[Federal Register Volume 80, Number 200 (Friday, October 16, 2015)]
[Notices]
[Pages 62580-62584]
[FR Doc No: 2015-26323]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76126; File No. SR-NASDAQ-2015-095]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order
Granting Approval of Proposed Rule Change Relating to the Listing and
Trading of the Shares of the AltShares Long/Short High Yield Fund of
ETFis Series Trust I

October 9, 2015.

I. Introduction

    On August 7, 2015, The NASDAQ Stock Market LLC (the ``Exchange'' or
``Nasdaq'') filed with the Securities and Exchange Commission''
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'' or ``Exchange Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to list and trade shares
(``Shares'') of the AltShares Long/Short High Yield Fund (``Fund'') of
ETFis Series Trust I (``Trust'') under NASDAQ Rule 5735. The proposed
rule change was published for comment in the Federal Register on August
25, 2015.\3\ The Commission received no comments on the proposed rule
change. This order grants approval of the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 75738 (August 19,
2015), 80 FR 51632 (``Notice'').
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II. Description of the Proposal

    The Exchange proposes to list and trade the Shares under Nasdaq
Rule 5735, which governs the listing and trading of Managed Fund Shares
on the Exchange. The Fund will be an actively-managed exchange-traded
fund (``ETF''). The Shares will be offered by the Trust,\4\ which is
registered with the Commission as an investment company and has filed a
registration statement on Form N-1A (``Registration Statement'')

with the Commission.\5\ The Fund will be a series of the Trust.
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    \4\ According to the Exchange, the Adviser (as defined herein)
has obtained certain exemptive relief, upon which the Trust may
rely, under the Investment Company Act of 1940 (``1940 Act''). See
Investment Company Act Release No. 30607 (July 23, 2013) (File No.
812-14080).
    \5\ See Post-Effective Amendment No. 40/41 to Form N-1A
Registration Statement for the Trust, dated May 4, 2015 (File Nos.
333-187668 and 811-22819).
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    Etfis Capital LLC will be the investment adviser (``Adviser'') to
the Fund, and Bramshill Investments, LLC will be the investment sub-
adviser to the Fund (``Sub-Adviser''). ETF Distributors LLC
(``Distributor'') will be the principal underwriter and distributor of
the Fund's Shares. The Bank of New York Mellon Corporation (``BNY'')
will act as the administrator, accounting agent, custodian, and
transfer agent to the Fund. The Exchange states that the Adviser is not
a broker-dealer, although it is affiliated with the Distributor, a
broker-dealer.\6\ The Exchange represents that the Adviser has
implemented a fire wall with respect to its broker-dealer affiliate
regarding access to information concerning the composition and/or
changes to the portfolio.\7\ According to the Exchange, the Sub-Adviser
is not a broker-dealer and is not affiliated with a broker-dealer.\8\
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    \6\ See Notice, supra note 3, 80 FR at 51632.
    \7\ See id.
    \8\ In the event (a) the Adviser or the Sub-Adviser becomes
newly affiliated with a broker-dealer or registers as a broker-
dealer, or (b) any new adviser or new sub-adviser is a registered
broker-dealer or is or becomes affiliated with a broker-dealer, it
will implement a fire wall with respect to its relevant personnel
and/or such broker-dealer affiliate, as applicable, regarding access
to information concerning the composition and/or changes to the Fund
portfolio and will be subject to procedures designed to prevent the
use and dissemination of material nonpublic information regarding
such portfolio.
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    The Exchange has made the following representations and statements
in describing the Fund and its investment strategy, including the
Fund's portfolio holdings and investment restrictions.\9\
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    \9\ The Commission notes that additional information regarding
the Fund, the Trust, and the Shares, including investment
strategies, risks, creation and redemption procedures, fees,
portfolio holdings disclosure policies, calculation of net asset
value (``NAV''), distributions, and taxes, among other things, can
be found in the Notice and the Registration Statement, as
applicable. See Notice and Registration Statement, supra notes 3 and
5, respectively.
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A. Exchange's Description of the Fund's Principal Investments

    The investment objective of the Fund will be to seek current income
and capital appreciation with reduced volatility over time. The Fund
will seek to achieve its investment objective primarily by investing in
a portfolio of ``high yield'' debt securities of U.S. companies. Under
normal market conditions,\10\ the Fund will hold long positions in high
yield debt securities selected because the Sub-Adviser believes they
are likely to outperform the market over time or increase in value in
the near term (``Long Position''), and will hold short positions in
high yield debt securities selected because the Sub-Adviser believes
they are likely to lose value in the near or longer term (``Short
Position'').
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    \10\ The term ``under normal market conditions'' as used herein
includes, but is not limited to, the absence of adverse market,
economic, political or other conditions, including extreme
volatility or trading halts in the fixed income or other securities
markets or the financial markets generally; operational issues
causing dissemination of inaccurate market information; or force
majeure type events such as systems failure, natural or man-made
disaster, act of God, armed conflict, act of terrorism, riot or
labor disruption, or any similar intervening circumstance.
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    The Fund will not have any portfolio maturity limitation and may
invest its assets in instruments with short-term, medium-term, or long-
term maturities. Issuers of securities in which the Fund expects to
invest will include large and medium capitalization companies, and may
include small capitalization companies. According to the Exchange, the
Sub-Adviser expects the Fund's investment portfolio to include up to
200 different securities positions with a target portfolio net exposure
(the market value of the Long Position minus the market value of the
Short Position) of between -20% and 100%.\11\
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    \11\ See Notice, supra note 3, 80 FR at 51633.
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    In selecting securities for the Fund's portfolio, the Sub-Adviser
generally will analyze debt securities included in the Bloomberg USD
Corporate High Yield Bond Index. While the Fund may invest directly in
high yield debt securities, the Sub-Adviser may also implement the
Fund's strategy by investing in exchange-traded pools (which will
consist of exchange-traded funds, exchange-traded notes, or closed-end
funds, each of which will be listed for trading on a U.S. exchange,
collectively, ``ETPs'') that invest a significant portion of their
portfolios in high yield debt instruments (``High Yield ETPs'').
    Positions in high-yield debt securities also may include foreign
debt securities traded on U.S. or foreign exchanges or in U.S. or
foreign over-the-counter markets, which may be denominated in foreign
currencies. Any currency hedging will be accomplished by taking long or
short positions in ETPs.
    The Exchange states that ``high yield debt securities'' generally
include debt securities that are rated lower than ``BBB-'' by Standard
& Poor's Ratings Group or ``Baa3'' by Moody's Investors Service, Inc.
or at a similar level by another nationally recognized statistical
rating organization, or are unrated but are deemed to be of comparable
quality by the Sub-Adviser.\12\ These securities will consist of: (a)
Senior and subordinated corporate debt obligations (bonds, debentures,
notes, and commercial paper); (b) senior bank loans (including through
loan assignments and loan participations); (c) preferred stocks; (d)
municipal bonds; (e) convertible bonds; and (f) convertible preferred
stocks.\13\ The Fund will not invest in other types of high-yield debt
securities, such as asset-backed securities. The Fund will not be
limited to investing in high-yield securities, so any of the securities
listed may also be investment grade. In addition, the Fund may invest
in U.S. treasuries.
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    \12\ See id.
    \13\ The Exchange states that convertible bonds and convertible
preferred stocks in which the Fund may invest, and the equity
securities into which these securities may be converted, and also
preferred stocks (non-convertible) in which the Fund may invest,
generally will be exchange-traded. According to the Exchange, the
Sub-Adviser's current expectation is that at least 80% of these
securities will be exchange-traded. The Exchange represents that at
least 90% of these exchange-traded securities will be traded on
exchanges that are Intermarket Surveillance Group (``ISG'') members.
See id. at 51633 n.12.
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    According to the Exchange, as a result of its trading strategy, the
Fund expects to engage in frequent portfolio transactions that will
likely result in higher portfolio turnover than other similar
investment companies.\14\ Under normal circumstances, the anticipated
annual portfolio turnover rate for the Fund is expected to be greater
than 100%.
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    \14\ See id. at 51633.
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B. Exchange's Description of the Fund's Other Investments

    In addition to investing in High Yield ETPs, the Fund may invest in
other fixed-income ETPs, but the Fund will not invest in leveraged
ETPs. The Exchange states that the Fund will not purchase more than 3%
of an ETF's outstanding shares unless: (i) The ETF or the Fund has
received an order for exemptive relief from the 3% limitation from the
Commission that is applicable to the Fund; and (ii) the ETF and the
Fund take appropriate steps to comply with any conditions in such
order.\15\ The Fund also may invest in warrants.\16\
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    \15\ See id.
    \16\ The Exchange states that warrants in which the Fund
invests, and the equity securities into which these warrants may be
converted, generally will be exchange-traded. According to the
Exchange, the Sub-Adviser's current expectation is that at least 80%
of these securities will be exchange-traded. The Exchange represents
that at least 90% of these exchange-traded securities will be traded
on exchanges that are ISG members. See Notice, supra note 3, 80 FR
at 51633 n.13.
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    In certain adverse market, economic, political, or other
conditions, the Fund

may temporarily depart from its normal investment policies and
strategy, provided that the alternative is consistent with the Fund's
investment objective and is in the best interest of the Fund. At such
times, the Fund may invest in cash or cash equivalents, such as money
market instruments,\17\ and to the extent permitted by applicable law
and the Fund's investment restrictions, the Fund may invest in shares
of money market mutual funds. Under such circumstances, the Fund may
invest up to 100% of its assets in these investments and may do so for
extended periods of time. Under normal circumstances, however, the Fund
may also hold money market instruments and/or shares of money market
mutual funds for various reasons including to provide for funds
awaiting investment, to accumulate cash for anticipated purchases of
portfolio securities, to allow for shareholder redemptions, and to
provide for the Fund's operating expenses.
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    \17\ The Exchange states that the money market instruments in
which the Fund may invest are short-term (less than one-year) notes
issued by (i) the U.S. government, (ii) an agency of the U.S.
government, or (iii) a U.S. corporation. See id. at 51633 n.14.
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C. Exchange's Description of the Fund's Investment Restrictions

    According to the Exchange, the Fund anticipates investing entirely
in fully liquid assets, but it has the flexibility to invest up to 15%
of its net assets in illiquid securities and other illiquid assets.\18\
Under the supervision of the Board of Trustees of the Trust (``Trust
Board''), the Sub-Adviser will determine the liquidity of the Fund's
investments, and through reports from the Sub-Adviser, the Trust Board
will monitor investments in illiquid instruments.\19\ The Exchange
represents that, if through a change in values, net assets, or other
circumstances, the Fund were in a position where more than 15% of its
net assets were invested in illiquid securities or other illiquid
assets, it would seek to take appropriate steps to protect
liquidity.\20\
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    \18\ See id. at 51633-34.
    \19\ According to the Exchange, in determining the liquidity of
the Fund's investments, the Sub-Adviser may consider various factors
including: (i) The frequency of trades and quotations; (ii) the
number of dealers and prospective purchasers in the marketplace;
(iii) dealer undertakings to make a market; (iv) the nature of the
security (including any demand or tender features); and (v) the
nature of the marketplace for trades (including the ability to
assign or offset the Fund's rights and obligations relating to the
investment). See Notice, supra note 3, 80 FR at 51634.
    \20\ See id.
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    The Fund will generally seek to invest in high-yield debt
securities, bank loans, and other debt issuances that the Sub-Adviser
deems to be liquid, with readily available prices. The Fund will only
invest in bank loans that have a par amount outstanding of U.S. $100
million or greater at the time the loan is originally issued. The Fund
will not enter into a long or short position in high yield debt
securities with a par amount outstanding of less than U.S. $100 million
at the time of issuance of such high yield debt securities, if upon
establishing such position, the total value of such positions would
represent fifty percent or greater of the Fund's net assets.
    The Fund will not invest more than 25% of the value of its total
assets in securities of issuers in any particular industry.
    The Fund's investments (including investments in ETPs) will not be
utilized to seek to achieve a leveraged return on the Fund's net
assets. The Exchange represents that the Fund will not invest in
futures contracts, options, swaps, or other derivative instruments.

III. Discussion and Commission Findings

    After careful review, the Commission finds that the Exchange's
proposal to list and trade the Shares is consistent with the Exchange
Act and the rules and regulations thereunder applicable to a national
securities exchange.\21\ In particular, the Commission finds that the
proposed rule change is consistent with Section 6(b)(5) of the Exchange
Act,\22\ which requires, among other things, that the Exchange's rules
be designed to promote just and equitable principles of trade, to
remove impediments to and perfect the mechanism of a free and open
market and a national market system, and, in general, to protect
investors and the public interest.
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    \21\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \22\ 15 U.S.C. 78f(b)(5).
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    The Commission also finds that the proposal to list and trade the
Shares on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of
the Exchange Act,\23\ which sets forth the finding of Congress that it
is in the public interest and appropriate for the protection of
investors and the maintenance of fair and orderly markets to assure the
availability to brokers, dealers, and investors of information with
respect to quotations for, and transactions in, securities. Quotation
and last-sale information for the Shares and the exchange-traded
securities held by the Fund will be available via UTP Level 1, as well
as Nasdaq proprietary quote and trade services.\24\ On each business
day, before commencement of trading in Shares in the Regular Market
Session \25\ on the Exchange, the Trust will disclose on its Web site
the identities and quantities of the portfolio of securities and other
assets (``Disclosed Portfolio'') held by the Fund that will form the
basis for the Fund's calculation of NAV at the end of the business
day.\26\ In addition, the Intraday Indicative Value, available on the
NASDAQ OMX Information LLC proprietary index data service,\27\ will be
based upon the current value for the components of the Disclosed
Portfolio and will be updated and widely disseminated and broadly
displayed at least every 15 seconds during the Regular Market
Session.\28\ During hours when the local markets for foreign securities
in the Fund's portfolio are closed, the Intraday Indicative Value will
be updated at least every 15 seconds during the Regular Market Session
to reflect currency exchange fluctuations.\29\ The NAV of the Fund will
be calculated by BNY and determined at the close of regular trading on
the New York Stock

Exchange (ordinarily 4:00 p.m. Eastern time) on each day that such
exchange is open.\30\ The Web site for the Fund will include a form of
the prospectus for the Fund and additional data relating to NAV and
other applicable quantitative information.\31\
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    \23\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \24\ See Notice, supra note 3, 80 FR at 51636.
    \25\ See Nasdaq Rule 4120(b)(4) (describing the three trading
sessions on the Exchange: (1) Pre-Market Session from 7:00 a.m. to
9:30 a.m. Eastern time; (2) Regular Market Session from 9:30 a.m. to
4:00 p.m. or 4:15 p.m. Eastern time; and (3) Post-Market Session
from 4:00 p.m. or 4:15 p.m. to 8:00 p.m. Eastern time).
    \26\ Under accounting procedures to be followed by the Fund,
trades made on the prior business day (``T'') will be booked and
reflected in NAV on the current business day (``T+1'').
Notwithstanding the foregoing, portfolio trades that are executed
prior to the opening of the Exchange on any business day may be
booked and reflected in NAV on such business day. Accordingly, the
Fund will be able to disclose at the beginning of the business day
the portfolio that will form the basis for the NAV calculation at
the end of the business day. The daily disclosure will include for
each portfolio security and other asset of the Fund the following
information on the Fund's Web site (if applicable): name, ticker
symbol, CUSIP number or other identifier, if any; type of holding
(such as ``bond,'' ``note,'' ``preferred stock,'' ``ETP,'' ``mutual
fund''); quantity held (as measured by, for example, number of
shares, contracts or units); maturity date, if any; coupon rate, if
any; effective date, if any; market value of the holding; and the
percentage weighting of the holdings in the Fund's portfolio. The
Web site information will be publicly available at no charge.
    \27\ Currently, the NASDAQ OMX Global Index Data Service
(``GIDS'') is the NASDAQ OMX global index data feed service,
offering real-time updates, daily summary messages, and access to
widely followed indexes and Intraday Indicative Values for ETFs. The
Exchange represents that GIDS provides investment professionals with
the daily information needed to track or trade NASDAQ OMX indexes,
listed ETFs, or third-party partner indexes and ETFs. See Notice,
supra note 3, 80 FR at 51636, n.23.
    \28\ See id. at 51636.
    \29\ See id.
    \30\ According to the Exchange, ETPs, exchange-traded fixed
income securities, exchange-traded convertible securities, exchange-
traded warrants, and any other exchange traded securities will be
valued at the official closing price on their principal exchange or
board of trade, or lacking any current reported sale at the time of
valuation, at the mean between the most recent bid and asked
quotations on the principal exchange or board of trade. Portfolio
securities traded on more than one securities exchange will be
valued at the last sale price or official closing price, as
applicable, on the business day as of which such value is being
determined at the close of the exchange representing the principal
market for such securities. Fixed-income securities traded over-the-
counter (including high yield fixed-income securities and money
market instruments); warrants traded over-the-counter; and
convertible securities traded over-the-counter will be valued at the
mean between the most recent available bid and asked quotations
provided by parties that make a market in the instrument. If recent
bid and ask quotations are not available, these securities will be
valued in accordance with the Fund's fair valuation procedures.
Money market instruments with maturities of less than 60 days will
be valued at amortized cost. Shares of mutual funds that are not
exchange-listed will be valued at their net asset value.
    \31\ See id. at 51638.
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    The Exchange further states that the intra-day, executable price
quotations on the high yield debt securities, bank loans, warrants,
other fixed-income and convertible securities, including cash and cash
equivalents, ETPs, and other assets held by the Fund will be available
from major broker-dealer firms or on the exchange on which they are
traded, if applicable.\32\ The foregoing intra-day price information is
available through subscription services, such as Bloomberg and Thomson
Reuters, which can be accessed by Authorized Participants and other
investors. Information regarding market price and volume of the Shares
is and will be continually available on a real-time basis throughout
the day on brokers' computer screens and other electronic services. The
previous day's closing price and trading volume information for the
Shares will be published daily in the financial section of newspapers.
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    \32\ See id.
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    The Commission also believes that the proposal to list and trade
the Shares is reasonably designed to promote fair disclosure of
information that may be necessary to price the Shares appropriately and
to prevent trading when a reasonable degree of transparency cannot be
assured. The Exchange states that it will obtain a representation from
the issuer of the Shares that the NAV per Share will be calculated
daily and that the NAV and the Disclosed Portfolio will be made
available to all market participants at the same time.\33\ The Exchange
also represents that the Exchange may consider all relevant factors in
exercising its discretion to halt or suspend trading in the Shares of
the Fund. Nasdaq will halt or pause trading in the Shares under the
conditions specified in Nasdaq Rules 4120 and 4121, including the
trading pauses under Nasdaq Rules 4120(a)(11) and (12). Trading may be
halted because of market conditions or for reasons that, in the view of
the Exchange, make trading in the Shares inadvisable.\34\ Trading in
the Shares also will be subject to Rule 5735(d)(2)(D), which sets forth
circumstances under which Shares of the Fund may be halted.\35\ The
Exchange states that it has a general policy prohibiting the
distribution of material, non-public information by its employees.\36\
In addition, the Exchange states that the Adviser is not a broker-
dealer, although it is affiliated with the Distributor, a broker-
dealer, and that the Adviser has implemented a fire wall with respect
to its broker-dealer affiliate regarding access to information
concerning the composition and/or changes to the portfolio.\37\ The
Exchange states that the Sub-Adviser is not a broker-dealer and is not
affiliated with a broker-dealer.\38\ Further, the Commission notes that
the Reporting Authority \39\ that provides the Disclosed Portfolio must
implement and maintain, or be subject to, procedures designed to
prevent the use and dissemination of material, non-public information
regarding the actual components of the portfolio.\40\ The Exchange
represents that trading in the Shares will be subject to the existing
trading surveillances, administered by both Nasdaq and also the
Financial Industry Regulatory Authority (``FINRA'') on behalf of the
Exchange, which are designed to detect violations of Exchange rules and
applicable federal securities laws.\41\
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    \33\ See id.
    \34\ These may include: (1) the extent to which trading is not
occurring in the securities and/or the financial instruments
constituting the Disclosed Portfolio of the Fund; or (2) whether
other unusual conditions or circumstances detrimental to the
maintenance of a fair and orderly market are present. See id. at
51636.
    \35\ See id.
    \36\ See id. at 51637.
    \37\ See id. at 51632. See also supra note 8. The Exchange
further represents that an investment adviser to an open-end fund is
required to be registered under the Investment Advisers Act of 1940
(``Advisers Act''). As a result, the Adviser and its related
personnel are subject to the provisions of Rule 204A-1 under the
Advisers Act, which requires investment advisers to adopt a code of
ethics that reflects the fiduciary nature of their relationship with
their clients as well as compliance with other applicable securities
laws. Accordingly, investment advisers must have procedures designed
to prevent the communication and misuse of non-public information,
consistent with Rule 204A-1 under the Advisers Act. In addition,
Rule 206(4)-7 under the Advisers Act makes it unlawful for an
investment adviser to provide investment advice to clients unless
such investment adviser has (i) adopted and implemented written
policies and procedures reasonably designed to prevent violation, by
the investment adviser and its supervised persons, of the Advisers
Act and the Commission rules adopted thereunder; (ii) implemented,
at a minimum, an annual review regarding the adequacy of the
policies and procedures established pursuant to subparagraph (i)
above and the effectiveness of their implementation; and (iii)
designated an individual (who is a supervised person) responsible
for administering the policies and procedures adopted under
subparagraph (i) above.
    \38\ See id. at 51632.
    \39\ Nasdaq Rule 5730(c)(4) defines ``Reporting Authority.''
    \40\ See Nasdaq Rule 5735(d)(2)(B)(ii).
    \41\ FINRA surveils trading on the Exchange pursuant to a
regulatory services agreement. The Exchange is responsible for
FINRA's performance under this regulatory services agreement.
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    Nasdaq deems the Shares to be equity securities, thus rendering
trading in the Shares subject to Nasdaq's existing rules governing the
trading of equity securities. In support of this proposal, the Exchange
represented that:
    (1) The Shares will be subject to Nasdaq Rule 5735, which sets
forth the initial and continued listing criteria applicable to Managed
Fund Shares.
    (2) Trading in the Shares will be subject to the existing trading
surveillances administered by both Nasdaq and FINRA on behalf of the
Exchange, which are designed to detect violations of Exchange rules and
applicable federal securities laws, and these procedures are adequate
to properly monitor Exchange trading of the Shares in all trading
sessions and to detect and help deter violations of Exchange rules and
applicable federal securities laws.
    (3) FINRA, on behalf of the Exchange, will communicate as needed
regarding trading in the Shares or other exchange-traded securities
with other markets and other entities that are ISG \42\ members, and
FINRA, on behalf of the Exchange, may obtain trading information
regarding trading in the Shares; exchange-traded fixed income
securities; exchange-traded warrants; exchange-traded convertible
securities; ETPs; or other exchange-traded securities from such markets
and other entities. In addition, the Exchange may obtain information
regarding trading in the Shares; exchange-traded warrants; exchange-
traded fixed-income securities; exchange-traded convertible

securities; ETPs; or other exchange-traded securities from markets and
other entities that are members of ISG or with which the Exchange has
in place a comprehensive surveillance sharing agreement. FINRA, on
behalf of the Exchange, is able to access, as needed, trade information
for certain fixed income securities, including corporate debt
securities and money market instruments, held by the Fund reported to
FINRA's TRACE.
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    \42\ For a list of the current members of ISG, see
www.isgportal.org.
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    (4) The Exchange has appropriate rules to facilitate transactions
in the Shares during all trading sessions.
    (5) Prior to the commencement of trading, the Exchange will inform
its members in an Information Circular of the special characteristics
and risks associated with trading the Shares. Specifically, the
Information Circular will discuss the following: (a) The procedures for
purchases and redemptions of Shares in Creation Units (and that Shares
are not individually redeemable); (b) Nasdaq Rule 2111A, which imposes
suitability obligations on Nasdaq members with respect to recommending
transactions in the Shares to customers; (c) how and by whom
information regarding the Intraday Indicative Value and the Disclosed
Portfolio is disseminated; (d) the risks involved in trading the Shares
during the Pre-Market and Post-Market Sessions when an updated Intraday
Indicative Value will not be calculated or publicly disseminated; (e)
the requirement that members deliver a prospectus to investors
purchasing newly issued Shares prior to or concurrently with the
confirmation of a transaction; and (f) trading information.
    (6) For initial and continued listing, the Fund must be in
compliance with Rule 10A-3 under the Act.\43\
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    \43\ See 17 CFR 240.10A-3.
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    (7) At least 90% of the convertible bonds, convertible preferred
stocks, and warrants in which the Fund invests, and the equity
securities into which these securities may be converted, and also
preferred stocks (non-convertible) in which the Fund invests, will be
traded on exchanges that are ISG members.
    (8) The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets.
    (9) The Fund will only invest in bank loans that have a par amount
outstanding of U.S. $100 million or greater at the time the loan is
originally issued.
    (10) The Fund will not enter into a long or short position in high
yield debt securities with a par amount outstanding of less than U.S.
$100 million at the time of issuance of such high yield debt
securities, if upon establishing such position, the total value of such
positions would represent fifty percent or greater of the Fund's net
assets. In addition, the Fund will not invest in other types of high-
yield debt securities, such as asset-backed securities.
    (11) The Fund will not invest more than 25% of the value of its
total assets in securities of issuers in any particular industry.
    (12) The Fund's investments (including investments in ETPs) will
not be utilized to seek to achieve a leveraged return on the Fund's net
assets.
    (13) The Fund will not invest in futures contracts, options, swaps,
or other derivative instruments.
    (14) A minimum of 100,000 Shares will be outstanding at the
commencement of trading on the Exchange.
    This approval order is based on all of the Exchange's
representations, including those set forth above and in the Notice. The
Commission notes that the Fund and the Shares must comply with the
requirements of Nasdaq Rule 5735 to be listed and traded on the
Exchange.
    For the foregoing reasons, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act \44\ and the
rules and regulations thereunder applicable to a national securities
exchange.
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    \44\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act,\45\ that the proposed rule change (SR-NASDAQ-2015-095)
be, and it hereby is, approved.
---------------------------------------------------------------------------

    \45\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\46\
---------------------------------------------------------------------------

    \46\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-26323 Filed 10-15-15; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 172 (Friday, September 4, 2015)]
[Notices]
[Pages 53601-53606]
[FR Doc No: 2015-21958]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75792; File No. SR-ISE-2015-26]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Adopting a Principles-Based Approach To Prohibit the Misuse of
Material, Non-Public Information by Market Makers by Deleting Rule 810

August 31, 2015.
    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 August 28, 2015, the International Securities Exchange, LLC
(the ``Exchange'' or the ``ISE'') filed with the Securities and
Exchange 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\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    ISE proposes to adopt a principles-based approach to prohibit the
misuse of material, non-public information by market makers by deleting
Rule 810. The text of the proposed rule change is available on the
Exchange's Web site at www.ise.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 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

(a) Purpose--
    The Exchange proposes to adopt a principles-based approach to
prohibit the misuse of material, non-public information by market
makers by deleting Rule 810. In so doing, the Exchange would harmonize
its rules amongst its Members \3\ relating to protecting against the
misuse of material, non-public information. The Exchange believes that
Rule 810 is no longer necessary because all Members, including market
makers, are subject to the Exchange's general principles-based
requirements governing the protection against the misuse of material,
non-public information, pursuant to Exchange Rules, Chapter 4--Business
Conduct, Rule 408 (Prevention of the Misuse of Material Nonpublic
Information), section (a) (``Rule 408(a)''), which obviates the need
for separately-prescribed requirements for a subset of market
participants on the Exchange.
---------------------------------------------------------------------------

    \3\ The term ``Member'' means an organization that has been
approved to exercise trading rights associated with Exchange Rights.
See Rule 100(a)(23).
---------------------------------------------------------------------------

Background
    The Exchange has two classes of registered market makers. Pursuant
to Rule 800, a market maker is a Member with Designated Trading
Representatives that is registered with the Exchange for the purpose of
making transactions as a dealer-specialist. As the rule further
provides, a market maker can be either a CMM or a PMM. All market
makers are subject to the requirements of Rules 803 and 804, which set
forth the obligations of market makers, particularly relating to
quoting.
    Rule 803 specifies the obligations of market makers, which include
making markets that, absent changed market conditions, will be honored
for the number of contracts entered into the Exchange's System in all
series of options classes to which the market maker is appointed. The
quoting obligations of market makers are set forth in Rule 804. That
rule sets forth the main difference between PMMs and CMMs, namely that
PMMs have a heightened quoting obligation as compared to CMMs.\4\ In
addition to a heightened quoting obligation pursuant to Rule 804, an
Electronic Access Member may designate a Preferred Market Maker \5\ on
orders it enters into the System (``Preferenced Orders''). These
Preferred Market Makers, quoting at the NBBO at the time the
Preferenced Order is received, are eligible to receive a greater
allocation of participation rights.\6\
---------------------------------------------------------------------------

    \4\ Compare Rule 804(e)(1) (``Primary Market Makers. Primary
Market Makers must enter continuous quotations and enter into any
resulting transactions in all of the series listed on the Exchange
of the options classes to which it is appointed on a daily basis.'')
with 804(e)(2) (``Competitive Market Makers. (i) On any given day, a
Competitive Market Maker is not required to enter quotations in the
options classes to which it is appointed. (ii) A Competitive Market
Maker may initiate quoting in options classes to which it is
appointed intraday. (iii) Whenever a Competitive Market Maker enters
a quote in an options class to which it is appointed, it must
maintain continuous quotations in that class for 60% of the time the
class is open for trading on the Exchange; provided, however, that a
Competitive Market Maker shall be required to maintain continuous
quotations for 90% of the time the class is open for trading on the
Exchange in any options class in which it receives Preferenced
Orders . . . .'').
    \5\ A Preferred Market Maker may be the PMM appointed to the
options class or any CMM appointed to the options class.
    \6\ .03 of Supplementary Material to Rule 713.
---------------------------------------------------------------------------

    Importantly, all market makers have access to the same information
in the order book that is available to all other market participants.
Moreover, none of the Exchange's market makers have agency obligations
to the Exchange's order book. As such, the distinctions between PMMs
and CMMs are the quoting requirements set forth in Rule 804.
    Notwithstanding that market makers have access to the same Exchange
trading information as all other market participants on the Exchange,
the Exchange has specific rules governing how market makers may
operate. Rule 810 allows market makers to engage in Other Business
Activities \7\ and to be affiliated with a broker-dealer that engages
in Other Business Activities only if there is an Information Barrier
between the marking making activities and the Other Business
Activities. The Rule further provides that market makers must implement
detailed Exchange-approved procedures to restrict the flow of material,
non-public information. Rule 810(b) outlines the organizational
structure of the Information Barrier, which a market maker must
implement to meet the requirements of Rule 810(a). The Information
Barrier is meant to ensure that a market maker will not have access to
material, non-public information while engaging in Other Business
Activities and that a market maker will not misuse material, non-public
information obtained from an affiliated broker-dealer engaged in the
Other Business Activities.
---------------------------------------------------------------------------

    \7\ Other Business Activities means ``(1) conducting an
investment or banking or public securities business; (2) making
markets in the stocks underlying the options in which it makes
markets; or (3) handling listed options orders as agent on behalf of
Public Customers or broker-dealers; (4) conducting non-market making
proprietary listed options trading activities.''
---------------------------------------------------------------------------

Proposed Rule Change
    The Exchange believes that the guidelines in Rule 810, for market
makers, are no longer necessary and proposes to delete it. Rather, the
Exchange believes that Rule 408(a) governing the misuse of material,
non-public information provides for an appropriate, principles-based
approach to prevent the market abuses Rule 810 is designed to address.
Specifically Rule 408(a) requires every Exchange Member to establish,
maintain and enforce written policies and procedures reasonably
designed, taking into consideration the nature of the Member's
business, to prevent the misuse of material, non-public information by
such Member or associated person. For purposes of this requirement, the
misuse of material, non-public information includes, but is not limited
to, the following:
    (a) Trading in any securities issued by a corporation, partnership,
or Funds, as defined in Rule 502(h), or a trust or similar entities, or
in any related securities or related options or other derivative
securities, or in any related non-U.S. currency, non-U.S. currency
options, futures or options on futures on such currency, or any other
derivatives based on such currency, or in any related commodity,
related commodity futures or options on commodity futures or any other
related commodity derivatives, while in possession of material
nonpublic information concerning that corporation or those Funds or
that trust or similar entities;
    (b) trading in an underlying security or related options or other
derivative

securities, or in any related non-U.S. currency, non-U.S. currency
options, futures or options on futures on such currency, or in any
related commodity, related commodity futures or options on commodity
futures or any other related commodity derivatives, or any other
derivatives based on such currency while in possession of material
nonpublic information concerning imminent transactions in the above;
and
    (c) disclosing to another person any material nonpublic information
involving a corporation, partnership, or Funds or a trust or similar
entities whose shares are publicly traded or an imminent transaction in
an underlying security or related securities or in the underlying non-
U.S. currency or any related non-U.S. currency options, futures or
options on futures on such currency, or in any related commodity,
related commodity futures or options on commodity futures or any other
related commodity derivatives, or any other derivatives based on such
currency for the purpose of facilitating the possible misuse of such
material nonpublic information.
    Because market makers are already subject to the requirements of
Rule 408(a) and because market makers do not have any trading or
information advantage over other Members, the Exchange does not believe
that it is necessary to separately require specific limitations on
dealings between market makers and their affiliates. Deleting Rule 810
would provide market makers and Members with the flexibility to adapt
their policies and procedures as reasonably designed to reflect changes
to their business model, business activities, or the securities market
in a manner similar to how Members on the Exchange currently operate
and consistent with Rule 408(a). However, the Exchange notes that
deleting Rule 810 does not obviate the need for reasonably designed
information barriers in certain situations.
    As noted above, PMMs and CMMs are distinguished under Exchange
rules only to the extent that PMMs have heightened obligations and
allocation guarantees. However, none of these heightened obligations
provides different or greater access to non-public information than any
other market participant on the Exchange.\8\ Specifically, market
makers on the Exchange do not have access to trading information
provided by the Exchange, either at, or prior to, the point of
execution, that is not made available to all other market participants
on the Exchange in a similar manner. Further, as noted above, market
makers on the Exchange do not have any agency responsibilities for
orders on the order book. Accordingly, because market makers do not
have any trading advantages at the Exchange due to their market role,
the Exchange believes that they should be subject to the same rules as
Members regarding the protection against the misuse of material, non-
public information, which in this case, is existing Rule 408(a).
---------------------------------------------------------------------------

    \8\ See Rules 802(e) and 803.
---------------------------------------------------------------------------

    The Exchange notes that even with this proposed rule change,
pursuant to Rule 408(a), a market maker would still be obligated to
ensure that its policies and procedures reflect the current state of
its business and continue to be reasonably designed to achieve
compliance with applicable federal securities law and regulations, and
with applicable Exchange rules, including being reasonably designed to
protect against the misuse of material, non-public information. While
information barriers would not specifically be required under the
proposal, Rule 408(a) already requires that a Member consider its
business model or business activities in structuring its policies and
procedures, which may dictate that an information barrier or a
functional separation be part of the set of policies and procedures
that would be reasonably designed to achieve compliance with applicable
securities law and regulations, and with applicable Exchange rules.
    The Exchange is not proposing to change what is considered to be
material, non-public information and, thus does not expect there to be
any changes to the types of information that an affiliated brokerage
business of a market maker could share with such market maker. In that
regard, the proposed rule change will not permit the EAM unit of a
member to have access to any non-public order or quote information of
the affiliated market maker, including hidden or undisplayed size or
price information of such orders and quotes. Market makers are not
allowed to post hidden or undisplayed orders and quotes on the
Exchange. Members do not expect to receive any additional order or
quote information as a result of this proposed rule change.
    Further, the Exchange does not believe that there will be any
material change to member information barriers as a result of removal
of the Exchange's pre-approval requirements. In fact, the Exchange
anticipates that eliminating the pre-approval requirement should
facilitate implementation of changes to member information barriers as
necessary to protect against the misuse of material, non-public
information. The Exchange also suggests that the pre-approval
requirement is unnecessary because market makers do not have agency
responsibilities to the book, or time and place information advantages
because of their market role. However, as is the case today with market
makers, information barriers of new entrants would be subject to review
as part of a new firm application. Moreover, the policies and
procedures of market makers, including those relating to information
barriers, would be subject to review by FINRA, on behalf of the
Exchange, pursuant to a Regulatory Services Agreement.
    The Exchange further notes that under Rule 408(a), a Member would
be able to structure its firm to provide for its options market makers,
as applicable, to be structured with its equities and customer-facing
businesses, provided that any such structuring would be done in a
manner reasonably designed to protect against the misuse of material,
non-public information. For example, pursuant to Rule 408(a) a market
maker on the Exchange could be in the same independent trading unit, as
defined in Rule 200(f) of Regulation SHO,\9\ as an equities market
maker and other trading desks within the firm, including options
trading desks, so that the firm could share post-trade information to
better manage its risk across related securities. The Exchange believes
it is appropriate and consistent with Rule 408(a) and Section 15(g) of
the Act \10\ for a firm to share options position and related hedging
position information (e.g., equities, futures, and foreign currency)
within a firm to better manage risk on a firm-wide basis. The Exchange
notes, however, that if so structured, a firm would need to have
policies and procedures, including information barriers as applicable,
reasonably designed to protect against the misuse of material, non-
public information, and specifically customer information, consistent
with Rule 408(a).
---------------------------------------------------------------------------

    \9\ 17 CFR part 242.200(f).
    \10\ 15 U.S.C. 78o(g).
---------------------------------------------------------------------------

    The Exchange believes that the proposed reliance on the principles-
based Rule 408(a) would ensure that a Member that operates a market
maker would be required to protect against the misuse of any material,
non-public information. As noted above, Rule 408(a) already requires
that firms refrain from trading while in possession of material, non-
public information concerning imminent transactions in the security or
related product. The Exchange believes that moving to a principles-
based approach rather than prescribing how and when to wall off a

market maker from the rest of the firm would provide Members operating
as market makers with appropriate tools to better manage risk across a
firm, including integrating options positions with other positions of
the firm or, as applicable, by the respective independent trading unit.
Specifically, the Exchange believes that it is appropriate for risk
management purposes for a member operating a market maker to be able to
consider both options market makers traded positions for purposes of
calculating net positions consistent with Rule 200 of Regulation SHO,
calculating intra-day net capital positions, and managing risk both
generally as well as in compliance with Rule 15c3-5 under the Act (the
``Market Access Rule'').\11\ The Exchange notes that any risk
management operations would need to operate consistent with the
requirement to protect against the misuse of material, non-public
information.
---------------------------------------------------------------------------

    \11\ 17 CFR part 240.15c3-5.
---------------------------------------------------------------------------

    The Exchange further notes that if market makers are integrated
with other market making operations, they would be subject to existing
rules that prohibit Members from disadvantaging their customers or
other market participants by improperly capitalizing on a member
organization's access to the receipt of material, non-public
information. As such, a member organization that integrates its market
maker operations together with equity market making would need to
protect customer information consistent with existing obligations to
protect such information. The Exchange has rules prohibiting Members
from disadvantaging their customers or other market participants by
improperly capitalizing on the Members' access to or receipt of
material, nonpublic information. For example, Rule 609 requires members
to establish, maintain, enforce, and keep current a system of
compliance and supervisory controls, reasonably designed to achieve
compliance with applicable securities laws and Exchange rules.
Additionally, Rule 400 prevents a person associated with a Member, who
has knowledge of all material terms and conditions of (i) an order and
a solicited order, (ii) an order being facilitated, or (iii) orders
being crossed; the execution of which are imminent, to enter, based on
such knowledge, an order to buy or sell an option for the same
underlying security as any option that is the subject of the order, or
an order to buy or sell the security underlying such class, or an order
to buy or sell any related instrument unless certain circumstances are
met.\12\
---------------------------------------------------------------------------

    \12\ .02 of Supplementary Material to Rule 400.
---------------------------------------------------------------------------

    Additionally, the Exchange proposes to amend the text of
Supplementary Material .06 to Rule 717 by reverting to Rule 717's
proposed text as it was originally adopted in 2011.\13\ The Exchange
notes that the current rule text includes explanatory language that was
added in 2014 \14\ to conform to amendments made to Rule 810. Now that
the Exchange proposes to delete Rule 810, these past, conforming
changes are unnecessary. The Exchange further notes that the changes
proposed in this filing to Rule 717 have no substantive effect on the
rule--Members may still demonstrate that orders were entered without
knowledge of a pre-existing order on the book represented by the same
firm by providing evidence that effective information barriers between
the persons, business units and/or systems entering the orders onto the
Exchange were in existence at the time the orders were entered. The
rule requires that such information barriers be fully documented and
provided to the Exchange upon request.
---------------------------------------------------------------------------

    \13\ See Securities Exchange Act Release No. 65361 (September
20, 2011), 76 FR 59472 (September 26, 2011) (SR-ISE-2011-42).
    \14\ See Securities Exchange Act Release No. 73261 (September
30, 2014), 79 FR 60226 (October 6, 2014) (SR-ISE-2014-43).
---------------------------------------------------------------------------

(b) Basis--
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act \15\ in general, and furthers the objectives of Section
6(b)(5) \16\ in particular, in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change would remove
impediments to and perfect the mechanism of a free and open market by
adopting a principles based approach to permit a Member operating a
market maker to maintain and enforce policies and procedures to, among
other things, prohibit the misuse of material, non-public information
and eliminate restrictions on how a Member structures its market making
operations. The Exchange notes that the proposed rule change is based
on an approved rule of the Exchange to which market makers are already
subject--Rule 408(a)--and harmonizes the rules governing market makers
and Members. Moreover, Members operating market makers would continue
to be subject to federal and Exchange requirements for protecting
material, non-public order information.\17\ The Exchange believes that
the proposed rule change would remove impediments to and perfect the
mechanism of a free and open market because it would harmonize the
Exchange's approach to protecting against the misuse of material, non-
public information and no longer subject market makers to additional
requirements. The Exchange does not believe that the existing
requirements applicable to market makers are narrowly tailored to their
respective roles because neither market participant has access to
Exchange trading information in a manner different from any other
market participant on the Exchange and they do not have agency
responsibilities to the order book. Additionally, concerning Rule 717,
the Exchange believes that appropriate information barriers can be used
to demonstrate that the execution of two orders within one second was
inadvertent because the orders were entered without knowledge of each
other, will clarify the intent and application of Supplementary
Material .06 to Rule 717.
---------------------------------------------------------------------------

    \17\ See 15 U.S.C. 78o(g) and Rule 408(a).
---------------------------------------------------------------------------

    The Exchange further believes the proposal is designed to prevent
fraudulent and manipulative acts and practices and to promote just and
equitable principles of trade because existing rules make clear to
market makers and Members the type of conduct that is prohibited by the
Exchange. While the proposal eliminates requirements relating to the
misuse of material, non-public information, market makers and Members
would remain subject to existing Exchange rules requiring them to
establish and maintain systems to supervise their activities, and to
create, implement, and maintain written procedures that are reasonably
designed to comply with applicable securities laws and Exchange rules,
including the prohibition on the misuse of material, non-public
information.
    The Exchange notes that the proposed rule change would still
require that Members operating market makers maintain and enforce
policies and procedures reasonably designed to ensure compliance with
applicable federal securities laws and regulations and with Exchange
rules. Even though there would no longer be pre-approval of market
maker information barriers,

any market maker's written policies and procedures would continue to be
subject to oversight by the Exchange and therefore the elimination of
prescribed restrictions should not reduce the effectiveness of the
Exchange rules to protect against the misuse of material, non-public
information. Rather, Members will be able to utilize a flexible,
principles-based approach to modify their policies and procedures as
appropriate to reflect changes to their business model, business
activities, or to the securities market itself. Moreover, while
specified information barriers may no longer be required, a Member's
business model or business activities may dictate that an information
barrier or functional separation be part of the set of policies and
procedures that would be reasonably designed to achieve compliance with
applicable securities laws and regulations, and with applicable
Exchange rules. The Exchange therefore believes that the proposed rule
change will maintain the existing protection of investors and the
public interest that is currently applicable to market makers, while at
the same time removing impediments to and perfecting a free and open
market by moving to a principles-based approach to protect against the
misuse of material non-public information.
    Finally, the Exchange believes that proposed rule change to Rule
717 is consistent with Section 6(b)(5) of the Act,\18\ which requires
the rules of an exchange to prevent fraudulent and manipulative acts
and practices, promote just and equitable principles of trade, remove
impediments to, and perfect the mechanism of, a free and open market
and a national market system, and, in general, protect investors and
the public interest.. [sic] In particular, by continuing to specify
that the information barriers must be fully documented, members will be
better prepared to properly respond to requests for information by the
Exchange in the course of a regulatory investigation. Moreover, while
members are generally required to provide information to the Exchange
as requested, continuing to specify that members must provide written
documentation regarding information barriers within the context of this
rule will assure that all members adhere to the existing standard for
demonstrating compliance with the rule.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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 not necessary or appropriate in
furtherance of the purposes of the Act. To the contrary, the Exchange
believes that the proposal will enhance competition by allowing market
makers to comply with applicable Exchange rules in a manner best suited
to their business models, business activities, and the securities
markets, thus reducing regulatory burdens while still ensuring
compliance with applicable securities laws and regulations and Exchange
rules. The Exchange believes that the proposal will foster a fair and
orderly marketplace without being overly burdensome upon market makers.
    Moreover, the Exchange believes that the proposed rule change would
eliminate a burden on competition for Members which currently exists as
a result of disparate rule treatment between the options and equities
markets regarding how to protect against the misuse of material, non-
public information. For those Members that are also members of equity
exchanges, their respective equity market maker operations are now
subject to a principles-based approach to protecting against the misuse
of material non-public information.\19\ The Exchange believes it would
remove a burden on competition to enable Members to similarly apply a
principles-based approach to protecting against the misuse of material,
non-public information in the options space. To this end, the Exchange
notes that Rule 408(a) still requires a Member that operates as a
market maker on the Exchange to evaluate its business to assure that
its policies and procedures are reasonably designed to protect against
the misuse of material, non-public information. However, with this
proposed rule change, a Member that trades equities and options could
look at its firm more holistically to structure its operations in a
manner that provides it with better tools to manage its risks across
multiple security classes, while at the same time protecting against
the misuse of material non-public information.
---------------------------------------------------------------------------

    \19\ See Securities Exchange Act Release Nos. 60604 (Sept. 2,
2009), 76 FR 46272 (Sept. 8, 2009) (SR-NYSEArca-2009-78) (Order
approving elimination of NYSE Arca rule that required market makers
to establish and maintain specifically prescribed information
barriers, including discussion of NYSE Arca and Nasdaq rules)
(``Arca Approval Order''); 61574 (Feb. 23, 2010), 75 FR 9455 (Mar.
2, 2010) (SR-BATS-2010-003) (Order approving amendments to BATS Rule
5.5 to move to a principles-based approach to protecting against the
misuse of material, non-public information, and noting that the
proposed change is consistent with the approaches of NYSE Arca and
Nasdaq) (``BATS Approval Order''); and 72534 (July 3, 2014), 79 FR
39440 (July 10, 2014), SR-NYSE-2014-12) (Order approving amendments
to NYSE Rule 98 governing designated market makers to move to a
principles-based approach to prohibit the misuse of material non-
public information) (``NYSE Approval Order'').
---------------------------------------------------------------------------

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any written comments from members or other interested parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The Exchange believes that the foregoing proposed rule change may
take effect upon filing with the Commission pursuant to
Section19(b)(3)(A) \20\ of the Act and Rule 19b-4(f)(6) thereunder \21\
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 after its filing date, or such shorter time as the Commission
may designate.
---------------------------------------------------------------------------

    \20\ 15 U.S.C. 78s(b)(3)(A).
    \21\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    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: (i)
necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-ISE-2015-26 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities

and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
    All submissions should refer to File Number SR-ISE-2015-26. 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 Web site (http://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 Web site 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 will also be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-ISE-2015-26 and should be
submitted on or before September 25, 2015.
---------------------------------------------------------------------------

    \22\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-21958 Filed 9-3-15; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 75, Number 192 (Tuesday, October 5, 2010)]
[Notices]
[Page 61507]
[FR Doc No: 2010-24983]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2010-N-0001]

General and Plastic Surgery Devices Panel of the Medical Devices
Advisory Committee; Amendment of Notice

AGENCY:  Food and Drug Administration, HHS.

ACTION:  Notice.

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    The Food and Drug Administration (FDA) is announcing an amendment
to the notice of meeting of the General and Plastic Surgery Devices
Panel of the Medical Devices Advisory Committee. This meeting was
announced in the Federal Register of August 16, 2010 (75 FR 49940). The
amendment is being made to reflect a change in the Agenda portion of
the document. There are no other changes.

FOR FURTHER INFORMATION CONTACT:  Margaret McCabe-Janicki, Center for
Devices and Radiological Health, Food and Drug Administration, 10903
New Hampshire Ave., Bldg. 66, rm. 1535, Silver Spring, MD 20993-0002,
301-796-7029, or FDA Advisory Committee Information Line, 1-800-741-
8138<PHONE_NUMBER> in the Washington, DC area), code<PHONE_NUMBER>. Please
call the Information Line for up-to-date information on this meeting.

SUPPLEMENTARY INFORMATION: In the Federal Register of August 16, 2010,
FDA announced that a meeting of the General and Plastic Surgery Devices
Panel of the Medical Devices Advisory Committee would be held on
November 18, 2010. On page 49940, in the second column, in the Agenda
portion of the document, the first full paragraph is changed to read as
follows:
    Agenda: On November 18, 2010, the committee will discuss, make
recommendations, and vote on information related to the premarket
approval application for MelaFind, sponsored by MELA Sciences.
MelaFind(R) is a non-invasive and objective multi-spectral computer
vision system designed to aid physicians in the detection of early
melanoma from among clinically atypical (those having one or more
clinical or historical characteristics of melanoma, such as asymmetry,
border irregularity, color variegation, diameter greater than 6
millimeters, evolving, patient concern, regression, and ``ugly
duckling'') cutaneous pigmented lesions that are non-ulcerated, not
bleeding, and less than 2.2 centimeters in diameter, when a physician
chooses to obtain additional information before making a final decision
to biopsy to rule out melanoma.
    This notice is issued under the Federal Advisory Committee Act (5
U.S.C. app. 2) and 21 CFR part 14, relating to the advisory committees.

    Dated: September 30, 2010.
Jill Hartzler Warner,
Acting Associate Commissioner for Special Medical Programs.
[FR Doc. 2010-24983 Filed 10-4-10; 8:45 am]
BILLING CODE 4160-01-S