Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 1.1 To Modify the Definition of “UTP Derivative Securities Product” and Rule 5.1-E(a) To Incorporate the Modified Definition of “UTP Exchange Traded Product”, 26508-26510 [2020-09372]
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26508
Federal Register / Vol. 85, No. 86 / Monday, May 4, 2020 / Notices
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the facility for leverage purposes and
the loans’ duration will be no more than
7 days.3
2. Applicants anticipate that the
proposed facility would provide a
borrowing Fund with a source of
liquidity at a rate lower than the bank
borrowing rate at times when the cash
position of the Fund is insufficient to
meet temporary cash requirements. In
addition, Funds making short-term cash
loans directly to other Funds would
earn interest at a rate higher than they
otherwise could obtain from investing
their cash in repurchase agreements or
certain other short term instruments.
Thus, applicants assert that the facility
would benefit both borrowing and
lending Funds.
3. Applicants agree that any order
granting the requested relief will be
subject to the terms and conditions
stated in the application. Among others,
the Adviser, through a designated
committee, would administer the
facility as a disinterested fiduciary as
part of its duties under the investment
management agreements with the Funds
and would receive no additional fee as
compensation for its services in
connection with the administration of
the facility.4 The facility would be
subject to oversight and certain
approvals by the Funds’ Board,
including, among others, approval of the
interest rate formula and of the method
for allocating loans across Funds, as
well as review of the process in place to
evaluate the liquidity implications for
the Funds. A Fund’s aggregate
outstanding interfund loans will not
exceed 15% of its net assets, and the
Fund’s loans to any one Fund will not
exceed 5% of the lending Fund’s net
assets.5
4. Applicants assert that the facility
does not raise the concerns underlying
section 12(d)(1) of the Act given that the
Funds are part of the same group of
investment companies and there will be
no duplicative costs or fees to the
Funds.6 Applicants also assert that the
adviser an ‘‘Adviser’’). For purposes of the
requested order, ‘‘successor’’ is limited to any entity
that results from a reorganization into another
jurisdiction or a change in the type of a business
organization.
3 Any Fund, however, will be able to call a loan
on one business day’s notice.
4 Members of the designated committee may
include one or more investment professionals,
including individuals involved in making
investment decisions regarding short-term
investments.
5 Under certain circumstances, a borrowing Fund
will be required to pledge collateral to secure the
loan.
6 Applicants state that the obligation to repay an
interfund loan could be deemed to constitute a
security for the purposes of sections 17(a)(1) and
12(d)(1) of the Act.
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proposed transactions do not raise the
concerns underlying sections 17(a)(1),
17(a)(3), 17(d) and 21(b) of the Act as
the Funds would not engage in lending
transactions that unfairly benefit
insiders or are detrimental to the Funds.
Applicants state that the facility will
offer both reduced borrowing costs and
enhanced returns on loaned funds to all
participating Funds and each Fund
would have an equal opportunity to
borrow and lend on equal terms based
on an interest rate formula that is
objective and verifiable. With respect to
the relief from section 17(a)(2) of the
Act, applicants note that any collateral
pledged to secure an interfund loan
would be subject to the same conditions
imposed by any other lender to a Fund
that imposes conditions on the quality
of or access to collateral for a borrowing
(if the lender is another Fund) or the
same or better conditions (in any other
circumstance).7
5. Applicants also believe that the
limited relief from section 18(f)(1) of the
Act that is necessary to implement the
facility (because the lending Funds are
not banks) is appropriate in light of the
conditions and safeguards described in
the application and because the openend Funds would remain subject to the
requirement of section 18(f)(1) that all
borrowings of the open-end Fund,
including combined interfund loans and
bank borrowings, have at least 300%
asset coverage.
6. Section 6(c) of the Act permits the
Commission to exempt any persons or
transactions from any provision of the
Act if 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. Section 12(d)(1)(J) 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 section 12(d)(1) if the
exemption is consistent with the public
interest and the protection of investors.
Section 17(b) of the Act authorizes the
Commission to grant an order
permitting a transaction otherwise
prohibited by section 17(a) if it finds
that (a) the terms of the proposed
transaction are fair and reasonable and
do not involve overreaching on the part
of any person concerned; (b) the
proposed transaction is consistent with
the policies of each registered
investment company involved; and (c)
7 Applicants state that any pledge of securities to
secure an interfund loan could constitute a
purchase of securities for purposes of section
17(a)(2) of the Act.
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the proposed transaction is consistent
with the general purposes of the Act.
Rule 17d–1(b) under the Act provides
that in passing upon an application filed
under the rule, the Commission will
consider whether the participation of
the registered investment company in a
joint enterprise, joint arrangement or
profit sharing plan on the basis
proposed is consistent with the
provisions, policies and purposes of the
Act and the extent to which such
participation is on a basis different from
or less advantageous than that of the
other participants.
For the Commission, by the Division of
Investment Management, under delegated
authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–09378 Filed 5–1–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–88761; File No. SR–
NYSEArca–2020–34]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Rule 1.1 To
Modify the Definition of ‘‘UTP
Derivative Securities Product’’ and
Rule 5.1–E(a) To Incorporate the
Modified Definition of ‘‘UTP Exchange
Traded Product’’
April 28, 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, NYSE Arca, Inc. (‘‘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.
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 Derivative Securities Product’’
and (2) Rule 5.1–E(a) to incorporate the
definition of UTP Derivative Securities
Product as set forth in revised Rule 1.1.
The proposed rule change is available
1 15
U.S.C.78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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Federal Register / Vol. 85, No. 86 / Monday, May 4, 2020 / Notices
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 Derivative Securities Product’’
and (2) Rule 5.1–E(a) to incorporate the
definition of UTP Derivative Securities
Product as set forth in revised Rule 1.1.
jbell on DSKJLSW7X2PROD with NOTICES
Rule 1.1
Rule 1.1(k) currently provides that the
term ‘‘Derivative Securities 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 Derivative Securities Product’’
means a Derivative Securities Product
that trades on the Exchange pursuant to
unlisted trading privileges. The
Exchange proposes to amend the
definition of ‘‘UTP Derivative Securities
Product’’ to mean one of the following
Derivative Securities 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,
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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 Derivative
Securities Products to which the
Exchange would extend unlisted trading
privileges (‘‘UTP’’).
Rule 5.1–E(a)
Rule 5.1–E(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. Rule 5.1–
E(a)(2) further specifies that a UTP
Derivative Security, 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–E(a)(2)(i)–
(v).
Because the Exchange proposes to
modify the definition of UTP Derivative
Securities Product in Rule 1.1(k) to
conform to the rules of NYSE National
and NYSE Chicago, the Exchange
proposes to amend Rule 5.1–E(a)(2) to
eliminate redundant text and cross
reference the term ‘‘UTP Derivative
Securities Product’’ as it is defined in
Rule 1.1. This proposed change would
also conform Rule 5.1–E(a) with the
comparable NYSE National rule.
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 Derivative Securities
Products to which UTP may be
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).
5 15 U.S.C. 78f(b).
6 15 U.S.C. 78f(b)(4) & (5).
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26509
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 Derivative
Securities Products that may be traded
on a UTP basis on the Exchange.
The Exchange believes that its
proposal to amend Rule 5.1–E(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 Derivative
Securities 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.
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 Derivative Securities Products on the
Exchange in a manner consistent with
its affiliated exchanges.
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.
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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Federal Register / Vol. 85, No. 86 / Monday, May 4, 2020 / Notices
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
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.
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.
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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9 17
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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:
• 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–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–NYSEArca–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,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NYSEArca–2020–34 and
should be submitted on or before May
26, 2020.
Frm 00071
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[FR Doc. 2020–09372 Filed 5–1–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
PO 00000
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
J. Matthew DeLesDernier,
Assistant Secretary.
Sfmt 4703
[Release No. 34–88764; File No. SR–
NYSEARCA–2020–35]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Its Schedule of
Fees and Charges
April 28, 2020.
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 April 17,
2020, 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend its
Schedule of Fees and Charges to adopt
listing and annual fees for ExchangeTraded Fund Shares listed under
recently adopted Rule 5.2–E(j)(8). 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,
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
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]]>Agencies
[Federal Register Volume 85, Number 86 (Monday, May 4, 2020)]
[Notices]
[Pages 26508-26510]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09372]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88761; File No. SR-NYSEArca-2020-34]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 1.1
To Modify the Definition of ``UTP Derivative Securities Product'' and
Rule 5.1-E(a) To Incorporate the Modified Definition of ``UTP Exchange
Traded Product''
April 28, 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, NYSE Arca, Inc. (``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 Derivative Securities Product'' and (2) Rule 5.1-
E(a) to incorporate the definition of UTP Derivative Securities Product
as set forth in revised Rule 1.1. The proposed rule change is available
[[Page 26509]]
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 Derivative Securities Product'' and (2) Rule 5.1-
E(a) to incorporate the definition of UTP Derivative Securities Product
as set forth in revised Rule 1.1.
Rule 1.1
Rule 1.1(k) currently provides that the term ``Derivative
Securities 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 Derivative Securities Product'' means
a Derivative Securities Product that trades on the Exchange pursuant to
unlisted trading privileges. The Exchange proposes to amend the
definition of ``UTP Derivative Securities Product'' to mean one of the
following Derivative Securities 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 Derivative Securities 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-E(a)
Rule 5.1-E(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.
Rule 5.1-E(a)(2) further specifies that a UTP Derivative Security,
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-E(a)(2)(i)-(v).
Because the Exchange proposes to modify the definition of UTP
Derivative Securities Product in Rule 1.1(k) to conform to the rules of
NYSE National and NYSE Chicago, the Exchange proposes to amend Rule
5.1-E(a)(2) to eliminate redundant text and cross reference the term
``UTP Derivative Securities Product'' as it is defined in Rule 1.1.
This proposed change would also conform Rule 5.1-E(a) with the
comparable NYSE National rule.
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).
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The Exchange believes its proposed rule change ensures that Rule
1.1 identifies and publicly states the complete list of Derivative
Securities 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 Derivative Securities Products that may be traded on a
UTP basis on the Exchange.
The Exchange believes that its proposal to amend Rule 5.1-E(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 Derivative Securities
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 Derivative Securities Products on the Exchange in a
manner consistent with its affiliated exchanges.
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.
[[Page 26510]]
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-NYSEArca-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-NYSEArca-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, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSEArca-2020-34 and should be submitted
on or before May 26, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-09372 Filed 5-1-20; 8:45 am]
BILLING CODE 8011-01-P
