Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change Relating to the Listing and Trading of Shares of the Direxion Daily Crude Oil Bull 3x Shares and Direxion Daily Crude Oil Bear 3x Shares Under NYSE Arca Equities Rule 8.200, 9608-9613 [2017-02444]
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9608
Federal Register / Vol. 82, No. 24 / Tuesday, February 7, 2017 / Notices
[FR Doc. 2017–01933 Filed 2–6–17; 8:45 am]
BILLING CODE 7590–01–P
POSTAL SERVICE
International Product Change—ADP 1
Contracts
Postal ServiceTM.
ACTION: Notice.
AGENCY:
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add
Alternative Delivery Provider 1 product
to the Competitive Products List.
DATES: Effective date: February 7, 2017.
FOR FURTHER INFORMATION CONTACT:
Lauren Schuttloffel, (202) 268–4198.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642, on January 30, 2017, it filed with
the Postal Regulatory Commission a
Request of the United States Postal
Service to Add Alternative Delivery
Provider 1 Contracts to the Competitive
Products List, and Notice of Filing
(Under Seal) of Contract and
Application for Non-Public Treatment
of Materials Filed Under Seal.
Documents are available at
www.prc.gov, Docket Nos. MC2017–82
and CP2017–111.
SUMMARY:
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 list and
trade the shares of the following under
NYSE Arca Equities Rule 8.200,
Commentary .02 (‘‘Trust Issued
Receipts’’): Direxion Daily Crude Oil
Bull 3x Shares and Direxion Daily
Crude Oil Bear 3x Shares. 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.
BILLING CODE 7710–P
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.
SECURITIES AND EXCHANGE
COMMISSION
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
Stanley F. Mires,
Attorney, Federal Requirements.
[FR Doc. 2017–02439 Filed 2–6–17; 8:45 am]
[Release No. 34–79916; File No. SR–
NYSEArca–2017–05]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of Proposed
Rule Change Relating to the Listing
and Trading of Shares of the Direxion
Daily Crude Oil Bull 3x Shares and
Direxion Daily Crude Oil Bear 3x
Shares Under NYSE Arca Equities Rule
8.200
Lhorne on DSK30JT082PROD with NOTICES
February 1, 2017.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on January
23, 2017, NYSE Arca, Inc. (the
‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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1. Purpose
The Exchange proposes to list and
trade shares (‘‘Shares’’) of the following
under NYSE Arca Equities Rule 8.200,
Commentary .02, which governs the
listing and trading of Trust Issued
Receipts: Direxion Daily Crude Oil Bull
3x Shares and Direxion Daily Crude Oil
Bear 3x Shares (each a ‘‘Fund’’ and,
collectively, the ‘‘Funds’’).4
Each Fund is a series of the Direxion
Shares ETF Trust II (the ‘‘Trust’’), a
Delaware statutory trust.5 The Trust and
4 Commentary .02 to NYSE Arca Equities Rule
8.200 applies to Trust Issued Receipts that invest
in ‘‘Financial Instruments.’’ The term ‘‘Financial
Instruments,’’ as defined in Commentary .02(b)(4) to
NYSE Arca Equities Rule 8.200, means any
combination of investments, including cash;
securities; options on securities and indices; futures
contracts; options on futures contracts; forward
contracts; equity caps, collars, and floors; and swap
agreements.
5 The Trust is registered under the Securities Act
of 1933. On December 14, 2016, the Trust filed with
PO 00000
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Sfmt 4703
the Funds are managed and controlled
by Direxion Asset Management, LLC
(the ‘‘Sponsor’’). The Sponsor is
registered as a commodity pool operator
(‘‘CPO’’) with the Commodity Futures
Trading Commission (‘‘CFTC’’) and is a
member of the National Futures
Association (‘‘NFA’’).6
In its capacity as the Custodian for the
Funds, Bank of New York Mellon (the
‘‘Custodian’’) may hold the Funds’
investment assets and cash and cash
equivalents pursuant to a custodial
agreement. The Custodian is also the
transfer agent for the Shares. In
addition, in its capacity as
Administrator for the Funds, U.S.
Bancorp Fund Services, LLC (the
‘‘Administrator’’) prepares and files
certain regulatory filings on behalf of
the Funds.
Foreside Fund Services, LLC serves as
the distributor of the Shares (the
‘‘Distributor’’). The Distributor is a
broker-dealer registered with the
Commission under the Securities
Exchange Act of 1934 and a member of
the Financial Industry Regulatory
Authority (‘‘FINRA’’). The Trust offers
Shares of the Funds for sale through the
Distributor in ‘‘Creation Units’’, as
described below. The Distributor will
also assist the Sponsor and
administrator with certain functions and
duties relating to distribution and
marketing.
Direxion Daily Crude Oil Bull 3x Shares
According to the Registration
Statement, the investment objective of
the Fund is to seek, on a daily basis,
investment results that correspond
(before fees and expenses) to a multiple
three times (3x ) of the daily
performance of the Bloomberg WTI
Crude Oil SubindexSM, a subindex of
the Bloomberg Commodity IndexSM (the
the Commission a registration statement on Form
S–1 under the Securities Act of 1933 (15 U.S.C. 77a)
(‘‘Securities Act’’) relating to the Funds (File No.
333–215091) (the ‘‘Registration Statement’’). The
description of the operation of the Trust and the
Funds herein is based, in part, on the Registration
Statement.
6 The Commission has previously approved
listing of Trust Issued Receipts based on oil on the
American Stock Exchange (now known as NYSE
MKT LLC) and NYSE Arca. See, e.g., Securities
Exchange Act Release Nos. 53582 (March 31, 2006),
71 FR 17510 (April 6, 2006) (SR–Amex–2005–127)
(order approving listing and trading of shares of
United States Oil Fund, LP); 57188 (January 23,
2008), 73 FR 5607 (January 30, 2008) (SR–Amex–
2007–70) (order approving listing and trading of
shares of United States Heating Oil Fund, LP and
United States Gasoline Fund, LP); 61881 (April 9,
2010), 75 FR 20028 (April 16, 2010) (SR–
NYSEArca–2010–14) (order approving listing and
trading of shares of United States Brent Oil Fund,
LP); and 62527 (July 19, 2010), 75 FR 43606 (July
26, 2010) (order approving listing and trading of
shares of United States Commodity Index Fund).
E:\FR\FM\07FEN1.SGM
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Federal Register / Vol. 82, No. 24 / Tuesday, February 7, 2017 / Notices
‘‘Benchmark’’).7 The Benchmark is
intended to reflect the performance of
crude oil as measured by the price of
West Texas Intermediate crude oil
futures contracts traded on the New
York Mercantile Exchange (the
‘‘NYMEX,’’ which is part of the Chicago
Mercantile Exchange (‘‘CME’’)),
including the impact of rolling,8
without regard to income earned on
cash positions. The Fund will not be
directly linked to the ‘‘spot’’ price of
crude oil. The Fund does not seek to
achieve its investment objective over a
period greater than a single trading
day.9
Direxion Daily Crude Oil Bear 3x Shares
According to the Registration
Statement, the investment objective of
the Fund is to seek, on a daily basis,
investment results that correspond
(before fees and expenses) to three times
(3x ) the inverse of the performance of
the Benchmark which, as noted, is
intended to reflect the performance of
crude oil as measured by the price of
West Texas Intermediate crude oil
futures contracts traded on the NYMEX.
The Fund will not be directly linked to
the ‘‘spot’’ price of crude oil. The Fund
does not seek to achieve its investment
objective over a period greater than a
single trading day.10
Lhorne on DSK30JT082PROD with NOTICES
Investment Strategies of the Funds
In seeking to achieve the Funds’
investment objectives, the Sponsor will
utilize a mathematical approach to
determine the type, quantity and mix of
investment positions that the Sponsor
believes, in combination, should
produce daily returns consistent with
the Funds’ respective objectives. The
Sponsor would rely on a pre-determined
model to generate orders that result in
repositioning the Funds’ investments in
accordance with their respective
investment objectives.
7 According to the Registration Statement, the
Bloomberg WTI Crude Oil SubindexSM is a ‘‘rolling
index,’’ which means that the Index does not take
physical possession of any commodities. See also
note 8, infra.
8 According to the Registration Statement, futures
contracts held by the Funds near expiration are
generally closed out and replaced by contracts with
a later expiration as required by the Bloomberg WTI
Crude Oil SubindexSM. This process is referred to
as ‘‘rolling.’’ The Funds do not intend to hold
futures contracts through expiration, but instead to
‘‘roll’’ their respective positions.
9 According to the Registration Statement, a single
trading day is measured from the time a Fund
calculates its NAV to the time of a Fund’s next NAV
calculation.
10 According to the Registration Statement, the
return of a Fund for a period longer than a single
trading day is the result of its return for each day
compounded over the period and thus will usually
differ from a Fund’s multiple times the return of the
Benchmark for the same period.
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The Funds will seek to achieve their
investment objectives by investing,
under normal market conditions,11
substantially all of its assets in oil
futures contracts traded in the U.S. and
listed options on such contracts
(together, the ‘‘Futures Contracts’’). The
Funds’ investments in Futures Contracts
will be used to produce economically
‘‘leveraged’’ or ‘‘inverse leveraged’’
investment results for the Funds.
In the event position or accountability
limits are reached with respect to
Futures Contracts, each Fund may
obtain exposure to the Benchmark
through investment in swap
transactions and forward contracts
referencing such Benchmark or other
benchmarks the Sponsor believes
should be closely correlated to the
performance of each Fund’s benchmark
such as the Energy Select Sector Index
or the S&P Oil & Gas Exploration &
Production Select Industry Index (the
‘‘Financial Instruments’’). To the extent
that the Trust invests in Financial
Instruments, it would first make use of
exchange-traded Financial Instruments,
if available. If an investment in
exchange-traded Financial Instruments
is unavailable, then the Trust would
invest in Financial Instruments that
clear through derivatives clearing
organizations that satisfy the Trust’s
criteria, if available. If an investment in
cleared Financial Instruments is
unavailable, then the Trust would invest
in other Financial Instruments,
including uncleared Financial
Instruments in the over-the-counter
(‘‘OTC’’) market. The Funds may also
invest in Financial Instruments if the
market for a specific futures contract
experiences emergencies (e.g., natural
disaster, terrorist attack or an act of God)
or disruptions (e.g., a trading halt or a
flash crash) that prevent or make it
impractical for a Fund to obtain the
appropriate amount of investment
exposure using Futures Contracts.
The Funds will invest such that each
Fund’s exposure to the Benchmark will
consist substantially of Futures
Contracts. The Funds’ remaining net
assets, which may be substantial, may
be invested in cash or cash equivalents
and/or U.S. Treasury securities or other
high credit quality, short-term fixedincome or similar securities (such as
shares of money market funds and
11 The term ‘‘normal market conditions’’ includes,
but is not limited to, the absence of trading halts
in the applicable financial markets generally;
operational issues (e.g., systems failure) causing
dissemination of inaccurate market information; or
force majeure type events such as natural or
manmade disaster, act of God, armed conflict, act
of terrorism, riot or labor disruption or any similar
intervening circumstance.
PO 00000
Frm 00051
Fmt 4703
Sfmt 4703
9609
collateralized repurchase agreements)
for direct investment or as collateral for
the Funds’ investments.
The Funds do not intend to hold
Futures Contracts through expiration,
but instead to ‘‘roll’’ their respective
positions. When the market for these
contracts is such that the prices are
higher in the more distant delivery
months than in the nearer delivery
months, the sale during the course of
the ‘‘rolling process’’ of the more nearby
contract would take place at a price that
is lower than the price of the more
distant contract. This pattern of higher
futures prices for longer expiration
Futures Contracts is referred to as
‘‘contango.’’ Alternatively, when the
market for these contracts is such that
the prices are higher in the nearer
months than in the more distant
months, the sale during the course of
the ‘‘rolling process’’ of the more nearby
contract would take place at a price that
is higher than the price of the more
distant contract. This pattern of higher
futures prices for shorter expiration
futures contracts is referred to as
‘‘backwardation.’’ The presence of
contango in certain Futures Contracts at
the time of rolling could adversely affect
a Fund with long positions, and
positively affect a Fund with short
positions. Similarly, the presence of
backwardation in certain futures
contracts at the time of rolling such
contracts could adversely affect a Fund
with short positions and positively
affect a Fund with long positions.
According to the Registration
Statement, U.S. future [sic] exchanges
have established accountability levels
and position limits on the maximum net
long or net short Futures Contracts in
commodity interests that any person or
group of persons under common trading
control (other than as a hedge, which an
investment by a Fund is not) may hold,
own or control. These levels and
position limits apply to the Futures
Contracts that each Fund would invest
in to meet its investment objective. In
addition to accountability levels and
position limits, U.S. futures exchanges
also set daily price fluctuation limits on
Futures Contracts. The daily price
fluctuation limit establishes the
maximum amount that the price of a
Futures Contract may vary either up or
down from the previous day’s
settlement price.
The Funds do not expect to have
leveraged exposure greater than three
times (3x) the Funds’ net assets. Thus,
the maximum margin held at a Future
Commission Merchant would not
exceed three times the margin
requirement for either Fund.
E:\FR\FM\07FEN1.SGM
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Federal Register / Vol. 82, No. 24 / Tuesday, February 7, 2017 / Notices
Net Asset Value
According to the Registration
Statement, a Fund’s per Share NAV will
be calculated by taking the current
market value of its total assets;
subtracting any liabilities; and dividing
that total by the total number of
outstanding Shares. Each Fund’s NAV
will be calculated on each Business Day
that the New York Stock Exchange LLC
(‘‘NYSE’’) is open. Each Fund will
compute its NAVs at 2:30 p.m. Eastern
Time (‘‘E.T.’’), which is the designated
closing time of the crude oil futures
market on NYMEX,12 or if the NYSE
closes earlier than 2:30 p.m. E.T., each
Fund will compute its NAVs at the time
the NYSE closes. Each Fund’s NAV will
be calculated only once each trading
day. Each Fund’s daily NAV may be
found at www.direxioninvestments.com.
In calculating the NAV of a Fund, the
settlement value of a Fund’s nonexchange traded Financial Instruments
will be determined by applying the
then-current prices for the applicable
reference asset to the terms of such
Fund’s non-exchange traded Financial
Instruments. However, in the event that
an underlying reference asset is not
trading due to the operation of daily
limits or otherwise, the Sponsor may in
its sole discretion choose to fair value
the reference asset in order to value a
Fund’s non-exchange traded Financial
Instruments for purposes of the NAV
calculation. Such fair value prices
would generally be determined based on
available inputs about the current value
of the underlying reference assets and
would be based on principles that the
Sponsor deems fair and equitable so
long as such principles are consistent
with normal industry standards.
Futures Contracts traded on a U.S.
exchange will be calculated at their then
current market value, which is based
upon the settlement or the last traded
price before the NAV calculation time,
for that particular Futures Contract
traded on the applicable exchange on
the date with respect to which NAV is
being determined; provided, that if a
Futures Contract traded on an exchange
could not be liquidated on such day,
due to the operation of daily limits or
other rules of the exchange upon which
that position is traded or otherwise, the
Sponsor may in its sole discretion
choose to determine a fair value price as
the basis for determining the market
value of such position for such day.
Cash and cash equivalents will be
valued on the basis of broker quotes or
valuations provided by a third party
pricing service.
12 The
normal trading hours of the NYMEX are
10:00 a.m. E.T. to 2:30 p.m. E.T.
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Collateralized repurchase agreements
will be valued based on price quotations
or other equivalent indications of value
provided by a third-party pricing
service.
Indicative Fund Value
In order to provide updated
information relating to the Funds for use
by investors and market professionals,
the Exchange will calculate an updated
‘‘Indicative Fund Value’’ (‘‘IFV’’). The
IFV will be calculated by using the prior
day’s closing net assets of a Fund as a
base and updating throughout the
Exchange’s Core Trading Session of 9:30
a.m. E.T. to 4:00 p.m. E.T. changes in
the value of the Futures Contracts and
Financial Instruments held by a Fund.
The IFV will be disseminated on a per
Share basis every 15 seconds during the
Exchange’s Core Trading Session.
The IFV will be available through online information services.
Creation and Redemption of Shares
According to the Registration
Statement, each Fund intends to create
and redeem Shares in one or more
Creation Units.13 A creation transaction
generally takes place when an
Authorized Participant deposits
generally a specified amount of cash in
exchange for a specified number of
Creation Units. Similarly, Shares can be
redeemed only in Creation Units for
cash. The prices at which creations and
redemptions occur would be based on
the next calculation of the NAV after an
order is received.
Only Authorized Participants may
purchase and redeem Creation Units.
An Authorized Participant is an entity
that has entered into an Authorized
Participant Agreement with the Trust
and the Sponsor.
Creation Procedures
On any ‘‘Business Day’’, an
Authorized Participant may place an
order with the Distributor to create one
or more Creation Units. For purposes of
processing both purchase and
redemption orders, a ‘‘Business Day’’
means any day other than a day when
any of the NYSE, NYSE Arca, the
Chicago Board Options Exchange,
Incorporated (‘‘CBOE’’), CBOE Futures
Exchange (‘‘CFE’’), the Chicago
Mercantile Exchange (‘‘CME’’)
(including the Chicago Board of Trade
and NYMEX) or the Intercontinental
Exchange (‘‘ICE’’) or other exchange
material to the valuation or operation of
the Funds is closed for regular trading.
13 A Creation Unit is a block of 50,000 Shares of
a Fund. Except when aggregated in Creation Units,
the Shares are not redeemable securities.
PO 00000
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Sfmt 4703
Purchase orders must be placed by 2:30
p.m. E.T. or earlier if the NYSE closes
before the cut-off time.
Redemption Procedures
According to the Registration
Statement, the procedures by which an
Authorized Participant can redeem one
or more Creation Units mirror the
procedures for the creation of Creation
Units. On any Business Day, an
Authorized Participant may place an
order with the Distributor to redeem one
or more Creation Units.
The redemption procedures allow
Authorized Participants to redeem
Creation Units. Individual shareholders
may not redeem directly from a Fund.
By placing a redemption order, an
Authorized Participant agrees to deliver
the Creation Units to be redeemed
through the Depository Trust
Company’s (‘‘DTC’’) book entry system
to the applicable Fund not later than
noon E.T. on the first Business Day
immediately following the redemption
order date (T+1). The Sponsor reserves
the right to extend the deadline for a
Fund to receive the Creation Units
required for settlement up to the third
Business Day following the redemption
order date (T+3).
Availability of Information
The NAV for the Funds’ Shares will
be disseminated daily to all market
participants at the same time. The
intraday, closing prices, and settlement
prices of the Futures Contracts will be
readily available from the applicable
futures exchange Web sites, automated
quotation systems, published or other
public sources, or major market data
vendors.
Complete real-time data for the
Futures Contracts is available by
subscription through on-line
information services. ICE Futures U.S.
and NYMEX also provide delayed
futures and options on futures
information on current and past trading
sessions and market news free of charge
on their respective Web sites. The
specific contract specifications for
Futures Contracts would also be
available on such Web sites, as well as
other financial informational sources.
Quotation and last-sale information
regarding the Shares will be
disseminated through the facilities of
the Consolidated Tape Association
(‘‘CTA’’). Quotation information for cash
equivalents and OTC swaps may be
obtained from brokers and dealers who
make markets in such instruments.
Quotation information for exchangetraded swaps will be available from the
applicable exchange and major market
vendors. Intra-day price information for
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Federal Register / Vol. 82, No. 24 / Tuesday, February 7, 2017 / Notices
forward contracts will be available from
major market data vendors. The IFV will
be available through on-line information
services.
In addition, the Funds’ Web site,
www.direxioninvestments.com, will
display the applicable end of day
closing NAV. The daily holdings of each
Fund will be available on the Funds’
Web site before 9:30 a.m. E.T.14 Each
Fund’s total portfolio composition will
be disclosed each Business Day that
NYSE Arca is open for trading, on the
Funds’ Web site. The Web site
disclosure of portfolio holdings will be
made daily and will include, as
applicable, (i) the composite value of
the total portfolio, (ii) the name,
percentage weighting, and value of the
Futures Contracts and Financial
Instruments, (iii) the name and value of
each Treasury security and cash
equivalent, and (iv) the amount of cash
held in each Fund’s portfolio. The
Funds’ Web site will be publicly
accessible at no charge. The spot price
of oil also is available on a 24-hour basis
from major market data vendors.
Trading Halts
Lhorne on DSK30JT082PROD with NOTICES
With respect to trading halts, the
Exchange may consider all relevant
factors in exercising its discretion to
halt or suspend trading in the Shares of
a Fund.15 Trading in Shares of a Fund
will be halted if the circuit breaker
parameters in NYSE Arca Equities Rule
7.12 have been reached. Trading also
may be halted because of market
conditions or for reasons that, in the
view of the Exchange, make trading in
the Shares inadvisable.
The Exchange may halt trading during
the day in which an interruption to the
dissemination of the IFV or the value of
the Benchmark occurs. If the
interruption to the dissemination of the
IFV, the value of the [sic] or the value
of the Benchmark persists past the
trading day in which it occurred, the
Exchange will halt trading no later than
the beginning of the trading day
following the interruption. In addition,
if the Exchange becomes aware that the
NAV with respect to the Shares is not
disseminated to all market participants
at the same time, it will halt trading in
the Shares until such time as the NAV
is available to all market participants.
14 The Web site disclosure of portfolio holdings
will be made daily and will include, as applicable,
(i) the composite value of the total portfolio, (ii) the
name, percentage weighting, and value of the
Futures Contracts and Financial Instruments, (iii)
the name and value of each Treasury security and
cash equivalent, and (iv) the amount of cash held
in each Fund’s portfolio.
15 See NYSE Arca Equities Rule 7.12.
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Trading Rules
The Exchange deems the Shares to be
equity securities, thus rendering trading
in the Shares subject to the Exchange’s
existing rules governing the trading of
equity securities. Shares will trade on
the NYSE Arca Marketplace from 4 a.m.
to 8 p.m. E.T. in accordance with NYSE
Arca Equities Rule 7.34 (Early, Core,
and Late Trading Sessions). The
Exchange has appropriate rules to
facilitate transactions in the Shares
during all trading sessions. As provided
in NYSE Arca Equities Rule 7.6, the
minimum price variation (‘‘MPV’’) for
quoting and entry of orders in equity
securities traded on the NYSE Arca
Marketplace is $0.01, with the exception
of securities that are priced less than
$1.00 for which the MPV for order entry
is $0.0001.
The Shares will conform to the initial
and continued listing criteria under
NYSE Arca Equities Rule 8.200. The
trading of the Shares will be subject to
NYSE Arca Equities Rule 8.200,
Commentary .02(e), which sets forth
certain restrictions on Equity Trading
Permit (‘‘ETP’’) Holders acting as
registered Market Makers in Trust
Issued Receipts to facilitate
surveillance. The Exchange represents
that, for initial and continued listing,
each Fund will be in compliance with
Rule 10A–3 16 under the Act, as
provided by NYSE Arca Equities Rule
5.3. A minimum of 100,000 Shares of
each Fund will be outstanding at the
commencement of trading on the
Exchange.
Surveillance
The Exchange represents that trading
in the Shares of each Fund will be
subject to the existing trading
surveillances administered by the
Exchange, as well as cross-market
surveillances administered by FINRA on
behalf of the Exchange, which are
designed to detect violations of
Exchange rules and applicable federal
securities laws.17 The Exchange
represents that these procedures are
adequate to properly monitor Exchange
trading of the Shares in all trading
sessions and to deter and detect
violations of Exchange rules and federal
securities laws applicable to trading on
the Exchange.
The surveillances referred to above
generally focus on detecting securities
trading outside their normal patterns,
CFR 240.10A–3.
conducts cross-market surveillances on
behalf of the Exchange pursuant to a regulatory
services agreement. The Exchange is responsible for
FINRA’s performance under this regulatory services
agreement.
9611
which could be indicative of
manipulative or other violative activity.
When such situations are detected,
surveillance analysis follows and
investigations are opened, where
appropriate, to review the behavior of
all relevant parties for all relevant
trading violations.
The Exchange or FINRA, on behalf of
the Exchange, or both, will
communicate as needed regarding
trading in the Shares and certain
Futures Contracts with other markets
and other entities that are members of
the Intermarket Surveillance Group
(‘‘ISG’’), and the Exchange or FINRA, on
behalf of the Exchange, or both, may
obtain trading information regarding
trading in the Shares and certain
Futures Contracts from such markets
and other entities. In addition, the
Exchange may obtain information
regarding trading in the Shares and
certain Futures Contracts from markets
and other entities that are members of
ISG or with which the Exchange has in
place a comprehensive surveillance
sharing agreement (‘‘CSSA’’).18
Not more than 10% of the net assets
of a Fund in the aggregate invested in
Futures Contracts shall consist of
Futures Contracts whose principal
market is not a member of the ISG or is
a market with which the Exchange does
not have a CSSA.
In addition, the Exchange also has a
general policy prohibiting the
distribution of material, non-public
information by its employees.
All statements and representations
made in this filing regarding (a) the
description of the portfolios of the
Funds or the Benchmark, and (b)
limitations on portfolio holdings,
reference assets or the Benchmark shall
constitute continued listing
requirements for listing the Shares on
the Exchange.
The issuer has represented to the
Exchange that it will advise the
Exchange of any failure by the Funds to
comply with the continued listing
requirements, and, pursuant to its
obligations under Section 19(g)(1) of the
Act, the Exchange will monitor for
compliance with the continued listing
requirements. If a Fund is not in
compliance with the applicable listing
requirements, the Exchange will
commence delisting procedures under
NYSE Arca Equities Rule 5.5(m).
16 17
17 FINRA
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Frm 00053
Fmt 4703
Sfmt 4703
18 For a list of the current members of ISG, see
www.isgportal.org. The Exchange notes that not all
components of a Fund may trade on markets that
are members of ISG or with which the Exchange has
in place a CSSA.
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9612
Federal Register / Vol. 82, No. 24 / Tuesday, February 7, 2017 / Notices
Information Bulletin
Prior to the commencement of
trading, the Exchange will inform its
ETP Holders in an Information Bulletin
of the special characteristics and risks
associated with trading the Shares.
Specifically, the Information Bulletin
will discuss the following: (1) The risks
involved in trading the Shares during
the Early and Late Trading Sessions
when an updated IFV will not be
calculated or publicly disseminated; (2)
the procedures for purchases and
redemptions of Shares in Creation Units
(and that Shares are not individually
redeemable); (3) NYSE Arca Equities
Rule 9.2(a), which imposes a duty of
due diligence on its ETP Holders to
learn the essential facts relating to every
customer prior to trading the Shares; (4)
how information regarding the IFV is
disseminated; (5) that a static IFV will
be disseminated, between the close of
trading on the ICE Futures U.S. and
NYMEX and the close of the NYSE Arca
Core Trading Session; (6) the
requirement that ETP Holders deliver a
prospectus to investors purchasing
newly issued Shares prior to or
concurrently with the confirmation of a
transaction; and (7) trading information.
Prior to the commencement of
trading, the Exchange will inform its
ETP Holders of the suitability
requirements of NYSE Arca Equities
Rule 9.2(a) in an Information Bulletin.
Specifically, ETP Holders will be
reminded in the Information Bulletin
that, in recommending transactions in
the Shares, they must have a reasonable
basis to believe that (1) the
recommendation is suitable for a
customer given reasonable inquiry
concerning the customer’s investment
objectives, financial situation, needs,
and any other information known by
such ETP Holder, and (2) the customer
can evaluate the special characteristics,
and is able to bear the financial risks, of
an investment in the Shares. In
connection with the suitability
obligation, the Information Bulletin will
also provide that ETP Holders must
make reasonable efforts to obtain the
following information: (1) The
customer’s financial status; (2) the
customer’s tax status; (3) the customer’s
investment objectives; and (4) such
other information used or considered to
be reasonable by such ETP Holder or
registered representative in making
recommendations to the customer.
Further, the Exchange states that
FINRA has implemented increased sales
practice and customer margin
requirements for FINRA members
applicable to inverse, leveraged and
inverse leveraged exchange-traded
VerDate Sep<11>2014
14:31 Feb 06, 2017
Jkt 241001
securities (which include the Shares)
and options on such securities, as
described in FINRA Regulatory Notices
09–31 (June 2009), 09–53 (August 2009),
and 09–65 (November 2009)
(collectively, ‘‘FINRA Regulatory
Notices’’). ETP Holders that carry
customer accounts will be required to
follow the FINRA guidance set forth in
these notices. As noted above, each
Fund will seek, on a daily basis,
investment results that correspond
(before fees and expenses) to 3x or ¥3x,
respectively, the performance of the
Benchmark). Over a period of time in
excess of one day, the cumulative
percentage increase or decrease in the
NAV of the Shares of a Fund may
diverge significantly from a multiple or
inverse multiple of the cumulative
percentage decrease or increase in the
Benchmark due to a compounding
effect.
In addition, the Information Bulletin
will advise ETP Holders, prior to the
commencement of trading, of the
prospectus delivery requirements
applicable to a Fund. The Information
Bulletin will also discuss any
exemptive, no-action, and interpretive
relief granted by the Commission from
any rules under the Act. In addition, the
Information Bulletin will reference that
a Fund is subject to various fees and
expenses described in the Registration
Statement. The Information Bulletin
will also reference that the CFTC has
regulatory jurisdiction over the trading
of Futures Contracts traded on U.S.
markets.
The Information Bulletin will also
disclose the trading hours of the Shares
that the NAV for the Shares will be
calculated after 2:30 p.m. E.T. each
trading day. The Information Bulletin
will disclose that information about the
Shares will be publicly available on the
Funds’ Web site.
2. Statutory Basis
The basis under the Act for this
proposed rule change is the requirement
under Section 6(b)(5) 19 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.
The Exchange believes that the
proposed rule change is designed to
prevent fraudulent and manipulative
acts and practices and to protect
investors and the public interest in that
the Shares will be listed and traded on
19 15
PO 00000
U.S.C. 78f(b)(5).
Frm 00054
Fmt 4703
Sfmt 4703
the Exchange pursuant to the initial and
continued listing criteria in NYSE Arca
Equities Rule 8.200. The Exchange has
in place surveillance procedures that are
adequate to properly monitor trading in
the Shares in all trading sessions and to
deter and detect violations of Exchange
rules and applicable federal securities
laws. The Exchange or FINRA, on behalf
of the Exchange, or both, will
communicate as needed regarding
trading in the Shares, and certain
Futures Contracts with other markets
and other entities that are members of
the ISG, and the Exchange or FINRA, on
behalf of the Exchange, or both, may
obtain trading information regarding
trading in the Shares and certain
Futures Contracts from such markets
and other entities. In addition, the
Exchange may obtain information
regarding trading in the Shares and
certain Futures Contracts from markets
and other entities that are members of
ISG or with which the Exchange has in
place a CSSA. Not more than 10% of the
net assets of the Fund in the aggregate
invested in Futures Contracts shall
consist of Futures Contracts whose
principal market is not a member of the
ISG or is a market with which the
Exchange does not have a CSSA. The
intraday, closing prices, and settlement
prices of the Futures Contracts will be
readily available from the applicable
futures exchange Web sites, automated
quotation systems, published or other
public sources, or major market data
vendors Web site or on-line information
services.
Complete real-time data for the
Futures Contracts is available by
subscription from on-line information
services. ICE Futures U.S. and NYMEX
also provide delayed futures
information on current and past trading
sessions and market news free of charge
on their Web sites. The specific contract
specifications for Futures Contracts
would also be available on such Web
sites, as well as other financial
informational sources. Information
regarding options will be available from
the applicable exchanges or major
market data vendors. Quotation and
last-sale information regarding the
Shares will be disseminated through the
facilities of the CTA. In addition, the
Funds’ Web site, will display the
applicable end of day closing NAV.
Each Fund’s total portfolio composition
will be disclosed each Business Day, on
the Funds’ Web site. The Web site
disclosure of portfolio holdings will be
made daily and will include, as
applicable, (i) the composite value of
the total portfolio, (ii) the name,
percentage weighting, and value of the
E:\FR\FM\07FEN1.SGM
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Federal Register / Vol. 82, No. 24 / Tuesday, February 7, 2017 / Notices
Lhorne on DSK30JT082PROD with NOTICES
Futures Contracts and Financial
Instruments, (iii) the name and value of
each Treasury security and cash
equivalent, and (iv) the amount of cash
held in each Fund’s portfolio.
Moreover, prior to the commencement
of trading, the Exchange will inform its
Equity Trading Permit Holders in an
Information Bulletin of the special
characteristics and risks associated with
trading the Shares and of the suitability
requirements of NYSE Arca Equities
Rule 9.2(a). The Information Bulletin
will advise ETP Holders, prior to the
commencement of trading, of the
prospectus delivery requirements
applicable to a Fund. The Information
Bulletin will also discuss any
exemptive, no-action, and interpretive
relief granted by the Commission from
any rules under the Act. In addition, the
Information Bulletin will reference that
a Fund is subject to various fees and
expenses described in the Registration
Statement. The Information Bulletin
will also reference that the CFTC has
regulatory jurisdiction over the trading
of Futures Contracts traded on U.S.
markets. The Information Bulletin will
also disclose the trading hours of the
Shares and that the NAV for the Shares
will be calculated after 2:30 p.m. E.T.
each trading day. The Information
Bulletin will disclose that information
about the Shares will be publicly
available on the Funds’ Web site.
Trading in Shares of a Fund will be
halted if the circuit breaker parameters
in NYSE Arca Equities Rule 7.12 have
been reached or because of market
conditions or for reasons that, in the
view of the Exchange, make trading in
the Shares inadvisable.
The proposed rule change is designed
to perfect the mechanism of a free and
open market and, in general, to protect
investors and the public interest in that
it will facilitate the listing and trading
of additional types of Trust Issued
Receipts based on oil prices that will
enhance competition among market
participants, to the benefit of investors
and the marketplace. As noted above,
the Exchange has in place surveillance
procedures that are adequate to properly
monitor trading in the Shares in all
trading sessions and to deter and detect
violations of Exchange rules and
applicable federal securities laws.
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
notes that the proposed rule change will
facilitate the listing and trading of
VerDate Sep<11>2014
14:31 Feb 06, 2017
Jkt 241001
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:
9613
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–2017–05 and should be
submitted on or before February 28,
2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–02444 Filed 2–6–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–79915; File No. SR–OCC–
2017–801]
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–2017–05 on the subject line.
Self-Regulatory Organizations; The
Options Clearing Corporation; Notice
of Filing of Advance Notice
Concerning The Options Clearing
Corporation’s Margin Coverage During
Times of Increased Volatility
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–2017–05. 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
Pursuant to Section 806(e)(1) of Title
VIII of the Dodd-Frank Wall Street
Reform and Consumer Protection Act,
entitled the Payment, Clearing, and
Settlement Supervision Act of 2010
(‘‘Payment, Clearing and Settlement
Supervision Act’’) 1 and Rule 19b–
4(n)(1)(i) under the Securities Exchange
Act of 1934 (‘‘Act’’),2 notice is hereby
given that on January 4, 2017, The
Options Clearing Corporation (‘‘OCC’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) an
advance notice described in Items I, II
and III below, which Items have been
prepared by OCC. The Commission is
publishing this notice to solicit
PO 00000
Frm 00055
Fmt 4703
Sfmt 4703
February 1, 2016.
20 17
CFR 200.30–3(a)(12).
U.S.C. 5465(e)(1).
2 17 CFR 240.19b–4(n)(1)(i).
1 12
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]]>Agencies
[Federal Register Volume 82, Number 24 (Tuesday, February 7, 2017)]
[Notices]
[Pages 9608-9613]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-02444]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-79916; File No. SR-NYSEArca-2017-05]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change Relating to the Listing and Trading of Shares
of the Direxion Daily Crude Oil Bull 3x Shares and Direxion Daily Crude
Oil Bear 3x Shares Under NYSE Arca Equities Rule 8.200
February 1, 2017.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on January 23, 2017, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') filed with the Securities and Exchange Commission (the
``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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to list and trade the shares of the following
under NYSE Arca Equities Rule 8.200, Commentary .02 (``Trust Issued
Receipts''): Direxion Daily Crude Oil Bull 3x Shares and Direxion Daily
Crude Oil Bear 3x Shares. 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 Exchange proposes to list and trade shares (``Shares'') of the
following under NYSE Arca Equities Rule 8.200, Commentary .02, which
governs the listing and trading of Trust Issued Receipts: Direxion
Daily Crude Oil Bull 3x Shares and Direxion Daily Crude Oil Bear 3x
Shares (each a ``Fund'' and, collectively, the ``Funds'').\4\
---------------------------------------------------------------------------
\4\ Commentary .02 to NYSE Arca Equities Rule 8.200 applies to
Trust Issued Receipts that invest in ``Financial Instruments.'' The
term ``Financial Instruments,'' as defined in Commentary .02(b)(4)
to NYSE Arca Equities Rule 8.200, means any combination of
investments, including cash; securities; options on securities and
indices; futures contracts; options on futures contracts; forward
contracts; equity caps, collars, and floors; and swap agreements.
---------------------------------------------------------------------------
Each Fund is a series of the Direxion Shares ETF Trust II (the
``Trust''), a Delaware statutory trust.\5\ The Trust and the Funds are
managed and controlled by Direxion Asset Management, LLC (the
``Sponsor''). The Sponsor is registered as a commodity pool operator
(``CPO'') with the Commodity Futures Trading Commission (``CFTC'') and
is a member of the National Futures Association (``NFA'').\6\
---------------------------------------------------------------------------
\5\ The Trust is registered under the Securities Act of 1933. On
December 14, 2016, the Trust filed with the Commission a
registration statement on Form S-1 under the Securities Act of 1933
(15 U.S.C. 77a) (``Securities Act'') relating to the Funds (File No.
333-215091) (the ``Registration Statement''). The description of the
operation of the Trust and the Funds herein is based, in part, on
the Registration Statement.
\6\ The Commission has previously approved listing of Trust
Issued Receipts based on oil on the American Stock Exchange (now
known as NYSE MKT LLC) and NYSE Arca. See, e.g., Securities Exchange
Act Release Nos. 53582 (March 31, 2006), 71 FR 17510 (April 6, 2006)
(SR-Amex-2005-127) (order approving listing and trading of shares of
United States Oil Fund, LP); 57188 (January 23, 2008), 73 FR 5607
(January 30, 2008) (SR-Amex-2007-70) (order approving listing and
trading of shares of United States Heating Oil Fund, LP and United
States Gasoline Fund, LP); 61881 (April 9, 2010), 75 FR 20028 (April
16, 2010) (SR-NYSEArca-2010-14) (order approving listing and trading
of shares of United States Brent Oil Fund, LP); and 62527 (July 19,
2010), 75 FR 43606 (July 26, 2010) (order approving listing and
trading of shares of United States Commodity Index Fund).
---------------------------------------------------------------------------
In its capacity as the Custodian for the Funds, Bank of New York
Mellon (the ``Custodian'') may hold the Funds' investment assets and
cash and cash equivalents pursuant to a custodial agreement. The
Custodian is also the transfer agent for the Shares. In addition, in
its capacity as Administrator for the Funds, U.S. Bancorp Fund
Services, LLC (the ``Administrator'') prepares and files certain
regulatory filings on behalf of the Funds.
Foreside Fund Services, LLC serves as the distributor of the Shares
(the ``Distributor''). The Distributor is a broker-dealer registered
with the Commission under the Securities Exchange Act of 1934 and a
member of the Financial Industry Regulatory Authority (``FINRA''). The
Trust offers Shares of the Funds for sale through the Distributor in
``Creation Units'', as described below. The Distributor will also
assist the Sponsor and administrator with certain functions and duties
relating to distribution and marketing.
Direxion Daily Crude Oil Bull 3x Shares
According to the Registration Statement, the investment objective
of the Fund is to seek, on a daily basis, investment results that
correspond (before fees and expenses) to a multiple three times (3x )
of the daily performance of the Bloomberg WTI Crude Oil Subindex\SM\, a
subindex of the Bloomberg Commodity Index\SM\ (the
[[Page 9609]]
``Benchmark'').\7\ The Benchmark is intended to reflect the performance
of crude oil as measured by the price of West Texas Intermediate crude
oil futures contracts traded on the New York Mercantile Exchange (the
``NYMEX,'' which is part of the Chicago Mercantile Exchange (``CME'')),
including the impact of rolling,\8\ without regard to income earned on
cash positions. The Fund will not be directly linked to the ``spot''
price of crude oil. The Fund does not seek to achieve its investment
objective over a period greater than a single trading day.\9\
---------------------------------------------------------------------------
\7\ According to the Registration Statement, the Bloomberg WTI
Crude Oil Subindex\SM\ is a ``rolling index,'' which means that the
Index does not take physical possession of any commodities. See also
note 8, infra.
\8\ According to the Registration Statement, futures contracts
held by the Funds near expiration are generally closed out and
replaced by contracts with a later expiration as required by the
Bloomberg WTI Crude Oil Subindex\SM\. This process is referred to as
``rolling.'' The Funds do not intend to hold futures contracts
through expiration, but instead to ``roll'' their respective
positions.
\9\ According to the Registration Statement, a single trading
day is measured from the time a Fund calculates its NAV to the time
of a Fund's next NAV calculation.
---------------------------------------------------------------------------
Direxion Daily Crude Oil Bear 3x Shares
According to the Registration Statement, the investment objective
of the Fund is to seek, on a daily basis, investment results that
correspond (before fees and expenses) to three times (3x ) the inverse
of the performance of the Benchmark which, as noted, is intended to
reflect the performance of crude oil as measured by the price of West
Texas Intermediate crude oil futures contracts traded on the NYMEX. The
Fund will not be directly linked to the ``spot'' price of crude oil.
The Fund does not seek to achieve its investment objective over a
period greater than a single trading day.\10\
---------------------------------------------------------------------------
\10\ According to the Registration Statement, the return of a
Fund for a period longer than a single trading day is the result of
its return for each day compounded over the period and thus will
usually differ from a Fund's multiple times the return of the
Benchmark for the same period.
---------------------------------------------------------------------------
Investment Strategies of the Funds
In seeking to achieve the Funds' investment objectives, the Sponsor
will utilize a mathematical approach to determine the type, quantity
and mix of investment positions that the Sponsor believes, in
combination, should produce daily returns consistent with the Funds'
respective objectives. The Sponsor would rely on a pre-determined model
to generate orders that result in repositioning the Funds' investments
in accordance with their respective investment objectives.
The Funds will seek to achieve their investment objectives by
investing, under normal market conditions,\11\ substantially all of its
assets in oil futures contracts traded in the U.S. and listed options
on such contracts (together, the ``Futures Contracts''). The Funds'
investments in Futures Contracts will be used to produce economically
``leveraged'' or ``inverse leveraged'' investment results for the
Funds.
---------------------------------------------------------------------------
\11\ The term ``normal market conditions'' includes, but is not
limited to, the absence of trading halts in the applicable financial
markets generally; operational issues (e.g., systems failure)
causing dissemination of inaccurate market information; or force
majeure type events such as natural or manmade disaster, act of God,
armed conflict, act of terrorism, riot or labor disruption or any
similar intervening circumstance.
---------------------------------------------------------------------------
In the event position or accountability limits are reached with
respect to Futures Contracts, each Fund may obtain exposure to the
Benchmark through investment in swap transactions and forward contracts
referencing such Benchmark or other benchmarks the Sponsor believes
should be closely correlated to the performance of each Fund's
benchmark such as the Energy Select Sector Index or the S&P Oil & Gas
Exploration & Production Select Industry Index (the ``Financial
Instruments''). To the extent that the Trust invests in Financial
Instruments, it would first make use of exchange-traded Financial
Instruments, if available. If an investment in exchange-traded
Financial Instruments is unavailable, then the Trust would invest in
Financial Instruments that clear through derivatives clearing
organizations that satisfy the Trust's criteria, if available. If an
investment in cleared Financial Instruments is unavailable, then the
Trust would invest in other Financial Instruments, including uncleared
Financial Instruments in the over-the-counter (``OTC'') market. The
Funds may also invest in Financial Instruments if the market for a
specific futures contract experiences emergencies (e.g., natural
disaster, terrorist attack or an act of God) or disruptions (e.g., a
trading halt or a flash crash) that prevent or make it impractical for
a Fund to obtain the appropriate amount of investment exposure using
Futures Contracts.
The Funds will invest such that each Fund's exposure to the
Benchmark will consist substantially of Futures Contracts. The Funds'
remaining net assets, which may be substantial, may be invested in cash
or cash equivalents and/or U.S. Treasury securities or other high
credit quality, short-term fixed-income or similar securities (such as
shares of money market funds and collateralized repurchase agreements)
for direct investment or as collateral for the Funds' investments.
The Funds do not intend to hold Futures Contracts through
expiration, but instead to ``roll'' their respective positions. When
the market for these contracts is such that the prices are higher in
the more distant delivery months than in the nearer delivery months,
the sale during the course of the ``rolling process'' of the more
nearby contract would take place at a price that is lower than the
price of the more distant contract. This pattern of higher futures
prices for longer expiration Futures Contracts is referred to as
``contango.'' Alternatively, when the market for these contracts is
such that the prices are higher in the nearer months than in the more
distant months, the sale during the course of the ``rolling process''
of the more nearby contract would take place at a price that is higher
than the price of the more distant contract. This pattern of higher
futures prices for shorter expiration futures contracts is referred to
as ``backwardation.'' The presence of contango in certain Futures
Contracts at the time of rolling could adversely affect a Fund with
long positions, and positively affect a Fund with short positions.
Similarly, the presence of backwardation in certain futures contracts
at the time of rolling such contracts could adversely affect a Fund
with short positions and positively affect a Fund with long positions.
According to the Registration Statement, U.S. future [sic]
exchanges have established accountability levels and position limits on
the maximum net long or net short Futures Contracts in commodity
interests that any person or group of persons under common trading
control (other than as a hedge, which an investment by a Fund is not)
may hold, own or control. These levels and position limits apply to the
Futures Contracts that each Fund would invest in to meet its investment
objective. In addition to accountability levels and position limits,
U.S. futures exchanges also set daily price fluctuation limits on
Futures Contracts. The daily price fluctuation limit establishes the
maximum amount that the price of a Futures Contract may vary either up
or down from the previous day's settlement price.
The Funds do not expect to have leveraged exposure greater than
three times (3x) the Funds' net assets. Thus, the maximum margin held
at a Future Commission Merchant would not exceed three times the margin
requirement for either Fund.
[[Page 9610]]
Net Asset Value
According to the Registration Statement, a Fund's per Share NAV
will be calculated by taking the current market value of its total
assets; subtracting any liabilities; and dividing that total by the
total number of outstanding Shares. Each Fund's NAV will be calculated
on each Business Day that the New York Stock Exchange LLC (``NYSE'') is
open. Each Fund will compute its NAVs at 2:30 p.m. Eastern Time
(``E.T.''), which is the designated closing time of the crude oil
futures market on NYMEX,\12\ or if the NYSE closes earlier than 2:30
p.m. E.T., each Fund will compute its NAVs at the time the NYSE closes.
Each Fund's NAV will be calculated only once each trading day. Each
Fund's daily NAV may be found at www.direxioninvestments.com.
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\12\ The normal trading hours of the NYMEX are 10:00 a.m. E.T.
to 2:30 p.m. E.T.
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In calculating the NAV of a Fund, the settlement value of a Fund's
non-exchange traded Financial Instruments will be determined by
applying the then-current prices for the applicable reference asset to
the terms of such Fund's non-exchange traded Financial Instruments.
However, in the event that an underlying reference asset is not trading
due to the operation of daily limits or otherwise, the Sponsor may in
its sole discretion choose to fair value the reference asset in order
to value a Fund's non-exchange traded Financial Instruments for
purposes of the NAV calculation. Such fair value prices would generally
be determined based on available inputs about the current value of the
underlying reference assets and would be based on principles that the
Sponsor deems fair and equitable so long as such principles are
consistent with normal industry standards.
Futures Contracts traded on a U.S. exchange will be calculated at
their then current market value, which is based upon the settlement or
the last traded price before the NAV calculation time, for that
particular Futures Contract traded on the applicable exchange on the
date with respect to which NAV is being determined; provided, that if a
Futures Contract traded on an exchange could not be liquidated on such
day, due to the operation of daily limits or other rules of the
exchange upon which that position is traded or otherwise, the Sponsor
may in its sole discretion choose to determine a fair value price as
the basis for determining the market value of such position for such
day.
Cash and cash equivalents will be valued on the basis of broker
quotes or valuations provided by a third party pricing service.
Collateralized repurchase agreements will be valued based on price
quotations or other equivalent indications of value provided by a
third-party pricing service.
Indicative Fund Value
In order to provide updated information relating to the Funds for
use by investors and market professionals, the Exchange will calculate
an updated ``Indicative Fund Value'' (``IFV''). The IFV will be
calculated by using the prior day's closing net assets of a Fund as a
base and updating throughout the Exchange's Core Trading Session of
9:30 a.m. E.T. to 4:00 p.m. E.T. changes in the value of the Futures
Contracts and Financial Instruments held by a Fund.
The IFV will be disseminated on a per Share basis every 15 seconds
during the Exchange's Core Trading Session.
The IFV will be available through on-line information services.
Creation and Redemption of Shares
According to the Registration Statement, each Fund intends to
create and redeem Shares in one or more Creation Units.\13\ A creation
transaction generally takes place when an Authorized Participant
deposits generally a specified amount of cash in exchange for a
specified number of Creation Units. Similarly, Shares can be redeemed
only in Creation Units for cash. The prices at which creations and
redemptions occur would be based on the next calculation of the NAV
after an order is received.
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\13\ A Creation Unit is a block of 50,000 Shares of a Fund.
Except when aggregated in Creation Units, the Shares are not
redeemable securities.
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Only Authorized Participants may purchase and redeem Creation
Units. An Authorized Participant is an entity that has entered into an
Authorized Participant Agreement with the Trust and the Sponsor.
Creation Procedures
On any ``Business Day'', an Authorized Participant may place an
order with the Distributor to create one or more Creation Units. For
purposes of processing both purchase and redemption orders, a
``Business Day'' means any day other than a day when any of the NYSE,
NYSE Arca, the Chicago Board Options Exchange, Incorporated (``CBOE''),
CBOE Futures Exchange (``CFE''), the Chicago Mercantile Exchange
(``CME'') (including the Chicago Board of Trade and NYMEX) or the
Intercontinental Exchange (``ICE'') or other exchange material to the
valuation or operation of the Funds is closed for regular trading.
Purchase orders must be placed by 2:30 p.m. E.T. or earlier if the NYSE
closes before the cut-off time.
Redemption Procedures
According to the Registration Statement, the procedures by which an
Authorized Participant can redeem one or more Creation Units mirror the
procedures for the creation of Creation Units. On any Business Day, an
Authorized Participant may place an order with the Distributor to
redeem one or more Creation Units.
The redemption procedures allow Authorized Participants to redeem
Creation Units. Individual shareholders may not redeem directly from a
Fund. By placing a redemption order, an Authorized Participant agrees
to deliver the Creation Units to be redeemed through the Depository
Trust Company's (``DTC'') book entry system to the applicable Fund not
later than noon E.T. on the first Business Day immediately following
the redemption order date (T+1). The Sponsor reserves the right to
extend the deadline for a Fund to receive the Creation Units required
for settlement up to the third Business Day following the redemption
order date (T+3).
Availability of Information
The NAV for the Funds' Shares will be disseminated daily to all
market participants at the same time. The intraday, closing prices, and
settlement prices of the Futures Contracts will be readily available
from the applicable futures exchange Web sites, automated quotation
systems, published or other public sources, or major market data
vendors.
Complete real-time data for the Futures Contracts is available by
subscription through on-line information services. ICE Futures U.S. and
NYMEX also provide delayed futures and options on futures information
on current and past trading sessions and market news free of charge on
their respective Web sites. The specific contract specifications for
Futures Contracts would also be available on such Web sites, as well as
other financial informational sources. Quotation and last-sale
information regarding the Shares will be disseminated through the
facilities of the Consolidated Tape Association (``CTA''). Quotation
information for cash equivalents and OTC swaps may be obtained from
brokers and dealers who make markets in such instruments. Quotation
information for exchange-traded swaps will be available from the
applicable exchange and major market vendors. Intra-day price
information for
[[Page 9611]]
forward contracts will be available from major market data vendors. The
IFV will be available through on-line information services.
In addition, the Funds' Web site, www.direxioninvestments.com, will
display the applicable end of day closing NAV. The daily holdings of
each Fund will be available on the Funds' Web site before 9:30 a.m.
E.T.\14\ Each Fund's total portfolio composition will be disclosed each
Business Day that NYSE Arca is open for trading, on the Funds' Web
site. The Web site disclosure of portfolio holdings will be made daily
and will include, as applicable, (i) the composite value of the total
portfolio, (ii) the name, percentage weighting, and value of the
Futures Contracts and Financial Instruments, (iii) the name and value
of each Treasury security and cash equivalent, and (iv) the amount of
cash held in each Fund's portfolio. The Funds' Web site will be
publicly accessible at no charge. The spot price of oil also is
available on a 24-hour basis from major market data vendors.
---------------------------------------------------------------------------
\14\ The Web site disclosure of portfolio holdings will be made
daily and will include, as applicable, (i) the composite value of
the total portfolio, (ii) the name, percentage weighting, and value
of the Futures Contracts and Financial Instruments, (iii) the name
and value of each Treasury security and cash equivalent, and (iv)
the amount of cash held in each Fund's portfolio.
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Trading Halts
With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares of a Fund.\15\ Trading in Shares of a Fund will
be halted if the circuit breaker parameters in NYSE Arca Equities Rule
7.12 have been reached. Trading also may be halted because of market
conditions or for reasons that, in the view of the Exchange, make
trading in the Shares inadvisable.
---------------------------------------------------------------------------
\15\ See NYSE Arca Equities Rule 7.12.
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The Exchange may halt trading during the day in which an
interruption to the dissemination of the IFV or the value of the
Benchmark occurs. If the interruption to the dissemination of the IFV,
the value of the [sic] or the value of the Benchmark persists past the
trading day in which it occurred, the Exchange will halt trading no
later than the beginning of the trading day following the interruption.
In addition, if the Exchange becomes aware that the NAV with respect to
the Shares is not disseminated to all market participants at the same
time, it will halt trading in the Shares until such time as the NAV is
available to all market participants.
Trading Rules
The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. Shares will trade on
the NYSE Arca Marketplace from 4 a.m. to 8 p.m. E.T. in accordance with
NYSE Arca Equities Rule 7.34 (Early, Core, and Late Trading Sessions).
The Exchange has appropriate rules to facilitate transactions in the
Shares during all trading sessions. As provided in NYSE Arca Equities
Rule 7.6, the minimum price variation (``MPV'') for quoting and entry
of orders in equity securities traded on the NYSE Arca Marketplace is
$0.01, with the exception of securities that are priced less than $1.00
for which the MPV for order entry is $0.0001.
The Shares will conform to the initial and continued listing
criteria under NYSE Arca Equities Rule 8.200. The trading of the Shares
will be subject to NYSE Arca Equities Rule 8.200, Commentary .02(e),
which sets forth certain restrictions on Equity Trading Permit
(``ETP'') Holders acting as registered Market Makers in Trust Issued
Receipts to facilitate surveillance. The Exchange represents that, for
initial and continued listing, each Fund will be in compliance with
Rule 10A-3 \16\ under the Act, as provided by NYSE Arca Equities Rule
5.3. A minimum of 100,000 Shares of each Fund will be outstanding at
the commencement of trading on the Exchange.
---------------------------------------------------------------------------
\16\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------
Surveillance
The Exchange represents that trading in the Shares of each Fund
will be subject to the existing trading surveillances administered by
the Exchange, as well as cross-market surveillances administered by
FINRA on behalf of the Exchange, which are designed to detect
violations of Exchange rules and applicable federal securities
laws.\17\ The Exchange represents that these procedures are adequate to
properly monitor Exchange trading of the Shares in all trading sessions
and to deter and detect violations of Exchange rules and federal
securities laws applicable to trading on the Exchange.
---------------------------------------------------------------------------
\17\ FINRA conducts cross-market surveillances on behalf of the
Exchange pursuant to a regulatory services agreement. The Exchange
is responsible for FINRA's performance under this regulatory
services agreement.
---------------------------------------------------------------------------
The surveillances referred to above generally focus on detecting
securities trading outside their normal patterns, which could be
indicative of manipulative or other violative activity. When such
situations are detected, surveillance analysis follows and
investigations are opened, where appropriate, to review the behavior of
all relevant parties for all relevant trading violations.
The Exchange or FINRA, on behalf of the Exchange, or both, will
communicate as needed regarding trading in the Shares and certain
Futures Contracts with other markets and other entities that are
members of the Intermarket Surveillance Group (``ISG''), and the
Exchange or FINRA, on behalf of the Exchange, or both, may obtain
trading information regarding trading in the Shares and certain Futures
Contracts from such markets and other entities. In addition, the
Exchange may obtain information regarding trading in the Shares and
certain Futures Contracts from markets and other entities that are
members of ISG or with which the Exchange has in place a comprehensive
surveillance sharing agreement (``CSSA'').\18\
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\18\ For a list of the current members of ISG, see
www.isgportal.org. The Exchange notes that not all components of a
Fund may trade on markets that are members of ISG or with which the
Exchange has in place a CSSA.
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Not more than 10% of the net assets of a Fund in the aggregate
invested in Futures Contracts shall consist of Futures Contracts whose
principal market is not a member of the ISG or is a market with which
the Exchange does not have a CSSA.
In addition, the Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.
All statements and representations made in this filing regarding
(a) the description of the portfolios of the Funds or the Benchmark,
and (b) limitations on portfolio holdings, reference assets or the
Benchmark shall constitute continued listing requirements for listing
the Shares on the Exchange.
The issuer has represented to the Exchange that it will advise the
Exchange of any failure by the Funds to comply with the continued
listing requirements, and, pursuant to its obligations under Section
19(g)(1) of the Act, the Exchange will monitor for compliance with the
continued listing requirements. If a Fund is not in compliance with the
applicable listing requirements, the Exchange will commence delisting
procedures under NYSE Arca Equities Rule 5.5(m).
[[Page 9612]]
Information Bulletin
Prior to the commencement of trading, the Exchange will inform its
ETP Holders in an Information Bulletin of the special characteristics
and risks associated with trading the Shares. Specifically, the
Information Bulletin will discuss the following: (1) The risks involved
in trading the Shares during the Early and Late Trading Sessions when
an updated IFV will not be calculated or publicly disseminated; (2) the
procedures for purchases and redemptions of Shares in Creation Units
(and that Shares are not individually redeemable); (3) NYSE Arca
Equities Rule 9.2(a), which imposes a duty of due diligence on its ETP
Holders to learn the essential facts relating to every customer prior
to trading the Shares; (4) how information regarding the IFV is
disseminated; (5) that a static IFV will be disseminated, between the
close of trading on the ICE Futures U.S. and NYMEX and the close of the
NYSE Arca Core Trading Session; (6) the requirement that ETP Holders
deliver a prospectus to investors purchasing newly issued Shares prior
to or concurrently with the confirmation of a transaction; and (7)
trading information.
Prior to the commencement of trading, the Exchange will inform its
ETP Holders of the suitability requirements of NYSE Arca Equities Rule
9.2(a) in an Information Bulletin. Specifically, ETP Holders will be
reminded in the Information Bulletin that, in recommending transactions
in the Shares, they must have a reasonable basis to believe that (1)
the recommendation is suitable for a customer given reasonable inquiry
concerning the customer's investment objectives, financial situation,
needs, and any other information known by such ETP Holder, and (2) the
customer can evaluate the special characteristics, and is able to bear
the financial risks, of an investment in the Shares. In connection with
the suitability obligation, the Information Bulletin will also provide
that ETP Holders must make reasonable efforts to obtain the following
information: (1) The customer's financial status; (2) the customer's
tax status; (3) the customer's investment objectives; and (4) such
other information used or considered to be reasonable by such ETP
Holder or registered representative in making recommendations to the
customer.
Further, the Exchange states that FINRA has implemented increased
sales practice and customer margin requirements for FINRA members
applicable to inverse, leveraged and inverse leveraged exchange-traded
securities (which include the Shares) and options on such securities,
as described in FINRA Regulatory Notices 09-31 (June 2009), 09-53
(August 2009), and 09-65 (November 2009) (collectively, ``FINRA
Regulatory Notices''). ETP Holders that carry customer accounts will be
required to follow the FINRA guidance set forth in these notices. As
noted above, each Fund will seek, on a daily basis, investment results
that correspond (before fees and expenses) to 3x or -3x, respectively,
the performance of the Benchmark). Over a period of time in excess of
one day, the cumulative percentage increase or decrease in the NAV of
the Shares of a Fund may diverge significantly from a multiple or
inverse multiple of the cumulative percentage decrease or increase in
the Benchmark due to a compounding effect.
In addition, the Information Bulletin will advise ETP Holders,
prior to the commencement of trading, of the prospectus delivery
requirements applicable to a Fund. The Information Bulletin will also
discuss any exemptive, no-action, and interpretive relief granted by
the Commission from any rules under the Act. In addition, the
Information Bulletin will reference that a Fund is subject to various
fees and expenses described in the Registration Statement. The
Information Bulletin will also reference that the CFTC has regulatory
jurisdiction over the trading of Futures Contracts traded on U.S.
markets.
The Information Bulletin will also disclose the trading hours of
the Shares that the NAV for the Shares will be calculated after 2:30
p.m. E.T. each trading day. The Information Bulletin will disclose that
information about the Shares will be publicly available on the Funds'
Web site.
2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \19\ 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.
---------------------------------------------------------------------------
\19\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices and to protect
investors and the public interest in that the Shares will be listed and
traded on the Exchange pursuant to the initial and continued listing
criteria in NYSE Arca Equities Rule 8.200. The Exchange has in place
surveillance procedures that are adequate to properly monitor trading
in the Shares in all trading sessions and to deter and detect
violations of Exchange rules and applicable federal securities laws.
The Exchange or FINRA, on behalf of the Exchange, or both, will
communicate as needed regarding trading in the Shares, and certain
Futures Contracts with other markets and other entities that are
members of the ISG, and the Exchange or FINRA, on behalf of the
Exchange, or both, may obtain trading information regarding trading in
the Shares and certain Futures Contracts from such markets and other
entities. In addition, the Exchange may obtain information regarding
trading in the Shares and certain Futures Contracts from markets and
other entities that are members of ISG or with which the Exchange has
in place a CSSA. Not more than 10% of the net assets of the Fund in the
aggregate invested in Futures Contracts shall consist of Futures
Contracts whose principal market is not a member of the ISG or is a
market with which the Exchange does not have a CSSA. The intraday,
closing prices, and settlement prices of the Futures Contracts will be
readily available from the applicable futures exchange Web sites,
automated quotation systems, published or other public sources, or
major market data vendors Web site or on-line information services.
Complete real-time data for the Futures Contracts is available by
subscription from on-line information services. ICE Futures U.S. and
NYMEX also provide delayed futures information on current and past
trading sessions and market news free of charge on their Web sites. The
specific contract specifications for Futures Contracts would also be
available on such Web sites, as well as other financial informational
sources. Information regarding options will be available from the
applicable exchanges or major market data vendors. Quotation and last-
sale information regarding the Shares will be disseminated through the
facilities of the CTA. In addition, the Funds' Web site, will display
the applicable end of day closing NAV. Each Fund's total portfolio
composition will be disclosed each Business Day, on the Funds' Web
site. The Web site disclosure of portfolio holdings will be made daily
and will include, as applicable, (i) the composite value of the total
portfolio, (ii) the name, percentage weighting, and value of the
[[Page 9613]]
Futures Contracts and Financial Instruments, (iii) the name and value
of each Treasury security and cash equivalent, and (iv) the amount of
cash held in each Fund's portfolio.
Moreover, prior to the commencement of trading, the Exchange will
inform its Equity Trading Permit Holders in an Information Bulletin of
the special characteristics and risks associated with trading the
Shares and of the suitability requirements of NYSE Arca Equities Rule
9.2(a). The Information Bulletin will advise ETP Holders, prior to the
commencement of trading, of the prospectus delivery requirements
applicable to a Fund. The Information Bulletin will also discuss any
exemptive, no-action, and interpretive relief granted by the Commission
from any rules under the Act. In addition, the Information Bulletin
will reference that a Fund is subject to various fees and expenses
described in the Registration Statement. The Information Bulletin will
also reference that the CFTC has regulatory jurisdiction over the
trading of Futures Contracts traded on U.S. markets. The Information
Bulletin will also disclose the trading hours of the Shares and that
the NAV for the Shares will be calculated after 2:30 p.m. E.T. each
trading day. The Information Bulletin will disclose that information
about the Shares will be publicly available on the Funds' Web site.
Trading in Shares of a Fund will be halted if the circuit breaker
parameters in NYSE Arca Equities Rule 7.12 have been reached or because
of market conditions or for reasons that, in the view of the Exchange,
make trading in the Shares inadvisable.
The proposed rule change is designed to perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest in that it will facilitate the listing and trading of
additional types of Trust Issued Receipts based on oil prices that will
enhance competition among market participants, to the benefit of
investors and the marketplace. As noted above, the Exchange has in
place surveillance procedures that are adequate to properly monitor
trading in the Shares in all trading sessions and to deter and detect
violations of Exchange rules and applicable federal securities laws.
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 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:
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-2017-05 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-2017-05. 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-2017-05 and should
be submitted on or before February 28, 2017.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
Eduardo A. Aleman,
Assistant Secretary.
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\20\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2017-02444 Filed 2-6-17; 8:45 am]
BILLING CODE 8011-01-P
