Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Representations Regarding the Names and Principal Investments of Certain WBI SMID Funds Currently Listed and Traded on the Exchange Under NYSE Arca Equities Rule 8.600, 63852-63855 [2015-26676]
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63852
Federal Register / Vol. 80, No. 203 / Wednesday, October 21, 2015 / Notices
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
information that you wish to make
available publicly.
All submissions should refer to File
No. SR–BATS–2015–86 and should be
submitted on or before November 12,
2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–26677 Filed 10–20–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–76161; File No. SR–
NYSEArca–2015–88]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending
Representations Regarding the Names
and Principal Investments of Certain
WBI SMID Funds Currently Listed and
Traded on the Exchange Under NYSE
Arca Equities Rule 8.600
tkelley on DSK3SPTVN1PROD with NOTICES
October 15, 2015.
Pursuant to section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on
September 30, 2015, NYSE Arca, Inc.
(‘‘Exchange’’ or ‘‘NYSE Arca’’) filed
with the Securities and Exchange
16 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
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Commission (‘‘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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to change
representations regarding the names and
principal investments of each of the
following: WBI SMID Tactical Growth
Shares; WBI SMID Tactical Value
Shares; WBI SMID Tactical Yield
Shares; WBI SMID Tactical Select
Shares; WBI Large Cap Tactical Growth
Shares; WBI Large Cap Tactical Value
Shares; WBI Large Cap Tactical Yield
Shares; and WBI Large Cap Tactical
Select Share (each a ‘‘Fund’’ and,
collectively, the ‘‘Funds’’). Shares of the
Funds have been approved for listing
and trading on the Exchange under
NYSE Arca Equities Rule 8.600. 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 Commission has approved a
proposed rule change relating to listing
and trading on the Exchange of shares
(‘‘Shares’’) of the Funds under NYSE
Arca Equities Rule 8.600,4 which
4 See Securities Exchange Act Release No. 72895
(August 21, 2014), 79 FR 51210 (August 27, 2014)
(SR–NYSEArca–2014–67) (the ‘‘Prior Order’’). The
notice with respect to the Prior Order was
published in Securities Exchange Act Release No.
72526 (July 2, 2014), 79 FR 39035 (July 9, 2014)
(‘‘Prior Notice’’ and, together with the Prior Order,
the ‘‘Prior Release’’).
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governs the listing and trading of
Managed Fund Shares.5 The Funds’
Shares are currently listed and traded
on the Exchange under NYSE Arca
Equities Rule 8.600.
The Shares are offered by Absolute
Shares Trust (the ‘‘Trust’’), a statutory
trust organized under the laws of the
State of Delaware and registered with
the Commission as an open-end
management investment company.6 The
investment adviser to the Fund is
Millington Securities, Inc. (the
‘‘Adviser’’) and WBI Investments, Inc. is
each Fund’s sub-adviser (‘‘SubAdviser’’).
Common Fund Strategy and
Characteristics
The principal investment objective of
each Fund is to seek long-term capital
appreciation and the potential for
current income, while also seeking to
protect principal during unfavorable
market conditions. As described in the
Prior Release, the Sub-Adviser manages
each Fund’s portfolio based on a
proprietary selection process as
described in the Prior Release (the
‘‘Selection Process’’). The Selection
Process attempts to provide consistent,
attractive returns net of expenses with
potentially less volatility and risk to
capital than traditional approaches,
5 A Managed Fund Share is a security that
represents an interest in an investment company
registered under the Investment Company Act of
1940 (15 U.S.C. 80a–1) (‘‘1940 Act’’) organized as
an open-end investment company or similar entity
that invests in a portfolio of securities selected by
its investment adviser consistent with its
investment objectives and policies. In contrast, an
open-end investment company that issues
Investment Company Units, listed and traded on
the Exchange under NYSE Arca Equities Rule
5.2(j)(3), seeks to provide investment results that
correspond generally to the price and yield
performance of a specific foreign or domestic stock
index, fixed income securities index or combination
thereof.
6 The Trust is registered under the 1940 Act. On
December 9, 2013, the Trust filed with the
Commission its registration statement on Form
N–1A under the Securities Act of 1933 (15 U.S.C.
77a) (‘‘Securities Act’’), and under the 1940 Act
relating to the Funds (File Nos. 333–192733 and
811–22917) (as amended, the ‘‘Registration
Statement’’). The Trust filed supplements to amend
the prospectus contained in the Registration
Statement on July 17, 2015 and filed post-effective
amendments to the Registration Statement on
August 21, 2015, which amendment will become
effective as of October 31, 2015, reflecting the
changes to the Funds described herein. For the
avoidance of doubt, the names and principal
investment strategies of the WBI Tactical Income
Shares and the WBI Tactical High Income Shares,
which also are series in the Trust approved in the
Prior Release, are not being changed. The
description of the operation of the Trust and the
Funds herein is based, in part, on the Registration
Statement. In addition, the Commission has issued
an order granting certain exemptive relief to the
Trust under the 1940 Act. See Investment Company
Act Release No. 30543 (May 29, 2013) (File No.
812–13886) (‘‘Exemptive Order’’).
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Federal Register / Vol. 80, No. 203 / Wednesday, October 21, 2015 / Notices
whatever market conditions may be.
Each Fund defines an absolute return
approach to investment management in
this way. The Selection Process
includes a buy discipline and a sell
discipline as described in the Prior
Release. In this proposed rule change,
the Exchange proposes (1) to reflect
changes to the names of Funds from the
names included in the Prior Release;
and (2) to change representations
relating to ‘‘Principal Investments’’ of
each Fund in the Prior Release that each
Fund will invest at least 80% of net
assets in specified equity securities to
representations that each Fund will seek
to invest principally in such specified
equity securities, cash and ‘‘Cash
Equivalents’’ (as described below) when
it believes this is consistent with each
Fund’s investment objective of
protecting principal.7 For clarity, each
Fund will invest at least 80% of its net
assets in its principal investment
strategy.
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WBI SMID Tactical Growth Shares
As described in the Prior Release,
under normal market conditions, the
Fund invests at least 80% of its net
assets in the exchange-listed equity
securities of small-capitalization and
mid-capitalization domestic and foreign
companies selected on the basis of the
Selection Process.8 Going forward, the
Fund will seek to invest principally in
7 Under the Prior Release, the Funds could
temporarily depart from their respective 80%
principal investment strategies and make ‘‘short
term investments in cash, cash equivalents, highquality short-term debt securities and money
market instruments for temporary defensive
purposes in response to adverse market, economic
or political conditions. . . . [E]ach Fund could
acquire the following short-term investments: (1)
Certificates of deposit issued by commercial banks
as well as savings banks or savings and loan
associations; (2) bankers’ acceptances; (3) time
deposits; and (4) commercial paper and short-term
notes rated at the time of purchase ‘‘A–2’’ or higher
by Standard & Poor’s®, ‘‘Prime-1’’ by Moody’s®
Investors Services Inc., or similarly rated by another
nationally recognized statistical rating organization,
or, if unrated, will be determined by the SubAdviser to be of comparable quality, as well as U.S.
Government obligations.’’ Such high-quality shortterm debt securities, money market instruments and
the investments enumerated above are hereinafter
collectively referred to as ‘‘Cash Equivalents’’. In
this proposed rule change, Cash Equivalents will be
included in each Fund’s principal investment
strategy and no longer only for temporary defensive
purposes. Intra-day price information for Cash
Equivalents will be available from major market
data vendors.
8 The Adviser represents that the Adviser and the
Sub-Adviser have managed and will continue to
manage the Funds in the manner described in the
Prior Release, and will not implement the changes
described herein until the instant proposed rule
change is operative. The change to the name of the
Funds and to the Funds’ investments as described
herein will be effective upon the filing an
additional amendment to the Registration
Statement.
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the exchange-listed equity securities of
small-capitalization and midcapitalization domestic and foreign
companies, cash and Cash Equivalents,
selected on the basis of the Selection
Process.
In addition, going forward, the Fund’s
name will change to WBI Tactical SMG
Shares.
WBI SMID Tactical Value Shares
As described in the Prior Release,
under normal market conditions, the
Fund invests at least 80% of its net
assets in the exchange-listed equity
securities of small-capitalization and
mid-capitalization domestic and foreign
companies selected by the Sub-Adviser
utilizing the Selection Process. Going
forward, the Fund will seek to invest
principally in the exchange-listed equity
securities of small-capitalization and
mid-capitalization domestic and foreign
companies, cash and Cash Equivalents,
selected by the Sub-Adviser utilizing
the Selection Process.
In addition, going forward, the Fund’s
name will change to WBI Tactical SMV
Shares.
WBI SMID Tactical Yield Shares
As described in the Prior Release,
under normal market conditions, the
Fund invests at least 80% of its net
assets in the exchange-listed dividendpaying equity securities of smallcapitalization and mid-capitalization
domestic and foreign companies
selected by the Sub-Adviser utilizing
the Selection Process. Going forward,
the Fund will seek to invest principally
in the exchange-listed dividend-paying
equity securities of small-capitalization
and mid-capitalization domestic and
foreign companies, cash and Cash
Equivalents, selected by the SubAdviser utilizing the Selection Process.
In addition, going forward, the Fund’s
name will change to WBI Tactical SMY
Shares.
WBI SMID Tactical Select Shares
As described in the Prior Release,
under normal market conditions, the
Fund invests at least 80% of its net
assets in the exchange-listed equity
securities of small-capitalization and
mid-capitalization domestic and foreign
companies selected by the Sub-Adviser
utilizing the Selection Process. Going
forward, the Fund will seek to invest
principally in the exchange-listed equity
securities of small-capitalization and
mid-capitalization domestic and foreign
companies, cash and Cash Equivalents,
selected by the Sub-Adviser utilizing
the Selection Process.
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63853
In addition, going forward, the Fund’s
name will change to WBI Tactical SMS
Shares.
WBI Large Cap Tactical Growth Shares
As described in the Prior Release,
under normal market conditions, the
Fund invests at least 80% of its net
assets in the exchange-listed equity
securities of large capitalization
domestic and foreign companies
selected by the Sub-Adviser utilizing
the Selection Process. Going forward,
the Fund will seek to invest principally
in the exchange-listed equity securities
of large capitalization domestic and
foreign companies, cash and Cash
Equivalents, selected by the SubAdviser utilizing the Selection Process.
In addition, going forward, the Fund’s
name will change to WBI Tactical LCG
Shares.
WBI Large Cap Tactical Value Shares
As described in the Prior Release,
under normal market conditions, the
Fund invests at least 80% of its net
assets in the exchange-listed equity
securities of large capitalization
domestic and foreign companies
selected by the Sub-Adviser utilizing
the Selection Process. Going forward,
the Fund will seek to invest principally
in the exchange-listed equity securities
of large capitalization domestic and
foreign companies, cash and Cash
Equivalents, selected by the SubAdviser utilizing the Selection Process.
In addition, going forward, the Fund’s
name will change to WBI Tactical LCV
Shares.
WBI Large Cap Tactical Yield Shares
As described in the Prior Release,
under normal market conditions, the
Fund invests at least 80% of its net
assets in the exchange-listed dividendpaying equity securities of large
capitalization domestic and foreign
companies selected by the Sub-Adviser
utilizing the Selection Process. Going
forward, the Fund will seek to invest
principally in the exchange-listed
dividend-paying equity securities of
large capitalization domestic and
foreign companies, cash and Cash
Equivalents, selected by the SubAdviser utilizing the Selection Process.
In addition, going forward, the Fund’s
name will change to WBI Tactical LCY
Shares.
WBI Large Cap Tactical Select Shares
As described in the Prior Release,
under normal market conditions, the
Fund invests at least 80% of its net
assets in the exchange-listed equity
securities of large capitalization
domestic and foreign companies
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Federal Register / Vol. 80, No. 203 / Wednesday, October 21, 2015 / Notices
tkelley on DSK3SPTVN1PROD with NOTICES
selected by the Sub-Adviser utilizing
the Selection Process. Going forward,
the Fund will seek to invest principally
in the exchange-listed equity securities
of large capitalization domestic and
foreign companies, cash and Cash
Equivalents, selected by the SubAdviser utilizing the Selection Process.
In addition, going forward, the Fund’s
name will change to WBI Tactical LCS
Shares.
Except for the changes described
above, all other representations made in
the Prior Release remain unchanged.9
The Funds will comply with all initial
and continued listing requirements
under NYSE Arca Equities Rule 8.600.
2. Statutory Basis
The basis under the Act for this
proposed rule change is the requirement
under section 6(b)(5) 10 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.
As noted above, the Selection Process
attempts to provide consistent,
attractive returns net of expenses with
potentially less volatility and risk to
capital than traditional approaches,
whatever market conditions may be.
While the Funds would continue to
invest in the types of securities
described in the Prior Release, the
proposed change to represent that each
Fund will seek to invest principally in
specified exchange-listed equity
securities, cash and Cash Equivalents,
rather than at least 80% of its net assets
in specified exchange-listed equity
securities, would provide additional
flexibility to seek each Funds’
investment objective of protecting
principal. The inclusion of cash and
Cash Equivalents in each Fund’s
principal investments, rather than the
use of such instruments solely for
temporary defensive purposes, would
facilitate each Fund’s ability to protect
principal, which could serve as a
significant benefit for investors.
The proposed rule change is designed
to promote just and equitable principles
of trade and to protect investors and the
public interest in that the Shares are
listed and traded on the Exchange
pursuant to the initial and continued
listing criteria in NYSE Arca Equities
Rule 8.600. Except for the changes
described above, all other
9 See note 4, supra. All terms referenced but not
defined herein are defined in the Prior Release.
10 15 U.S.C. 78f(b)(5).
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representations made in the Prior
Release remain unchanged.11
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 purpose of the Act. The Exchange
believes the proposed rule change is
designed to allow the Fund to invest in
securities that would permit a Fund to
better implement the Selection Process
as described in the Prior Release, and
will enhance competition among issues
of Managed Fund Shares that invest in
equity securities.
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 prior to 30 days from the date
on which it was filed, or such shorter
time as the Commission may designate,
if consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.
The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Commission believes that
waiver of the 30-day operative delay
period is consistent with the protection
of investors and the public interest. The
Commission notes that the proposal
would allow the Funds greater
flexibility in seeking their investment
objective of protecting principal during
unfavorable market conditions, which
could benefit investors and the public
interest. Therefore, the Commission
designates the proposed rule change to
be operative upon filing.12
At any time within 60 days of the
filing of the proposed rule change, the
11 See note 4, supra. All terms referenced but not
defined herein are defined in the Prior Release.
12 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).
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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.
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–2015–88 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–2015–88. 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
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NYSEArca–2015–88 and should be
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Federal Register / Vol. 80, No. 203 / Wednesday, October 21, 2015 / Notices
submitted on or before November 12,
2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–26676 Filed 10–20–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–76163; File No. SR–BYX–
2015–44]
Self-Regulatory Organizations; BATS
Y-Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change to Adopt Rule 2.4,
Mandatory Participation in Testing of
Backup Systems
October 15, 2015.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on October
2, 2015, BATS Y-Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BYX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange has
designated this proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6)(iii)
thereunder,4 which renders it effective
upon filing with the Commission. 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 filed a proposal to
adopt business continuity and disaster
recovery plans (‘‘BC/DR plans’’) testing
requirements for certain Exchange
Members 5 in connection with
Regulation Systems Compliance and
Integrity (‘‘Regulation SCI’’), as further
described below.6
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6)(iii).
5 The term ‘‘Member’’ is defined as ‘‘any
registered broker or dealer that has been admitted
to membership in the Exchange.’’ See Exchange
Rule 1.5(n).
6 See Securities Exchange Act Release No. 73639
(November 19, 2014), 79 FR 72252 (December 5,
2014) (‘‘SCI Adopting Release’’).
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The text of the proposed rule change
is available at the Exchange’s Web site
at www.batstrading.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
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 parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
As adopted by the Commission,
Regulation SCI applies to certain selfregulatory organizations (including the
Exchange), alternative trading systems
(‘‘ATSs’’), plan processors, and exempt
clearing agencies (collectively, ‘‘SCI
entities’’), and will require these SCI
entities to comply with requirements
with respect to the automated systems
central to the performance of their
regulated activities. Among the
requirements of Regulation SCI is Rule
1001(a)(2)(v), which requires the
Exchange and other SCI entities to
maintain ‘‘[b]usiness continuity and
disaster recovery plans that include
maintaining backup and recovery
capabilities sufficiently resilient and
geographically diverse and that are
reasonably designed to achieve next
business day resumption of trading and
two-hour resumption of critical SCI
systems following a wide-scale
disruption.’’ 7 The Exchange takes pride
in the reliability and availability of its
systems. Historically, Exchange systems
have been up and available more than
99.9% of the time; yet as a precaution,
the Exchange has put extensive time
and resources toward planning for
system failures and already maintains
robust BC/DR plans consistent with the
Rule. As set forth below, in connection
with Regulation SCI, the Exchange is
proposing to require certain Members to
participate in testing of the operation of
the Exchange’s BC/DR plans.
With respect to an SCI entity’s BC/DR
plans, including its backup systems,
paragraph (a) of Rule 1004 of Regulation
SCI requires each SCI entity to:
‘‘[e]stablish standards for the
designation of those members or
participants that the SCI entity
reasonably determines are, taken as a
whole, the minimum necessary for the
maintenance of fair and orderly markets
in the event of the activation of such
plans.’’ 8 Paragraph (b) of Rule 1004
further requires each SCI entity to
‘‘[d]esignate members or participants
pursuant to the standards established in
paragraph (a) of [Rule 1004] and require
participation by such designated
members or participants in scheduled
functional and performance testing of
the operation of such plans, in the
manner and frequency specified by the
SCI entity, provided that such frequency
shall not be less than once every 12
months.’’ 9 In order to comply with Rule
1004 of Regulation SCI, the Exchange
proposes to adopt Rule 2.4, governing
mandatory participation in testing of
Exchange backup systems, as described
below. The Exchange proposes to delete
current Rule 2.4 in its entirety because
such rule was applicable to a waive-in
process offered by the Exchange when it
commenced operations and is now
obsolete.
First, in paragraph (a) of Rule 2.4, the
Exchange proposes to include language
from paragraph (a) of Rule 1004 of
Regulation SCI to summarize the
Exchange’s obligation pursuant to such
rule. Specifically, the Exchange
proposes to state that ‘‘[p]ursuant to
Regulation SCI and with respect to the
Exchange’s business continuity and
disaster recovery plans, including its
backup systems, the Exchange is
required to establish standards for the
designation of Members that the
Exchange reasonably determines are,
taken as a whole, the minimum
necessary for the maintenance of fair
and orderly markets in the event of the
activation of such plans.’’ The Exchange
further proposes that paragraph (a)
indicate that the ‘‘Exchange has
established standards and will designate
Members according to those standards’’
as set forth in the proposed Rule. In
addition, the Exchange proposes to
make clear that all Members are
permitted to connect to the Exchange’s
backup systems as well as to participate
in testing of such systems. Proposed
paragraph (a) is consistent with the
Commission’s adoption of Regulation
SCI, which encouraged ‘‘SCI entities to
permit non-designated members or
8 17
7 17
PO 00000
CFR 242.1001(a)(2)(v).
Frm 00119
Fmt 4703
Sfmt 4703
63855
9 17
E:\FR\FM\21OCN1.SGM
CFR 242.1004(a).
CFR 242.1004(b).
21OCN1
]]>Agencies
[Federal Register Volume 80, Number 203 (Wednesday, October 21, 2015)]
[Notices]
[Pages 63852-63855]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-26676]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-76161; File No. SR-NYSEArca-2015-88]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending
Representations Regarding the Names and Principal Investments of
Certain WBI SMID Funds Currently Listed and Traded on the Exchange
Under NYSE Arca Equities Rule 8.600
October 15, 2015.
Pursuant to section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on September 30, 2015, NYSE Arca, Inc. (``Exchange'' or ``NYSE
Arca'') filed with the Securities and Exchange Commission
(``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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to change representations regarding the names
and principal investments of each of the following: WBI SMID Tactical
Growth Shares; WBI SMID Tactical Value Shares; WBI SMID Tactical Yield
Shares; WBI SMID Tactical Select Shares; WBI Large Cap Tactical Growth
Shares; WBI Large Cap Tactical Value Shares; WBI Large Cap Tactical
Yield Shares; and WBI Large Cap Tactical Select Share (each a ``Fund''
and, collectively, the ``Funds''). Shares of the Funds have been
approved for listing and trading on the Exchange under NYSE Arca
Equities Rule 8.600. 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 Commission has approved a proposed rule change relating to
listing and trading on the Exchange of shares (``Shares'') of the Funds
under NYSE Arca Equities Rule 8.600,\4\ which governs the listing and
trading of Managed Fund Shares.\5\ The Funds' Shares are currently
listed and traded on the Exchange under NYSE Arca Equities Rule 8.600.
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\4\ See Securities Exchange Act Release No. 72895 (August 21,
2014), 79 FR 51210 (August 27, 2014) (SR-NYSEArca-2014-67) (the
``Prior Order''). The notice with respect to the Prior Order was
published in Securities Exchange Act Release No. 72526 (July 2,
2014), 79 FR 39035 (July 9, 2014) (``Prior Notice'' and, together
with the Prior Order, the ``Prior Release'').
\5\ A Managed Fund Share is a security that represents an
interest in an investment company registered under the Investment
Company Act of 1940 (15 U.S.C. 80a-1) (``1940 Act'') organized as an
open-end investment company or similar entity that invests in a
portfolio of securities selected by its investment adviser
consistent with its investment objectives and policies. In contrast,
an open-end investment company that issues Investment Company Units,
listed and traded on the Exchange under NYSE Arca Equities Rule
5.2(j)(3), seeks to provide investment results that correspond
generally to the price and yield performance of a specific foreign
or domestic stock index, fixed income securities index or
combination thereof.
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The Shares are offered by Absolute Shares Trust (the ``Trust''), a
statutory trust organized under the laws of the State of Delaware and
registered with the Commission as an open-end management investment
company.\6\ The investment adviser to the Fund is Millington
Securities, Inc. (the ``Adviser'') and WBI Investments, Inc. is each
Fund's sub-adviser (``Sub-Adviser'').
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\6\ The Trust is registered under the 1940 Act. On December 9,
2013, the Trust filed with the Commission its registration statement
on Form N-1A under the Securities Act of 1933 (15 U.S.C. 77a)
(``Securities Act''), and under the 1940 Act relating to the Funds
(File Nos. 333-192733 and 811-22917) (as amended, the ``Registration
Statement''). The Trust filed supplements to amend the prospectus
contained in the Registration Statement on July 17, 2015 and filed
post-effective amendments to the Registration Statement on August
21, 2015, which amendment will become effective as of October 31,
2015, reflecting the changes to the Funds described herein. For the
avoidance of doubt, the names and principal investment strategies of
the WBI Tactical Income Shares and the WBI Tactical High Income
Shares, which also are series in the Trust approved in the Prior
Release, are not being changed. The description of the operation of
the Trust and the Funds herein is based, in part, on the
Registration Statement. In addition, the Commission has issued an
order granting certain exemptive relief to the Trust under the 1940
Act. See Investment Company Act Release No. 30543 (May 29, 2013)
(File No. 812-13886) (``Exemptive Order'').
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Common Fund Strategy and Characteristics
The principal investment objective of each Fund is to seek long-
term capital appreciation and the potential for current income, while
also seeking to protect principal during unfavorable market conditions.
As described in the Prior Release, the Sub-Adviser manages each Fund's
portfolio based on a proprietary selection process as described in the
Prior Release (the ``Selection Process''). The Selection Process
attempts to provide consistent, attractive returns net of expenses with
potentially less volatility and risk to capital than traditional
approaches,
[[Page 63853]]
whatever market conditions may be. Each Fund defines an absolute return
approach to investment management in this way. The Selection Process
includes a buy discipline and a sell discipline as described in the
Prior Release. In this proposed rule change, the Exchange proposes (1)
to reflect changes to the names of Funds from the names included in the
Prior Release; and (2) to change representations relating to
``Principal Investments'' of each Fund in the Prior Release that each
Fund will invest at least 80% of net assets in specified equity
securities to representations that each Fund will seek to invest
principally in such specified equity securities, cash and ``Cash
Equivalents'' (as described below) when it believes this is consistent
with each Fund's investment objective of protecting principal.\7\ For
clarity, each Fund will invest at least 80% of its net assets in its
principal investment strategy.
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\7\ Under the Prior Release, the Funds could temporarily depart
from their respective 80% principal investment strategies and make
``short term investments in cash, cash equivalents, high-quality
short-term debt securities and money market instruments for
temporary defensive purposes in response to adverse market, economic
or political conditions. . . . [E]ach Fund could acquire the
following short-term investments: (1) Certificates of deposit issued
by commercial banks as well as savings banks or savings and loan
associations; (2) bankers' acceptances; (3) time deposits; and (4)
commercial paper and short-term notes rated at the time of purchase
``A-2'' or higher by Standard & Poor's[supreg], ``Prime-1'' by
Moody's[supreg] Investors Services Inc., or similarly rated by
another nationally recognized statistical rating organization, or,
if unrated, will be determined by the Sub-Adviser to be of
comparable quality, as well as U.S. Government obligations.'' Such
high-quality short-term debt securities, money market instruments
and the investments enumerated above are hereinafter collectively
referred to as ``Cash Equivalents''. In this proposed rule change,
Cash Equivalents will be included in each Fund's principal
investment strategy and no longer only for temporary defensive
purposes. Intra-day price information for Cash Equivalents will be
available from major market data vendors.
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WBI SMID Tactical Growth Shares
As described in the Prior Release, under normal market conditions,
the Fund invests at least 80% of its net assets in the exchange-listed
equity securities of small-capitalization and mid-capitalization
domestic and foreign companies selected on the basis of the Selection
Process.\8\ Going forward, the Fund will seek to invest principally in
the exchange-listed equity securities of small-capitalization and mid-
capitalization domestic and foreign companies, cash and Cash
Equivalents, selected on the basis of the Selection Process.
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\8\ The Adviser represents that the Adviser and the Sub-Adviser
have managed and will continue to manage the Funds in the manner
described in the Prior Release, and will not implement the changes
described herein until the instant proposed rule change is
operative. The change to the name of the Funds and to the Funds'
investments as described herein will be effective upon the filing an
additional amendment to the Registration Statement.
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In addition, going forward, the Fund's name will change to WBI
Tactical SMG Shares.
WBI SMID Tactical Value Shares
As described in the Prior Release, under normal market conditions,
the Fund invests at least 80% of its net assets in the exchange-listed
equity securities of small-capitalization and mid-capitalization
domestic and foreign companies selected by the Sub-Adviser utilizing
the Selection Process. Going forward, the Fund will seek to invest
principally in the exchange-listed equity securities of small-
capitalization and mid-capitalization domestic and foreign companies,
cash and Cash Equivalents, selected by the Sub-Adviser utilizing the
Selection Process.
In addition, going forward, the Fund's name will change to WBI
Tactical SMV Shares.
WBI SMID Tactical Yield Shares
As described in the Prior Release, under normal market conditions,
the Fund invests at least 80% of its net assets in the exchange-listed
dividend-paying equity securities of small-capitalization and mid-
capitalization domestic and foreign companies selected by the Sub-
Adviser utilizing the Selection Process. Going forward, the Fund will
seek to invest principally in the exchange-listed dividend-paying
equity securities of small-capitalization and mid-capitalization
domestic and foreign companies, cash and Cash Equivalents, selected by
the Sub-Adviser utilizing the Selection Process.
In addition, going forward, the Fund's name will change to WBI
Tactical SMY Shares.
WBI SMID Tactical Select Shares
As described in the Prior Release, under normal market conditions,
the Fund invests at least 80% of its net assets in the exchange-listed
equity securities of small-capitalization and mid-capitalization
domestic and foreign companies selected by the Sub-Adviser utilizing
the Selection Process. Going forward, the Fund will seek to invest
principally in the exchange-listed equity securities of small-
capitalization and mid-capitalization domestic and foreign companies,
cash and Cash Equivalents, selected by the Sub-Adviser utilizing the
Selection Process.
In addition, going forward, the Fund's name will change to WBI
Tactical SMS Shares.
WBI Large Cap Tactical Growth Shares
As described in the Prior Release, under normal market conditions,
the Fund invests at least 80% of its net assets in the exchange-listed
equity securities of large capitalization domestic and foreign
companies selected by the Sub-Adviser utilizing the Selection Process.
Going forward, the Fund will seek to invest principally in the
exchange-listed equity securities of large capitalization domestic and
foreign companies, cash and Cash Equivalents, selected by the Sub-
Adviser utilizing the Selection Process.
In addition, going forward, the Fund's name will change to WBI
Tactical LCG Shares.
WBI Large Cap Tactical Value Shares
As described in the Prior Release, under normal market conditions,
the Fund invests at least 80% of its net assets in the exchange-listed
equity securities of large capitalization domestic and foreign
companies selected by the Sub-Adviser utilizing the Selection Process.
Going forward, the Fund will seek to invest principally in the
exchange-listed equity securities of large capitalization domestic and
foreign companies, cash and Cash Equivalents, selected by the Sub-
Adviser utilizing the Selection Process.
In addition, going forward, the Fund's name will change to WBI
Tactical LCV Shares.
WBI Large Cap Tactical Yield Shares
As described in the Prior Release, under normal market conditions,
the Fund invests at least 80% of its net assets in the exchange-listed
dividend-paying equity securities of large capitalization domestic and
foreign companies selected by the Sub-Adviser utilizing the Selection
Process. Going forward, the Fund will seek to invest principally in the
exchange-listed dividend-paying equity securities of large
capitalization domestic and foreign companies, cash and Cash
Equivalents, selected by the Sub-Adviser utilizing the Selection
Process.
In addition, going forward, the Fund's name will change to WBI
Tactical LCY Shares.
WBI Large Cap Tactical Select Shares
As described in the Prior Release, under normal market conditions,
the Fund invests at least 80% of its net assets in the exchange-listed
equity securities of large capitalization domestic and foreign
companies
[[Page 63854]]
selected by the Sub-Adviser utilizing the Selection Process. Going
forward, the Fund will seek to invest principally in the exchange-
listed equity securities of large capitalization domestic and foreign
companies, cash and Cash Equivalents, selected by the Sub-Adviser
utilizing the Selection Process.
In addition, going forward, the Fund's name will change to WBI
Tactical LCS Shares.
Except for the changes described above, all other representations
made in the Prior Release remain unchanged.\9\ The Funds will comply
with all initial and continued listing requirements under NYSE Arca
Equities Rule 8.600.
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\9\ See note 4, supra. All terms referenced but not defined
herein are defined in the Prior Release.
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2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under section 6(b)(5) \10\ 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.
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\10\ 15 U.S.C. 78f(b)(5).
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As noted above, the Selection Process attempts to provide
consistent, attractive returns net of expenses with potentially less
volatility and risk to capital than traditional approaches, whatever
market conditions may be. While the Funds would continue to invest in
the types of securities described in the Prior Release, the proposed
change to represent that each Fund will seek to invest principally in
specified exchange-listed equity securities, cash and Cash Equivalents,
rather than at least 80% of its net assets in specified exchange-listed
equity securities, would provide additional flexibility to seek each
Funds' investment objective of protecting principal. The inclusion of
cash and Cash Equivalents in each Fund's principal investments, rather
than the use of such instruments solely for temporary defensive
purposes, would facilitate each Fund's ability to protect principal,
which could serve as a significant benefit for investors.
The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that the Shares are listed and traded on the Exchange pursuant to the
initial and continued listing criteria in NYSE Arca Equities Rule
8.600. Except for the changes described above, all other
representations made in the Prior Release remain unchanged.\11\
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\11\ See note 4, supra. All terms referenced but not defined
herein are defined in the Prior Release.
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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 purpose of the Act. The Exchange believes the
proposed rule change is designed to allow the Fund to invest in
securities that would permit a Fund to better implement the Selection
Process as described in the Prior Release, and will enhance competition
among issues of Managed Fund Shares that invest in equity securities.
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 prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
The Exchange has asked the Commission to waive the 30-day operative
delay so that the proposal may become operative immediately upon
filing. The Commission believes that waiver of the 30-day operative
delay period is consistent with the protection of investors and the
public interest. The Commission notes that the proposal would allow the
Funds greater flexibility in seeking their investment objective of
protecting principal during unfavorable market conditions, which could
benefit investors and the public interest. Therefore, the Commission
designates the proposed rule change to be operative upon filing.\12\
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\12\ 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).
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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.
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-2015-88 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-2015-88. 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 information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEArca-2015-88 and should
be
[[Page 63855]]
submitted on or before November 12, 2015.
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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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-26676 Filed 10-20-15; 8:45 am]
BILLING CODE 8011-01-P
