence delisting procedures under
Exchange Rule 14.12.
This approval order is based on all of
the Exchange’s representations,
including those set forth above and in
Amendment Nos. 1, 2, and 3. The
Commission notes that the Fund and the
Shares must comply with the
requirements of BATS Rule 14.11(i) to
be initially and continuously listed and
traded on the Exchange.
For the foregoing reasons, the
Commission finds that the proposed
rule change, as modified by Amendment
Nos. 1, 2, and 3, is consistent with
Section 6(b)(5) of the Exchange Act 28
and Section 11A(a)(1)(C)(iii) of the
Exchange Act 29 and the rules and
regulations thereunder applicable to a
national securities exchange.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Exchange Act,30
that the proposed rule change (SR–
BATS–2016–16), as modified by
Amendment Nos. 1, 2, and 3, be, and it
hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.31
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–14928 Filed 6–23–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. SIPA–177; File No. SIPC–2016–
02]
Securities Investor Protection
Corporation; Notice of Filing of
Proposed Bylaw Amendments Relating
to Assessment of SIPC Members
June 15, 2016.
Correction
In notice document 2016–14499,
appearing on pages 39986 through
39990 in the issue of Monday, June 20,
2016, make the following corrections:
1. On page 39986, in the third
column, in the document heading,
under SECURITIES AND EXCHANGE
COMMISSION, ‘‘[Release No. SIPA–177;
File No. SIPC–2016–01]’’ should read
‘‘[Release No. SIPA–177; File No. SIPC–
2016–02]’’.
2. On page 39989, in the third
column, in the fifth paragraph, on the
28 15
U.S.C. 78f(b)(5).
U.S.C. 78k–1(a)(1)(C)(iii).
30 15 U.S.C. 78s(b)(2).
31 17 CFR 200.30–3(a)(12).
29 15
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Federal Register / Vol. 81, No. 122 / Friday, June 24, 2016 / Notices
third line, ‘‘SIPC–2016–01’’ should read
‘‘SIPC–2016–02’’.
3. On page 39989, in the third
column, in the seventh paragraph, on
the second line, ‘‘SIPC–2016–01’’
should read ‘‘SIPC–2016–02’’.
4. On page 39989, in the third
column, in the ninth paragraph, on the
second line, ‘‘SIPC–2016–01’’ should
read ‘‘SIPC–2016–02’’.
[FR Doc. C1–2016–14499 Filed 6–23–16; 8:45 am]
BILLING CODE 1505–01–D
SECURITIES AND EXCHANGE
COMMISSION
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
[Release No. 34–78103; File No. SR–
NASDAQ–2016–089]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change to Options
Pricing at Chapter XV, Section 2
June 20, 2016.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1, and Rule 19b–4 thereunder,2
notice is hereby given that on June 14,
2016, The NASDAQ Stock Market LLC
(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II,
and III, below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
sradovich on DSK3GDR082PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Chapter XV, entitled ‘‘Options Pricing,’’
at Section 2, which governs pricing for
Exchange members using the NASDAQ
Options Market (‘‘NOM’’), the
Exchange’s facility for executing and
routing standardized equity and index
options.3
The text of the proposed rule change
is available on the Exchange’s Web site
at https://nasdaq.cchwallstreet.com, at
the principal office of the Exchange, and
at the Commission’s Public Reference
Room.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 References in this proposal to Chapter and
Series are to NOM rules, unless otherwise
indicated.
2 17
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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
Exchange 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 these
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 aspects of such
statements.
1. Purpose
The Exchange proposes certain
amendments to the NOM transaction
fees set forth at Chapter XV, Section 2(1)
for executing and routing standardized
equity and index options under the
Penny Pilot Option 4 program.
Specifically, the Exchange proposes in
Section 2(1) two new incentives
regarding Non-NOM Market Makers and
NOM Market Makers Penny Pilot
Options Fees for Removing Liquidity;
and proposes to delete note 4 regarding
Non-Penny Pilot Options Fee for
Removing Liquidity. The proposed
changes will allow the Exchange to
continue to offer and expand incentives
to NOM Participants to add more
liquidity to NOM.
Change 1: Penny Pilot Options—
Incentives To Earn Additional
Discounts on Fee for Removing
Liquidity
Note 2 to Section 2(1) applies to NonNOM Market Makers 5 and NOM Market
Makers 6 Penny Pilot Options Fees for
Removing Liquidity. Currently, note 2
4 The Penny Pilot was established in March 2008
and was last extended in 2015. See Securities
Exchange Act Release Nos. 57579 (March 28, 2008),
73 FR 18587 (April 4, 2008) (SR–NASDAQ–2008–
026) (notice of filing and immediate effectiveness
establishing Penny Pilot); and 75283 (June 24,
2015), 80 FR 37347 (June 30, 2015) (SR–NASDAQ–
2015–063) (notice of filing and immediate
effectiveness extending the Penny Pilot through
June 30, 2016). All Penny Pilot Options listed on
the Exchange can be found at https://
www.nasdaqtrader.com/Micro.aspx?id=phlx.
5 The term ‘‘Non-NOM Market Maker’’ is a
registered market maker on another options
exchange that is not a NOM Market Maker. A NonNOM Market Maker must append the proper NonNOM Market Maker designation to orders routed to
NOM.
6 The term ‘‘NOM Market Maker’’ is a Participant
that has registered as a Market Maker on NOM
pursuant to Chapter VII, Section 2, and must also
remain in good standing pursuant to Chapter VII,
PO 00000
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41359
offers a $0.02 discount (reduction to
$0.48 per contract fee) on the Penny
Pilot Options Fee for Removing
Liquidity.7 Currently, note 2 offers that
Participants 8 that add 1.30% of
Customer,9 Professional,10 Firm,11
Broker-Dealer,12 or Non-NOM Market
Maker liquidity in Penny Pilot Options
and/or Non-Penny Pilot Options of total
industry customer equity and ETF
option average daily volume or ADV
contracts per day are assessed a $0.48
per contract Penny Pilot Options Fee for
Removing Liquidity provided the
Participant is (i) both the buyer and the
seller or (ii) the Participant removes
liquidity from another Participant under
Common Ownership.13 The Exchange
proposes two additional ways to earn an
enhanced discount on the NOM Market
Maker and Non-NOM Market Maker
Penny Pilot Options Fee for Removing
Liquidity.
First, the Exchange proposes to
amend note 2 to Section 2(1) to add a
new incentive that would assess NOM
Market Maker and Non-NOM Market
Maker a $0.32 per contract fee
applicable to executions less than
10,000 contracts provided the
Participant adds 1.50% of Customer,
Professional, Firm, Broker-Dealer or
Non-NOM Market Maker liquidity in
Section 4. In order to receive NOM Market Maker
pricing in all securities, the Participant must be
registered as a NOM Market Maker in at least one
security.
7 The NOM Market Maker and Non-NOM Market
Maker Penny Pilot Options Fees for Removing
Liquidity are $0.50 per contract.
8 The term ‘‘Participant’’ or ‘‘Options Participant’’
means a firm, or organization that is registered with
the Exchange pursuant to Chapter II of these Rules
for purposes of participating in options trading on
NOM as a ‘‘Nasdaq Options Order Entry Firm’’ or
‘‘Nasdaq Options Market Maker’’. Participants on
NOM are also known as ‘‘NOM Participants.’’
9 The term ‘‘Customer’’ or (‘‘C’’) applies to any
transaction that is identified by a Participant for
clearing in the Customer range at The Options
Clearing Corporation which is not for the account
of broker or dealer or for the account of a
‘‘Professional’’ (as that term is defined in Chapter
I, Section 1(a)(48)).
10 The term ‘‘Professional’’ or (‘‘P’’) means any
person or entity that (i) is not a broker or dealer in
securities, and (ii) places more than 390 orders in
listed options per day on average during a calendar
month for its own beneficial account(s) pursuant to
Chapter I, Section 1(a)(48). All Professional orders
shall be appropriately marked by Participants.
11 The term ‘‘Firm’’ or (‘‘F’’) applies to any
transaction that is identified by a Participant for
clearing in the Firm range at The Options Clearing
Corporation.
12 The term ‘‘Broker-Dealer’’ or (‘‘B’’) applies to
any transaction which is not subject to any of the
other transaction fees applicable within a particular
category.
13 The term ‘‘Common Ownership’’ shall mean
Participants under 75% common ownership or
control. Common Ownership shall apply to all
pricing in Chapter XV, Section 2 for which a
volume threshold or volume percentage is required
to obtain the pricing.
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]]>Agencies
[Federal Register Volume 81, Number 122 (Friday, June 24, 2016)]
[Notices]
[Pages 41358-41359]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: C1-2016-14499]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. SIPA-177; File No. SIPC-2016-02]
Securities Investor Protection Corporation; Notice of Filing of
Proposed Bylaw Amendments Relating to Assessment of SIPC Members
June 15, 2016.
Correction
In notice document 2016-14499, appearing on pages 39986 through
39990 in the issue of Monday, June 20, 2016, make the following
corrections:
1. On page 39986, in the third column, in the document heading,
under SECURITIES AND EXCHANGE COMMISSION, ``[Release No. SIPA-177; File
No. SIPC-2016-01]'' should read ``[Release No. SIPA-177; File No. SIPC-
2016-02]''.
2. On page 39989, in the third column, in the fifth paragraph, on
the
[[Page 41359]]
third line, ``SIPC-2016-01'' should read ``SIPC-2016-02''.
3. On page 39989, in the third column, in the seventh paragraph, on
the second line, ``SIPC-2016-01'' should read ``SIPC-2016-02''.
4. On page 39989, in the third column, in the ninth paragraph, on
the second line, ``SIPC-2016-01'' should read ``SIPC-2016-02''.
[FR Doc. C1-2016-14499 Filed 6-23-16; 8:45 am]
BILLING CODE 1505-01-D
