Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change, as Modified by Amendment No. 1, To List and Trade Shares of the ForceShares Daily 4X US Market Futures Long Fund and ForceShares Daily 4X US Market Futures Short Fund Under Commentary .02 to NYSE Arca Equities Rule 8.200, 9625-9627 [2017-02442]

Download as PDF Federal Register / Vol. 82, No. 24 / Tuesday, February 7, 2017 / Notices notes that the proposed rule change will facilitate the listing and trading of additional types of Trust Issued Receipts based on oil prices and that will enhance competition among market participants, to the benefit of investors and the marketplace. 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 Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (a) By order approve or disapprove such proposed rule change; or (b) institute proceedings to determine whether the proposed rule change should be 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: Lhorne on DSK30JT082PROD with NOTICES Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule4comments@ sec.gov. Please include File Number SR– NYSEArca–2017–07 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–2017–07. 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 (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule VerDate Sep<11>2014 14:31 Feb 06, 2017 Jkt 241001 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–2017–07 and should be submitted on or before February 28, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–02445 Filed 2–6–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–79914; File No. SR– NYSEArca–2016–120] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change, as Modified by Amendment No. 1, To List and Trade Shares of the ForceShares Daily 4X US Market Futures Long Fund and ForceShares Daily 4X US Market Futures Short Fund Under Commentary .02 to NYSE Arca Equities Rule 8.200 February 1, 2017. I. Introduction On October 17, 2016, NYSE Arca, Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to list and trade shares 16 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00067 Fmt 4703 Sfmt 4703 9625 (‘‘Shares’’) of the ForceShares Daily 4X US Market Futures Long Fund (‘‘Fund’’ or ‘‘Long Fund’’) and ForceShares Daily 4X US Market Futures Short Fund (‘‘Fund’’ or ‘‘Short Fund’’ and, together with the Long Fund, the ‘‘Funds’’) under Commentary .02 to NYSE Arca Equities Rule 8.200. The proposed rule change was published for comment in the Federal Register on November 4, 2016.3 On December 14, 2016, pursuant to Section 19(b)(2) of the Act,4 the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.5 On December 22, 2016, the Exchange filed Amendment No. 1 to the proposed rule change, which replaced and superseded the proposed rule change as originally filed.6 The Commission has received no comments on the proposed rule change. This order institutes proceedings under Section 19(b)(2)(B) of the Act 7 to determine whether to approve or disapprove the proposed rule change. II. Exchange’s Description of the Proposal, as Modified by Amendment No. 1 The Exchange proposes to list and trade the Shares under Commentary .02 to NYSE Arca Equities Rule 8.200, which governs the listing and trading of Trust Issued Receipts on the Exchange. Each Fund is a commodity pool that is a series of the ForceShares Trust. ForceShares LLC will be the sponsor of the Funds (‘‘Sponsor’’). ALPS Distributors, Inc. will be the marketing agent for the Shares. U.S. Bank National Association will be the Funds’ custodian (‘‘Custodian’’) and will hold the Funds’ cash and cash equivalents. The Custodian will also be the registrar and transfer agent for the Shares. The Long Fund’s primary investment objective is to seek daily investment 3 See Securities Exchange Act Release No. 79201 (October 31, 2016), 81 FR 76977. 4 15 U.S.C. 78s(b)(2). 5 See Securities Exchange Act Release No. 79550, 81 FR 92892 (December 20, 2016). The Commission designated February 2, 2017, as the date by which it shall approve, disapprove, or institute proceedings to determine whether to disapprove the proposed rule change. 6 In Amendment No. 1, the Exchange: (a) Clarified the permissible investments of the Funds; (b) added that a creation basket may not differ in size from a redemption basket, and that basket sizes may be between 10,000 and 100,000 Shares; (c) modified when purchase orders may be rejected, when the right of redemption may be suspended, and when the redemption settlement date may be postponed; and (d) made various technical changes. Amendment No. 1 is available at: https:// www.sec.gov/comments/sr-nysearca-2016-120/ nysearca2016120-1442225-130027.pdf. 7 15 U.S.C. 78s(b)(2)(B). E:\FR\FM\07FEN1.SGM 07FEN1 9626 Federal Register / Vol. 82, No. 24 / Tuesday, February 7, 2017 / Notices Lhorne on DSK30JT082PROD with NOTICES results, before fees and expenses, that correspond to approximately four times (400%) the daily performance, and the Short Fund’s primary investment objective is to seek daily investment results, before fees and expenses, that correspond to approximately four times the inverse (¥400%) of the daily performance, of the closing settlement price for lead month (i.e., the ‘‘near month’’ or next-to-expire) Standard & Poor’s 500 Stock Price Index Futures contracts (‘‘Big S&P Contracts’’) that are traded on the Chicago Mercantile Exchange. Each Fund will not seek to achieve its primary investment objective over a period of time greater than a single day. Under normal market condition, each Fund will seek to achieve its primary investment objective by investing primarily in Big S&P Contracts such that daily changes in the Fund’s net asset value (‘‘NAV’’) are expected to closely track the changes, in the case of the Long Fund, or the inverse of the changes, in the case of the Short Fund, in the closing settlement price of the lead month Big S&P Contracts (‘‘Benchmark’’) on a leveraged basis. Each Fund will also invest in E-MiniTM S&P 500® Futures contracts (‘‘E-Minis’’ and, together with Big S&P Contracts, ‘‘Primary S&P Interests’’) to seek to achieve its primary investment objective where position limits prevent further purchases of Big S&P Contracts. Each Fund expects to apply approximately 10–25% of its portfolio toward obtaining exposure to futures contracts, all of which would be lead month or deferred month Primary S&P Interests. Each Fund may also invest in swap agreements (cleared and over-thecounter) referencing Primary S&P Interests or the S&P 500 Index, and over-the-counter forward contracts referencing Primary S&P Interests (‘‘Other S&P Interests’’). Each Fund may invest in Other S&P Interests in an amount up to 25% of its net assets. Each Fund may acquire or dispose of Stop Options on Primary S&P Interests in pursuing its secondary investment objective of recouping a small amount of a Fund’s losses that may result from large movements in the Benchmark. Stop Options are expected to average less than approximately 5% of each Fund’s portfolio.8 8 Not more than 10% of the net assets of each Fund in the aggregate invested in futures contracts or exchange-traded options contracts will consist of futures contracts or exchange-traded options contracts whose principal market is not a member of the Intermarket Surveillance Group or is a market with which the Exchange does not have a comprehensive surveillance sharing agreement. VerDate Sep<11>2014 14:31 Feb 06, 2017 Jkt 241001 On a day-to-day basis, each Fund will invest the remainder of its assets in money market funds, depository accounts with institutions with high quality credit ratings, or short-term debt instruments that have terms-to-maturity of less than 397 days and exhibit high quality credit profiles, including U.S. government securities and repurchase agreements (collectively, ‘‘Cash Equivalents’’). Cash Equivalents are expected to comprise approximately 70– 85% of each Fund’s portfolio.9 III. Proceedings To Determine Whether To Approve or Disapprove SR– NYSEArca–2016–120 and Grounds for Disapproval Under Consideration The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act 10 to determine whether the proposed rule change should be approved or disapproved. Institution of such proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, as described below, the Commission seeks and encourages interested persons to provide comments on the proposed rule change. Pursuant to Section 19(b)(2)(B) of the Act,11 the Commission is providing notice of the grounds for disapproval under consideration. The Commission is instituting proceedings to allow for additional analysis of the proposed rule change’s consistency with Section 6(b)(5) of the Act, which requires, among other things, that the rules of a national securities exchange be ‘‘designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade,’’ and ‘‘to protect investors and the public interest.’’ 12 IV. Procedure: Request for Written Comments The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the proposal. In particular, the Commission invites the written views of interested persons concerning whether the proposal is consistent with Section 9 For more information regarding the Funds and the Shares, see Amendment No. 1, supra note 6. 10 15 U.S.C. 78s(b)(2)(B). 11 Id. 12 15 U.S.C. 78f(b)(5). PO 00000 Frm 00068 Fmt 4703 Sfmt 4703 6(b)(5) or any other provision of the Act, or the rules and regulations thereunder. Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b–4, any request for an opportunity to make an oral presentation.13 Interested persons are invited to submit written data, views, and arguments regarding whether the proposal should be approved or disapproved by February 28, 2017. Any person who wishes to file a rebuttal to any other person’s submission must file that rebuttal by March 14, 2017. The Commission asks that commenters address the sufficiency of the Exchange’s statements in support of the proposal, which are set forth in Amendment No. 1,14 in addition to any other comments they may wish to submit about the proposed rule change. The Commission notes that the proposal sets forth certain conditions relating to the creation and redemption of baskets of Shares. In particular, under the proposal, ‘‘[t]he Sponsor may, in its discretion, suspend the right of redemption, or postpone the redemption settlement date with respect to a Fund . . . for such other period as the Sponsor determines to be necessary for the protection of a Fund’s Shareholders. . . .’’ 15 What are commenters’ views on the scope of this discretion with respect to redemptions? Is the discretion likely to have an effect on the arbitrage mechanisms and, if so, how? Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSEArca–2016–120 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange 13 Section 19(b)(2) of the Act, as amended by the Securities Acts Amendments of 1975, Public Law 94–29 (June 4, 1975), grants the Commission flexibility to determine what type of proceeding— either oral or notice and opportunity for written comments—is appropriate for consideration of a particular proposal by a self-regulatory organization. See Securities Acts Amendments of 1975, Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). 14 See supra note 6. 15 See Amendment No. 1, supra note 6, at 21. E:\FR\FM\07FEN1.SGM 07FEN1 Federal Register / Vol. 82, No. 24 / Tuesday, February 7, 2017 / Notices Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEArca–2016–120. 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 (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR– NYSEArca–2016–120 and should be submitted on or before February 28, 2017. Rebuttal comments should be submitted by March 14, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Eduardo A. Aleman, Assistant Secretary. BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Lhorne on DSK30JT082PROD with NOTICES Sunshine Act Meeting Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Public Law 94–409, that the Securities and Exchange Commission will hold a closed meeting on Thursday, February 9, 2017 at 2 p.m. Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the closed meeting. Certain CFR 200.30–3(a)(57). VerDate Sep<11>2014 14:31 Feb 06, 2017 Jkt 241001 Dated: February 2, 2017. Brent J. Fields, Secretary. BILLING CODE 8011–01–P DEPARTMENT OF STATE [Public Notice: 9873] Notice of Determinations; Culturally Significant Object Imported for Exhibition Determinations: ‘‘The Dutch Fleet Assembling Before the Four Days’ Battle’’ Exhibition Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), E.O. 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681, et seq.; 22 U.S.C. 6501 note, et seq.), Delegation of Authority No. 234 of October 1, 1999, Delegation of Authority No. 236–3 of August 28, 2000 (and, as appropriate, Delegation of Authority No. 257–1 of December 11, 2015), I hereby determine that the object to be included in the exhibition ‘‘The Dutch Fleet Assembling Before the Four Days’ Battle,’’ imported from abroad for temporary exhibition within the United States, is of cultural significance. The object is imported pursuant to a loan PO 00000 Frm 00069 Fmt 4703 Sfmt 4703 agreement with the foreign owner or custodian. I also determine that the exhibition or display of the exhibit object at The Metropolitan Museum of Art, New York, New York, from on or about March 1, 2017, until on or about March 1, 2018, and at possible additional exhibitions or venues yet to be determined, is in the national interest. I have ordered that Public Notice of these Determinations be published in the Federal Register. FOR FURTHER INFORMATION CONTACT: For further information, including an object list, contact the Office of Public Diplomacy and Public Affairs in the Office of the Legal Adviser, U.S. Department of State (telephone: 202– 632–6471; email: section2459@ state.gov). The mailing address is U.S. Department of State, L/PD, SA–5, Suite 5H03, Washington, DC 20522–0505. Alyson Grunder, Deputy Assistant Secretary for Policy, Bureau of Educational and Cultural Affairs, Department of State. [FR Doc. 2017–02436 Filed 2–6–17; 8:45 am] BILLING CODE 4710–05–P DEPARTMENT OF STATE [Public Notice: 9872] [FR Doc. 2017–02531 Filed 2–3–17; 11:15 am] SUMMARY: [FR Doc. 2017–02442 Filed 2–6–17; 8:45 am] 16 17 staff members who have an interest in the matters also may be present. The General Counsel of the Commission, or her designee, has certified that, in her opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) and 17 CFR 200.402(a)(3), (a)(5), (a)(7), (a)(9)(ii) and (a)(10), permit consideration of the scheduled matter at the closed meeting. Commissioner Stein, as duty officer, voted to consider the items listed for the closed meeting in closed session. The subject matter of the closed meeting will be: Institution and settlement of injunctive actions; Institution and settlement of administrative proceedings; Resolution of litigation claims; Litigation matters; and Other matters relating to enforcement proceedings. At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed; please contact Brent J. Fields from the Office of the Secretary at (202) 551–5400. 9627 Advisory Committee on International Economic Policy; Notice of Open Meeting The Advisory Committee on International Economic Policy (ACIEP) will meet from 2:00 until 5:00 p.m., on Tuesday, February 28, in Washington, DC at the State Department, 320 21st St. NW. The meeting will be hosted by the Acting Assistant Secretary of State for Economic and Business Affairs, Patricia M. Haslach, and Committee Chair Paul R. Charron. The ACIEP serves the U.S. government in a solely advisory capacity, and provides advice concerning topics in international economic policy. It is expected that during this meeting, the ACIEP subcommittee on sanctions policy and the Stakeholder Advisory Board will provide updates on their recent work. This meeting is open to the public, though seating is limited. Entry to the building is controlled. To obtain preclearance for entry, members of the public planning to attend must, no later than Tuesday, February 21, provide their full name and professional affiliation (if any) to Alan Krill by email: KrillA@state.gov. Requests for reasonable accommodation should also be made to Alan Krill before Tuesday, February 21. Requests made after that E:\FR\FM\07FEN1.SGM 07FEN1

Agencies

[Federal Register Volume 82, Number 24 (Tuesday, February 7, 2017)]
[Notices]
[Pages 9625-9627]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-02442]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79914; File No. SR-NYSEArca-2016-120]


Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting 
Proceedings To Determine Whether To Approve or Disapprove a Proposed 
Rule Change, as Modified by Amendment No. 1, To List and Trade Shares 
of the ForceShares Daily 4X US Market Futures Long Fund and ForceShares 
Daily 4X US Market Futures Short Fund Under Commentary .02 to NYSE Arca 
Equities Rule 8.200

February 1, 2017.

I. Introduction

    On October 17, 2016, NYSE Arca, Inc. (``NYSE Arca'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to list and trade shares (``Shares'') of the 
ForceShares Daily 4X US Market Futures Long Fund (``Fund'' or ``Long 
Fund'') and ForceShares Daily 4X US Market Futures Short Fund (``Fund'' 
or ``Short Fund'' and, together with the Long Fund, the ``Funds'') 
under Commentary .02 to NYSE Arca Equities Rule 8.200. The proposed 
rule change was published for comment in the Federal Register on 
November 4, 2016.\3\ On December 14, 2016, pursuant to Section 19(b)(2) 
of the Act,\4\ the Commission designated a longer period within which 
to approve the proposed rule change, disapprove the proposed rule 
change, or institute proceedings to determine whether to disapprove the 
proposed rule change.\5\ On December 22, 2016, the Exchange filed 
Amendment No. 1 to the proposed rule change, which replaced and 
superseded the proposed rule change as originally filed.\6\ The 
Commission has received no comments on the proposed rule change. This 
order institutes proceedings under Section 19(b)(2)(B) of the Act \7\ 
to determine whether to approve or disapprove 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. 79201 (October 31, 
2016), 81 FR 76977.
    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 79550, 81 FR 92892 
(December 20, 2016). The Commission designated February 2, 2017, as 
the date by which it shall approve, disapprove, or institute 
proceedings to determine whether to disapprove the proposed rule 
change.
    \6\ In Amendment No. 1, the Exchange: (a) Clarified the 
permissible investments of the Funds; (b) added that a creation 
basket may not differ in size from a redemption basket, and that 
basket sizes may be between 10,000 and 100,000 Shares; (c) modified 
when purchase orders may be rejected, when the right of redemption 
may be suspended, and when the redemption settlement date may be 
postponed; and (d) made various technical changes. Amendment No. 1 
is available at: https://www.sec.gov/comments/sr-nysearca-2016-120/nysearca2016120-1442225-130027.pdf.
    \7\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

II. Exchange's Description of the Proposal, as Modified by Amendment 
No. 1

    The Exchange proposes to list and trade the Shares under Commentary 
.02 to NYSE Arca Equities Rule 8.200, which governs the listing and 
trading of Trust Issued Receipts on the Exchange. Each Fund is a 
commodity pool that is a series of the ForceShares Trust. ForceShares 
LLC will be the sponsor of the Funds (``Sponsor''). ALPS Distributors, 
Inc. will be the marketing agent for the Shares. U.S. Bank National 
Association will be the Funds' custodian (``Custodian'') and will hold 
the Funds' cash and cash equivalents. The Custodian will also be the 
registrar and transfer agent for the Shares.
    The Long Fund's primary investment objective is to seek daily 
investment

[[Page 9626]]

results, before fees and expenses, that correspond to approximately 
four times (400%) the daily performance, and the Short Fund's primary 
investment objective is to seek daily investment results, before fees 
and expenses, that correspond to approximately four times the inverse 
(-400%) of the daily performance, of the closing settlement price for 
lead month (i.e., the ``near month'' or next-to-expire) Standard & 
Poor's 500 Stock Price Index Futures contracts (``Big S&P Contracts'') 
that are traded on the Chicago Mercantile Exchange. Each Fund will not 
seek to achieve its primary investment objective over a period of time 
greater than a single day.
    Under normal market condition, each Fund will seek to achieve its 
primary investment objective by investing primarily in Big S&P 
Contracts such that daily changes in the Fund's net asset value 
(``NAV'') are expected to closely track the changes, in the case of the 
Long Fund, or the inverse of the changes, in the case of the Short 
Fund, in the closing settlement price of the lead month Big S&P 
Contracts (``Benchmark'') on a leveraged basis. Each Fund will also 
invest in E-MiniTM S&P 500[supreg] Futures contracts (``E-
Minis'' and, together with Big S&P Contracts, ``Primary S&P 
Interests'') to seek to achieve its primary investment objective where 
position limits prevent further purchases of Big S&P Contracts. Each 
Fund expects to apply approximately 10-25% of its portfolio toward 
obtaining exposure to futures contracts, all of which would be lead 
month or deferred month Primary S&P Interests. Each Fund may also 
invest in swap agreements (cleared and over-the-counter) referencing 
Primary S&P Interests or the S&P 500 Index, and over-the-counter 
forward contracts referencing Primary S&P Interests (``Other S&P 
Interests''). Each Fund may invest in Other S&P Interests in an amount 
up to 25% of its net assets.
    Each Fund may acquire or dispose of Stop Options on Primary S&P 
Interests in pursuing its secondary investment objective of recouping a 
small amount of a Fund's losses that may result from large movements in 
the Benchmark. Stop Options are expected to average less than 
approximately 5% of each Fund's portfolio.\8\
---------------------------------------------------------------------------

    \8\ Not more than 10% of the net assets of each Fund in the 
aggregate invested in futures contracts or exchange-traded options 
contracts will consist of futures contracts or exchange-traded 
options contracts whose principal market is not a member of the 
Intermarket Surveillance Group or is a market with which the 
Exchange does not have a comprehensive surveillance sharing 
agreement.
---------------------------------------------------------------------------

    On a day-to-day basis, each Fund will invest the remainder of its 
assets in money market funds, depository accounts with institutions 
with high quality credit ratings, or short-term debt instruments that 
have terms-to-maturity of less than 397 days and exhibit high quality 
credit profiles, including U.S. government securities and repurchase 
agreements (collectively, ``Cash Equivalents''). Cash Equivalents are 
expected to comprise approximately 70-85% of each Fund's portfolio.\9\
---------------------------------------------------------------------------

    \9\ For more information regarding the Funds and the Shares, see 
Amendment No. 1, supra note 6.
---------------------------------------------------------------------------

III. Proceedings To Determine Whether To Approve or Disapprove SR-
NYSEArca-2016-120 and Grounds for Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section 
19(b)(2)(B) of the Act \10\ to determine whether the proposed rule 
change should be approved or disapproved. Institution of such 
proceedings is appropriate at this time in view of the legal and policy 
issues raised by the proposed rule change. Institution of proceedings 
does not indicate that the Commission has reached any conclusions with 
respect to any of the issues involved. Rather, as described below, the 
Commission seeks and encourages interested persons to provide comments 
on the proposed rule change.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

    Pursuant to Section 19(b)(2)(B) of the Act,\11\ the Commission is 
providing notice of the grounds for disapproval under consideration. 
The Commission is instituting proceedings to allow for additional 
analysis of the proposed rule change's consistency with Section 6(b)(5) 
of the Act, which requires, among other things, that the rules of a 
national securities exchange be ``designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade,'' and ``to protect investors and the public 
interest.'' \12\
---------------------------------------------------------------------------

    \11\ Id.
    \12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

IV. Procedure: Request for Written Comments

    The Commission requests that interested persons provide written 
submissions of their views, data, and arguments with respect to the 
issues identified above, as well as any other concerns they may have 
with the proposal. In particular, the Commission invites the written 
views of interested persons concerning whether the proposal is 
consistent with Section 6(b)(5) or any other provision of the Act, or 
the rules and regulations thereunder. Although there do not appear to 
be any issues relevant to approval or disapproval that would be 
facilitated by an oral presentation of views, data, and arguments, the 
Commission will consider, pursuant to Rule 19b-4, any request for an 
opportunity to make an oral presentation.\13\
---------------------------------------------------------------------------

    \13\ Section 19(b)(2) of the Act, as amended by the Securities 
Acts Amendments of 1975, Public Law 94-29 (June 4, 1975), grants the 
Commission flexibility to determine what type of proceeding--either 
oral or notice and opportunity for written comments--is appropriate 
for consideration of a particular proposal by a self-regulatory 
organization. See Securities Acts Amendments of 1975, Senate Comm. 
on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st 
Sess. 30 (1975).
---------------------------------------------------------------------------

    Interested persons are invited to submit written data, views, and 
arguments regarding whether the proposal should be approved or 
disapproved by February 28, 2017. Any person who wishes to file a 
rebuttal to any other person's submission must file that rebuttal by 
March 14, 2017. The Commission asks that commenters address the 
sufficiency of the Exchange's statements in support of the proposal, 
which are set forth in Amendment No. 1,\14\ in addition to any other 
comments they may wish to submit about the proposed rule change. The 
Commission notes that the proposal sets forth certain conditions 
relating to the creation and redemption of baskets of Shares. In 
particular, under the proposal, ``[t]he Sponsor may, in its discretion, 
suspend the right of redemption, or postpone the redemption settlement 
date with respect to a Fund . . . for such other period as the Sponsor 
determines to be necessary for the protection of a Fund's Shareholders. 
. . .'' \15\ What are commenters' views on the scope of this discretion 
with respect to redemptions? Is the discretion likely to have an effect 
on the arbitrage mechanisms and, if so, how?
---------------------------------------------------------------------------

    \14\ See supra note 6.
    \15\ See Amendment No. 1, supra note 6, at 21.
---------------------------------------------------------------------------

    Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2016-120 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange

[[Page 9627]]

Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2016-120. 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 (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEArca-2016-120 and should 
be submitted on or before February 28, 2017. Rebuttal comments should 
be submitted by March 14, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(57).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-02442 Filed 2-6-17; 8:45 am]
BILLING CODE 8011-01-P