Initial Form ATS-N Filing; Notice of Extension of Commission Review Period, 26491-26492 [2019-11839]

Download as PDF Federal Register / Vol. 84, No. 109 / Thursday, June 6, 2019 / Notices khammond on DSKBBV9HB2PROD with NOTICES registered management investment company will be a voting stock and have equal voting rights with every other outstanding voting stock. Applicants state that multiple classes of shares of the Funds may violate section 18(i) of the Act because each class would be entitled to exclusive voting rights with respect to matters solely related to that class. 4. Section 6(c) of the Act provides that the Commission may exempt any person, security or transaction or any class or classes of persons, securities or transactions from any provision of the Act, or from any rule or regulation under the Act, if and to the extent such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Applicants request an exemption under section 6(c) from sections 18(a)(2), 18(c) and 18(i) to permit the Funds to issue multiple classes of shares. 5. Applicants submit that the proposed allocation of expenses relating to distribution and voting rights among multiple classes is equitable and will not discriminate against any group or class of shareholders. Applicants submit that the proposed arrangements would permit a Fund to facilitate the distribution of its securities and provide investors with a broader choice of shareholder services. Applicants assert that the proposed closed-end investment company multiple class structure does not raise the concerns underlying section 18 of the Act to any greater degree than open-end investment companies’ multiple class structures that are permitted by rule 18f–3 under the Act. Applicants state that each Fund will comply with the provisions of rule 18f–3 as if it were an open-end investment company. Asset-Based Distribution and/or Service Fees 1. Section 17(d) of the Act and rule 17d–1 under the Act prohibit an affiliated person of a registered investment company, or an affiliated person of such person, acting as principal, from participating in or effecting any transaction in connection with any joint enterprise or joint arrangement in which the investment company participates unless the Commission issues an order permitting the transaction. In reviewing applications submitted under section 17(d) and rule 17d–1, the Commission considers whether the participation of the investment company in a joint enterprise or joint arrangement is consistent with the provisions, policies VerDate Sep<11>2014 16:11 Jun 05, 2019 Jkt 247001 and purposes of the Act, and the extent to which the participation is on a basis different from or less advantageous than that of other participants. 2. Rule 17d–3 under the Act provides an exemption from section 17(d) and rule 17d–1 to permit open-end investment companies to enter into distribution arrangements pursuant to rule 12b–1 under the Act. Applicants request an order under section 17(d) and rule 17d–1 under the Act to the extent necessary to permit the Fund to impose asset-based distribution and/or service fees. Applicants have agreed to comply with rules 12b–1 and 17d–3 as if those rules applied to closed-end investment companies, which they believe will resolve any concerns that might arise in connection with a Fund financing the distribution of its shares through assetbased distribution fees. 3. For the reasons stated above, applicants submit that the exemptions requested under section 6(c) are necessary and appropriate in the public interest and are consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Applicants also state that the Funds’ imposition of assetbased distribution and/or service fees is consistent with the provisions, policies and purposes of the Act and does not involve participation on a basis different from or less advantageous than that of other participants. Applicants’ Condition Applicants agree that any order granting the requested relief will be subject to the following condition: Each Fund relying on the order will comply with the provisions of rules 6c– 10, 12b–1, 17d–3, 18f–3, 22d–1, and, where applicable, 11a–3 under the Act, as amended from time to time, as if those rules applied to closed-end management investment companies, and will comply with the FINRA Sales Charge Rule, as amended from time to time, as if that rule applied to all closedend management investment companies. For the Commission, by the Division of Investment Management, under delegated authority. Eduardo A. Aleman, Deputy Secretary. 26491 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–85978; File No. 013–00140] Initial Form ATS–N Filing; Notice of Extension of Commission Review Period May 31, 2019. On February 13, 2019, Virtu MatchIt ATS filed an initial Form ATS–N (‘‘Form ATS–N’’) with the Securities and Exchange Commission (‘‘Commission’’). Pursuant to Rule 304 under the Securities and Exchange Act of 1934 (‘‘Act’’), the Commission may, after notice and an opportunity for hearing, declare an initial Form ATS–N ineffective no later than 120 days from the date of filing with the Commission, or, if applicable, the extended review period. June 13, 2019 is 120 calendar days from the date of filing. Pursuant to Rule 304(a)(1)(iv)(B), the Commission may extend the initial Form ATS–N review period for up to an additional 120 calendar days if the initial Form ATS–N is unusually lengthy or raises novel or complex issues that require additional time for review. Virtu MatchIt ATS was operating pursuant to an initial operation report on Form ATS on file with the Commission as of January 7, 2019.1 Virtu MatchIt ATS filed an initial Form ATS–N on February 13, 2019. During the initial 120 calendar day review period, the Commission staff has been reviewing the disclosures on Virtu MatchIt ATS’s initial Form ATS–N. In addition, the staff has been engaged in ongoing discussions with Virtu MatchIt ATS about its disclosures and manner of operations, as well as the requirements of Form ATS–N, to facilitate complete and comprehensible disclosures that reflect the complexities of those operations. Form ATS–N requires NMS Stock ATSs to file with the Commission, and disclose to the public for the first time, certain information, including descriptions by the NMS Stock ATSs of their fees, the trading activities by their broker-dealer operators and their affiliates in the NMS Stock ATSs, their use of market data, their written standards for granting access to trading on the NMS Stock ATSs, and their written safeguards and procedures for protecting their subscribers’ confidential trading information required by revised Rule 301(b)(10) of Regulation ATS. The [FR Doc. 2019–11793 Filed 6–5–19; 8:45 am] 1 An NMS Stock ATS (as defined in Rule 300(k) of Regulation ATS) that was operating pursuant to an initial operation report on Form ATS on file with the Commission as of January 7, 2019 is a ‘‘Legacy NMS Stock ATS.’’ 17 CFR 242.301(b)(2)(viii). BILLING CODE 8011–01–P PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 E:\FR\FM\06JNN1.SGM 06JNN1 26492 Federal Register / Vol. 84, No. 109 / Thursday, June 6, 2019 / Notices initial Form ATS–N disclosures and discussions with Commission staff have revealed complexities about the operations of Legacy NMS Stock ATSs including, among other things, matching functionalities, means of order entry, order interaction and execution procedures, conditional order processes, segmentation of orders, and counterparty selection protocols. The Commission staff needs additional time to review novel and complex issues such as these, which Commission staff has discussed with Virtu MatchIt ATS. Extending the initial Form ATS–N Commission review period for an additional 120 calendar days will provide Commission staff an opportunity to continue its review of the initial Form ATS–N disclosures and discussions with Virtu MatchIt ATS. In the conversations between Virtu MatchIt ATS and Commission staff about the initial Form ATS–N disclosures and the ATS operations, Commission staff and Virtu MatchIt ATS have discussed a potential amendment to update Virtu MatchIt ATS’s disclosures regarding the complexities of its operations. Extending the review period will enable the NMS Stock ATS to amend its disclosures, if appropriate, and allow Commission staff to conduct a thorough review of amendments to the initial disclosures provided on the initial Form ATS–N. For the reasons given above, the Commission is extending the review period of the initial Form ATS–N submitted by Virtu MatchIt ATS. Accordingly, pursuant to Rule 304(a)(1)(iv)(B), October 11, 2019 is the date by which the Commission may declare the initial Form ATS–N submitted by Virtu MatchIt ATS ineffective. By the Commission. Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2019–11839 Filed 6–5–19; 8:45 am] khammond on DSKBBV9HB2PROD with NOTICES BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–85988; File No. SR– CboeEDGX–2019–033] Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Amending Rule 21.7 Concerning the Opening Auction Process May 31, 2019. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on May 22, 2019, Cboe EDGX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGX’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange filed the proposal as a ‘‘non-controversial’’ proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b–4(f)(6) thereunder.4 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 Cboe EDGX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGX Options’’) proposes to amend Rule 21.7. The text of the proposed rule change is provided in Exhibit 5. The text of the proposed rule change is also available on the Exchange’s website (https://markets.cboe.com/us/ options/regulation/rule_filings/edgx/), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(6). 2 17 VerDate Sep<11>2014 16:11 Jun 05, 2019 Jkt 247001 PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The proposed rule change makes enhancements to the Exchange’s opening auction process. The Exchange recently adopted an opening auction process, which the Exchange intends to implement on June 24, 2019.5 The Exchange intends to implement the enhancements proposed in this rule filing at that time. First, the proposed rule change amends the definition of Composite Market in Rule 21.7(a). The term ‘‘Composite Market’’ means the market for a series comprised of (1) the higher of the then-current best appointed Market-Maker bulk message bid on the Queuing Book and the away best bid (‘‘ABB’’) (if there is an ABB) and (2) the lower of the then-current best appointed Market-Maker bulk message offer on the Queuing Book and the away best offer (‘‘ABO’’) (if there is an ABO).6 The Queuing Book means the book into which Users may submit orders and quotes (and onto which good-tilcancelled and good-til-day orders remaining on the Book from the previous trading session or trading day, as applicable, are entered) during the Queuing Period for participation in the applicable opening rotation. The Queuing Period means the time period prior to the initiation of an opening rotation during which the System accepts orders and quotes for participation in the opening rotation for the applicable trading session. Therefore, in an All Sessions Class (i.e., a class that trades during both the Global Trading Hours (‘‘GTH’’) and Regular Trading Hours (‘‘RTH’’) trading sessions), the Composite Market will be based on the appointed Market-Maker bulk message bids and offers in the RTH Queuing Book (available from 7:30 a.m. through the opening of trading). It currently will not consider any appointed Market-Maker bulk message bids and offers in that class in the GTH book (on which trading will be occurring in that class from 8:30 a.m. through 9:15 a.m.). Market-Makers are generally responsible for pricing the markets in 5 See Securities Exchange Act Release No. 85797 (May 7, 2019), 84 FR 20920 (May 13, 2019), SR– CboeEDGX–2019–027. The changes in SR– CboeEDGX–2019–027 are currently effective but not yet operative; however, the proposed rule text in this rule filing assume operativeness of those effective changes. 6 The term ‘‘Composite Bid (Offer)’’ means the bid (offer) used to determine the Composite Market. E:\FR\FM\06JNN1.SGM 06JNN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 84, Number 109 (Thursday, June 6, 2019)]
[Notices]
[Pages 26491-26492]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-11839]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85978; File No. 013-00140]


Initial Form ATS-N Filing; Notice of Extension of Commission 
Review Period

May 31, 2019.
    On February 13, 2019, Virtu MatchIt ATS filed an initial Form ATS-N 
(``Form ATS-N'') with the Securities and Exchange Commission 
(``Commission''). Pursuant to Rule 304 under the Securities and 
Exchange Act of 1934 (``Act''), the Commission may, after notice and an 
opportunity for hearing, declare an initial Form ATS-N ineffective no 
later than 120 days from the date of filing with the Commission, or, if 
applicable, the extended review period. June 13, 2019 is 120 calendar 
days from the date of filing. Pursuant to Rule 304(a)(1)(iv)(B), the 
Commission may extend the initial Form ATS-N review period for up to an 
additional 120 calendar days if the initial Form ATS-N is unusually 
lengthy or raises novel or complex issues that require additional time 
for review.
    Virtu MatchIt ATS was operating pursuant to an initial operation 
report on Form ATS on file with the Commission as of January 7, 
2019.\1\ Virtu MatchIt ATS filed an initial Form ATS-N on February 13, 
2019. During the initial 120 calendar day review period, the Commission 
staff has been reviewing the disclosures on Virtu MatchIt ATS's initial 
Form ATS-N. In addition, the staff has been engaged in ongoing 
discussions with Virtu MatchIt ATS about its disclosures and manner of 
operations, as well as the requirements of Form ATS-N, to facilitate 
complete and comprehensible disclosures that reflect the complexities 
of those operations.
---------------------------------------------------------------------------

    \1\ An NMS Stock ATS (as defined in Rule 300(k) of Regulation 
ATS) that was operating pursuant to an initial operation report on 
Form ATS on file with the Commission as of January 7, 2019 is a 
``Legacy NMS Stock ATS.'' 17 CFR 242.301(b)(2)(viii).
---------------------------------------------------------------------------

    Form ATS-N requires NMS Stock ATSs to file with the Commission, and 
disclose to the public for the first time, certain information, 
including descriptions by the NMS Stock ATSs of their fees, the trading 
activities by their broker-dealer operators and their affiliates in the 
NMS Stock ATSs, their use of market data, their written standards for 
granting access to trading on the NMS Stock ATSs, and their written 
safeguards and procedures for protecting their subscribers' 
confidential trading information required by revised Rule 301(b)(10) of 
Regulation ATS. The

[[Page 26492]]

initial Form ATS-N disclosures and discussions with Commission staff 
have revealed complexities about the operations of Legacy NMS Stock 
ATSs including, among other things, matching functionalities, means of 
order entry, order interaction and execution procedures, conditional 
order processes, segmentation of orders, and counterparty selection 
protocols. The Commission staff needs additional time to review novel 
and complex issues such as these, which Commission staff has discussed 
with Virtu MatchIt ATS. Extending the initial Form ATS-N Commission 
review period for an additional 120 calendar days will provide 
Commission staff an opportunity to continue its review of the initial 
Form ATS-N disclosures and discussions with Virtu MatchIt ATS.
    In the conversations between Virtu MatchIt ATS and Commission staff 
about the initial Form ATS-N disclosures and the ATS operations, 
Commission staff and Virtu MatchIt ATS have discussed a potential 
amendment to update Virtu MatchIt ATS's disclosures regarding the 
complexities of its operations. Extending the review period will enable 
the NMS Stock ATS to amend its disclosures, if appropriate, and allow 
Commission staff to conduct a thorough review of amendments to the 
initial disclosures provided on the initial Form ATS-N.
    For the reasons given above, the Commission is extending the review 
period of the initial Form ATS-N submitted by Virtu MatchIt ATS. 
Accordingly, pursuant to Rule 304(a)(1)(iv)(B), October 11, 2019 is the 
date by which the Commission may declare the initial Form ATS-N 
submitted by Virtu MatchIt ATS ineffective.

    By the Commission.
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-11839 Filed 6-5-19; 8:45 am]
 BILLING CODE 8011-01-P

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