Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the NYSE Arca Equities Schedule of Fees and Charges for Exchange Services to Exclude the Date of the Annual Reconstitution of the Russell Investments Indexes for Billing Purposes When Calculating ETP Holder Average Daily Volume of Trade Activity and Consolidated ADV, 39419-39421 [2014-16100]
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Federal Register / Vol. 79, No. 132 / Thursday, July 10, 2014 / Notices
(‘‘Amended Order’’) to permit: AC LLC
to hold up to 100% of the outstanding
membership interests of American
Capital Energy & Infrastructure I
Management, LLC (‘‘AC Energy’’); AC
LLC to hold up to 100% of the
outstanding membership interests of
American Capital Equity Management
III, LLC (‘‘ACEM3’’); AC LLC to hold up
to 100% of the outstanding membership
interests of ACLFM; ACLFM to hold up
to 100% of the outstanding membership
interests of American Capital CLO
Management, LLC (‘‘ACAM’’); and
ACLFM to hold up to 100% of the
outstanding membership interests of
American Capital ACSF Management,
LLC (‘‘AC Debt’’).
Applicants’ Representations
1. On March 27, 2012, the Company,
AC LLC,1 ACMM, and ECAM 2 obtained
an order under section 6(c) of the 1940
Act for an exemption from section
12(d)(3) of the 1940 Act (the ‘‘Prior
Order’’).3 Subsequently, the Company
and AC LLC formed several additional
directly or indirectly wholly-owned
entities that intend to register or have
registered as investment advisers under
the Investment Advisers Act of 1940
(the ‘‘Advisers Act’’): AC Energy,
ACEM3, and AC Debt.4 AC LLC owns
100% of the membership interests of AC
Energy and ACEM3. AC LLC owns
100% of the membership interests of
ACLFM, which in turn owns 100% of
the membership interests of AC Debt.5
2. Applicants are seeking the
DATES: Filing Dates: The application was
Amended Order to extend the relief
filed on August 15, 2013, and amended
granted in the Prior Order to the
on October 2, 2013, February 18, 2014,
ownership of these new advisory
and June 6, 2014.
entities, as described above.6 In
HEARING OR NOTIFICATION OF HEARING: An addition, the Amended Order would
order granting the requested relief will
amend: (i) The Definition of ‘‘AC Subs’’
be issued unless the Commission orders in the Prior Order to include AC Energy,
a hearing. Interested persons may
ACEM3 and AC Debt and (ii) the
request a hearing by writing to the
definition of ‘‘Applicants’’ in the Prior
Order to include ACLFM.
Commission’s Secretary and serving
3. Applicants state that, because of the
applicants with a copy of the request,
potential for the Company to expand its
personally or by mail. Hearing requests
asset management business by having
should be received by the Commission
by 5:30 p.m. on July 28, 2014, and
1 Effective January 30, 2013, the entity referred to
should be accompanied by proof of
as American Capital, LLC in the Prior Order (as
service on applicants, in the form of an
defined below) changed its name to American
Capital Asset Management, LLC.
affidavit or, for lawyers, a certificate of
2 Effective September 5, 2013, the entity referred
service. Hearing requests should state
to as European Capital Financial Services
the nature of the writer’s interest, the
(Guernsey) Limited in the Prior Order changed its
reason for the request, and the issues
name to European Capital Asset Management
Limited.
contested. Persons who wish to be
3 American Capital, Ltd., et al., Investment
notified of a hearing may request
Company Act Release Nos. 29973 (March 1, 2012)
notification by writing to the
(notice) and 30010 (March 27, 2012) (order).
Commission’s Secretary.
4 Applicants state that AC Energy and ACEM3
Secretary, U.S. Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
Applicants: 2 Bethesda Metro Center,
14th Floor, Bethesda, Maryland 20814.
ADDRESSES:
Jill
Ehrlich, Senior Counsel, at (202) 551–
6819, or David P. Bartels, Branch Chief,
at (202) 551–6821 (Division of
Investment Management, Chief
Counsel’s Office).
FOR FURTHER INFORMATION CONTACT:
mstockstill on DSK4VPTVN1PROD with NOTICES
SUPPLEMENTARY INFORMATION:
The
following is a summary of the
application. The complete application
may be obtained via the Commission’s
Web site by searching for the file
number, or for an applicant using the
‘‘Company’’ name box, at https://
www.sec.gov/search/search.htm or by
calling (202) 551–8090.
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18:38 Jul 09, 2014
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will be registered as investment advisers under the
Advisers Act upon obtaining the Amended Order
and that AC Debt registered as an investment
adviser under the Advisers Act effective September
25, 2013.
5 ACLFM also owns ACAM. Effective January 30,
2013, the entity referred to as American Capital
Asset Management, LLC in the Prior Order changed
its name to American Capital Leveraged Finance
Management, LLC. Effective August 1, 2013, it then
changed its name again to American Capital CLO
Management, LLC. When the Prior Order was
issued, AC LLC directly owned 100% of the
outstanding membership interests of ACAM. On
August 14, 2013, AC LLC executed a Contribution
Agreement contributing its interests in ACAM to
ACLFM.
6 The Company will only rely on the Amended
Order with respect to its investments in AC LLC
and the AC Subs; AC LLC will only rely on /he
Amended Order with respect to the AC Subs;
ACMM will only rely on the Amended Order with
respect to American Capital AGNC Management,
LLC and American Capital MTGE Management,
LLC; ECAM will only rely on the Amended Order
with respect to European Capital Financial Services
Limited; and ACLFM will only rely on the
Amended Order with respect to AC Debt and
ACAM.
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Fmt 4703
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39419
AC LLC, through the new AC Subs,
advise additional funds, it would be
beneficial to the Company and the
Company’s stockholders for the
Company to be permitted to continue to
hold, indirectly, AC Energy, AC Debt
and ACEM3. Applicants represent that
the legal analysis applicable to the
request for the Amended Order is
virtually identical to the analysis in the
application for the Prior Order and that
it applies to the new AC Subs to the
same extent as it applies to the
previously registered AC Subs.
Applicants believe the requested relief
is in the public interest and consistent
with the protection of investors and the
purposes fairly intended by the policy
and provisions of the 1940 Act.
4. Applicants further represent that,
except as expressly stated in the
application for the Amended Order, all
representations to the Prior Order will
remain in effect and will apply to the
new entities relying on the Amended
Order and to the new AC Subs, and the
terms and conditions of the Prior Order
will apply equally to the Amended
Order.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2014–16103 Filed 7–9–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–72542; File No. SR–
NYSEArca–2014–73]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending the NYSE Arca
Equities Schedule of Fees and
Charges for Exchange Services to
Exclude the Date of the Annual
Reconstitution of the Russell
Investments Indexes for Billing
Purposes When Calculating ETP
Holder Average Daily Volume of Trade
Activity and Consolidated ADV
July 3, 2014.
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 June 24,
2014, NYSE Arca, Inc. (the ‘‘Exchange’’
or ‘‘NYSE Arca’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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39420
Federal Register / Vol. 79, No. 132 / Thursday, July 10, 2014 / Notices
change as described in Items I, II, and
III 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.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange proposes to amend the
NYSE Arca Equities Schedule of Fees
and Charges for Exchange Services
(‘‘Fee Schedule’’) to exclude the date of
the annual reconstitution of the Russell
Investments Indexes (the ‘‘Russell
Reconstitution Date’’) for billing
purposes when calculating ETP Holder
average daily volume (‘‘ADV’’) of trade
activity and consolidated ADV
(‘‘CADV’’). The Exchange proposes to
implement the fee change effective
immediately. 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.
mstockstill on DSK4VPTVN1PROD with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend the
Fee Schedule to exclude the Russell
Reconstitution Date for billing purposes
when calculating ETP Holder ADV of
trade activity and CADV.4 The Exchange
proposes to implement the fee change
effective immediately.
Various fees and credits in the Fee
Schedule are based on an ETP Holder’s
ADV of trade activity during the billing
month, taken as a percentage of CADV.
CADV means U.S. CADV for
4 Questions and answers related to the Russell
Reconstitution Date are available at https://
www.russell.com/indexes/americas/tools-resources/
reconstitution/frequently-asked-questions.page.
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18:38 Jul 09, 2014
Jkt 232001
transactions reported to the
Consolidated Tape. Trade activity across
all markets on the Russell
Reconstitution Date typically exceeds
levels on other days during the month,
thereby resulting in an unusually higher
CADV for the billing month. The
Exchange therefore proposes to exclude
the Russell Reconstitution Date when
calculating ETP Holder ADV of trade
activity and CADV. The Exchange
would amend Footnotes 1 and 3 in the
Fee Schedule to specify that trade
activity and CADV, respectively, do not
include the Russell Reconstitution Date.
ETP Holder transactions on the Russell
Reconstitution Date would continue to
be subject to the fees and credits in the
Fee Schedule. The 2014 Russell
Reconstitution Date is June 27, 2014.
The proposed change is not otherwise
intended to address any other issues,
and the Exchange is not aware of any
problems that ETP Holders would have
in complying with the proposed change.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,5 in general, and
furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,6 in
particular, because it provides for the
equitable allocation of reasonable dues,
fees, and other charges among its
members, issuers and other persons
using its facilities and does not unfairly
discriminate between customers,
issuers, brokers or dealers.
The Exchange believes that the
proposed change is reasonable because
trade activity across all markets on the
Russell Reconstitution Date typically
exceeds levels on other days during the
month, thereby resulting in an
artificially higher CADV for the billing
month. Trade activity of a particular
ETP Holder, taken as a percentage of
CADV, could therefore be lower on the
Russell Reconstitution Date than during
the rest of the billing month. This could
prevent an ETP Holder from qualifying
for the pricing tiers in the Fee Schedule,
despite such ETP Holder’s trade activity
during the rest of the billing month
being sufficient to qualify. The proposed
change would therefore eliminate the
potential for the increased trade activity
that typically occurs on the Russell
Reconstitution Date to cause an ETP
Holder to fail to qualify for the pricing
tiers in the Fee Schedule during that
month.
The proposed change is equitable and
not unfairly discriminatory because the
Russell Reconstitution Date would be
PO 00000
5 15
6 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4) and (5).
Frm 00057
Fmt 4703
Sfmt 4703
excluded when determining trade
activity for all ETP Holders and when
determining CADV for billing purposes
for all ETP Holders. The proposed
change would eliminate a particular day
of trade activity that is likely to be an
outlier compared to the rest of the
trading month, both with respect to a
particular ETP Holder’s trade activity as
well as CADV for the month. While the
proposed change is primarily designed
so that an ETP Holder that would
otherwise qualify for a pricing tier is not
negatively impacted by the higher trade
activity on the Russell Reconstitution
Date, the proposed change would also
eliminate the potential for an ETP
Holder whose trade activity is
artificially higher on the Russell
Reconstitution Date to qualify for the
pricing tiers when such ETP Holder’s
activity during the rest of the month is
not representative of the levels required
by the pricing tiers.
The proposed change is also
reasonable because it is similar to the
manner in which Footnotes 1 and 3 in
the Fee Schedule currently specify that
trade activity and CADV exclude trade
activity on days when the market closes
early. Without this existing exclusion,
and in contrast to the artificially higher
CADV for the month caused by the
Russell Reconstitution Date, CADV for a
billing month during which the market
closes early on a particular day or days
would be artificially low. The current
exclusion eliminates the potential for
the decreased trade activity that
typically occurs on an early close day to
make it more likely for an ETP Holder
to qualify for the pricing tiers in the Fee
Schedule. As with the existing
exclusion for early close days, the
proposed exclusion of the Russell
Reconstitution Date is consistent with
the Act because it would address a
somewhat predictable variance in
typical trade activity resulting from a
known, future event (i.e., an early close
day or, as discussed herein, the Russell
Reconstitution Date).
The Exchange also believes that it is
reasonable to exclude the Russell
Reconstitution Date as proposed herein
because the Nasdaq Stock Market LLC
(‘‘Nasdaq’’) treats the Russell
Reconstitution Date in the same
manner.7
Finally, the Exchange believes that it
is subject to significant competitive
forces, as described below in the
Exchange’s statement regarding the
burden on competition.
7 See, e.g., Nasdaq Rule 7018(a). See also
Securities Exchange Act Release No. 69758 (June
13, 2013), 78 FR 36801 (June 19, 2013) (SR–
NASDAQ–2013–081).
E:\FR\FM\10JYN1.SGM
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Federal Register / Vol. 79, No. 132 / Thursday, July 10, 2014 / Notices
mstockstill on DSK4VPTVN1PROD with NOTICES
For these reasons, the Exchange
believes that the proposal is consistent
with the Act.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
In accordance with Section 6(b)(8) of
the Act,8 the Exchange believes that the
proposed rule change would not impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed change would eliminate a
particular trading day from
consideration when calculating trade
activity of ETP Holders and CADV for
billing purposes, given that trade
activity across all markets on the Russell
Reconstitution Date typically exceeds
levels on other days during the month,
thereby resulting in an artificially higher
CADV for the billing month. This
proposed change would therefore
provide all ETP Holders with a clearer
picture of the level of trade activity
required of them in order to qualify for
the pricing tiers in the Fee Schedule.
The Russell Reconstitution Date occurs
toward the end of the billing month—
June 27, 2014 for the next
reconstitution. Only one trading day
would remain in the month. Without
this proposed exclusion, it would be
difficult for an ETP Holder to modify its
trade activity on the Exchange during
the remainder of the month in order to
make up for any shortfall with respect
to the pricing tiers caused by the
increased trade activity on the Russell
Reconstitution Date.
Also, the Exchange does not believe
that the proposed change will impair
the ability of ETP Holders or competing
order execution venues to maintain
their competitive standing in the
financial markets. In this regard, the
Exchange notes that pricing on other
exchanges treats the Russell
Reconstitution Date in the same
manner.9
Finally, the Exchange notes that it
operates in a highly competitive market
in which market participants can
readily favor competing venues if they
deem fee levels at a particular venue to
be excessive or rebate opportunities
available at other venues to be more
favorable. In such an environment, the
Exchange must continually adjust its
fees and rebates to remain competitive
with other exchanges and with
alternative trading systems that have
been exempted from compliance with
the statutory standards applicable to
exchanges. Because competitors are free
to modify their own fees and credits in
response, and because market
participants may readily adjust their
order routing practices, the Exchange
believes that the degree to which fee
changes in this market may impose any
burden on competition is extremely
limited. As a result of all of these
considerations, the Exchange does not
believe that the proposed changes will
impair the ability of member
organizations or competing order
execution venues to maintain their
competitive standing in the financial
markets.
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
The foregoing rule change is effective
upon filing pursuant to Section
19(b)(3)(A) 10 of the Act and
subparagraph (f)(2) of Rule 19b–4 11
thereunder, because it establishes a due,
fee, or other charge imposed by the
Exchange.
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) 12 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–2014–73 on the subject line.
10 15
8 15
U.S.C. 78s(b)(3)(A).
11 17 CFR 240.19b–4(f)(2).
12 15 U.S.C. 78s(b)(2)(B).
U.S.C. 78f(b)(8).
supra note 7.
9 See
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18:38 Jul 09, 2014
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PO 00000
Frm 00058
Fmt 4703
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39421
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–2014–73. 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 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–2014–73, and should be
submitted on or before July 31, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2014–16100 Filed 7–9–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–72544; File No. SR–ICEEU–
2014–10]
Self-Regulatory Organizations; ICE
Clear Europe Limited; Notice of Filing
of Proposed Rule Change to CDS
Policies Relating to EMIR
July 3, 2014.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
13 17
E:\FR\FM\10JYN1.SGM
CFR 200.30–3(a)(12).
10JYN1
]]>Agencies
[Federal Register Volume 79, Number 132 (Thursday, July 10, 2014)]
[Notices]
[Pages 39419-39421]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-16100]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72542; File No. SR-NYSEArca-2014-73]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending the NYSE
Arca Equities Schedule of Fees and Charges for Exchange Services to
Exclude the Date of the Annual Reconstitution of the Russell
Investments Indexes for Billing Purposes When Calculating ETP Holder
Average Daily Volume of Trade Activity and Consolidated ADV
July 3, 2014.
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 June 24, 2014, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule
[[Page 39420]]
change as described in Items I, II, and III 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 the
Substance of the Proposed Rule Change
The Exchange proposes to amend the NYSE Arca Equities Schedule of
Fees and Charges for Exchange Services (``Fee Schedule'') to exclude
the date of the annual reconstitution of the Russell Investments
Indexes (the ``Russell Reconstitution Date'') for billing purposes when
calculating ETP Holder average daily volume (``ADV'') of trade activity
and consolidated ADV (``CADV''). The Exchange proposes to implement the
fee change effective immediately. 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the Fee Schedule to exclude the
Russell Reconstitution Date for billing purposes when calculating ETP
Holder ADV of trade activity and CADV.\4\ The Exchange proposes to
implement the fee change effective immediately.
---------------------------------------------------------------------------
\4\ Questions and answers related to the Russell Reconstitution
Date are available at https://www.russell.com/indexes/americas/tools-resources/reconstitution/frequently-asked-questions.page.
---------------------------------------------------------------------------
Various fees and credits in the Fee Schedule are based on an ETP
Holder's ADV of trade activity during the billing month, taken as a
percentage of CADV. CADV means U.S. CADV for transactions reported to
the Consolidated Tape. Trade activity across all markets on the Russell
Reconstitution Date typically exceeds levels on other days during the
month, thereby resulting in an unusually higher CADV for the billing
month. The Exchange therefore proposes to exclude the Russell
Reconstitution Date when calculating ETP Holder ADV of trade activity
and CADV. The Exchange would amend Footnotes 1 and 3 in the Fee
Schedule to specify that trade activity and CADV, respectively, do not
include the Russell Reconstitution Date. ETP Holder transactions on the
Russell Reconstitution Date would continue to be subject to the fees
and credits in the Fee Schedule. The 2014 Russell Reconstitution Date
is June 27, 2014.
The proposed change is not otherwise intended to address any other
issues, and the Exchange is not aware of any problems that ETP Holders
would have in complying with the proposed change.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\5\ in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\6\ in
particular, because it provides for the equitable allocation of
reasonable dues, fees, and other charges among its members, issuers and
other persons using its facilities and does not unfairly discriminate
between customers, issuers, brokers or dealers.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The Exchange believes that the proposed change is reasonable
because trade activity across all markets on the Russell Reconstitution
Date typically exceeds levels on other days during the month, thereby
resulting in an artificially higher CADV for the billing month. Trade
activity of a particular ETP Holder, taken as a percentage of CADV,
could therefore be lower on the Russell Reconstitution Date than during
the rest of the billing month. This could prevent an ETP Holder from
qualifying for the pricing tiers in the Fee Schedule, despite such ETP
Holder's trade activity during the rest of the billing month being
sufficient to qualify. The proposed change would therefore eliminate
the potential for the increased trade activity that typically occurs on
the Russell Reconstitution Date to cause an ETP Holder to fail to
qualify for the pricing tiers in the Fee Schedule during that month.
The proposed change is equitable and not unfairly discriminatory
because the Russell Reconstitution Date would be excluded when
determining trade activity for all ETP Holders and when determining
CADV for billing purposes for all ETP Holders. The proposed change
would eliminate a particular day of trade activity that is likely to be
an outlier compared to the rest of the trading month, both with respect
to a particular ETP Holder's trade activity as well as CADV for the
month. While the proposed change is primarily designed so that an ETP
Holder that would otherwise qualify for a pricing tier is not
negatively impacted by the higher trade activity on the Russell
Reconstitution Date, the proposed change would also eliminate the
potential for an ETP Holder whose trade activity is artificially higher
on the Russell Reconstitution Date to qualify for the pricing tiers
when such ETP Holder's activity during the rest of the month is not
representative of the levels required by the pricing tiers.
The proposed change is also reasonable because it is similar to the
manner in which Footnotes 1 and 3 in the Fee Schedule currently specify
that trade activity and CADV exclude trade activity on days when the
market closes early. Without this existing exclusion, and in contrast
to the artificially higher CADV for the month caused by the Russell
Reconstitution Date, CADV for a billing month during which the market
closes early on a particular day or days would be artificially low. The
current exclusion eliminates the potential for the decreased trade
activity that typically occurs on an early close day to make it more
likely for an ETP Holder to qualify for the pricing tiers in the Fee
Schedule. As with the existing exclusion for early close days, the
proposed exclusion of the Russell Reconstitution Date is consistent
with the Act because it would address a somewhat predictable variance
in typical trade activity resulting from a known, future event (i.e.,
an early close day or, as discussed herein, the Russell Reconstitution
Date).
The Exchange also believes that it is reasonable to exclude the
Russell Reconstitution Date as proposed herein because the Nasdaq Stock
Market LLC (``Nasdaq'') treats the Russell Reconstitution Date in the
same manner.\7\
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\7\ See, e.g., Nasdaq Rule 7018(a). See also Securities Exchange
Act Release No. 69758 (June 13, 2013), 78 FR 36801 (June 19, 2013)
(SR-NASDAQ-2013-081).
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Finally, the Exchange believes that it is subject to significant
competitive forces, as described below in the Exchange's statement
regarding the burden on competition.
[[Page 39421]]
For these reasons, the Exchange believes that the proposal is
consistent with the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\8\ the Exchange
believes that the proposed rule change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. The proposed change would eliminate a particular
trading day from consideration when calculating trade activity of ETP
Holders and CADV for billing purposes, given that trade activity across
all markets on the Russell Reconstitution Date typically exceeds levels
on other days during the month, thereby resulting in an artificially
higher CADV for the billing month. This proposed change would therefore
provide all ETP Holders with a clearer picture of the level of trade
activity required of them in order to qualify for the pricing tiers in
the Fee Schedule. The Russell Reconstitution Date occurs toward the end
of the billing month--June 27, 2014 for the next reconstitution. Only
one trading day would remain in the month. Without this proposed
exclusion, it would be difficult for an ETP Holder to modify its trade
activity on the Exchange during the remainder of the month in order to
make up for any shortfall with respect to the pricing tiers caused by
the increased trade activity on the Russell Reconstitution Date.
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\8\ 15 U.S.C. 78f(b)(8).
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Also, the Exchange does not believe that the proposed change will
impair the ability of ETP Holders or competing order execution venues
to maintain their competitive standing in the financial markets. In
this regard, the Exchange notes that pricing on other exchanges treats
the Russell Reconstitution Date in the same manner.\9\
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\9\ See supra note 7.
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Finally, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues if they deem fee levels at a particular venue to be
excessive or rebate opportunities available at other venues to be more
favorable. In such an environment, the Exchange must continually adjust
its fees and rebates to remain competitive with other exchanges and
with alternative trading systems that have been exempted from
compliance with the statutory standards applicable to exchanges.
Because competitors are free to modify their own fees and credits in
response, and because market participants may readily adjust their
order routing practices, the Exchange believes that the degree to which
fee changes in this market may impose any burden on competition is
extremely limited. As a result of all of these considerations, the
Exchange does not believe that the proposed changes will impair the
ability of member organizations or competing order execution venues to
maintain their competitive standing in the financial markets.
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
The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \10\ of the Act and subparagraph (f)(2) of Rule
19b-4 \11\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(2).
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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) \12\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\12\ 15 U.S.C. 78s(b)(2)(B).
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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-2014-73 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-2014-73.
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 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-2014-73, and should be submitted on or before July 31, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2014-16100 Filed 7-9-14; 8:45 am]
BILLING CODE 8011-01-P
