Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Clarify Portions of Rule 14.11 (Other Securities) Related to the Applicability of Certain Disclosure Requirements, 43194-43196 [2019-17860]
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43194
Federal Register / Vol. 84, No. 161 / Tuesday, August 20, 2019 / Notices
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–CboeBYX–2019–005 and
should be submitted on or before
September 10, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–17857 Filed 8–19–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–86664; File No. SR–
CboeBZX–2019–031]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change Relating to
Clarify Portions of Rule 14.11 (Other
Securities) Related to the Applicability
of Certain Disclosure Requirements
August 14, 2019.
jbell on DSK3GLQ082PROD with NOTICES
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 July 31,
2019, Cboe BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Exchange filed the proposal as a ‘‘noncontroversial’’ 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 BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX’’) proposes to
clarify portions of rule 14.11 (Other
Securities) related to the applicability of
certain disclosure requirements. 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/
equities/regulation/rule_filings/bzx/), at
12 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)(iii).
4 17 CFR 240.19b–4(f)(6).
1 15
VerDate Sep<11>2014
20:49 Aug 19, 2019
Jkt 247001
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.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to clarify
portions of Rule 14.11 related to the
applicability of certain disclosure
requirements, as well as make nonsubstantive changes to correct an
inadvertent spelling error throughout
Rule 14.11(a) and (b).
Currently, under Rule 14.11(b)
(Portfolio Depositary Receipts), Rule
14.11(c) (Index Fund Shares), and Rule
14.11(j) (Derivative Securities Traded
under Unlisted Trading Privileges) a
Member is required to provide to all
purchasers a written description of the
terms and characteristics of the
applicable securities (or a ‘‘product
description’’). In addition, Members also
have a separate prospectus delivery
requirement under Section 24(d) of the
Investment Company Act of 1940
(‘‘1940 Act’’). A Member, however, is
not required to send a Section 24(d)
prospectus for a security if such security
is subject of an order by the Securities
and Exchange Commission
(‘‘Commission’’) exempting it from
Section 24(d) prospectus delivery
requirements, and is not otherwise
subject to prospectus delivery
requirements under the Securities Act of
1933 (‘‘1933 Act’’). As such, the
Exchange provides rules requiring
Members to deliver a product
description for securities exempt from
the prospectus delivery requirements.
The Exchange notes that a product
description is a written description of
the terms and characteristics of a
security in a form prepared or approved
by the Exchange, whereas a prospectus
is a legal document required by and
filed with the Commission which
PO 00000
Frm 00096
Fmt 4703
Sfmt 4703
contains detailed disclosers about a
security.
Currently, subparagraphs (j)(3), (b)(2),
and (c)(2) to Rule 14.11 govern the
written description disclosure
requirements for derivative securities
traded under unlisted trading privileges
(‘‘UTP Derivative Securities’’), series of
Portfolio Depositary Receipts, or series
of Index Fund Shares, respectively. As
written, these subparagraphs under
14.11 do not make it explicit to
Members that the product description
requirements are applicable only to
prospectus-exempt products.
Furthermore, current subparagraphs
(b)(2) and (c)(2) to Rule 14.11 do not
contain a provision (like that of
subparagraph (j)(3)(B)) that the
Exchange will inform its Members by
means of an information circular when
the product description delivery
requirements apply. Therefore, in order
to provide Members with better
understanding of the provisions in
connection these requirements, the
Exchange now proposes to amend its
rules to explicitly state that the product
description delivery requirements apply
only to the respective products that are
exempt from the 1940 Act prospectus
delivery requirements and are not
otherwise subject to the prospectus
delivery requirements under the 1933
Act. The Exchange also proposes to add
language to subparagraphs (b)(2) and
(c)(2) to inform Members that the
Exchange will announce the
applicability of the product description
delivery requirements to particular
series of Portfolio Depositary Receipts or
Index Fund Shares via information
circular. This change is intended to
provide clarity to Members regarding
when and how the Exchange will notify
Members of their product delivery
obligations. The Exchange notes that
Rule 14.11(j)(3)(B) currently provides
that the Exchange informs its Members
of the application of product description
delivery requirements related to UTP
Derivative Securities by means of
information circular. The Exchange also
notes that the proposed amendments are
substantially similar to the disclosure
requirement provision currently
applicable to Managed Fund Shares.5
The Exchange proposes to update the
heading of Rule 14.11(j)(3)(A), which
currently states ‘‘Prospectus Delivery’’,
to ‘‘Scope of Product Description’’ as it
believes this better aligns with the
requirements provided for under
paragraph (j)(3), thus provides further
clarity regarding the product description
requirements contained within this
paragraph.
5 See
E:\FR\FM\20AUN1.SGM
Rule 14.11(i)(6).
20AUN1
Federal Register / Vol. 84, No. 161 / Tuesday, August 20, 2019 / Notices
jbell on DSK3GLQ082PROD with NOTICES
Additionally, the Exchange proposes
to correct an inadvertent spelling
mistake throughout Rule 14.11(b).
Current Rule 14.11(b) spells the term
‘‘Depositary’’ incorrectly as
‘‘Depository’’, therefore the Exchange
proposes to correct this spelling where
applicable throughout Rule 14.11(b).
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.6 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 7 requirements that the rules of
an exchange be 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 regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, 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.
Additionally, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) 8 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
The Exchange also believes the
proposed rule change is consistent with
Section 6(b)(1) of the Act, which
provides that the Exchange be organized
and have the capacity to be able to carry
out the purposes of the Act and to
enforce compliance by the Exchange’s
Members and persons associated with
its Members with the Act, the rules and
regulations thereunder, and the rules of
the Exchange.
In particular, the Exchange believes
that this proposal benefits and protects
investors because it is designed to
bolster Member understanding of its
rules and the applicability of the
subparagraphs providing for written
description disclosure requirements to
certain products. Because current
subparagraphs (j)(3), (b)(2), and (c)(2) to
Rule 14.11 currently do not explicitly
state under what circumstances they
will apply to the respective products
under each subparagraph, the Exchange
has found that it is unclear to Members
the subparagraphs in connection with
6 15
7 15
required written descriptions only apply
to securities or series that are exempt
from the Section 24(d) prospectus
delivery requirements, and otherwise
not subject to prospectus delivery
requirements under the 1933 Act. The
Exchange thus believes this proposed
change will enhance Members’
understanding with respect to when and
to which products the relevant
subparagraphs are applicable, thereby
protecting investors and the public
interest. The Exchange notes that this
proposal does not alter any of the
disclosure requirements applicable to
market participants, but merely intends
to make explicit when the written
disclosure provisions apply, as well as
establish that the Exchange will notify
Members via information circular of
their product description obligations for
particular series Portfolio Depositary
Receipts and Index Fund Shares.
Additionally, the Exchange believes that
providing clear rules regarding the
applicability of provisions requiring
written product description deliveries
will enable the Exchange to be
organized and have the capacity to
enforce compliance its Members with
the Act and the rules of Exchange. The
Exchange notes that the proposed
changes are substantially similar to Rule
14.11(i)(6), which covers the disclosure
requirements applicable to Managed
Fund Shares.
Additionally, the Exchange makes
corrective changes to an inadvertent
incorrect spelling of the term
‘‘Depositary’’ throughout Rule 14.11(b),
which it believes will protect investors
by alleviating any potential confusion.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will result in
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, as amended.
On the contrary, the proposed rule
change is not designed to address any
competitive issues but is only intended
to bolster Member understanding of its
rules with respect to the applicability of
certain disclosure requirement
provisions.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No comments were solicited or
received on the proposed rule change.
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
8 Id.
VerDate Sep<11>2014
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not:
A. Significantly affect the protection
of investors or the public interest;
B. impose any significant burden on
competition; and
C. become operative for 30 days from
the date on which it was filed, or such
shorter time as the Commission may
designate, it has become effective
pursuant to Section 19(b)(3)(A) of the
Act 9 and Rule 19b–4(f)(6) 10 thereunder.
At any time within 60 days of the filing
of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission will institute proceedings
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–
CboeBZX–2019–031 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–CboeBZX–2019–031. 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
9 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
10 17
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43195
E:\FR\FM\20AUN1.SGM
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Federal Register / Vol. 84, No. 161 / Tuesday, August 20, 2019 / Notices
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–CboeBZX–2019–031 and
should be submitted on or before
September 10, 2019.
U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B)
and (10) and 17 CFR 200.402(a)(3),
(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and
(a)(10), permit consideration of the
scheduled matters at the closed meeting.
The subject matters of the closed
meeting will consist of the following
topics:
Institution and settlement of
injunctive actions;
Institution and settlement of
administrative proceedings;
Resolution of litigation claims; and
Other matters relating to enforcement
proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting agenda items that
may consist of adjudicatory,
examination, litigation, or regulatory
matters.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Jill M. Peterson,
Assistant Secretary.
Dated: August 15, 2019.
Vanessa A. Countryman,
Secretary.
CONTACT PERSON FOR MORE INFORMATION:
For further information; please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
[FR Doc. 2019–17974 Filed 8–16–19; 11:15 am]
BILLING CODE 8011–01–P
[FR Doc. 2019–17860 Filed 8–19–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–86659; File No. SR–
NYSEArca–2019–57]
Sunshine Act Meetings
2:00 p.m. on Thursday,
August 22, 2019.
PLACE: The meeting will be held at the
Commission’s headquarters, 100 F
Street NE, Washington, DC 20549.
STATUS: This meeting will be closed to
the public.
MATTERS TO BE CONSIDERED:
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the closed meeting. Certain
staff members who have an interest in
the matters also may be present.
In the event that the time, date, or
location of this meeting changes, an
announcement of the change, along with
the new time, date, and/or place of the
meeting will be posted on the
Commission’s website at https://
www.sec.gov.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemptions set forth in 5
jbell on DSK3GLQ082PROD with NOTICES
TIME AND DATE:
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of Proposed
Rule Change To List and Trade Shares
of the Franklin Liberty Systematic
Style Premia ETF, a Series of the
Franklin Templeton ETF Trust Under
NYSE Arca Rule 8.600–E
August 14, 2019.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on August
8, 2019, NYSE Arca, Inc. (‘‘NYSE Arca’’
or the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
11 17
CFR 200.30–3(a)(12).
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20:49 Aug 19, 2019
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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to list and
trade shares of the Franklin Liberty
Systematic Style Premia ETF, a series of
the Franklin Templeton ETF Trust
(‘‘Trust’’), under NYSE Arca Rule 8.600–
E (‘‘Managed Fund Shares’’). 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.
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 Franklin
Liberty Systematic Style Premia ETF
(the ‘‘Fund’’) 4 under NYSE Arca Rule
8.600–E, which governs the listing and
trading of Managed Fund Shares 5 on
the Exchange.
4 The Trust is registered under the 1940 Act. On
July 31, 2019, the Trust filed with the Commission
an amendment to its registration statement on Form
N–1A under the Securities Act of 1933 (15 U.S.C.
77a) (‘‘Securities Act’’) and the 1940 Act relating to
the Fund (File Nos. 333–208873 and 811–23124)
(the ‘‘Registration Statement’’). The description of
the operation of the Trust and the Fund herein is
based, in part, on the Registration Statement. In
addition, the Commission has issued an order
granting certain exemptive relief to Franklin ETF
Trust, Franklin Advisers, Inc. and Franklin
Templeton Distributors, Inc. under the 1940 Act
that the Trust relies on. See Investment Company
Act Release No. 30350 (January 15, 2013)
(‘‘Exemptive Order’’). Investments made by the
Fund will comply with the conditions set forth in
the Exemptive Order.
5 A Managed Fund Share is a security that
represents an interest in an investment company
registered under the Investment Company Act of
1940 (15 U.S.C. 80a-1) (‘‘1940 Act’’) organized as an
open-end investment company or similar entity that
invests in a portfolio of securities selected by its
investment adviser consistent with its investment
objectives and policies. In contrast, an open-end
investment company that issues Investment
Company Units, listed and traded on the Exchange
E:\FR\FM\20AUN1.SGM
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]]>Agencies
[Federal Register Volume 84, Number 161 (Tuesday, August 20, 2019)]
[Notices]
[Pages 43194-43196]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-17860]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-86664; File No. SR-CboeBZX-2019-031]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Relating
to Clarify Portions of Rule 14.11 (Other Securities) Related to the
Applicability of Certain Disclosure Requirements
August 14, 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 July 31, 2019, Cboe BZX Exchange, Inc. (the ``Exchange'' or
``BZX'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') proposes to
clarify portions of rule 14.11 (Other Securities) related to the
applicability of certain disclosure requirements. 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/equities/regulation/rule_filings/bzx/), 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.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to clarify portions of Rule 14.11 related to
the applicability of certain disclosure requirements, as well as make
non-substantive changes to correct an inadvertent spelling error
throughout Rule 14.11(a) and (b).
Currently, under Rule 14.11(b) (Portfolio Depositary Receipts),
Rule 14.11(c) (Index Fund Shares), and Rule 14.11(j) (Derivative
Securities Traded under Unlisted Trading Privileges) a Member is
required to provide to all purchasers a written description of the
terms and characteristics of the applicable securities (or a ``product
description''). In addition, Members also have a separate prospectus
delivery requirement under Section 24(d) of the Investment Company Act
of 1940 (``1940 Act''). A Member, however, is not required to send a
Section 24(d) prospectus for a security if such security is subject of
an order by the Securities and Exchange Commission (``Commission'')
exempting it from Section 24(d) prospectus delivery requirements, and
is not otherwise subject to prospectus delivery requirements under the
Securities Act of 1933 (``1933 Act''). As such, the Exchange provides
rules requiring Members to deliver a product description for securities
exempt from the prospectus delivery requirements. The Exchange notes
that a product description is a written description of the terms and
characteristics of a security in a form prepared or approved by the
Exchange, whereas a prospectus is a legal document required by and
filed with the Commission which contains detailed disclosers about a
security.
Currently, subparagraphs (j)(3), (b)(2), and (c)(2) to Rule 14.11
govern the written description disclosure requirements for derivative
securities traded under unlisted trading privileges (``UTP Derivative
Securities''), series of Portfolio Depositary Receipts, or series of
Index Fund Shares, respectively. As written, these subparagraphs under
14.11 do not make it explicit to Members that the product description
requirements are applicable only to prospectus-exempt products.
Furthermore, current subparagraphs (b)(2) and (c)(2) to Rule 14.11 do
not contain a provision (like that of subparagraph (j)(3)(B)) that the
Exchange will inform its Members by means of an information circular
when the product description delivery requirements apply. Therefore, in
order to provide Members with better understanding of the provisions in
connection these requirements, the Exchange now proposes to amend its
rules to explicitly state that the product description delivery
requirements apply only to the respective products that are exempt from
the 1940 Act prospectus delivery requirements and are not otherwise
subject to the prospectus delivery requirements under the 1933 Act. The
Exchange also proposes to add language to subparagraphs (b)(2) and
(c)(2) to inform Members that the Exchange will announce the
applicability of the product description delivery requirements to
particular series of Portfolio Depositary Receipts or Index Fund Shares
via information circular. This change is intended to provide clarity to
Members regarding when and how the Exchange will notify Members of
their product delivery obligations. The Exchange notes that Rule
14.11(j)(3)(B) currently provides that the Exchange informs its Members
of the application of product description delivery requirements related
to UTP Derivative Securities by means of information circular. The
Exchange also notes that the proposed amendments are substantially
similar to the disclosure requirement provision currently applicable to
Managed Fund Shares.\5\
---------------------------------------------------------------------------
\5\ See Rule 14.11(i)(6).
---------------------------------------------------------------------------
The Exchange proposes to update the heading of Rule 14.11(j)(3)(A),
which currently states ``Prospectus Delivery'', to ``Scope of Product
Description'' as it believes this better aligns with the requirements
provided for under paragraph (j)(3), thus provides further clarity
regarding the product description requirements contained within this
paragraph.
[[Page 43195]]
Additionally, the Exchange proposes to correct an inadvertent
spelling mistake throughout Rule 14.11(b). Current Rule 14.11(b) spells
the term ``Depositary'' incorrectly as ``Depository'', therefore the
Exchange proposes to correct this spelling where applicable throughout
Rule 14.11(b).
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\6\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \7\ requirements that the rules of an exchange be
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 regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, 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. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \8\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers. The Exchange also believes the proposed rule
change is consistent with Section 6(b)(1) of the Act, which provides
that the Exchange be organized and have the capacity to be able to
carry out the purposes of the Act and to enforce compliance by the
Exchange's Members and persons associated with its Members with the
Act, the rules and regulations thereunder, and the rules of the
Exchange.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
\8\ Id.
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In particular, the Exchange believes that this proposal benefits
and protects investors because it is designed to bolster Member
understanding of its rules and the applicability of the subparagraphs
providing for written description disclosure requirements to certain
products. Because current subparagraphs (j)(3), (b)(2), and (c)(2) to
Rule 14.11 currently do not explicitly state under what circumstances
they will apply to the respective products under each subparagraph, the
Exchange has found that it is unclear to Members the subparagraphs in
connection with required written descriptions only apply to securities
or series that are exempt from the Section 24(d) prospectus delivery
requirements, and otherwise not subject to prospectus delivery
requirements under the 1933 Act. The Exchange thus believes this
proposed change will enhance Members' understanding with respect to
when and to which products the relevant subparagraphs are applicable,
thereby protecting investors and the public interest. The Exchange
notes that this proposal does not alter any of the disclosure
requirements applicable to market participants, but merely intends to
make explicit when the written disclosure provisions apply, as well as
establish that the Exchange will notify Members via information
circular of their product description obligations for particular series
Portfolio Depositary Receipts and Index Fund Shares. Additionally, the
Exchange believes that providing clear rules regarding the
applicability of provisions requiring written product description
deliveries will enable the Exchange to be organized and have the
capacity to enforce compliance its Members with the Act and the rules
of Exchange. The Exchange notes that the proposed changes are
substantially similar to Rule 14.11(i)(6), which covers the disclosure
requirements applicable to Managed Fund Shares.
Additionally, the Exchange makes corrective changes to an
inadvertent incorrect spelling of the term ``Depositary'' throughout
Rule 14.11(b), which it believes will protect investors by alleviating
any potential confusion.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as amended. On
the contrary, the proposed rule change is not designed to address any
competitive issues but is only intended to bolster Member understanding
of its rules with respect to the applicability of certain disclosure
requirement provisions.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No comments were solicited or received on the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not:
A. Significantly affect the protection of investors or the public
interest;
B. impose any significant burden on competition; and
C. become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) of the Act \9\ and
Rule 19b-4(f)(6) \10\ thereunder. At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission will institute proceedings to determine whether the proposed
rule change should be approved or disapproved.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the 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 [email protected]. Please include
File Number SR-CboeBZX-2019-031 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-CboeBZX-2019-031. 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
[[Page 43196]]
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-CboeBZX-2019-031 and should be submitted
on or before September 10, 2019.
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\11\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-17860 Filed 8-19-19; 8:45 am]
BILLING CODE 8011-01-P
