Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 1.1 To Modify the Definition of “UTP Exchange Traded Product” and Rule 5.1 To Incorporate the Modified Definition of “UTP Exchange Traded Product”, 25487-25489 [2020-09250]
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Federal Register / Vol. 85, No. 85 / Friday, May 1, 2020 / Notices
342,194 hours. Accordingly, we
estimate that rule 206(4)–6 results in an
annual aggregate burden of collection
for SEC-registered investment advisers
of a total of 464,844 hours.
Written comments are invited on: (a)
Whether the collections of information
are necessary for the proper
performance of the functions of the
Commission, including whether the
information has practical utility; (b) the
accuracy of the Commission’s estimate
of the burdens of the collections of
information; (c) ways to enhance the
quality, utility, and clarity of the
information collected; and (d) ways to
minimize the burdens of the collections
of information on respondents,
including through the use of automated
collection techniques or other forms of
information technology. Consideration
will be given to comments and
suggestions submitted in writing within
60 days of this publication. An agency
may not conduct or sponsor a collection
of information unless it displays a
currently valid OMB control number.
No person shall be subject to any
penalty for failing to comply with a
collection of information subject to the
PRA that does not display a valid OMB
control number.
Please direct your written comments
to David Bottom, Director/Chief
Information Officer, Securities and
Exchange Commission, C/O Cynthia
Roscoe, 100 F Street NE, Washington,
DC 20549; or send an email to: PRA_
Mailbox@sec.gov.
Dated: April 28, 2020.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–09297 Filed 4–30–20; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–88754; File No. SR–NYSE–
2020–34]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend Rule
1.1 To Modify the Definition of ‘‘UTP
Exchange Traded Product’’ and Rule
5.1 To Incorporate the Modified
Definition of ‘‘UTP Exchange Traded
Product’’
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
VerDate Sep<11>2014
08:07 May 01, 2020
Jkt 250001
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend (1)
Rule 1.1 to modify the definition of
‘‘UTP Exchange Traded Product’’ and
(2) Rule 5.1 to incorporate the definition
of UTP Exchange Traded Product as set
forth in revised Rule 1.1. The proposed
rule change is available on the
Exchange’s website at www.nyse.com, at
the principal office of the Exchange, and
at the Commission’s Public Reference
Room.
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
BILLING CODE 8011–01–P
April 27, 2020.
notice is hereby given that on April 16,
2020, New York Stock Exchange LLC
(‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the self-regulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
1. Purpose
The Exchange proposes to amend (1)
Rule 1.1 to modify the definition of
‘‘UTP Exchange Traded Product’’ and
(2) Rule 5.1 to incorporate the definition
of UTP Exchange Traded Product as set
forth in revised Rule 1.1.
Rule 1.1
Rule 1.1(l) currently provides that the
term ‘‘Exchange Traded Product’’ means
a security that meets the definition of
‘‘derivative securities product’’ in Rule
19b–4(e) under the Securities Exchange
Act of 1934 and a ‘‘UTP Exchange
Traded Product’’ means an Exchange
Traded Product that trades on the
Exchange pursuant to unlisted trading
privileges. The Exchange proposes to
amend the definition of ‘‘UTP Exchange
Traded Product’’ to mean one of the
PO 00000
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Sfmt 4703
25487
following Exchange Traded Products
that trades on the Exchange pursuant to
unlisted trading privileges: Equity
Linked Notes, Investment Company
Units, Index-Linked Exchangeable
Notes, Equity Gold Shares, Equity
Index-Linked Securities, CommodityLinked Securities, Currency-Linked
Securities, Fixed-Income Index-Linked
Securities, Futures-Linked Securities,
Multifactor-Index-Linked Securities,
Trust Certificates, Currency and Index
Warrants, Portfolio Depository Receipts,
Trust Issued Receipts, CommodityBased Trust Shares, Currency Trust
Shares, Commodity Index Trust Shares,
Commodity Futures Trust Shares,
Partnership Units, Paired Trust Shares,
Trust Units, Managed Fund Shares,
Managed Trust Securities, and Managed
Portfolio Shares.
This proposed change is based on
NYSE National, Inc. (‘‘NYSE National’’)
Rule 1.1(m) and NYSE Chicago, Inc.
(‘‘NYSE Chicago’’) Rule 1.1(k).4 This list
is designed to align the rules of the
Exchange with the rules of NYSE
National and NYSE Chicago and to
enumerate the types of Exchange Traded
Products to which the Exchange would
extend unlisted trading privileges
(‘‘UTP’’).
Rule 5.1
Rule 5.1(a)(1) provides that the
Exchange may extend UTP to any
security that is an NMS stock (as
defined in Rule 600 of Regulation NMS
under the Act) that is listed on another
national securities exchange or with
respect to which unlisted trading
privileges may otherwise be extended in
accordance with Section 12(f) of the
Act. Rule 5.1(a)(2) further specifies that
a UTP Exchange Traded Product, which
is defined in that Rule as a ‘‘new
derivative securities product’’ as
defined in Rule 19b–4(e) under the
Exchange Act and traded pursuant to
Rule 19b–4(e) under the Act, would be
subject to the additional rules
enumerated in Rule 5.1(a)(2)(A)–(E).
Because the Exchange proposes to
modify the definition of UTP Exchange
Trading Product in Rule 1.1(l) to
conform to the rules of NYSE National
and NYSE Chicago, the Exchange
proposes to amend Rule 5.1(a)(2) to
eliminate redundant text and cross
reference the term ‘‘UTP Exchange
Traded Product’’ as it is defined in Rule
1.1. This proposed change would also
4 NYSE National and NYSE Chicago have filed
proposed rule changes for immediate effectiveness
to amend their respective rules to add Managed
Portfolio Shares to their definitions of UTP
Exchange Traded Products. See SR–NYSENAT–
2020–16 (filed April 16, 2020) and SR–NYSECHX–
2020–13 (filed April 16, 2020).
E:\FR\FM\01MYN1.SGM
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25488
Federal Register / Vol. 85, No. 85 / Friday, May 1, 2020 / Notices
conform Rule 5.1(a)(2) with the NYSE
National rule of the same number.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,5 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,6 in particular, because it is
designed to remove impediments to and
perfect the mechanism of a free and
open market, to promote just and
equitable principles of trade, and, in
general, to protect investors and the
public interest.
The Exchange believes its proposed
rule change ensures that Rule 1.1
identifies and publicly states the
complete list of Exchange Traded
Products to which UTP may be
extended for trading on the Exchange.
The Exchange also believes that the
proposed rule change removes
impediments to and perfects the
mechanism of a free and open market,
promotes just and equitable principles
of trade, and protects investors and the
public interest by promoting
consistency with the rules of the
Exchange’s affiliated markets and by
providing additional specificity, clarity,
and transparency in the Exchange’s
rules with respect to the Exchange
Traded Products that may be traded on
a UTP basis on the Exchange.
The Exchange believes that its
proposal to amend Rule 5.1(a)(2) also
removes impediments to and perfects
the mechanism of a free and open
market, promotes just and equitable
principles of trade, and protects
investors and the public interest
because it proposes to conform this rule
governing the trading of UTP Exchange
Traded Products with the comparable
rule of the Exchange’s affiliated market,
NYSE National, which has been
approved by the Commission.7 The
proposed rule change would also
remove impediments to and perfect the
mechanism of a free and open market
and a national market system and
protect investors and the public interest
by promoting continuity across
affiliated exchanges.
5 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4) & (5).
7 In its Order approving the NYSE National rule
on which this proposed change is based, the
Commission found that the NYSE National rules set
forth an ‘‘appropriate framework for the trading of
Exchange Traded Products on a UTP basis on the
Exchange’’ and are consistent with Section 6(b)(5)
of the Act. See Securities and Exchange Act Release
No. 83289 (May 17, 2018), 83 FR 23968 (May 23,
2018), at 23975.
6 15
VerDate Sep<11>2014
08:07 May 01, 2020
Jkt 250001
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed change would conform
Exchange rules, as described herein,
with the comparable rules of its
affiliated exchanges, NYSE National and
NYSE Chicago, and permit UTP trading
of Exchange Traded Products on the
Exchange in a manner consistent with
its affiliated exchange.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative 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 8 and Rule 19b–
4(f)(6) thereunder.9
A proposed rule change filed under
Rule 19b–4(f)(6) 10 normally does not
become operative for 30 days after the
date of the filing. However, pursuant to
Rule 19b–4(f)(6)(iii),11 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay so that
the proposal may become operative
immediately upon filing. The
Commission notes that the Exchange’s
proposal would conform the Exchange’s
rules, as described herein, to the
corresponding rules of its affiliated
exchanges.12 Accordingly, the
Commission believes that the proposal
8 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
10 17 CFR 240.19b–4(f)(6).
11 17 CFR 240.19b–4(f)(6)(iii).
12 See NYSE National Rules 1.1 and 5.1 and NYSE
Chicago Rule 1.1.
9 17
PO 00000
Frm 00106
Fmt 4703
Sfmt 4703
raises no new or novel regulatory issues
and waiver of the 30-day operative
delay is consistent with the protection
of investors and the public interest. The
Commission therefore waives the 30-day
operative delay and designates the
proposed rule change to be operative
upon filing.13
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.
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–
NYSE–2020–34 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–NYSE–2020–34. 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,
13 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
E:\FR\FM\01MYN1.SGM
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Federal Register / Vol. 85, No. 85 / Friday, May 1, 2020 / Notices
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–NYSE–2020–34 and should
be submitted on orbefore May 22, 2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–09250 Filed 4–30–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–259, OMB Control No.
3235–0269]
Proposed Collection; Comment
Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services, 100
F Street NE, Washington, DC 20549–2736.
Extension:
Rule 17f–5.
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 350l–3520), the Securities
and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the collection of information
summarized below. The Commission
plans to submit the existing collection
of information to the Office of
Management and Budget for extension
and approval.
Rule 17f–5 (17 CFR 270.17f–5) under
the Investment Company Act of 1940
[15 U.S.C. 80a] (the ‘‘Act’’) governs the
custody of the assets of registered
management investment companies
(‘‘funds’’) with custodians outside the
United States. Under rule 17f–5, a fund
or its foreign custody manager (as
delegated by the fund’s board) may
maintain the fund’s foreign assets in the
care of an eligible fund custodian under
certain conditions. If the fund’s board
delegates to a foreign custody manager
authority to place foreign assets, the
fund’s board must find that it is
reasonable to rely on each delegate the
14 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
08:07 May 01, 2020
board selects to act as the fund’s foreign
custody manager. The delegate must
agree to provide written reports that
notify the board when the fund’s assets
are placed with a foreign custodian and
when any material change occurs in the
fund’s custody arrangements. The
delegate must agree to exercise
reasonable care, prudence, and
diligence, or to adhere to a higher
standard of care. When the foreign
custody manager selects an eligible
foreign custodian, it must determine
that the fund’s assets will be subject to
reasonable care if maintained with that
custodian, and that the written contract
that governs each custody arrangement
will provide reasonable care for fund
assets. The contract must contain
certain specified provisions or others
that provide at least equivalent care.
The foreign custody manager must
establish a system to monitor the
performance of the contract and the
appropriateness of continuing to
maintain assets with the eligible foreign
custodian.
The collection of information
requirements in rule 17f–5 are intended
to provide protection for fund assets
maintained with a foreign bank
custodian whose use is not authorized
by statutory provisions that govern fund
custody arrangements,1 and that is not
subject to regulation and examination
by U.S. regulators. The requirement that
the fund board determine that it is
reasonable to rely on each delegate is
intended to ensure that the board
carefully considers each delegate’s
qualifications to perform its
responsibilities. The requirement that
the delegate provide written reports to
the board is intended to ensure that the
delegate notifies the board of important
developments concerning custody
arrangements so that the board may
exercise effective oversight. The
requirement that the delegate agree to
exercise reasonable care is intended to
provide assurances to the fund that the
delegate will properly perform its
duties.
The requirements that the foreign
custody manager determine that fund
assets will be subject to reasonable care
with the eligible foreign custodian and
under the custody contract, and that
each contract contain specified
provisions or equivalent provisions, are
intended to ensure that the delegate has
evaluated the level of care provided by
the custodian, that it weighs the
adequacy of contractual provisions, and
that fund assets are protected by
minimal contractual safeguards. The
requirement that the foreign custody
1 See
Jkt 250001
PO 00000
section 17(f) of the Act. 15 U.S.C. 80a–17(f).
Frm 00107
Fmt 4703
Sfmt 4703
25489
manager establish a monitoring system
is intended to ensure that the manager
periodically reviews each custody
arrangement and takes appropriate
action if developing custody risks may
threaten fund assets.2
Commission staff estimates that each
year, approximately 90 registrants 3
could be required to make an average of
one response per registrant under rule
17f–5, requiring approximately 2.5
hours of board of director time per
response, to make the necessary
findings concerning foreign custody
managers. The total annual burden
associated with these requirements of
the rule is up to approximately 225
hours (90 registrants × 2.5 hours per
registrant). The staff further estimates
that during each year, approximately 15
global custodians 4 are required to make
an average of 4 responses per custodian
concerning the use of foreign custodians
other than depositories. The staff
estimates that each response will take
approximately 270 hours, requiring
approximately 1080 total hours
annually per custodian (270 hours × 4
responses per custodian). The total
annual burden associated with these
requirements of the rule is
approximately 16,200 hours (15 global
custodians × 1080 hours per custodian).
Therefore, the total annual burden of all
collection of information requirements
of rule 17f–5 is estimated to be up to
16,425 hours (225 + 16,200). The total
annual cost of burden hours is estimated
to be $4,779,225 (225 hours × $4,465/
hour for board of director’s time +
(16,200 hours x $233/hour for a trust
administrator’s time)).5 Compliance
with the collection of information
requirements of the rule is necessary to
obtain the benefit of relying on the
rule’s permission for funds to maintain
their assets in foreign custodians.
2 The staff believes that subcustodian monitoring
does not involve ‘‘collection of information’’ within
the meaning of the Paperwork Reduction Act of
1995 (44 U.S.C. 3501–3520) (‘‘Paperwork Reduction
Act’’).
3 This figure is an estimate of the number of new
funds each year, based on data reported by funds
for 2017, 2018, and 2019. In practice, not all funds
will use foreign custody managers. The actual figure
therefore may be smaller.
4 This estimate is based on staff research.
5 Based on fund industry representations, the staff
estimated in 2014 that the average cost of board of
director time, for the board as a whole, was $4,000
per hour. Adjusting for inflation, the staff estimates
that the current average cost of board of director
time is approximately $4,465 per hour. The $233/
hour figure for a trust administrator is from
SIFMA’s Management & Professional Earnings in
the Securities Industry 2013, modified by
Commission staff to account for an 1800-hour workyear and inflation, and multiplied by 5.35 to
account for bonuses, firm size, employee benefits,
and overhead.
E:\FR\FM\01MYN1.SGM
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]]>Agencies
[Federal Register Volume 85, Number 85 (Friday, May 1, 2020)]
[Notices]
[Pages 25487-25489]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09250]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88754; File No. SR-NYSE-2020-34]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Rule 1.1 To Modify the Definition of ``UTP Exchange Traded
Product'' and Rule 5.1 To Incorporate the Modified Definition of ``UTP
Exchange Traded Product''
April 27, 2020.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on April 16, 2020, New York Stock Exchange LLC (``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the self-regulatory organization. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend (1) Rule 1.1 to modify the
definition of ``UTP Exchange Traded Product'' and (2) Rule 5.1 to
incorporate the definition of UTP Exchange Traded Product as set forth
in revised Rule 1.1. The proposed rule change is available on the
Exchange's website at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
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 amend (1) Rule 1.1 to modify the
definition of ``UTP Exchange Traded Product'' and (2) Rule 5.1 to
incorporate the definition of UTP Exchange Traded Product as set forth
in revised Rule 1.1.
Rule 1.1
Rule 1.1(l) currently provides that the term ``Exchange Traded
Product'' means a security that meets the definition of ``derivative
securities product'' in Rule 19b-4(e) under the Securities Exchange Act
of 1934 and a ``UTP Exchange Traded Product'' means an Exchange Traded
Product that trades on the Exchange pursuant to unlisted trading
privileges. The Exchange proposes to amend the definition of ``UTP
Exchange Traded Product'' to mean one of the following Exchange Traded
Products that trades on the Exchange pursuant to unlisted trading
privileges: Equity Linked Notes, Investment Company Units, Index-Linked
Exchangeable Notes, Equity Gold Shares, Equity Index-Linked Securities,
Commodity-Linked Securities, Currency-Linked Securities, Fixed-Income
Index-Linked Securities, Futures-Linked Securities, Multifactor-Index-
Linked Securities, Trust Certificates, Currency and Index Warrants,
Portfolio Depository Receipts, Trust Issued Receipts, Commodity-Based
Trust Shares, Currency Trust Shares, Commodity Index Trust Shares,
Commodity Futures Trust Shares, Partnership Units, Paired Trust Shares,
Trust Units, Managed Fund Shares, Managed Trust Securities, and Managed
Portfolio Shares.
This proposed change is based on NYSE National, Inc. (``NYSE
National'') Rule 1.1(m) and NYSE Chicago, Inc. (``NYSE Chicago'') Rule
1.1(k).\4\ This list is designed to align the rules of the Exchange
with the rules of NYSE National and NYSE Chicago and to enumerate the
types of Exchange Traded Products to which the Exchange would extend
unlisted trading privileges (``UTP'').
---------------------------------------------------------------------------
\4\ NYSE National and NYSE Chicago have filed proposed rule
changes for immediate effectiveness to amend their respective rules
to add Managed Portfolio Shares to their definitions of UTP Exchange
Traded Products. See SR-NYSENAT-2020-16 (filed April 16, 2020) and
SR-NYSECHX-2020-13 (filed April 16, 2020).
---------------------------------------------------------------------------
Rule 5.1
Rule 5.1(a)(1) provides that the Exchange may extend UTP to any
security that is an NMS stock (as defined in Rule 600 of Regulation NMS
under the Act) that is listed on another national securities exchange
or with respect to which unlisted trading privileges may otherwise be
extended in accordance with Section 12(f) of the Act. Rule 5.1(a)(2)
further specifies that a UTP Exchange Traded Product, which is defined
in that Rule as a ``new derivative securities product'' as defined in
Rule 19b-4(e) under the Exchange Act and traded pursuant to Rule 19b-
4(e) under the Act, would be subject to the additional rules enumerated
in Rule 5.1(a)(2)(A)-(E).
Because the Exchange proposes to modify the definition of UTP
Exchange Trading Product in Rule 1.1(l) to conform to the rules of NYSE
National and NYSE Chicago, the Exchange proposes to amend Rule
5.1(a)(2) to eliminate redundant text and cross reference the term
``UTP Exchange Traded Product'' as it is defined in Rule 1.1. This
proposed change would also
[[Page 25488]]
conform Rule 5.1(a)(2) with the NYSE National rule of the same number.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\5\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\6\ in particular, because it
is designed to remove impediments to and perfect the mechanism of a
free and open market, to promote just and equitable principles of
trade, and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(4) & (5).
---------------------------------------------------------------------------
The Exchange believes its proposed rule change ensures that Rule
1.1 identifies and publicly states the complete list of Exchange Traded
Products to which UTP may be extended for trading on the Exchange. The
Exchange also believes that the proposed rule change removes
impediments to and perfects the mechanism of a free and open market,
promotes just and equitable principles of trade, and protects investors
and the public interest by promoting consistency with the rules of the
Exchange's affiliated markets and by providing additional specificity,
clarity, and transparency in the Exchange's rules with respect to the
Exchange Traded Products that may be traded on a UTP basis on the
Exchange.
The Exchange believes that its proposal to amend Rule 5.1(a)(2)
also removes impediments to and perfects the mechanism of a free and
open market, promotes just and equitable principles of trade, and
protects investors and the public interest because it proposes to
conform this rule governing the trading of UTP Exchange Traded Products
with the comparable rule of the Exchange's affiliated market, NYSE
National, which has been approved by the Commission.\7\ The proposed
rule change would also remove impediments to and perfect the mechanism
of a free and open market and a national market system and protect
investors and the public interest by promoting continuity across
affiliated exchanges.
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\7\ In its Order approving the NYSE National rule on which this
proposed change is based, the Commission found that the NYSE
National rules set forth an ``appropriate framework for the trading
of Exchange Traded Products on a UTP basis on the Exchange'' and are
consistent with Section 6(b)(5) of the Act. See Securities and
Exchange Act Release No. 83289 (May 17, 2018), 83 FR 23968 (May 23,
2018), at 23975.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed change would
conform Exchange rules, as described herein, with the comparable rules
of its affiliated exchanges, NYSE National and NYSE Chicago, and permit
UTP trading of Exchange Traded Products on the Exchange in a manner
consistent with its affiliated exchange.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative 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 \8\ and Rule 19b-
4(f)(6) thereunder.\9\
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally
does not become operative for 30 days after the date of the filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\11\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. The Commission notes that
the Exchange's proposal would conform the Exchange's rules, as
described herein, to the corresponding rules of its affiliated
exchanges.\12\ Accordingly, the Commission believes that the proposal
raises no new or novel regulatory issues and waiver of the 30-day
operative delay is consistent with the protection of investors and the
public interest. The Commission therefore waives the 30-day operative
delay and designates the proposed rule change to be operative upon
filing.\13\
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\10\ 17 CFR 240.19b-4(f)(6).
\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ See NYSE National Rules 1.1 and 5.1 and NYSE Chicago Rule
1.1.
\13\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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.
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-NYSE-2020-34 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-NYSE-2020-34. 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,
[[Page 25489]]
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-NYSE-2020-34 and should be
submitted on or before May 22, 2020.
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\14\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-09250 Filed 4-30-20; 8:45 am]
BILLING CODE 8011-01-P
