Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Withdrawal of Proposed Rule Change to Adopt Limit Order Protection and Market Order Protection, 11850-11851 [2016-04907]
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Federal Register / Vol. 81, No. 44 / Monday, March 7, 2016 / Notices
asabaliauskas on DSK3SPTVN1PROD with NOTICES
8. Applicants submit that Congress
adopted section 22(e) to prevent
unreasonable, undisclosed or
unforeseen delays in the actual payment
of redemption proceeds. Applicants
state that allowing redemption
payments for Creation Units of a Global
Fund to be made within 15 calendar
days would not be inconsistent with the
spirit and intent of section 22(e).19
Applicants state that each Global Fund’s
statement of additional information
(‘‘SAI’’) will disclose those local
holidays (over the period of at least one
year following the date of the SAI), if
any, that are expected to prevent the
delivery of redemption proceeds in
seven calendar days and the maximum
number of days, up to 15 calendar days,
needed to deliver the proceeds for that
Global Fund. Applicants are not seeking
relief from section 22(e) with respect to
Global Funds that do not effect
redemptions of Creation Units in kind.
Sections 17(a)(1) and (2) of the Act
9. Section 17(a)(1) and (2) of the Act
generally prohibit an affiliated person of
a registered investment company, or an
affiliated person of such a person
(‘‘second tier affiliate’’), from selling any
security to or purchasing any security
from the company. Section 2(a)(3) of the
Act defines ‘‘affiliated person’’ to
include any person directly or indirectly
owning, controlling, or holding with
power to vote 5% or more of the
outstanding voting securities of the
other person and any person directly or
indirectly controlling, controlled by, or
under common control with, the other
person. Section 2(a)(9) of the Act
defines ‘‘control’’ of a fund as ‘‘the
power to exercise a controlling
influence over the management or
policies’’ of the fund and provides that
a control relationship will be presumed
where one person owns more than 25%
of another person’s voting securities.
The Funds may be deemed to be
controlled by an Adviser and hence
affiliated persons of each other. In
addition, the Funds may be deemed to
be under common control with any
other registered investment company (or
series thereof) advised by an Adviser (an
‘‘Affiliated Fund’’).
10. Applicants request an exemption
from section 17(a) under sections 6(c)
and 17(b) to permit in-kind purchases
and redemptions of Creation Units from
the Funds by persons that are affiliated
persons or second tier affiliates of the
Funds solely by virtue of one or more
requires that most securities transactions be settled
within three business days of the trade date.
19 Certain countries in which a Global Fund may
invest have historically had settlement periods of
up to 15 calendar days.
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18:37 Mar 04, 2016
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of the following: (a) Holding 5% or
more, or more than 25%, of the
outstanding Shares of one or more
Funds; (b) an affiliation with a person
with an ownership interest described in
(a); or (c) holding 5% or more, or more
than 25%, of the shares of one or more
Affiliated Funds.
11. Applicants assert that no useful
purpose would be served by prohibiting
the affiliated persons described above
from making in-kind purchases or inkind redemptions of Shares of a Fund in
Creation Units. Both the deposit
procedures for in-kind purchases of
Creation Units and the redemption
procedures for in-kind redemptions will
be effected in exactly the same manner
for all purchases and redemptions. The
valuation of the Deposit Instruments
and Redemption Instruments will be
made in the same manner, and in the
same manner as the Fund’s Portfolio
Positions, regardless of the identity of
the purchaser or redeemer. Except with
respect to cash determined in
accordance with the procedures
described in section I.G.1. of the
application, Deposit Instruments and
Redemption Instruments will be the
same for all purchasers and redeemers.
Therefore, applicants state that the inkind purchases and redemptions will
afford no opportunity for the specified
affiliated persons of a Fund to effect a
transaction detrimental to other holders
of Shares of that Fund. Applicants do
not believe that in-kind purchases and
redemptions will result in abusive selfdealing or overreaching of the Fund.
Applicant’s Conditions
Applicants agree that any order of the
Commission granting the requested
relief will be subject to the following
conditions:
1. As long as the Funds operate in
reliance on the requested order, the
Shares of the Funds will be listed on a
Listing Exchange.
2. Neither the Trust nor any Fund will
be advertised or marketed as an openend investment company or a mutual
fund. Any advertising material that
describes the purchase or sale of
Creation Units or refers to redeemability
will prominently disclose that the
Shares are not individually redeemable
and that owners of the Shares may
acquire those Shares from the Fund and
tender those Shares for redemption to
the Fund in Creation Units only.
3. The Web site for the Funds, which
is and will be publicly accessible at no
charge, will contain on a per Share
basis, for each Fund, the prior Business
Day’s NAV and the market closing price
or Bid/Ask Price, and a calculation of
the premium or discount of the market
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closing price or Bid/Ask Price against
such NAV.
4. On each Business Day, before
commencement of trading in Shares on
the Listing Exchange, the Fund will
disclose on its Web site the identities
and quantities of the Portfolio Positions
held by the Fund that will form the
basis for the Fund’s calculation of NAV
at the end of the Business Day.
5. The Adviser or any Fund SubAdviser, directly or indirectly, will not
cause any Authorized Participant (or
any investor on whose behalf an
Authorized Participant may transact
with the Fund) to acquire any Deposit
Instrument for the Fund through a
transaction in which the Fund could not
engage directly.
6. The requested relief to permit ETF
operations will expire on the effective
date of any Commission rule under the
Act that provides relief permitting the
operation of actively managed
exchange-traded funds.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–04913 Filed 3–4–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–77264; File No. SR–PHLX–
2016–12]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Withdrawal of Proposed Rule Change
to Adopt Limit Order Protection and
Market Order Protection
March 1, 2016.
On January 21, 2016, NASDAQ OMX
PHLX LLC (the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 1 and
Rule 19b–4 thereunder,2 a proposed rule
change to adopt a Limit Order
Protection and a Market Order
Protection feature for members
accessing PSX. The proposed rule
change was published for comment in
the Federal Register on February 5,
2016.3 The Commission received no
comment letters on the proposal. On
February 26, 2016, the Exchange
withdrew the proposed rule change.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 77007
(February 1, 2016), 81 FR 6314.
4 17 CFR 200.30–3(a)(12).
2 17
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Federal Register / Vol. 81, No. 44 / Monday, March 7, 2016 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.4
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–04907 Filed 3–4–16; 8:45 am]
BILLING CODE 8011–01–P
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–77269; File No. SR–FINRA–
2016–010]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing of a
Proposed Rule Change To Adopt
FINRA Rule 4554 (Alternative Trading
Systems—Recording and Reporting
Requirements of Order and Execution
Information for NMS Stocks)
March 1, 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 February
29, 2016, Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) 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 FINRA. 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
FINRA is proposing to adopt FINRA
Rule 4554 to require alternative trading
systems (‘‘ATSs’’) to submit additional
order information to FINRA.
The text of the proposed rule change
is available on FINRA’s Web site at
https://www.finra.org, at the principal
office of FINRA and at the
Commission’s Public Reference Room.
asabaliauskas on DSK3SPTVN1PROD with NOTICES
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
FINRA 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. FINRA has prepared
summaries, set forth in sections A, B,
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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18:37 Mar 04, 2016
FINRA is proposing to adopt FINRA
Rule 4554 to require ATSs to report
additional order information to FINRA.
While ATSs already submit order
information to FINRA that is required
by the Order Audit Trail System
(‘‘OATS’’) rules, there is additional
order information not currently required
to be reported to OATS, such as order
re-pricing events (e.g., changes to an
order that is pegged to the National Best
Bid or Offer (‘‘NBBO’’)) and order
display and reserve size information,
that, if available to FINRA, would
greatly enhance FINRA’s ability to
perform certain order-based
surveillance, including layering, quote
spoofing and mid-point pricing
manipulation surveillance, by enabling
FINRA to more fully reconstruct an
ATS’s order book. FINRA therefore is
proposing to require ATSs to report
additional ATS-specific data elements
in existing OATS reports for orders in
NMS stocks. ATSs would be required to
report this information to FINRA
consistent with current OATS reporting
requirements (no later than 8:00 a.m.
Eastern Time on the calendar day
following receipt of the order in an
electronic form as prescribed by
FINRA).
As described in more detail in Item C,
FINRA initially solicited comment on
this proposal in Regulatory Notice 14–
51.3 Based on concerns raised by
commenters about potential burdens
associated with the original proposal,
FINRA has revised the original proposal
to narrow some aspects of the order
information required to be reported
while still enhancing FINRA’s ability to
reconstruct an ATS’s order book for
surveillance purposes. The proposal sets
forth four categories of reporting
requirements: (1) Data to be reported by
all ATSs at the time of order receipt; (2)
data to be reported by all ATSs at the
time of order execution; (3) data to be
reported by ATSs that display
subscriber orders; and (4) data specific
to ATSs that are registered as ADF
Trading Centers. The proposed
requirements would apply to order and
execution information for NMS stocks.4
3 See
4 See
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Regulatory Notice 14–51 (November 2014).
17 CFR 242.600(b)(47).
Frm 00114
Fmt 4703
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11851
Proposed Order Receipt Reporting
Requirements Applicable to All ATSs
That Trade NMS Stocks
The first category of proposed changes
applies to all ATSs when reporting the
receipt of an order to OATS.
Specifically, the proposed rule would
require each ATS to indicate on all
orders received whether it displays
subscriber orders outside of the ATS
(other than to alternative trading system
employees).5 This requirement will
enable FINRA to distinguish between
ATSs that display orders outside the
ATS, either to subscribers or through
consolidated quote data (‘‘display
ATS’’) and ATSs that do not display
orders outside the ATS (‘‘non-display
ATS’’).6 A display ATS would also
indicate whether the order book is
displayed to subscribers only, or
distributed for publication in the
consolidated quotation data. Each ATS
would also be required to identify
whether it is an ADF Trading Center as
defined in FINRA Rule 6220. An ATS
would make these determinations on a
general basis, but would provide this
information through flags submitted on
every order event. Each ATS also would
be required to identify whether a
specific order can be routed away from
the ATS for execution, and whether
there are any counter-party restrictions
on the order. ATSs would also be
required to provide FINRA with a
unique identifier representing the
specific order type other than market
and limit orders that have no other
special handling instructions. In order
for FINRA to map the identifier to a
specific order type, an ATS will also be
required to provide FINRA with a list of
all of its order types twenty days before
such order types become effective, and
if the ATS makes any subsequent
changes to its order types, twenty days
before such changes become effective.7
5 The proposed requirements apply to any
alternative trading system, as defined in Rule
300(a)(1) of SEC Regulation ATS, that has filed a
Form ATS with the SEC and is subject to FINRA’s
OATS and equity trade reporting rules. See 17 CFR
242.300(a)(1).
For purposes of this rule, the term ‘‘order’’
includes a broker-dealer’s proprietary quotes that
are transmitted to an ATS.
6 If an ATS meets the applicable volume
thresholds, it is required to make its best bid and
best offer available for publication in the
consolidated quotation data. See 17 CFR
242.301(b)(3).
7 In a Regulatory Notice announcing the
implementation of this proposal, FINRA will
provide a deadline prior to the implementation date
by which current ATSs must initially submit lists
of their existing order types to FINRA.
FINRA notes that, under current Rule 301(b)(2)(ii)
of Regulation ATS, ATSs are required to file an
amendment on Form ATS at least 20 calendar days
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]]>Agencies
[Federal Register Volume 81, Number 44 (Monday, March 7, 2016)]
[Notices]
[Pages 11850-11851]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-04907]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-77264; File No. SR-PHLX-2016-12]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Withdrawal of Proposed Rule Change to Adopt Limit Order Protection and
Market Order Protection
March 1, 2016.
On January 21, 2016, NASDAQ OMX PHLX LLC (the ``Exchange'') filed
with the Securities and Exchange Commission (the ``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 \1\
and Rule 19b-4 thereunder,\2\ a proposed rule change to adopt a Limit
Order Protection and a Market Order Protection feature for members
accessing PSX. The proposed rule change was published for comment in
the Federal Register on February 5, 2016.\3\ The Commission received no
comment letters on the proposal. On February 26, 2016, the Exchange
withdrew the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 77007 (February 1,
2016), 81 FR 6314.
\4\ 17 CFR 200.30-3(a)(12).
[[Page 11851]]
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For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\4\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-04907 Filed 3-4-16; 8:45 am]
BILLING CODE 8011-01-P
