Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rules 903 and 903A, 42185-42188 [2018-17829]

Download as PDF Federal Register / Vol. 83, No. 161 / Monday, August 20, 2018 / Notices on other exchanges, while at the same time allowing the Exchange to continue to compete for order flow with other exchanges in option issues. 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 daltland on DSKBBV9HB2PROD with NOTICES The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 14 and Rule 19b–4(f)(6) thereunder.15 Because the proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b–4(f)(6)(iii) thereunder. A proposed rule change filed under Rule 19b–4(f)(6) 16 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),17 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission notes that the Exchange’s proposal would conform the Exchange’s rules to the amended OLPP, which the Commission previously approved.18 Accordingly, the Commission believes that the proposal raises no new or novel regulatory issues and waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. The Commission therefore waives the 30-day operative delay and designates the proposed rule change to be operative upon filing.19 14 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 16 17 CFR 240.19b–4(f)(6). 17 17 CFR 240.19b–4(f)(6)(iii). 18 See OLPP Notice, supra note 4. 19 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on 15 17 VerDate Sep<11>2014 19:04 Aug 17, 2018 Jkt 244001 At any time within 60 days of the filing of such 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 under Section 19(b)(2)(B) 20 of the Act to determine whether the proposed rule change 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 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–2018–59 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–2018–59. 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 the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. 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–NYSEArca–2018–59 and should be submitted on or before September 10, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.21 Robert W. Errett, Deputy Secretary. [FR Doc. 2018–17827 Filed 8–17–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–83842; File No. SR– NYSEAMER–2018–40] Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rules 903 and 903A August 14, 2018. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that on August 3, 2018, NYSE American LLC (‘‘Exchange’’ or ‘‘NYSE American’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Rules 903 and 903A. The proposed rule change is available on the Exchange’s website at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 21 17 efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 20 15 U.S.C. 78s(b)(2)(B). PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 42185 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 E:\FR\FM\20AUN1.SGM 20AUN1 42186 Federal Register / Vol. 83, No. 161 / Monday, August 20, 2018 / Notices II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, 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 purpose of this filing is to amend Rules 903 (Series of Options Open for Trading) and 903A (Select Provisions of the Options Listing Procedures Plan)— or OLPP—to conform to recently approved changes to the OLPP.4 The Exchange, which is one of the Participant Exchanges 5 to the OLPP, currently has rules that are designed to incorporate the requirements of the OLPP. All Participant Exchanges have similar such (essentially uniform) rules to ensure consistency and compliance with the OLPP. The Exchange proposes to modify such rules to reflect the recent updates as described below. Addition of Long-Term Equity Options (‘‘LEAPS’’) daltland on DSKBBV9HB2PROD with NOTICES First, the OLPP has been amended to change the earliest date on which new January LEAPS on equity options, options on Exchange Traded Funds (‘‘ETF’’), or options on Trust Issued Receipts (‘‘TIR’’) may be added to a single date (from three separate months). As noted in the OLPP Notice, in the past there were operational concerns related to adding new January LEAPs series for all options classes on 4 See Securities Exchange Act Release Nos. 82235 (December 7, 2017), 82 FR 58668 (December 13, 2017) (order approving the Fourth Amendment to the OLPP); 81893 (October 18, 2017), 82 FR 49249 (‘‘OLPP Notice’’). 5 In addition to the Exchange, the ‘‘Participant Exchanges’’ are: Chicago Board Options Exchange, Incorporated (now known as Cboe Exchange, Inc.), on behalf of the BATS Exchange, Inc. (now known as Cboe BZX Exchange, Inc.); Box Options Exchange, LLC; C2 Exchange, Incorporated (now known as Cboe C2 Exchange, Inc.); EDGX Exchange, Inc. (now known as Cboe EDGX Exchange, Inc.); Miami International Securities Exchange, LLC; MIAX PEARL, LLC; Nasdaq BX, Inc.; Nasdaq GEMX, LLC; Nasdaq ISE, LLC; Nasdaq MRX, LLC; Nasdaq Options Market, LLC; Nasdaq PHLX, LLC; and NYSE Arca Inc. VerDate Sep<11>2014 19:04 Aug 17, 2018 Jkt 244001 which LEAPs were listed on a single trading day.6 And, the addition of new series in a pre-electronic trading environment was a manual process. To accommodate this, the addition of new January LEAPs series was spread across three months (September, October, and November). Today, however, these operational concerns related to January LEAPs have been alleviated as new series can be added in bulk electronically. The Plan Participants, including the Exchange, believe that moving the addition of new January LEAPs series to no earlier than the Monday prior to the September expiration would reduce marketplace confusion about available January LEAPs series. Where previously January LEAPs series for options classes on the February or March expiration cycles would not have been available as early as January LEAPs series for options classes on the January expiration cycle, under the proposed change, all January LEAPs series will be available concurrently. Accordingly, to conform to this change, the Exchange proposes to modify Commentary .03(b) to Rule 903 to reflect that new January LEAPS series on equity options classes, options on ETFs, or options on TIRs, may not be added on a currently listed and traded option class earlier than the Monday prior to the September expiration (which is 28 months before the expiration).7 Addition of Equity, ETF, and TIR Option Series After Regular Trading Hours Second, the OLPP has been amended to allow equity, ETF, and TIR option series to be added based on trading after regular trading hours (i.e., after-market). As noted in the OLPP Notice, the prior version of the OLPP did not allow for option series to be added based on trading following regular trading hours.8 As such, the Exchange Participants were are [sic] unable to add new option series that may result from trading following regular trading hours until the next morning, depending on the range of prices in pre-market trading, which is significant because events that occur after regular trading hours, such as earnings releases, often have an important impact on the price of an underlying security. In addition, there are operational difficulties for market participants throughout the industry adding series after system startup. To avoid the potential burden that would 6 See supra n. 4, 82 FR 49249, at 49249. proposed Commentary .03(b) to Rule 903. 8 See supra n. 4, 82 FR 49249, at 49250. 7 See PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 result from the inability to add series as a result of trading following regular trading hours, the OLPP was amended to allow an additional category by which the price of an underlying security may be measured. Specifically, to conform to the amended OLPP, the Exchange proposes to add paragraph (b)(i)(4) to Rule 903A to provide that ‘‘for option series to be added based on trading following regular trading hours,’’ the price of the underlying security is measured by ‘‘the most recent share price reported by all national securities exchanges between 4:15 p.m. and 6:00 p.m. Eastern Time.’’ 9 Technical Changes The Exchange proposes to modify the description of LEAPs in Commentary .03(a) to Rule 903 to clarify the application of rules regarding LEAPs. The Exchange proposes to explicitly state that a LEAP is a series ‘‘that expire[s] twelve (12) to thirty-nine (39) months from the time they are opened for trading, and stock index options that expire twelve (12) to thirty-six (36) months from the time they are opened for trading’’ and that there may up to six ‘‘extended far term’’ expiration months ‘‘for any index, Exchange-Trade Fund Share, or equity option class.’’ 10 Currently, the Exchange rules do not set forth the minimum amount of time to expiration for consideration of an expiration month as a LEAP, nor do the rules explicate that there may only be six LEAP expiration months for any index, Exchange Traded Fund Share, or equity option class. The Exchange also does not currently specify that the potential additional expirations months are ‘‘extended far term’’ expirations months. The Exchange believes this proposed change would add clarity and transparency to Exchange rules and is consistent with analogous rules of other exchanges.11 The Exchange proposes to modify Commentary .03(a) to Rule 903 to delete now obsolete operational language, which dates back to when LEAPs were first adopted. The language in question provides that: Further, such option series will open for trading either when there is buying or selling interest, or 40 minutes prior to the close, whichever occurs first. No quotations need to be posted for such option series until they are opened for trading. The Exchange proposes to delete this language because when this language 9 See proposed Rule 903A(b)(i)(4). The Exchange proposes to relocate ‘‘and’’ from paragraph (2) to (3) to conform to the change. See proposed Rule 903A(b)(i)(2),(3). 10 See proposed Commentary .03(a) to Rule 903. 11 See, e.g., NYSE Arca Rule 6.4–O(d), (e). E:\FR\FM\20AUN1.SGM 20AUN1 Federal Register / Vol. 83, No. 161 / Monday, August 20, 2018 / Notices daltland on DSKBBV9HB2PROD with NOTICES was adopted LEAPs were not opened for trading until late in the trading day unless there was buying or selling interest.12 Today, however, technological improvements allow the Exchange to open all LEAP series at the same time as all other series in an option class. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) 13 of the Act, in general, and furthers the objectives of Section 6(b)(5),14 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanisms of a free and open market and a national market system. In particular, the proposed rule change, which conforms to the recently adopted provisions of the OLPP, as amended, allows the Exchange to continue to list extended far term option series that have been viewed as beneficial to traders, investors and public customers. Accordingly, the Exchange believes that the proposal is consistent with the Act because it will allow the Exchange to list all January, 2021expiration series on the Monday prior to the September, 2018 expiration. Moreover, this change would simplify the process for adding new January LEAP options series and reduce potential for investor confusion because all new January LEAP options would be made available beginning at the same time, consistent with the amended OLPP. The Exchange notes that this proposal does not propose any new provisions that have not already been approved by the Commission in the amended OLPP, but instead maintains series listing rules that conform to the amended OLPP. The proposal to permit series to be added based on after-market trading is designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanisms of a free and open market and a national market system, by allowing the Exchange to make series available for trading with reduced operational difficulties. The Exchange notes that this proposed change, which is consistent with the proposed Commentary .03(a) to Rule 903. U.S.C. 78f(b). 14 15 U.S.C. 78f(b)(5). amended OLPP should provide market participants with earlier notice regarding what options series will be available for trading the following day, and should help to enhance investors’ ability to plan their options trading. The Exchange also believes that the proposed technical changes, including adopting language to conform the rule text to clarify the operation of LEAPs, promotes just and equitable principles of trade (which aligns with approved rules of other options exchanges (see supra n. 11), foster cooperation and coordination with persons engaged in facilitating transactions in securities, and remove impediments to and perfect the mechanism of a free and open market and a national market system. 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 purposes of the Act. Specifically, the Exchange believes that by conforming Exchange rules to the amended OLPP, the Exchange would promote regulatory clarity and consistency, thereby reducing burdens on the marketplace and facilitating investor protection. The Exchange believes that adopting rules, which it anticipates will likewise be adopted by Participant Exchanges, would allow for continued competition between Exchange market participants trading similar products as their counterparts on other exchanges, while at the same time allowing the Exchange to continue to compete for order flow with other exchanges in option issues. 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 The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 15 and Rule 19b–4(f)(6) thereunder.16 Because the proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which 12 See 13 15 VerDate Sep<11>2014 19:04 Aug 17, 2018 Jkt 244001 15 15 16 17 PO 00000 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). Frm 00088 Fmt 4703 Sfmt 4703 42187 it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b–4(f)(6)(iii) thereunder. A proposed rule change filed under Rule 19b–4(f)(6) 17 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),18 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission notes that the Exchange’s proposal would conform the Exchange’s rules to the amended OLPP, which the Commission previously approved.19 Accordingly, the Commission believes that the proposal raises no new or novel regulatory issues and waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. The Commission therefore waives the 30-day operative delay and designates the proposed rule change to be operative upon filing.20 At any time within 60 days of the filing of such 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 under Section 19(b)(2)(B) 21 of the Act to determine whether the proposed rule change 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 proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: 17 17 CFR 240.19b–4(f)(6). CFR 240.19b–4(f)(6)(iii). 19 See OLPP Notice, supra note 4. 20 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 21 15 U.S.C. 78s(b)(2)(B). 18 17 E:\FR\FM\20AUN1.SGM 20AUN1 42188 Federal Register / Vol. 83, No. 161 / Monday, August 20, 2018 / Notices 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– NYSEAMER–2018–40 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. daltland on DSKBBV9HB2PROD with NOTICES All submissions should refer to File Number SR–NYSEAMER–2018–40. 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 the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. 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–NYSEAMER–2018–40 and should be submitted on or before September 10, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.22 Robert W. Errett, Deputy Secretary. [FR Doc. 2018–17829 Filed 8–17–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–83845; File No. SR– NYSEArca–2018–57] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1, To List and Trade Shares of the Amplify BlackSwan Growth & Treasury Core ETF Under Commentary .02 to NYSE Arca Rule 5.2–E(j)(3) August 14, 2018. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that on July 31, 2018, NYSE Arca, Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change. On August 10, 2018, the Exchange filed Amendment No. 1 to the proposed rule change, as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change, as modified by Amendment No. 1, 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 fund of the Amplify ETF Trust under Commentary .02 to NYSE Arca Rule 5.2–E(j)(3) (‘‘Investment Company Units’’): the Amplify BlackSwan Growth & Treasury Core ETF. This Amendment No. 1 to SR–NYSEArca–2018–57 replaces SR–NYSEArca–2018–57 as originally filed and supersedes such filing in its entirety. The proposed change is available on the Exchange’s website 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. 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 22 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 19:04 Aug 17, 2018 Jkt 244001 PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 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 Amplify BlackSwan Growth & Treasury Core ETF (‘‘Fund’’) under Commentary .02 to NYSE Arca Rule 5.2–E(j)(3), which governs the listing and trading of Investment Company Units (‘‘Units’’) on the Exchange.4 The Fund will be an index-based exchange traded fund (‘‘ETF’’). The Shares will be offered by the Amplify ETF Trust (‘‘Trust’’), which is registered with the Commission as an investment company and has filed a registration statement on Form N–1A (‘‘Registration Statement’’) with the Commission on behalf of the Fund.5 Amplify Investments LLC will be the investment adviser (‘‘Adviser’’) to the Fund. CSAT Investment Advisory, L.P., d/b/a Exponential ETFs will serve as sub-adviser for the Fund (‘‘SubAdviser’’). U.S. Bancorp Fund Services, LLC will be the administrator, custodian and fund accounting and transfer agent for the Fund. Quasar Distributors LLC will serve as the distributor for the Fund. Commentary .02(b)(i) to Rule 5.2– E(j)(3) provides that, if the applicable index is maintained by a broker-dealer or fund advisor, the broker-dealer or fund advisor shall erect and maintain a ‘‘fire wall’’ around the personnel who have access to information concerning changes and adjustments to the index.6 4 NYSE Arca Rule 5.2–E(j)(3)(A) provides that an Investment Company Unit is a security that represents an interest in a registered investment company that holds securities comprising, or otherwise based on or representing an interest in, an index or portfolio of securities (or holds securities in another registered investment company that holds securities comprising, or otherwise based on or representing an interest in, an index or portfolio of securities). 5 See Post-Effective Amendment No. 65 to Registration Statement on Form N–1A for the Trust, dated June 26, 2018 (File Nos. 333–207937 and 811–23108). The descriptions of the Fund and the Shares contained herein are based, in part, on information in the Registration Statement. In addition, the Commission has issued an order granting certain exemptive relief to the Trust under the Investment Company Act of 1940 (15 U.S.C. 80a–1) (‘‘1940 Act’’). See Investment Company Act Release No. 31822 (September 14, 2015) (File No. 812–14424) (‘‘Exemptive Order’’). 6 An investment adviser to an open-end fund is required to be registered under the Investment Advisers Act of 1940 (the ‘‘Advisers Act’’). As a result, the Adviser and Sub-adviser are subject to the provisions of Rule 204A–1 under the Advisers E:\FR\FM\20AUN1.SGM 20AUN1

Agencies

[Federal Register Volume 83, Number 161 (Monday, August 20, 2018)]
[Notices]
[Pages 42185-42188]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-17829]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83842; File No. SR-NYSEAMER-2018-40]


Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
Rules 903 and 903A

August 14, 2018.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on August 3, 2018, NYSE American LLC (``Exchange'' or ``NYSE 
American'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rules 903 and 903A. The proposed 
rule change is available on the Exchange's website at www.nyse.com, at 
the principal office of the Exchange, and at the Commission's Public 
Reference Room.

[[Page 42186]]

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 purpose of this filing is to amend Rules 903 (Series of Options 
Open for Trading) and 903A (Select Provisions of the Options Listing 
Procedures Plan)--or OLPP--to conform to recently approved changes to 
the OLPP.\4\
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    \4\ See Securities Exchange Act Release Nos. 82235 (December 7, 
2017), 82 FR 58668 (December 13, 2017) (order approving the Fourth 
Amendment to the OLPP); 81893 (October 18, 2017), 82 FR 49249 
(``OLPP Notice'').
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    The Exchange, which is one of the Participant Exchanges \5\ to the 
OLPP, currently has rules that are designed to incorporate the 
requirements of the OLPP. All Participant Exchanges have similar such 
(essentially uniform) rules to ensure consistency and compliance with 
the OLPP. The Exchange proposes to modify such rules to reflect the 
recent updates as described below.
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    \5\ In addition to the Exchange, the ``Participant Exchanges'' 
are: Chicago Board Options Exchange, Incorporated (now known as Cboe 
Exchange, Inc.), on behalf of the BATS Exchange, Inc. (now known as 
Cboe BZX Exchange, Inc.); Box Options Exchange, LLC; C2 Exchange, 
Incorporated (now known as Cboe C2 Exchange, Inc.); EDGX Exchange, 
Inc. (now known as Cboe EDGX Exchange, Inc.); Miami International 
Securities Exchange, LLC; MIAX PEARL, LLC; Nasdaq BX, Inc.; Nasdaq 
GEMX, LLC; Nasdaq ISE, LLC; Nasdaq MRX, LLC; Nasdaq Options Market, 
LLC; Nasdaq PHLX, LLC; and NYSE Arca Inc.
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Addition of Long-Term Equity Options (``LEAPS'')
    First, the OLPP has been amended to change the earliest date on 
which new January LEAPS on equity options, options on Exchange Traded 
Funds (``ETF''), or options on Trust Issued Receipts (``TIR'') may be 
added to a single date (from three separate months). As noted in the 
OLPP Notice, in the past there were operational concerns related to 
adding new January LEAPs series for all options classes on which LEAPs 
were listed on a single trading day.\6\ And, the addition of new series 
in a pre-electronic trading environment was a manual process. To 
accommodate this, the addition of new January LEAPs series was spread 
across three months (September, October, and November). Today, however, 
these operational concerns related to January LEAPs have been 
alleviated as new series can be added in bulk electronically. The Plan 
Participants, including the Exchange, believe that moving the addition 
of new January LEAPs series to no earlier than the Monday prior to the 
September expiration would reduce marketplace confusion about available 
January LEAPs series. Where previously January LEAPs series for options 
classes on the February or March expiration cycles would not have been 
available as early as January LEAPs series for options classes on the 
January expiration cycle, under the proposed change, all January LEAPs 
series will be available concurrently.
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    \6\ See supra n. 4, 82 FR 49249, at 49249.
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    Accordingly, to conform to this change, the Exchange proposes to 
modify Commentary .03(b) to Rule 903 to reflect that new January LEAPS 
series on equity options classes, options on ETFs, or options on TIRs, 
may not be added on a currently listed and traded option class earlier 
than the Monday prior to the September expiration (which is 28 months 
before the expiration).\7\
---------------------------------------------------------------------------

    \7\ See proposed Commentary .03(b) to Rule 903.
---------------------------------------------------------------------------

Addition of Equity, ETF, and TIR Option Series After Regular Trading 
Hours
    Second, the OLPP has been amended to allow equity, ETF, and TIR 
option series to be added based on trading after regular trading hours 
(i.e., after-market). As noted in the OLPP Notice, the prior version of 
the OLPP did not allow for option series to be added based on trading 
following regular trading hours.\8\ As such, the Exchange Participants 
were are [sic] unable to add new option series that may result from 
trading following regular trading hours until the next morning, 
depending on the range of prices in pre-market trading, which is 
significant because events that occur after regular trading hours, such 
as earnings releases, often have an important impact on the price of an 
underlying security. In addition, there are operational difficulties 
for market participants throughout the industry adding series after 
system startup. To avoid the potential burden that would result from 
the inability to add series as a result of trading following regular 
trading hours, the OLPP was amended to allow an additional category by 
which the price of an underlying security may be measured. 
Specifically, to conform to the amended OLPP, the Exchange proposes to 
add paragraph (b)(i)(4) to Rule 903A to provide that ``for option 
series to be added based on trading following regular trading hours,'' 
the price of the underlying security is measured by ``the most recent 
share price reported by all national securities exchanges between 4:15 
p.m. and 6:00 p.m. Eastern Time.'' \9\
---------------------------------------------------------------------------

    \8\ See supra n. 4, 82 FR 49249, at 49250.
    \9\ See proposed Rule 903A(b)(i)(4). The Exchange proposes to 
relocate ``and'' from paragraph (2) to (3) to conform to the change. 
See proposed Rule 903A(b)(i)(2),(3).
---------------------------------------------------------------------------

Technical Changes
    The Exchange proposes to modify the description of LEAPs in 
Commentary .03(a) to Rule 903 to clarify the application of rules 
regarding LEAPs. The Exchange proposes to explicitly state that a LEAP 
is a series ``that expire[s] twelve (12) to thirty-nine (39) months 
from the time they are opened for trading, and stock index options that 
expire twelve (12) to thirty-six (36) months from the time they are 
opened for trading'' and that there may up to six ``extended far term'' 
expiration months ``for any index, Exchange-Trade Fund Share, or equity 
option class.'' \10\ Currently, the Exchange rules do not set forth the 
minimum amount of time to expiration for consideration of an expiration 
month as a LEAP, nor do the rules explicate that there may only be six 
LEAP expiration months for any index, Exchange Traded Fund Share, or 
equity option class. The Exchange also does not currently specify that 
the potential additional expirations months are ``extended far term'' 
expirations months. The Exchange believes this proposed change would 
add clarity and transparency to Exchange rules and is consistent with 
analogous rules of other exchanges.\11\
---------------------------------------------------------------------------

    \10\ See proposed Commentary .03(a) to Rule 903.
    \11\ See, e.g., NYSE Arca Rule 6.4-O(d), (e).
---------------------------------------------------------------------------

    The Exchange proposes to modify Commentary .03(a) to Rule 903 to 
delete now obsolete operational language, which dates back to when 
LEAPs were first adopted. The language in question provides that:

    Further, such option series will open for trading either when 
there is buying or selling interest, or 40 minutes prior to the 
close, whichever occurs first. No quotations need to be posted for 
such option series until they are opened for trading.

    The Exchange proposes to delete this language because when this 
language

[[Page 42187]]

was adopted LEAPs were not opened for trading until late in the trading 
day unless there was buying or selling interest.\12\ Today, however, 
technological improvements allow the Exchange to open all LEAP series 
at the same time as all other series in an option class.
---------------------------------------------------------------------------

    \12\ See proposed Commentary .03(a) to Rule 903.
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) \13\ of 
the Act, in general, and furthers the objectives of Section 
6(b)(5),\14\ in particular, in that it is designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in facilitating transactions in securities, and to 
remove impediments to and perfect the mechanisms of a free and open 
market and a national market system.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In particular, the proposed rule change, which conforms to the 
recently adopted provisions of the OLPP, as amended, allows the 
Exchange to continue to list extended far term option series that have 
been viewed as beneficial to traders, investors and public customers. 
Accordingly, the Exchange believes that the proposal is consistent with 
the Act because it will allow the Exchange to list all January, 
2021expiration series on the Monday prior to the September, 2018 
expiration. Moreover, this change would simplify the process for adding 
new January LEAP options series and reduce potential for investor 
confusion because all new January LEAP options would be made available 
beginning at the same time, consistent with the amended OLPP. The 
Exchange notes that this proposal does not propose any new provisions 
that have not already been approved by the Commission in the amended 
OLPP, but instead maintains series listing rules that conform to the 
amended OLPP.
    The proposal to permit series to be added based on after-market 
trading is designed to promote just and equitable principles of trade, 
to foster cooperation and coordination with persons engaged in 
facilitating transactions in securities, and to remove impediments to 
and perfect the mechanisms of a free and open market and a national 
market system, by allowing the Exchange to make series available for 
trading with reduced operational difficulties. The Exchange notes that 
this proposed change, which is consistent with the amended OLPP should 
provide market participants with earlier notice regarding what options 
series will be available for trading the following day, and should help 
to enhance investors' ability to plan their options trading.
    The Exchange also believes that the proposed technical changes, 
including adopting language to conform the rule text to clarify the 
operation of LEAPs, promotes just and equitable principles of trade 
(which aligns with approved rules of other options exchanges (see supra 
n. 11), foster cooperation and coordination with persons engaged in 
facilitating transactions in securities, and remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system.

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 purposes of the Act. Specifically, the Exchange 
believes that by conforming Exchange rules to the amended OLPP, the 
Exchange would promote regulatory clarity and consistency, thereby 
reducing burdens on the marketplace and facilitating investor 
protection. The Exchange believes that adopting rules, which it 
anticipates will likewise be adopted by Participant Exchanges, would 
allow for continued competition between Exchange market participants 
trading similar products as their counterparts on other exchanges, 
while at the same time allowing the Exchange to continue to compete for 
order flow with other exchanges in option issues.

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \15\ and Rule 19b-4(f)(6) thereunder.\16\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \16\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \17\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\18\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Commission notes that 
the Exchange's proposal would conform the Exchange's rules to the 
amended OLPP, which the Commission previously approved.\19\ 
Accordingly, the Commission believes that the proposal raises no new or 
novel regulatory issues and waiver of the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
The Commission therefore waives the 30-day operative delay and 
designates the proposed rule change to be operative upon filing.\20\
---------------------------------------------------------------------------

    \17\ 17 CFR 240.19b-4(f)(6).
    \18\ 17 CFR 240.19b-4(f)(6)(iii).
    \19\ See OLPP Notice, supra note 4.
    \20\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such 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 under 
Section 19(b)(2)(B) \21\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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:

[[Page 42188]]

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 Number SR-NYSEAMER-2018-40 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-NYSEAMER-2018-40. 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 the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. 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-NYSEAMER-2018-40 and should be submitted 
on or before September 10, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
---------------------------------------------------------------------------

    \22\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2018-17829 Filed 8-17-18; 8:45 am]
 BILLING CODE 8011-01-P
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