Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Amendment No. 1 and Order Approving on an Accelerated Basis a Proposed Rule Change, as Modified by Amendment No. 1, To List and Trade Shares of the GraniteShares Gold MiniBAR Trust Pursuant to NYSE Arca Rule 8.201-E, 48877-48880 [2018-20998]
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Federal Register / Vol. 83, No. 188 / Thursday, September 27, 2018 / Notices
2. What is the exposure and risk of loss
to PBGC?
SECURITIES AND EXCHANGE
COMMISSION
Exposure. The Plan is in a strong
funded position. For each Plan year
since the adoption of PPA, the Plan’s
actuary certified that it was not
endangered, critical, or critical and
declining status, and as of January 1,
2017, the Plan’s funded percentage was
94.4%. The Plan is a Green zone plan
with steady contributions and a solid
base of active participants.
Risk of loss. The record shows that the
proposed amendment presents a low
risk of loss to PBGC’s multiemployer
insurance program. SCA employers
constitute a small part of the total
number of employers obligated to
contribute to the Plan. Eight of the
Plan’s approximately 130 contributing
employers are SCA employers and 3%
of the Plan’s active participants are
employed by SCA Employers. In
addition, the industry covered by the
amendment has unique characteristics
that suggest the SCA Employers’
contribution base is likely to remain
stable, and the historical data provided
by the Plan demonstrates that if the
proposed amendment had always been
in effect, the Plan’s withdrawal liability
payments would have been reduced by
only .03% of the Plan’s $1.8 billion
assets. Accordingly, the data
substantiates the Plan’s assertions that
the SCA Employer contribution base is
secure and the amendment will not pose
a significant risk to the insurance
system.
[Release No. 34–84257; File No. SR–
NYSEArca–2018–55]
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Conclusion
Based on the Plan’s submissions and
the representations and statements
made in connection with the request for
approval, PBGC has determined that the
plan amendment adopting the special
withdrawal liability rules (1) will apply
only to an industry that has
characteristics that would make the use
of special withdrawal liability rules
appropriate, and (2) will not pose a
significant risk to the insurance system.
Therefore, PBGC hereby grants the
Plan’s request for approval of a plan
amendment providing special
withdrawal liability rules, as set forth
herein. Should the Plan wish to amend
these rules at any time, PBGC approval
of the amendment will be required.
Issued in Washington, DC.
William Reeder,
Director, Pension Benefit Guaranty
Corporation.
[FR Doc. 2018–21040 Filed 9–26–18; 8:45 am]
BILLING CODE 7709–02–P
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Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of
Amendment No. 1 and Order
Approving on an Accelerated Basis a
Proposed Rule Change, as Modified by
Amendment No. 1, To List and Trade
Shares of the GraniteShares Gold
MiniBAR Trust Pursuant to NYSE Arca
Rule 8.201–E
September 21, 2018
I. Introduction
On July 19, 2018, NYSE Arca, Inc.
(‘‘NYSE Arca’’ or ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to list and trade shares
(‘‘Shares’’) of the GraniteShares Gold
MiniBAR Trust (‘‘Trust’’) under NYSE
Arca Equities Rule 8.201–E. The
proposed rule change was published for
comment in the Federal Register on
August 8, 2018.3 On September 14,
2018, the Exchange filed Amendment
No. 1 to the proposed rule change.4 The
Commission has not received any
comments on the proposed rule change.
The Commission is publishing this
notice to solicit comments on
Amendment No. 1 from interested
persons, and is approving the proposed
rule change, as modified by Amendment
No. 1, on an accelerated basis.
II. The Description of the Proposed
Rule Change, as Modified by
Amendment No. 1 5
The Exchange proposes to list and
trade the Shares under NYSE Arca
Equities Rule 8.201–E,6 which governs
the listing and trading of Commodity1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 83765
(Aug. 2, 2018), 83 FR 39138 (‘‘Notice’’).
4 In Amendment No. 1, the Exchange: (1) Asserted
that gold futures contribute to and provide evidence
of the liquidity of the overall market for gold; and
(2) stated that the Chicago Mercantile Exchange
Group (‘‘CME Group’’) and ICE Futures US (‘‘ICE’’)
are members of the Intermarket Surveillance Group
(‘‘ISG’’). Amendment No. 1 is available at: https://
www.sec.gov/comments/sr-NYSEArca–2018-55/
srnysearca201855-4348511-173281.pdf.
5 A more detailed description of the Trust and the
Shares, the creation and redemption of Shares, the
NAV, the availability of information, among other
things, is included in the Registration Statement,
infra note 6, and the Notice, supra note 3.
6 The Trust has filed a registration statement on
Form S–1 under the Securities Act of 1933 (15
U.S.C. 77a), dated July 2, 2018 (File No. 333–
226034) (‘‘Registration Statement’’).
2 17
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48877
Based Trust Shares on the Exchange.7
The Shares will represent units of
fractional undivided beneficial interest
in and ownership of the Trust. The
investment objective of the Trust will be
for the Shares to reflect the performance
of the price of gold, less the expenses
and liabilities of the Trust.
The sponsor of the Trust is
GraniteShares LLC (‘‘Sponsor’’). The
‘‘Trustee’’ is The Bank of New York
Mellon and the ‘‘Custodian’’ is ICBC
Standard Bank Plc.
III. Discussion and Commission
Findings
After careful review, the Commission
finds that the Exchange’s proposed rule
change, as modified by Amendment No.
1, to list and trade the Shares is
consistent with the Act and the rules
and regulations thereunder applicable to
a national securities exchange.8 In
particular, the Commission finds that
the proposal, as modified by
Amendment No. 1, is consistent with
Section 11A(a)(1)(C)(iii) of the Act,9
which sets forth Congress’ finding that
it is in the public interest and
appropriate for the protection of
investors and the maintenance of fair
and orderly markets to assure the
availability to brokers, dealers, and
investors of information with respect to
quotations for and transactions in
securities. The last-sale price for the
Shares will be disseminated over the
Consolidated Tape. According to the
Exchange, there is a considerable
amount of information about gold and
gold markets available on public
websites and through professional and
subscription services. Investors may
obtain gold pricing information on a 24hour basis based on the spot price for an
ounce of gold from various financial
information service providers.10
7 A ‘‘Commodity-Based Trust Share’’ is a security
(a) that is issued by a trust that holds a specified
commodity deposited with the trust; (b) that is
issued by such trust in a specified aggregate
minimum number in return for a deposit of a
quantity of the underlying commodity; and (c) that,
when aggregated in the same specified minimum
number, may be redeemed at a holder’s request by
such trust which will deliver to the redeeming
holder the quantity of the underlying commodity.
See NYSE Arca Equities Rule 8.201(c)(1).
8 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
9 15 U.S.C. 78k–1(a)(1)(C)(iii).
10 The Exchange states that Reuters and
Bloomberg, for example, provide at no charge on
their websites delayed information regarding the
spot price of Gold and last sale prices of gold
futures, as well as information about news and
developments in the gold market. Reuters and
Bloomberg also offer a professional service to
subscribers for a fee that provides information on
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Federal Register / Vol. 83, No. 188 / Thursday, September 27, 2018 / Notices
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Additionally, the Commission finds
that the proposed rule change, as
modified by Amendment No. 1, is
consistent with Section 6(b)(5) of the
Exchange Act,11 which requires, among
other things, that the Exchange’s rules
be designed to prevent fraudulent and
manipulative acts and practices,
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest. The
Commission notes that the Exchange
has surveillance-sharing agreements
with significant, regulated markets for
trading futures on gold. Specifically,
according to the Exchange: (1) The most
significant gold futures exchange in the
U.S. is COMEX, a subsidiary of New
York Mercantile Exchange, Inc., and a
subsidiary of the CME Group; (2) ICE
also lists gold futures;12 and (3) the CME
Group and ICE are members of the
ISG,13 which will allow NYSE Arca to
obtain surveillance information from
COMEX and ICE. Both COMEX and ICE
are regulated by the U.S. Commodity
Futures Trading Commission
(‘‘CFTC’’).14 The gold futures market is
of significant size and liquidity.15
The Commission believes that the
proposed rule change, as modified by
Amendment No. 1, is reasonably
designed to promote fair disclosure of
information that may be necessary to
price the Shares appropriately. NYSE
Arca Equities Rule 8.201–E(e)(2)(v)
requires that an intraday indicative
value (‘‘IIV,’’ which is referred to in the
gold prices directly from market participants.
Complete real-time data for gold futures and
options prices traded on the COMEX are available
by subscription from Reuters and Bloomberg. There
are a variety of other public websites providing
information on gold, ranging from those
specializing in precious metals to sites maintained
by major newspapers. In addition, the LBMA Gold
Price is publicly available at no charge at
www.lbma.org.uk. See Notice, supra note 3, 83 FR
at 39140.
11 15 U.S.C. 78f(b)(5).
12 See Notice, supra note 3, 83 FR at 39139.
13 See Amendment No. 1, supra note 4.
14 See Securities Exchange Act Release No. 82593
(January 26, 2018), 83 FR 4718, 4719 (February 1,
2018) (approving the listing and trading of shares
of the Perth Mint Physical Gold ETF).
15 The Commission notes that it has approved the
listing and trading of other Commodity-Based Trust
Shares overlying gold. See, e.g., Securities Exchange
Act Release No. 81918 (October 23, 2017), 82 FR
49884 (October 27, 2017) (SR–NYSEArca–2017–98);
Securities Exchange Act Release No. 71378 (January
23, 2014), 79 FR 71378 (January 29, 2014) (SR–
NYSEArca–2013–137); and Securities Exchange Act
Release No. 70195 (August 14, 2013), 78 FR 51239
(August 20, 2013) (SR–NYSEArca–2013–61). See
also Securities Exchange Act Release No. 83723
(July 26, 2018), 83 FR 37579, 37594 (August 1,
2018) (SR–BatsBZX–2016–30) (disapproving the
listing and trading of shares of the Winklevoss
Bitcoin Trust).
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17:20 Sep 26, 2018
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rule as the ‘‘Indicative Trust Value’’) be
calculated and disseminated at least
every 15 seconds. The IIV will be
calculated based on the amount of gold
held by the Trust and a price of gold
derived from updated bids and offers
indicative of the spot price of gold. The
Exchange states that the IIV relating to
the Shares will be widely disseminated
by one or more major market data
vendors at least every 15 seconds during
the Core Trading Session.16 The NAV of
the Trust will be published by the
Sponsor on each day that the NYSE
Arca is open for regular trading and will
be posted on the Trust’s website.17 The
Trust also will publish the following
information on their website: (1) The
mid-point of the bid-ask price as of the
close of trading (‘‘Bid/Ask Price’’), and
a calculation of the premium or
discount of such price against such
NAV; (2) data in chart format displaying
the frequency distribution of discounts
and premiums of the Bid/Ask Price
against the NAV, within appropriate
ranges, for each of the four previous
calendar quarters; (3) the Trust’s
prospectus, as well as the two most
recent reports to stockholders; and (4)
the last-sale price of the Shares as
traded in the U.S. market.18 In addition,
information regarding market price and
trading volume of the Shares will be
continually available on a real-time
basis throughout the day on brokers’
computer screens and other electronic
services. Information regarding the
previous day’s closing price and trading
volume information for the Shares will
be published daily in the financial
section of newspapers.
The Commission also believes that the
proposal, as modified by Amendment
No. 1, is reasonably designed to prevent
trading when a reasonable degree of
transparency cannot be assured. With
respect to trading halts, the Exchange
may consider all relevant factors in
exercising its discretion to halt or
suspend trading in the Shares. Trading
on the Exchange in the Shares may be
halted because of market conditions or
for reasons that, in the view of the
Exchange, make trading in the Shares
inadvisable. These may include: (1) The
extent to which conditions in the
underlying gold market have caused
disruptions and/or lack of trading, or (2)
whether other unusual conditions or
circumstances detrimental to the
maintenance of a fair and orderly
market are present. In addition, trading
in Shares will be subject to trading halts
caused by extraordinary market
16 See
Notice, supra note 3, 83 FR at 39142.
id.
18 See id. at 39140–41.
17 See
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volatility pursuant to the Exchange’s
‘‘circuit breaker’’ rule.19 The Exchange
will halt trading in the Shares if the
NAV of the Trust is not calculated or
disseminated daily.20 The Exchange
may halt trading during the day in
which an interruption occurs to the
dissemination of the IIV; if the
interruption to the dissemination of the
IIV persists past the trading day in
which it occurs, the Exchange will halt
trading no later than the beginning of
the trading day following the
interruption.21
Additionally, the Commission notes
that market makers in the Shares will be
subject to the requirements of NYSE
Arca Equities Rule 8.201–E(g), which
are designed to allow the Exchange to
ensure that they do not use their
positions to violate the requirements of
Exchange rules or applicable federal
securities laws.22
In support of this proposal, the
Exchange has made the following
additional representations:
(1) The Shares will be listed and
traded on the Exchange pursuant to the
initial and continued listing criteria in
NYSE Arca Equities Rule 8.201–E.23
(2) The Exchange has appropriate
rules to facilitate transactions in the
Shares during all trading sessions.24
(3) The Exchange deems the Shares to
be equity securities.25
(4) The Exchange also has a general
policy prohibiting the distribution of
material, non-public information by its
employees.26
(5) Trading in the Shares will be
subject to the existing trading
surveillances administered by the
Exchange, as well as cross-market
surveillances administered by the
Financial Industry Regulatory Authority
(‘‘FINRA’’) on behalf of the Exchange,
which are designed to detect violations
of Exchange rules and applicable federal
securities laws, and that these
19 See
id. at 39141.
id.
21 See id.
22 Commentary .04 of NYSE Arca Equities Rule
6.3 requires that an ETP Holder acting as a
registered market maker in the Shares, and its
affiliates, establish, maintain and enforce written
policies and procedures reasonably designed to
prevent the misuse of any material nonpublic
information with respect to such products, any
components of the related products, any physical
asset or commodity underlying the product,
applicable currencies, underlying indexes, related
futures or options on futures, and any related
derivative instruments.
23 See id. at 39142.
24 See id. at 39141.
25 See id. The Commission notes that, as a result,
trading of the Shares will be subject to the
Exchange’s existing rules governing the trading of
equity securities.
26 See id. at 39141–42.
20 See
E:\FR\FM\27SEN1.SGM
27SEN1
Federal Register / Vol. 83, No. 188 / Thursday, September 27, 2018 / Notices
procedures are adequate to properly
monitor Exchange trading of the Shares
in all trading sessions and to deter and
detect violations of Exchange rules and
federal securities laws applicable to
trading on the Exchange.27
(6) The Exchange or FINRA, on behalf
of the Exchange, or both, will
communicate as needed regarding
trading in the Shares with other markets
and other entities that are members of
the ISG, and the Exchange or FINRA, on
behalf of the Exchange, or both, may
obtain trading information regarding
trading in the Shares from such markets
and other entities. In addition, the
Exchange may obtain information
regarding trading in the Shares from
markets and other entities that are
members of ISG or with which the
Exchange has in place a comprehensive
surveillance sharing agreement.28
(7) Prior to the commencement of
trading, the Exchange will inform its
ETP Holders in an Information Bulletin
of the special characteristics and risks
associated with trading the Shares.
Specifically, the Information Bulletin
will discuss the following: (1) The
procedures for purchases and
redemptions of Shares in Baskets
(including noting that Shares are not
individually redeemable); (2) NYSE
Arca Rule 9.2–E(a), which imposes a
duty of due diligence on its ETP Holders
to learn the essential facts relating to
every customer prior to trading the
Shares; (3) how information regarding
the IIV is disseminated; (4) the
requirement that ETP Holders deliver a
prospectus to investors purchasing
newly issued Shares prior to or
concurrently with the confirmation of a
transaction; (5) the possibility that
trading spreads and the resulting
premium or discount on the Shares may
widen as a result of reduced liquidity of
gold trading during the Core and Late
Trading Sessions after the close of the
major world gold markets; and (6)
trading information.29
daltland on DSKBBV9HB2PROD with NOTICES
(8) All statements and representations
made in this filing regarding (a) the
description of the portfolio, (b)
limitations on portfolio holdings or
reference assets, or (c) the applicability
of Exchange listing rules specified in
this rule filing shall constitute
27 See id. at 39141. FINRA conducts cross-market
surveillances on behalf of the Exchange pursuant to
a regulatory services agreement. The Exchange is
responsible for FINRA’s performance under this
regulatory services agreement. See id. at 39141,
n.28.
28 See id. at 39141.
29 See id. at 39142.
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18:08 Sep 26, 2018
Jkt 244001
continued listing requirements for
listing the Shares on the Exchange.30
(9) The issuer has represented to the
Exchange that it will advise the
Exchange of any failure by the Trust to
comply with the continued listing
requirements, and, pursuant to its
obligations under Section 19(g)(1) of the
Act, the Exchange will monitor for
compliance with the continued listing
requirements. If the Trust is not in
compliance with the applicable listing
requirements, the Exchange will
commence delisting procedures under
NYSE Arca Rule 5.5–E(m).31
This approval order is based on all of
the Exchange’s representations—
including those set forth above, in the
Notice, and in Amendment No. 1—and
the Exchange’s description of the Trust.
For the foregoing reasons, the
Commission finds that the proposed
rule change, as modified by Amendment
No. 1, is consistent with Sections 6(b)(5)
and 11A(a)(1)(C)(iii) of the Act 32 and
the rules and regulations thereunder
applicable to a national securities
exchange.
IV. Solicitation of Comments on
Amendment No. 1 to the Proposed Rule
Change
Interested persons are invited to
submit written data, views, and
arguments concerning Amendment No.
1 to the proposed rule change.
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–2018–55 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–2018–55. 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
30 See id. See also NYSE Arca Rule 8.201–
E(e)(2)(vii).
31 See Notice, supra note 3, at 39142.
32 15 U.S.C. 78f(b)(5) and 15 U.S.C. 78k–
1(a)(1)(C)(iii), respectively.
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48879
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 this
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–NYSEArca–2018–55 and
should be submitted on or before
October 18, 2018.
V. Accelerated Approval of Proposed
Rule Change, as Modified by
Amendment No. 1
The Commission finds good cause to
approve the proposed rule change, as
modified by Amendment No. 1, prior to
the 30th day after the date of
publication of notice of Amendment No.
1 in the Federal Register. Amendment
No. 1 supplements the proposal by
providing additional information
regarding regulation of the gold futures
market. This information assisted the
Commission in evaluating the Shares’
susceptibility to manipulation.
Accordingly, the Commission finds
good cause, pursuant to Section 19(b)(2)
of the Exchange Act,33 to approve the
proposed rule change, as modified by
Amendment No. 1, on an accelerated
basis.
VI. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Exchange Act,34
that the proposed rule change (SR–
NYSEArca–2018–55), as modified by
Amendment No. 1 be, and it hereby is,
approved.
33 15
34 15
E:\FR\FM\27SEN1.SGM
U.S.C. 78s(b)(2).
U.S.C. 78s(b)(2).
27SEN1
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Federal Register / Vol. 83, No. 188 / Thursday, September 27, 2018 / Notices
For the Commission, by the Division
of Trading and Markets, pursuant to
delegated authority.35
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–20998 Filed 9–26–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–84259; File No. SR–NSCC–
2018–007]
Self-Regulatory Organizations;
National Securities Clearing
Corporation; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Clarify the Rules That
Describe the Buy-In Process
September 21, 2018.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on
September 19, 2018, National Securities
Clearing Corporation (‘‘NSCC’’) 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 clearing
agency. NSCC filed the proposed rule
change pursuant to Section 19(b)(3)(A)
of the Act 3 and Rule 19b–4(f)(4)
thereunder.4 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
daltland on DSKBBV9HB2PROD with NOTICES
The proposed rule change consists of
modifications to the Rules and
Procedures of NSCC (‘‘Rules’’) 5 in order
to enhance the rules and procedures
that describe the process by which a
Member entitled to receive securities
from the Corporation, where such
securities have failed to deliver, may
submit a notice of its intent to purchase,
or ‘‘buy-in,’’ any or all of such securities
and the processing of the subsequent
execution of that buy-in. The proposed
changes would not change how buy-ins
are processed at NSCC, but would
clarify and simplify the rules that
35 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).
4 17 CFR 240.19b–4(f)(4).
5 Available at https://www.dtcc.com/legal/rulesand-procedures. Capitalized terms used herein and
not otherwise defined shall have the meaning
assigned to such terms in the Rules.
1 15
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17:20 Sep 26, 2018
Jkt 244001
govern this processing, as described
below.
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission, the
clearing agency 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
clearing agency has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
1. Purpose
NSCC is proposing to make certain
revisions to Rule 10 (Failure to Deliver
on Security Balance Orders), Section 7
of Rule 11 (CNS System), Section J of
Procedure VII (CNS Accounting
Operation), and Sections A and B of
Procedure X (Execution of Buy-Ins) of
the Rules, which describe the process by
which a Member entitled to receive
securities (such quantity of securities is
defined in the Rules as that Member’s
‘‘Long Position’’), where such securities
have failed to deliver, may provide
NSCC with notice of its intent to buyin any or all of its Long Position.6 These
rules also describe the processing of the
subsequent execution of that buy-in.
First, the proposed changes would
update and simplify the Rules by
removing statements that do not provide
important information to Members
regarding the buy-in processing service,
and NSCC believes this proposed
change would make the Rules clearer
and more easily understood by
Members. For example, these proposed
changes would remove descriptions of
processing that do not occur at NSCC,
and descriptions of rules that are not
enforced by NSCC.
Second, the proposed changes would
revise, clarify and enhance the
transparency of these rules by, for
example, (1) reorganizing the rules
governing buy-in processing such that
they appear in fewer places in the Rules,
(2) revising certain statements and
adding new descriptions of buy-in
processing to improve the transparency
of these rules, and (3) correcting and
updating the uses of defined terms.
NSCC believes making these
descriptions clearer would enhance
6 Id.
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Fmt 4703
Sfmt 4703
Members’ understanding of their rights
and obligations in connection with this
service.
Each of these proposed changes is
described below.
(i) Overview of the Buy-In Process
Under the Rules, a Member with a
Long Position (referred to as the
‘‘originator’’) may submit to NSCC a
notice of its intention to buy-in any or
all of its Long Position. Such notice is
currently referred in the Rules as
‘‘Notice of Intention to Buy-In’’ and a
‘‘Buy-In Notice’’ and must specify the
quantity of securities, not exceeding the
originator’s Long Position, it intends to
buy-in (such quantity of securities is
referred to as the ‘‘Buy-In Position’’). As
described in Section J of Procedure VII
of the Rules, Buy-In Notices may be
either (1) submitted directly to NSCC by
the originator, and such Buy-In Notices
are referred to as an ‘‘Original Buy-In
Notice,’’ or (2) submitted directly to
NSCC by the originator as a ‘‘Buy-In
Retransmittal Notice’’ after the
originator has received notice that is has
failed to deliver securities away from
NSCC. References to Buy-In Notices
include both Original Buy-In Notices
and Buy-In Retransmittal Notices.
The day the Buy-In Notice is
submitted to NSCC is referred to as N,
and N+1 and N+2 refer to the
succeeding days. Original Buy-In
Notices expire on N+2 and Buy-In
Retransmittal Notices expire on N+1.
The Buy-In Position is given high
priority for allocation in NSCC’s
Continuous Net Settlement (‘‘CNS’’) 7
system through the completion of CNS
allocations in the day cycle on the day
the buy-in expires.
If, with respect to Original Buy-In
Notices, a Buy-in Position remains
unfilled after the completion of the CNS
allocation in the evening cycle on N+1,
or shortly after the receipt of a Buy-In
Retransmittal Notice, NSCC issues CNS
Retransmittal Notices to those Members
with the oldest Short Positions in those
securities in an amount equal to the
originator’s Long Position. Such notices
specify the originator and the total
quantity of securities requested in the
Buy-In Notice. If several Members have
Short Positions with the same age, all
7 CNS is an on-going accounting system which
nets each day’s settling trades with the prior day’s
closing positions, producing new Short or Long
Positions per security issue for each Member. NSCC
is always the contra side for all positions. The
positions are then passed against the Member’s
Designated Depository positions and available
securities are allocated by book-entry. This
allocation of securities is accomplished through an
evening cycle followed by a day cycle. CNS and its
operation are described in Rule 11 and Procedure
VII of the Rules. Supra note 5.
E:\FR\FM\27SEN1.SGM
27SEN1
]]>Agencies
[Federal Register Volume 83, Number 188 (Thursday, September 27, 2018)]
[Notices]
[Pages 48877-48880]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-20998]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-84257; File No. SR-NYSEArca-2018-55]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Amendment No. 1 and Order Approving on an Accelerated Basis a
Proposed Rule Change, as Modified by Amendment No. 1, To List and Trade
Shares of the GraniteShares Gold MiniBAR Trust Pursuant to NYSE Arca
Rule 8.201-E
September 21, 2018
I. Introduction
On July 19, 2018, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to
list and trade shares (``Shares'') of the GraniteShares Gold MiniBAR
Trust (``Trust'') under NYSE Arca Equities Rule 8.201-E. The proposed
rule change was published for comment in the Federal Register on August
8, 2018.\3\ On September 14, 2018, the Exchange filed Amendment No. 1
to the proposed rule change.\4\ The Commission has not received any
comments on the proposed rule change. The Commission is publishing this
notice to solicit comments on Amendment No. 1 from interested persons,
and is approving the proposed rule change, as modified by Amendment No.
1, on an accelerated basis.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 83765 (Aug. 2,
2018), 83 FR 39138 (``Notice'').
\4\ In Amendment No. 1, the Exchange: (1) Asserted that gold
futures contribute to and provide evidence of the liquidity of the
overall market for gold; and (2) stated that the Chicago Mercantile
Exchange Group (``CME Group'') and ICE Futures US (``ICE'') are
members of the Intermarket Surveillance Group (``ISG''). Amendment
No. 1 is available at: https://www.sec.gov/comments/sr-NYSEArca-2018-55/srnysearca201855-4348511-173281.pdf.
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II. The Description of the Proposed Rule Change, as Modified by
Amendment No. 1 \5\
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\5\ A more detailed description of the Trust and the Shares, the
creation and redemption of Shares, the NAV, the availability of
information, among other things, is included in the Registration
Statement, infra note 6, and the Notice, supra note 3.
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The Exchange proposes to list and trade the Shares under NYSE Arca
Equities Rule 8.201-E,\6\ which governs the listing and trading of
Commodity-Based Trust Shares on the Exchange.\7\ The Shares will
represent units of fractional undivided beneficial interest in and
ownership of the Trust. The investment objective of the Trust will be
for the Shares to reflect the performance of the price of gold, less
the expenses and liabilities of the Trust.
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\6\ The Trust has filed a registration statement on Form S-1
under the Securities Act of 1933 (15 U.S.C. 77a), dated July 2, 2018
(File No. 333-226034) (``Registration Statement'').
\7\ A ``Commodity-Based Trust Share'' is a security (a) that is
issued by a trust that holds a specified commodity deposited with
the trust; (b) that is issued by such trust in a specified aggregate
minimum number in return for a deposit of a quantity of the
underlying commodity; and (c) that, when aggregated in the same
specified minimum number, may be redeemed at a holder's request by
such trust which will deliver to the redeeming holder the quantity
of the underlying commodity. See NYSE Arca Equities Rule
8.201(c)(1).
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The sponsor of the Trust is GraniteShares LLC (``Sponsor''). The
``Trustee'' is The Bank of New York Mellon and the ``Custodian'' is
ICBC Standard Bank Plc.
III. Discussion and Commission Findings
After careful review, the Commission finds that the Exchange's
proposed rule change, as modified by Amendment No. 1, to list and trade
the Shares is consistent with the Act and the rules and regulations
thereunder applicable to a national securities exchange.\8\ In
particular, the Commission finds that the proposal, as modified by
Amendment No. 1, is consistent with Section 11A(a)(1)(C)(iii) of the
Act,\9\ which sets forth Congress' finding that it is in the public
interest and appropriate for the protection of investors and the
maintenance of fair and orderly markets to assure the availability to
brokers, dealers, and investors of information with respect to
quotations for and transactions in securities. The last-sale price for
the Shares will be disseminated over the Consolidated Tape. According
to the Exchange, there is a considerable amount of information about
gold and gold markets available on public websites and through
professional and subscription services. Investors may obtain gold
pricing information on a 24-hour basis based on the spot price for an
ounce of gold from various financial information service providers.\10\
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\8\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\9\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
\10\ The Exchange states that Reuters and Bloomberg, for
example, provide at no charge on their websites delayed information
regarding the spot price of Gold and last sale prices of gold
futures, as well as information about news and developments in the
gold market. Reuters and Bloomberg also offer a professional service
to subscribers for a fee that provides information on gold prices
directly from market participants. Complete real-time data for gold
futures and options prices traded on the COMEX are available by
subscription from Reuters and Bloomberg. There are a variety of
other public websites providing information on gold, ranging from
those specializing in precious metals to sites maintained by major
newspapers. In addition, the LBMA Gold Price is publicly available
at no charge at www.lbma.org.uk. See Notice, supra note 3, 83 FR at
39140.
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[[Page 48878]]
Additionally, the Commission finds that the proposed rule change,
as modified by Amendment No. 1, is consistent with Section 6(b)(5) of
the Exchange Act,\11\ which requires, among other things, that the
Exchange's rules be designed to prevent fraudulent and manipulative
acts and practices, promote just and equitable principles of trade, to
remove impediments to and perfect the mechanism of a free and open
market and a national market system, and, in general, to protect
investors and the public interest. The Commission notes that the
Exchange has surveillance-sharing agreements with significant,
regulated markets for trading futures on gold. Specifically, according
to the Exchange: (1) The most significant gold futures exchange in the
U.S. is COMEX, a subsidiary of New York Mercantile Exchange, Inc., and
a subsidiary of the CME Group; (2) ICE also lists gold futures;\12\ and
(3) the CME Group and ICE are members of the ISG,\13\ which will allow
NYSE Arca to obtain surveillance information from COMEX and ICE. Both
COMEX and ICE are regulated by the U.S. Commodity Futures Trading
Commission (``CFTC'').\14\ The gold futures market is of significant
size and liquidity.\15\
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\11\ 15 U.S.C. 78f(b)(5).
\12\ See Notice, supra note 3, 83 FR at 39139.
\13\ See Amendment No. 1, supra note 4.
\14\ See Securities Exchange Act Release No. 82593 (January 26,
2018), 83 FR 4718, 4719 (February 1, 2018) (approving the listing
and trading of shares of the Perth Mint Physical Gold ETF).
\15\ The Commission notes that it has approved the listing and
trading of other Commodity-Based Trust Shares overlying gold. See,
e.g., Securities Exchange Act Release No. 81918 (October 23, 2017),
82 FR 49884 (October 27, 2017) (SR-NYSEArca-2017-98); Securities
Exchange Act Release No. 71378 (January 23, 2014), 79 FR 71378
(January 29, 2014) (SR-NYSEArca-2013-137); and Securities Exchange
Act Release No. 70195 (August 14, 2013), 78 FR 51239 (August 20,
2013) (SR-NYSEArca-2013-61). See also Securities Exchange Act
Release No. 83723 (July 26, 2018), 83 FR 37579, 37594 (August 1,
2018) (SR-BatsBZX-2016-30) (disapproving the listing and trading of
shares of the Winklevoss Bitcoin Trust).
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The Commission believes that the proposed rule change, as modified
by Amendment No. 1, is reasonably designed to promote fair disclosure
of information that may be necessary to price the Shares appropriately.
NYSE Arca Equities Rule 8.201-E(e)(2)(v) requires that an intraday
indicative value (``IIV,'' which is referred to in the rule as the
``Indicative Trust Value'') be calculated and disseminated at least
every 15 seconds. The IIV will be calculated based on the amount of
gold held by the Trust and a price of gold derived from updated bids
and offers indicative of the spot price of gold. The Exchange states
that the IIV relating to the Shares will be widely disseminated by one
or more major market data vendors at least every 15 seconds during the
Core Trading Session.\16\ The NAV of the Trust will be published by the
Sponsor on each day that the NYSE Arca is open for regular trading and
will be posted on the Trust's website.\17\ The Trust also will publish
the following information on their website: (1) The mid-point of the
bid-ask price as of the close of trading (``Bid/Ask Price''), and a
calculation of the premium or discount of such price against such NAV;
(2) data in chart format displaying the frequency distribution of
discounts and premiums of the Bid/Ask Price against the NAV, within
appropriate ranges, for each of the four previous calendar quarters;
(3) the Trust's prospectus, as well as the two most recent reports to
stockholders; and (4) the last-sale price of the Shares as traded in
the U.S. market.\18\ In addition, information regarding market price
and trading volume of the Shares will be continually available on a
real-time basis throughout the day on brokers' computer screens and
other electronic services. Information regarding the previous day's
closing price and trading volume information for the Shares will be
published daily in the financial section of newspapers.
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\16\ See Notice, supra note 3, 83 FR at 39142.
\17\ See id.
\18\ See id. at 39140-41.
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The Commission also believes that the proposal, as modified by
Amendment No. 1, is reasonably designed to prevent trading when a
reasonable degree of transparency cannot be assured. With respect to
trading halts, the Exchange may consider all relevant factors in
exercising its discretion to halt or suspend trading in the Shares.
Trading on the Exchange in the Shares may be halted because of market
conditions or for reasons that, in the view of the Exchange, make
trading in the Shares inadvisable. These may include: (1) The extent to
which conditions in the underlying gold market have caused disruptions
and/or lack of trading, or (2) whether other unusual conditions or
circumstances detrimental to the maintenance of a fair and orderly
market are present. In addition, trading in Shares will be subject to
trading halts caused by extraordinary market volatility pursuant to the
Exchange's ``circuit breaker'' rule.\19\ The Exchange will halt trading
in the Shares if the NAV of the Trust is not calculated or disseminated
daily.\20\ The Exchange may halt trading during the day in which an
interruption occurs to the dissemination of the IIV; if the
interruption to the dissemination of the IIV persists past the trading
day in which it occurs, the Exchange will halt trading no later than
the beginning of the trading day following the interruption.\21\
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\19\ See id. at 39141.
\20\ See id.
\21\ See id.
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Additionally, the Commission notes that market makers in the Shares
will be subject to the requirements of NYSE Arca Equities Rule 8.201-
E(g), which are designed to allow the Exchange to ensure that they do
not use their positions to violate the requirements of Exchange rules
or applicable federal securities laws.\22\
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\22\ Commentary .04 of NYSE Arca Equities Rule 6.3 requires that
an ETP Holder acting as a registered market maker in the Shares, and
its affiliates, establish, maintain and enforce written policies and
procedures reasonably designed to prevent the misuse of any material
nonpublic information with respect to such products, any components
of the related products, any physical asset or commodity underlying
the product, applicable currencies, underlying indexes, related
futures or options on futures, and any related derivative
instruments.
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In support of this proposal, the Exchange has made the following
additional representations:
(1) The Shares will be listed and traded on the Exchange pursuant
to the initial and continued listing criteria in NYSE Arca Equities
Rule 8.201-E.\23\
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\23\ See id. at 39142.
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(2) The Exchange has appropriate rules to facilitate transactions
in the Shares during all trading sessions.\24\
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\24\ See id. at 39141.
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(3) The Exchange deems the Shares to be equity securities.\25\
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\25\ See id. The Commission notes that, as a result, trading of
the Shares will be subject to the Exchange's existing rules
governing the trading of equity securities.
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(4) The Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.\26\
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\26\ See id. at 39141-42.
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(5) Trading in the Shares will be subject to the existing trading
surveillances administered by the Exchange, as well as cross-market
surveillances administered by the Financial Industry Regulatory
Authority (``FINRA'') on behalf of the Exchange, which are designed to
detect violations of Exchange rules and applicable federal securities
laws, and that these
[[Page 48879]]
procedures are adequate to properly monitor Exchange trading of the
Shares in all trading sessions and to deter and detect violations of
Exchange rules and federal securities laws applicable to trading on the
Exchange.\27\
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\27\ See id. at 39141. FINRA conducts cross-market surveillances
on behalf of the Exchange pursuant to a regulatory services
agreement. The Exchange is responsible for FINRA's performance under
this regulatory services agreement. See id. at 39141, n.28.
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(6) The Exchange or FINRA, on behalf of the Exchange, or both, will
communicate as needed regarding trading in the Shares with other
markets and other entities that are members of the ISG, and the
Exchange or FINRA, on behalf of the Exchange, or both, may obtain
trading information regarding trading in the Shares from such markets
and other entities. In addition, the Exchange may obtain information
regarding trading in the Shares from markets and other entities that
are members of ISG or with which the Exchange has in place a
comprehensive surveillance sharing agreement.\28\
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\28\ See id. at 39141.
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(7) Prior to the commencement of trading, the Exchange will inform
its ETP Holders in an Information Bulletin of the special
characteristics and risks associated with trading the Shares.
Specifically, the Information Bulletin will discuss the following: (1)
The procedures for purchases and redemptions of Shares in Baskets
(including noting that Shares are not individually redeemable); (2)
NYSE Arca Rule 9.2-E(a), which imposes a duty of due diligence on its
ETP Holders to learn the essential facts relating to every customer
prior to trading the Shares; (3) how information regarding the IIV is
disseminated; (4) the requirement that ETP Holders deliver a prospectus
to investors purchasing newly issued Shares prior to or concurrently
with the confirmation of a transaction; (5) the possibility that
trading spreads and the resulting premium or discount on the Shares may
widen as a result of reduced liquidity of gold trading during the Core
and Late Trading Sessions after the close of the major world gold
markets; and (6) trading information.\29\
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\29\ See id. at 39142.
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(8) All statements and representations made in this filing
regarding (a) the description of the portfolio, (b) limitations on
portfolio holdings or reference assets, or (c) the applicability of
Exchange listing rules specified in this rule filing shall constitute
continued listing requirements for listing the Shares on the
Exchange.\30\
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\30\ See id. See also NYSE Arca Rule 8.201-E(e)(2)(vii).
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(9) The issuer has represented to the Exchange that it will advise
the Exchange of any failure by the Trust to comply with the continued
listing requirements, and, pursuant to its obligations under Section
19(g)(1) of the Act, the Exchange will monitor for compliance with the
continued listing requirements. If the Trust is not in compliance with
the applicable listing requirements, the Exchange will commence
delisting procedures under NYSE Arca Rule 5.5-E(m).\31\
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\31\ See Notice, supra note 3, at 39142.
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This approval order is based on all of the Exchange's
representations--including those set forth above, in the Notice, and in
Amendment No. 1--and the Exchange's description of the Trust.
For the foregoing reasons, the Commission finds that the proposed
rule change, as modified by Amendment No. 1, is consistent with
Sections 6(b)(5) and 11A(a)(1)(C)(iii) of the Act \32\ and the rules
and regulations thereunder applicable to a national securities
exchange.
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\32\ 15 U.S.C. 78f(b)(5) and 15 U.S.C. 78k-1(a)(1)(C)(iii),
respectively.
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IV. Solicitation of Comments on Amendment No. 1 to the Proposed Rule
Change
Interested persons are invited to submit written data, views, and
arguments concerning Amendment No. 1 to the proposed rule change.
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 Number SR-NYSEArca-2018-55 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-2018-55. 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 this 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-NYSEArca-2018-55 and should be submitted
on or before October 18, 2018.
V. Accelerated Approval of Proposed Rule Change, as Modified by
Amendment No. 1
The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 1, prior to the 30th day after the
date of publication of notice of Amendment No. 1 in the Federal
Register. Amendment No. 1 supplements the proposal by providing
additional information regarding regulation of the gold futures market.
This information assisted the Commission in evaluating the Shares'
susceptibility to manipulation. Accordingly, the Commission finds good
cause, pursuant to Section 19(b)(2) of the Exchange Act,\33\ to approve
the proposed rule change, as modified by Amendment No. 1, on an
accelerated basis.
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\33\ 15 U.S.C. 78s(b)(2).
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VI. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act,\34\ that the proposed rule change (SR-NYSEArca-2018-55),
as modified by Amendment No. 1 be, and it hereby is, approved.
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\34\ 15 U.S.C. 78s(b)(2).
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[[Page 48880]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\35\
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\35\ 17 CFR 200.30-3(a)(12).
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-20998 Filed 9-26-18; 8:45 am]
BILLING CODE 8011-01-P
