Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend BZX Rule 14.13, Company Listing Fees, 32164-32167 [2018-14789]
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Federal Register / Vol. 83, No. 133 / Wednesday, July 11, 2018 / Notices
(C) Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange has neither solicited
nor received written comments on 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
provisions of 5 U.S.C. 552, will be
available for website 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 will also be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–CboeBZX–2018–047 and
should be submitted on or before
August 1, 2018.
solicit comments on the proposed rule
change from interested persons.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Eduardo A. Aleman,
Assistant Secretary.
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant parts of such
statements.
[FR Doc. 2018–14788 Filed 7–10–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–83597; File No. SR–
CboeBZX–2018–046]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Amend BZX
Rule 14.13, Company Listing Fees
Paper Comments
daltland on DSKBBV9HB2PROD with NOTICES
• 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–
CboeBZX–2018–047 on the subject line.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on June 21,
2018, Cboe BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II and III
below, which Items have been prepared
by the Exchange. The Exchange has
designated the proposed rule change as
one establishing or changing a member
due, fee, or other charge imposed by the
Exchange under Section 19(b)(3)(A)(ii)
of the Act 3 and Rule 19b–4(f)(2)
thereunder,4 which renders the
proposed rule change effective upon
filing with the Commission. The
Commission is publishing this notice to
• 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–CboeBZX–2018–047. 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 website (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
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July 5, 2018.
PO 00000
9 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
1 15
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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange filed a proposal to
amend the fees applicable to securities
listed on the Exchange, which are set
forth in BZX Rule 14.13.
The text of the proposed rule change
is available at the Exchange’s website at
www.markets.cboe.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
(A) Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
On August 30, 2011, the Exchange
received approval of rules applicable to
the qualification, listing, and delisting
of companies on the Exchange,5 which
it modified on February 8, 2012 in order
to adopt pricing for the listing of
exchange traded products (‘‘ETPs’’) 6 on
the Exchange.7 On July 3, 2017, the
Exchange made certain changes to Rule
14.13 such that there were no entry fees
or annual fees for ETPs listed on the
Exchange.8 The Exchange is proposing
to amend Rule 14.13 in order to charge
an entry fee for ETPs that are not
Generically-Listed ETPs, as defined
below and to add annual listing fees for
ETPs listed on the Exchange.
5 See Securities Exchange Act Release No. 65225
(August 30, 2011), 76 FR 55148 (September 6, 2011)
(SR–BATS–2011–018).
6 As defined in Rule 11.8(e)(1)(A), the term ‘‘ETP’’
means any security listed pursuant to Exchange
Rule 14.11.
7 See Securities Exchange Act Release No. 66422
(February 17, 2012), 77 FR 11179 (February 24,
2012) (SR–BATS–2012–010).
8 See Securities Exchange Act Release No. 81152
(July 14, 2017), 82 FR 33525 (July 20, 2017) (SR–
BatsBZX–2017–45).
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Federal Register / Vol. 83, No. 133 / Wednesday, July 11, 2018 / Notices
Entry Fee
The Exchange is proposing that a
Company that submits an application to
list any ETP, which term includes all
securities set forth in Rule 14.11, shall
be required to pay an entry fee 9 as
follows:
(i) All ETPs, with the exception of
Index Fund Shares, Portfolio Depositary
Receipts, Managed Fund Shares, and
Currency Trust Shares that are listed on
the Exchange pursuant to Rule 19b–4(e)
under the Exchange Act and for which
a proposed rule change pursuant to
Section 19(b) of the Exchange Act is not
required to be filed with the
Commission (collectively, ‘‘GenericallyListed ETPs’’), shall pay an entry fee of
$7,500. Each issuer will be subject to an
aggregate maximum entry fee of $22,500
per calendar year.
(ii) There is no entry fee for
Generically-Listed ETPs.
Annual Fees
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The Exchange is proposing to
establish annual fees for listing on the
Exchange, largely based on the
consolidated average daily volume
(‘‘CADV’’) of an ETP. The Exchange is
also providing certain exceptions to
such CADV-based annual fees for
Legacy Listings, New Listings, and
Auction Fee Listings, each defined
below.
Specifically, the Exchange is
proposing that where an ETP was listed
on the Exchange prior to January 1, 2019
(a ‘‘Legacy Listing’’), such ETP will have
an annual listing fee of $4,000. Where
an ETP first lists on the Exchange or has
been listed for fewer than three calendar
months on the ETP’s first trading day of
the year (a ‘‘New Listing’’),10 and is not
a series of Linked Securities listed
pursuant to Rule 14.11(d), such ETP
will have an annual listing fee of $4,500.
Where an ETP is a New Listing and is
a series of Linked Securities listed
pursuant to Rule 14.11(d), such ETP
will have an annual listing fee of
$10,000. Where the average daily
auction volume combined between the
opening and closing auctions on the
Exchange across all of an issuer’s ETPs
listed on the Exchange exceeds 500,000
shares (an ‘‘Auction Fee Listing’’), there
is no annual listing fee for any of the
issuer’s ETPs listed on the Exchange.
9 The Exchange notes that the proposed entry fee
is substantively identical to those charged by NYSE
Arca, Inc. (‘‘Arca’’). See Securities Exchange Act
Release No. 81796 (October 2, 2017), 82 FR 46865
(October 6, 2017) (SR–NYSEArca–2017–105).
10 Upon initial listing on the Exchange, the
annual listing fee applicable to New Listings will
be prorated based on the number of trading days
remaining in the calendar year.
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Where an ETP is not a Legacy Listing,
a New Listing, an Auction Fee Listing,
or a series of Linked Securities listed
pursuant to Rule 14.11(d), such ETP
will have an annual listing fee as
follows based on the CADV of the ETP
in the fourth quarter of the preceding
calendar year:
apply equally for all issuers and all
ETPs. The Exchange believes that
charging such entry fee is reasonable
given the additional resources required
by the Exchange in connection with
ETPs requiring a proposed rule change
pursuant to Section 19(b), specifically
the significant additional time and
extensive legal and business resources
Annual
required by Exchange staff to prepare
CADV Range
listing fee
and review such filings and to
communicate with issuers and the
0–10,000 shares ...................
$7,000
Commission regarding such filings. As
10,001–100,000 shares ........
6,000
100,001–1,000,000 shares ...
5,500 noted above, this proposed change is
also substantively identical to fees
Greater than 1,000,000
13
shares ...............................
5,000 charged by Arca.
The Exchange believes that the
Where an ETP is not a Legacy Listing, proposed amendment to the annual
listing fees in Rule 14.13(b)(2)(C) to
a New Listing, or an Auction Fee
charge issuers listed on the Exchange
Listing, but is a series of Linked
based on the CADV of the applicable
Securities listed pursuant to Rule
ETPs is a reasonable, fair and equitable,
14.11(d), such ETP will have an annual
and not unfairly discriminatory
listing fee as follows based on the
allocation of fees and other charges
consolidated average daily volume
because it would create a distribution of
(‘‘CADV’’) in the fourth quarter of the
fees and other charges applicable to all
preceding calendar year:
issuers that generally reflect the
additional revenue that an ETP listed on
Annual
CADV Range
listing fee
the Exchange creates for the Exchange
through executions occurring in the
0–10,000 shares ...................
$15,000 auctions and additional shares executed
10,001–100,000 shares ........
14,000
on the Exchange. Listing exchanges
100,001–1,000,000 shares ...
13,000
generally receive an outsized portion of
Greater than 1,000,000
shares ...............................
12,000 intraday trading activity and receive all
auction volume for ETPs listed on the
exchange. The higher the CADV for an
Implementation Date
ETP, the greater the likely income the
The Exchange proposes to implement Exchange will receive based on outsized
these amendments to its fee schedule on intraday trading activity and auction
January 1, 2019.
volume for such ETP. As such, the
Exchange is proposing lower annual
2. Statutory Basis
listing fees for ETPs listed on the
The Exchange believes that the
Exchange as their CADV increases. This
proposed rule change is consistent with structure is designed to reward the
the requirements of the Act and the
issuer of an ETP for such additional
rules and regulations thereunder that
revenue brought to the Exchange as
are applicable to a national securities
CADV increases, which the Exchange
exchange, and, in particular, with the
believes creates a more equitable and
requirements of Section 6 of the Act.11
appropriate fee structure for issuers
Specifically, the Exchange believes that
based on the revenue and expenses
the proposed rule change is consistent
associated with listing ETPs on the
with Section 6(b)(4) and 6(b)(5) of the
Exchange. With this in mind, the
Act,12 in that it provides for the
Exchange believes that that it is
equitable allocation of reasonable dues,
reasonable, fair and equitable, and not
fees and other charges among issuers
unfairly discriminatory allocation of
and it does not unfairly discriminate
fees and other charges to charge lower
between customers, issuers, brokers or
fees for ETPs with a higher CADV.
dealers.
Further, the Exchange believes that
The Exchange believes that the
charging different fees for Linked
proposed amendment to Rule
Securities and other ETPs is reasonable
14.13(b)(1)(C) to implement an entry fee because there is generally less auction
for ETPs listed on the Exchange that are volume for Linked Securities than for
not Generically-Listed ETPs is a
other ETPs, meaning that an exchange
reasonable, fair and equitable, and not
can generally expect less revenue from
unfairly discriminatory allocation of
a Linked Security with the same CADV
fees and other charges because it would
PO 00000
11 15
U.S.C. 78f.
12 15 U.S.C. 78f(b)(4) and (5).
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13 See Securities Exchange Act Release No. 81796
(October 2, 2017), 82 FR 46865 (October 6, 2017)
(SR–NYSEArca–2017–105).
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Federal Register / Vol. 83, No. 133 / Wednesday, July 11, 2018 / Notices
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as another ETP. The CADV structure
proposed is designed to reward the
issuer of an ETP for providing the
Exchange with additional revenue as
CADV increases, so it is logically
consistent to charge higher fees to
Linked Securities for which the
Exchange does not expect as much
revenue. The proposed annual listing
fees for Linked Securities would,
however, still reward the issuer of a
series of Linked Securities for the
additional revenue brought to the
Exchange as the CADV of the Linked
Securities increases, which the
Exchange believes creates a more
equitable and appropriate fee structure
for issuers based on the revenue and
expenses associated with listing ETPs
on the Exchange.
The Exchange believes that it is a
reasonable, fair and equitable, and not
unfairly discriminatory allocation of
fees and other charges to offer lower
annual listing fees to Legacy Listings
because it will incentivize issuers to
transfer ETPs to the Exchange in
advance of January 1, 2019 in order to
receive a lower long term listing fee
while simultaneously providing
reduced fees to those ETPs that have
been listed on the Exchange at a time
when the Exchange was not charging
listing fees. The Exchange believes that
this proposed change is not unfairly
discriminatory because it is available to
all issuers and, because any ETP that is
listed on the Exchange prior to January
1, 2019 will qualify as a Legacy Listing,
issuers have plenty of time to coordinate
transferring ETPs to the Exchange and
still receiving such pricing.14
The Exchange also believes that it is
a reasonable, fair and equitable, and not
unfairly discriminatory allocation of
fees and other charges to offer lower
annual listing fees to New Listings
because the Exchange believes that
offering such lower pricing to ETPs that
are either just beginning their listing on
the Exchange or have been listed on the
Exchange for fewer than three months
on January 1 of a given year will help
to incentivize issuers to bring new ETPs
to market. Further, such ETPs have not
had any meaningful amount of time to
increase CADV and potentially reduce
the applicable annual listing fees. As
such, the Exchange believes that it is
reasonable, fair and equitable, and not
14 The
Exchange notes that there is precedent for
offering listing fees that are dependent on when the
listing occurs. For example, Investors Exchange,
LLC (‘‘IEX’’) offers credits of at least $250,000 that
are paid out over up to five years to corporate
issuers that announce a transfer of their listing to
IEX within 120 days of the first listing on IEX. See
Securities Exchange Act Release No. 81725
(September 26, 2017), 82 FR 45917 (October 2,
2017) (SR–IEX–2017–30).
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unfairly discriminatory allocation of
fees and other charges to offer lower
annual listing fees to New Listings.
The Exchange also believes that it is
a reasonable, fair and equitable, and not
unfairly discriminatory allocation of
fees and other charges to not charge an
annual listing fee to Auction Fee
Listings because, similar to determining
annual listing fees based on CADV, it
would create a distribution of fees and
other charges applicable to all issuers
that generally reflect the additional
revenue that such ETPs create for the
Exchange through auction volume. As
noted above, listing exchanges generally
receive an outsized portion of intraday
trading activity and receive all auction
volume for ETPs listed on the exchange.
The higher the auction volume of ETPs
listed on the Exchange, the greater the
income the Exchange will receive
through the daily opening and closing
auctions. As such, the Exchange is
proposing to eliminate annual listing
fees for ETPs from an issuer for which
the average daily auction volume
combined between the opening and
closing auctions on the Exchange across
all of that issuer’s ETPs listed on the
Exchange exceeds 500,000 shares. This
structure is designed to reward the
issuer of an ETP for such additional
revenue that the Exchange will receive
from the auctions, which the Exchange
believes creates a more equitable and
appropriate fee structure for issuers
based on the revenue and expenses
associated with listing ETPs on the
Exchange. Finally, the Exchange also
believes that such a fee structure will
also incentivize issuers to transfer
products with greater auction volume,
which are thus more profitable, to the
Exchange. As such, the Exchange
believes that that it is reasonable, fair
and equitable, and not unfairly
discriminatory allocation of fees and
other charges to charge lower fees for
Auction Fee Listings.
(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 not
necessary or appropriate in furtherance
of the purposes of the Act. With respect
to the proposed new pricing for the
listing of ETPs, the Exchange does not
believe that the changes burden
competition, but instead, enhance
competition, as it is intended to increase
the revenue of the Exchange’s listing
program in order to better compete.
Further, such proposed changes are
directly related to the amount of
revenue that the Exchange receives from
ETPs listed on the Exchange. As such,
PO 00000
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the proposal is a competitive proposal
designed to enhance pricing
competition among listing venues and
implement pricing for listings that better
reflects the revenue and expenses
associated with listing ETPs on the
Exchange.
The Exchange does not believe the
proposed amendments would burden
intramarket competition as they would
be available to all issuers uniformly.
(C) Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange has not solicited, and
does not intend to solicit, comments on
this proposed rule change. The
Exchange has not received any
unsolicited written comments from
Members or other interested parties.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 15 and Rule 19b–4(f)(2)
thereunder.16 At any time within 60
days of the filing of the proposed rule
change, the Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposal 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 No. SR–
CboeBZX–2018–046 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.
15 15
16 17
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U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
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Federal Register / Vol. 83, No. 133 / Wednesday, July 11, 2018 / Notices
All submissions should refer to File No.
SR–CboeBZX–2018–046. 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 website (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 website 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.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File No.
SR–CboeBZX–2018–046 and should be
submitted on or before August 1, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–14789 Filed 7–10–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
33148; 812–14886]
DMS ETF Trust I, et al.
July 6, 2018.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice.
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AGENCY:
Notice of an application for an order
under section 6(c) of the Investment
Company Act of 1940 (the ‘‘Act’’) for an
exemption from sections 2(a)(32),
5(a)(1), 22(d), and 22(e) of the Act and
rule 22c–1 under the Act, under
17 17
CFR 200.30–3(a)(12).
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sections 6(c) and 17(b) of the Act for an
exemption from sections 17(a)(1) and
17(a)(2) of the Act, and under section
12(d)(1)(J) for an exemption from
sections 12(d)(1)(A) and 12(d)(1)(B) of
the Act. The requested order would
permit (a) index-based series of certain
open-end management investment
companies (‘‘Funds’’) to issue shares
redeemable in large aggregations only
(‘‘Creation Units’’); (b) secondary market
transactions in Fund shares to occur at
negotiated market prices rather than at
net asset value (‘‘NAV’’); (c) certain
Funds to pay redemption proceeds,
under certain circumstances, more than
seven days after the tender of shares for
redemption; (d) certain affiliated
persons of a Fund to deposit securities
into, and receive securities from, the
Fund in connection with the purchase
and redemption of Creation Units; (e)
certain registered management
investment companies and unit
investment trusts outside of the same
group of investment companies as the
Funds (‘‘Funds of Funds’’) to acquire
shares of the Funds; and (f) certain
Funds (‘‘Feeder Funds’’) to create and
redeem Creation Units in-kind in a
master-feeder structure.
APPLICANTS: DMS ETF Trust I and DMS
ETF Trust II (each a ‘‘Trust’’ and
collectively, the ‘‘Trusts’’), each a
Delaware statutory trust registered
under the Act as an open-end
management investment company with
multiple series, and DMS ETF Solutions
LLC (‘‘Initial Adviser’’), a limited
liability company that will be registered
as an investment adviser under the
Investment Advisers Act of 1940.
FILING DATES: The application was filed
on March 12, 2018.
HEARING OR NOTIFICATION OF HEARING: An
order granting the requested relief will
be issued unless the Commission orders
a hearing. Interested persons may
request a hearing by writing to the
Commission’s Secretary and serving
applicants with a copy of the request,
personally or by mail. Hearing requests
should be received by the Commission
by 5:30 p.m. on July 31, 2018, and
should be accompanied by proof of
service on applicants, in the form of an
affidavit, or for lawyers, a certificate of
service. Pursuant to rule 0–5 under the
Act, hearing requests should state the
nature of the writer’s interest, any facts
bearing upon the desirability of a
hearing on the matter, the reason for the
request, and the issues contested.
Persons who wish to be notified of a
hearing may request notification by
writing to the Commission’s Secretary.
ADDRESSES: Secretary, Securities and
Exchange Commission, 100 F Street NE,
PO 00000
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32167
Washington, DC 20549–1090;
Applicants, 4500 Main Street, Kansas
City, MO 64111.
FOR FURTHER INFORMATION CONTACT:
Jessica Shin, Attorney-Adviser, at (202)
551–3685, or Andrea Ottomanelli
Magovern, Branch Chief, at (202) 551–
6821 (Division of Investment
Management, Chief Counsel’s Office).
SUPPLEMENTARY INFORMATION: The
following is a summary of the
application. The complete application
may be obtained via the Commission’s
website by searching for the file
number, or for an applicant using the
Company name box, at https://
www.sec.gov/search/search.htm or by
calling (202) 551–8090.
Summary of the Application
1. Applicants request an order that
would allow Funds to operate as index
exchange traded funds (‘‘ETFs’’).1 Fund
shares will be purchased and redeemed
at their NAV in Creation Units only. All
orders to purchase Creation Units and
all redemption requests will be placed
by or through an ‘‘Authorized
Participant,’’ which will have signed a
participant agreement with the
Distributor. Shares will be listed and
traded individually on a national
securities exchange, where share prices
will be based on the current bid/offer
market. Certain Funds may operate as
Feeder Funds in a master-feeder
structure. Any order granting the
requested relief would be subject to the
terms and conditions stated in the
application (‘‘Application’’).
2. Each Fund will hold investment
positions selected to correspond
generally to the performance of an
Underlying Index. In the case of SelfIndexing Funds, an affiliated person, as
defined in section 2(a)(3) of the Act
(‘‘Affiliated Person’’), or an affiliated
person of an Affiliated Person (‘‘SecondTier Affiliate’’), of the Trust or a Fund,
of the Adviser, of any sub-adviser to or
1 Applicants request that the order apply to the
initial series of the Trusts identified and described
in Appendix A to the Application and any
additional series of either Trust, and any other
existing or future open-end management investment
company or series thereof (each, included in the
term ‘‘Funds’’), that will operate as ETFs, and their
respective existing or future Master Funds, and
track a specified index comprised of domestic and/
or foreign equity securities and/or domestic and/or
foreign fixed income securities (each, an
‘‘Underlying Index’’). Any Fund will (a) be advised
by the Initial Adviser or an entity controlling,
controlled by, or under common control with the
Initial Adviser (each of the foregoing and any
successor thereto, an ‘‘Adviser’’) and (b) comply
with the terms and conditions of the Application.
For purposes of the requested Order, a ‘‘successor’’
is limited to an entity or entities that result from
a reorganization into another jurisdiction or a
change in the type of business organization.
E:\FR\FM\11JYN1.SGM
11JYN1
]]>Agencies
[Federal Register Volume 83, Number 133 (Wednesday, July 11, 2018)]
[Notices]
[Pages 32164-32167]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-14789]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-83597; File No. SR-CboeBZX-2018-046]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
BZX Rule 14.13, Company Listing Fees
July 5, 2018.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on June 21, 2018, Cboe BZX Exchange, Inc. (the ``Exchange'' or
``BZX'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II
and III below, which Items have been prepared by the Exchange. The
Exchange has designated the proposed rule change as one establishing or
changing a member due, fee, or other charge imposed by the Exchange
under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2)
thereunder,\4\ which renders the proposed rule change effective upon
filing with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange filed a proposal to amend the fees applicable to
securities listed on the Exchange, which are set forth in BZX Rule
14.13.
The text of the proposed rule change is available at the Exchange's
website at www.markets.cboe.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant parts of such
statements.
(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
On August 30, 2011, the Exchange received approval of rules
applicable to the qualification, listing, and delisting of companies on
the Exchange,\5\ which it modified on February 8, 2012 in order to
adopt pricing for the listing of exchange traded products (``ETPs'')
\6\ on the Exchange.\7\ On July 3, 2017, the Exchange made certain
changes to Rule 14.13 such that there were no entry fees or annual fees
for ETPs listed on the Exchange.\8\ The Exchange is proposing to amend
Rule 14.13 in order to charge an entry fee for ETPs that are not
Generically-Listed ETPs, as defined below and to add annual listing
fees for ETPs listed on the Exchange.
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\5\ See Securities Exchange Act Release No. 65225 (August 30,
2011), 76 FR 55148 (September 6, 2011) (SR-BATS-2011-018).
\6\ As defined in Rule 11.8(e)(1)(A), the term ``ETP'' means any
security listed pursuant to Exchange Rule 14.11.
\7\ See Securities Exchange Act Release No. 66422 (February 17,
2012), 77 FR 11179 (February 24, 2012) (SR-BATS-2012-010).
\8\ See Securities Exchange Act Release No. 81152 (July 14,
2017), 82 FR 33525 (July 20, 2017) (SR-BatsBZX-2017-45).
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[[Page 32165]]
Entry Fee
The Exchange is proposing that a Company that submits an
application to list any ETP, which term includes all securities set
forth in Rule 14.11, shall be required to pay an entry fee \9\ as
follows:
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\9\ The Exchange notes that the proposed entry fee is
substantively identical to those charged by NYSE Arca, Inc.
(``Arca''). See Securities Exchange Act Release No. 81796 (October
2, 2017), 82 FR 46865 (October 6, 2017) (SR-NYSEArca-2017-105).
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(i) All ETPs, with the exception of Index Fund Shares, Portfolio
Depositary Receipts, Managed Fund Shares, and Currency Trust Shares
that are listed on the Exchange pursuant to Rule 19b-4(e) under the
Exchange Act and for which a proposed rule change pursuant to Section
19(b) of the Exchange Act is not required to be filed with the
Commission (collectively, ``Generically-Listed ETPs''), shall pay an
entry fee of $7,500. Each issuer will be subject to an aggregate
maximum entry fee of $22,500 per calendar year.
(ii) There is no entry fee for Generically-Listed ETPs.
Annual Fees
The Exchange is proposing to establish annual fees for listing on
the Exchange, largely based on the consolidated average daily volume
(``CADV'') of an ETP. The Exchange is also providing certain exceptions
to such CADV-based annual fees for Legacy Listings, New Listings, and
Auction Fee Listings, each defined below.
Specifically, the Exchange is proposing that where an ETP was
listed on the Exchange prior to January 1, 2019 (a ``Legacy Listing''),
such ETP will have an annual listing fee of $4,000. Where an ETP first
lists on the Exchange or has been listed for fewer than three calendar
months on the ETP's first trading day of the year (a ``New
Listing''),\10\ and is not a series of Linked Securities listed
pursuant to Rule 14.11(d), such ETP will have an annual listing fee of
$4,500. Where an ETP is a New Listing and is a series of Linked
Securities listed pursuant to Rule 14.11(d), such ETP will have an
annual listing fee of $10,000. Where the average daily auction volume
combined between the opening and closing auctions on the Exchange
across all of an issuer's ETPs listed on the Exchange exceeds 500,000
shares (an ``Auction Fee Listing''), there is no annual listing fee for
any of the issuer's ETPs listed on the Exchange.
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\10\ Upon initial listing on the Exchange, the annual listing
fee applicable to New Listings will be prorated based on the number
of trading days remaining in the calendar year.
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Where an ETP is not a Legacy Listing, a New Listing, an Auction Fee
Listing, or a series of Linked Securities listed pursuant to Rule
14.11(d), such ETP will have an annual listing fee as follows based on
the CADV of the ETP in the fourth quarter of the preceding calendar
year:
------------------------------------------------------------------------
Annual listing
CADV Range fee
------------------------------------------------------------------------
0-10,000 shares......................................... $7,000
10,001-100,000 shares................................... 6,000
100,001-1,000,000 shares................................ 5,500
Greater than 1,000,000 shares........................... 5,000
------------------------------------------------------------------------
Where an ETP is not a Legacy Listing, a New Listing, or an Auction
Fee Listing, but is a series of Linked Securities listed pursuant to
Rule 14.11(d), such ETP will have an annual listing fee as follows
based on the consolidated average daily volume (``CADV'') in the fourth
quarter of the preceding calendar year:
------------------------------------------------------------------------
Annual listing
CADV Range fee
------------------------------------------------------------------------
0-10,000 shares......................................... $15,000
10,001-100,000 shares................................... 14,000
100,001-1,000,000 shares................................ 13,000
Greater than 1,000,000 shares........................... 12,000
------------------------------------------------------------------------
Implementation Date
The Exchange proposes to implement these amendments to its fee
schedule on January 1, 2019.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder that are applicable to a national securities exchange, and,
in particular, with the requirements of Section 6 of the Act.\11\
Specifically, the Exchange believes that the proposed rule change is
consistent with Section 6(b)(4) and 6(b)(5) of the Act,\12\ in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among issuers and it does not unfairly discriminate
between customers, issuers, brokers or dealers.
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\11\ 15 U.S.C. 78f.
\12\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes that the proposed amendment to Rule
14.13(b)(1)(C) to implement an entry fee for ETPs listed on the
Exchange that are not Generically-Listed ETPs is a reasonable, fair and
equitable, and not unfairly discriminatory allocation of fees and other
charges because it would apply equally for all issuers and all ETPs.
The Exchange believes that charging such entry fee is reasonable given
the additional resources required by the Exchange in connection with
ETPs requiring a proposed rule change pursuant to Section 19(b),
specifically the significant additional time and extensive legal and
business resources required by Exchange staff to prepare and review
such filings and to communicate with issuers and the Commission
regarding such filings. As noted above, this proposed change is also
substantively identical to fees charged by Arca.\13\
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\13\ See Securities Exchange Act Release No. 81796 (October 2,
2017), 82 FR 46865 (October 6, 2017) (SR-NYSEArca-2017-105).
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The Exchange believes that the proposed amendment to the annual
listing fees in Rule 14.13(b)(2)(C) to charge issuers listed on the
Exchange based on the CADV of the applicable ETPs is a reasonable, fair
and equitable, and not unfairly discriminatory allocation of fees and
other charges because it would create a distribution of fees and other
charges applicable to all issuers that generally reflect the additional
revenue that an ETP listed on the Exchange creates for the Exchange
through executions occurring in the auctions and additional shares
executed on the Exchange. Listing exchanges generally receive an
outsized portion of intraday trading activity and receive all auction
volume for ETPs listed on the exchange. The higher the CADV for an ETP,
the greater the likely income the Exchange will receive based on
outsized intraday trading activity and auction volume for such ETP. As
such, the Exchange is proposing lower annual listing fees for ETPs
listed on the Exchange as their CADV increases. This structure is
designed to reward the issuer of an ETP for such additional revenue
brought to the Exchange as CADV increases, which the Exchange believes
creates a more equitable and appropriate fee structure for issuers
based on the revenue and expenses associated with listing ETPs on the
Exchange. With this in mind, the Exchange believes that that it is
reasonable, fair and equitable, and not unfairly discriminatory
allocation of fees and other charges to charge lower fees for ETPs with
a higher CADV.
Further, the Exchange believes that charging different fees for
Linked Securities and other ETPs is reasonable because there is
generally less auction volume for Linked Securities than for other
ETPs, meaning that an exchange can generally expect less revenue from a
Linked Security with the same CADV
[[Page 32166]]
as another ETP. The CADV structure proposed is designed to reward the
issuer of an ETP for providing the Exchange with additional revenue as
CADV increases, so it is logically consistent to charge higher fees to
Linked Securities for which the Exchange does not expect as much
revenue. The proposed annual listing fees for Linked Securities would,
however, still reward the issuer of a series of Linked Securities for
the additional revenue brought to the Exchange as the CADV of the
Linked Securities increases, which the Exchange believes creates a more
equitable and appropriate fee structure for issuers based on the
revenue and expenses associated with listing ETPs on the Exchange.
The Exchange believes that it is a reasonable, fair and equitable,
and not unfairly discriminatory allocation of fees and other charges to
offer lower annual listing fees to Legacy Listings because it will
incentivize issuers to transfer ETPs to the Exchange in advance of
January 1, 2019 in order to receive a lower long term listing fee while
simultaneously providing reduced fees to those ETPs that have been
listed on the Exchange at a time when the Exchange was not charging
listing fees. The Exchange believes that this proposed change is not
unfairly discriminatory because it is available to all issuers and,
because any ETP that is listed on the Exchange prior to January 1, 2019
will qualify as a Legacy Listing, issuers have plenty of time to
coordinate transferring ETPs to the Exchange and still receiving such
pricing.\14\
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\14\ The Exchange notes that there is precedent for offering
listing fees that are dependent on when the listing occurs. For
example, Investors Exchange, LLC (``IEX'') offers credits of at
least $250,000 that are paid out over up to five years to corporate
issuers that announce a transfer of their listing to IEX within 120
days of the first listing on IEX. See Securities Exchange Act
Release No. 81725 (September 26, 2017), 82 FR 45917 (October 2,
2017) (SR-IEX-2017-30).
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The Exchange also believes that it is a reasonable, fair and
equitable, and not unfairly discriminatory allocation of fees and other
charges to offer lower annual listing fees to New Listings because the
Exchange believes that offering such lower pricing to ETPs that are
either just beginning their listing on the Exchange or have been listed
on the Exchange for fewer than three months on January 1 of a given
year will help to incentivize issuers to bring new ETPs to market.
Further, such ETPs have not had any meaningful amount of time to
increase CADV and potentially reduce the applicable annual listing
fees. As such, the Exchange believes that it is reasonable, fair and
equitable, and not unfairly discriminatory allocation of fees and other
charges to offer lower annual listing fees to New Listings.
The Exchange also believes that it is a reasonable, fair and
equitable, and not unfairly discriminatory allocation of fees and other
charges to not charge an annual listing fee to Auction Fee Listings
because, similar to determining annual listing fees based on CADV, it
would create a distribution of fees and other charges applicable to all
issuers that generally reflect the additional revenue that such ETPs
create for the Exchange through auction volume. As noted above, listing
exchanges generally receive an outsized portion of intraday trading
activity and receive all auction volume for ETPs listed on the
exchange. The higher the auction volume of ETPs listed on the Exchange,
the greater the income the Exchange will receive through the daily
opening and closing auctions. As such, the Exchange is proposing to
eliminate annual listing fees for ETPs from an issuer for which the
average daily auction volume combined between the opening and closing
auctions on the Exchange across all of that issuer's ETPs listed on the
Exchange exceeds 500,000 shares. This structure is designed to reward
the issuer of an ETP for such additional revenue that the Exchange will
receive from the auctions, which the Exchange believes creates a more
equitable and appropriate fee structure for issuers based on the
revenue and expenses associated with listing ETPs on the Exchange.
Finally, the Exchange also believes that such a fee structure will also
incentivize issuers to transfer products with greater auction volume,
which are thus more profitable, to the Exchange. As such, the Exchange
believes that that it is reasonable, fair and equitable, and not
unfairly discriminatory allocation of fees and other charges to charge
lower fees for Auction Fee Listings.
(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 not necessary or appropriate in
furtherance of the purposes of the Act. With respect to the proposed
new pricing for the listing of ETPs, the Exchange does not believe that
the changes burden competition, but instead, enhance competition, as it
is intended to increase the revenue of the Exchange's listing program
in order to better compete. Further, such proposed changes are directly
related to the amount of revenue that the Exchange receives from ETPs
listed on the Exchange. As such, the proposal is a competitive proposal
designed to enhance pricing competition among listing venues and
implement pricing for listings that better reflects the revenue and
expenses associated with listing ETPs on the Exchange.
The Exchange does not believe the proposed amendments would burden
intramarket competition as they would be available to all issuers
uniformly.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants or Others
The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from Members or other interested
parties.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \15\ and Rule 19b-4(f)(2) thereunder.\16\ At any
time within 60 days of the filing of the proposed rule change, the
Commission summarily may temporarily suspend such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act. If the Commission takes such
action, the Commission shall institute proceedings to determine whether
the proposed rule should be approved or disapproved.
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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposal 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 [email protected]. Please include
File No. SR-CboeBZX-2018-046 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.
[[Page 32167]]
All submissions should refer to File No. SR-CboeBZX-2018-046. 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 website (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 website 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. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File No. SR-CboeBZX-2018-046 and should be submitted on
or before August 1, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-14789 Filed 7-10-18; 8:45 am]
BILLING CODE 8011-01-P
