[Federal Register: August 3, 2006 (Volume 71, Number 149)]
[Notices]
[Page 44066-44067]
[DOCID:fr03au06-86]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54228; File No. SR-ISE-2006-14]

Self-Regulatory Organizations; International Securities Exchange,
Inc.; Order Granting Approval of a Proposed Rule Change and Amendment
No. 1 Thereto Relating to ISE Rule 720

July 27, 2006.

I. Introduction

    On March 22, 2006, the International Securities Exchange, Inc.
(``ISE'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to amend ISE Rule 720 (the
``Obvious Error Rule''). On May 18, 2006, the ISE submitted Amendment
No. 1 to the proposed rule change.\3\ The proposed rule change and
Amendment No. 1 were published for comment in the Federal Register on
June 14, 2006.\4\ The Commission received no comments on the proposal.
This order approves the proposed rule change, as amended.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, the Exchange amended proposed new
Supplementary Material .08 to ISE Rule 720 to state that unless all
parties to a trade agree otherwise, ISE Market Control may nullify a
trade if all parties to a trade fail to receive a trade execution
report due to a verifiable system outage. Amendment No. 1 also
clarified that the proposed rule change operates under the
assumption that a trade has taken place, but due to a system outage,
the parties to the trade never received a trade execution report and
thus were unaware of the trade having taken place.
    \4\ See Securities Exchange Act Release No. 53948 (June 6,
2006), 71 FR 34407.

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II. Description

    The ISE proposes to amend ISE Rule 720 to provide that, unless all
parties to a trade agree otherwise, the Exchange (through its Market
Control Unit) may nullify a transaction if all parties to the trade do
not receive a trade execution report \5\ due to a verifiable system
outage. The Exchange represented that it routinely sends out trade
execution reports to all Members that are parties to a trade.\6\
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    \5\ A trade execution report is an ISE system message sent to
all parties to a trade to inform them that a trade has been
consummated. Among other things, a trade execution report contains
pertinent details such as the underlying security, the price, number
of contracts traded, the strike price and the expiration date.
    \6\ See, Amendment No. 1, supra note 3.
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    The ISE states that it developed the Obvious Error Rule to address
the need to handle errors in a fully electronic market where orders and
quotes are executed automatically before an obvious error may be
discovered and corrected by Members. The Exchange notes that in
formulating the Obvious Error Rule, it weighed carefully the need to
assure that one market participant is not permitted to receive a
windfall at the expense of another market participant that made an
obvious error, against the need to assure that market participants are
not simply being given an opportunity to reconsider poor trading
decisions. The Exchange believes that the proposed rule change would
strengthen ISE's Obvious Error Rule because it would ensure that
parties are not adversely affected by a trade whose terms were never
fully communicated to them as a result of a system outage. As a matter
of ``housekeeping,'' the Exchange also proposes to renumber ISE Rule
720(e) as ISE Rule 720(d).

III. Discussion

    The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange \7\ and, in
particular, the requirements of Section 6(b) of the Act \8\ and the
rules and regulations thereunder. Specifically, the Commission finds
that the proposal is consistent with Section 6(b)(5) of the Act,\9\ in
that it is designed to foster cooperation and coordination with persons
engaged in regulating, clearing, settling, processing information with
respect to, and facilitating transaction in securities, to remove
impediments to and perfect the mechanism for a free and open market and
a national market system, and, in general, to protect investors and the
public interest.
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    \7\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    The Commission considers that in most circumstances trades that are
executed between parties should be honored. On rare occasions, the
circumstances surrounding an execution suggest that it is unrealistic
to expect that the parties to the trade had come to a meeting of the
minds regarding the terms of the transaction. In the Commission's view,
the determination of whether an ``obvious error'' has occurred should
be based on specific and objective criteria and subject to specific and
objective procedures. Under ISE's proposal, unless all parties to a
trade agree otherwise, ISE Market Control may nullify a trade if all
parties to the trade fail to receive a trade execution report due to a
verifiable system outage. The Commission believes that ISE's proposal
provides specific and objective criteria to be used by the Exchange to
nullify a trade in this circumstance. Accordingly, the Commission finds
that the Exchange's proposal is consistent with the Act.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\10\ that the proposed rule change (SR-ISE-2006-14), as amended, is
approved.
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    \10\ 15 U.S.C. 78f(b)(2).

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
 [FR Doc. E6-12526 Filed 8-2-06; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register: August 7, 2008 (Volume 73, Number 153)]
[Notices]
[Page 46117-46122]
[DOCID:fr07au08-119]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58285; File No. SR-NYSE-2008-60]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto in
Connection With the Proposed Acquisition of The Amex Membership
Corporation

August 1, 2008.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby
given that on July 23, 2008, the New York Stock Exchange LLC (``NYSE''
or ``Exchange''), a New York limited liability company and registered
national securities exchange, filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I, II and III below, which Items have been substantially prepared
by the

Exchange. On July 30, 2008, the NYSE filed Amendment No. 1 to the
proposed rule change. The Commission is publishing this notice to
solicit comments on the proposed rule change, as amended, from
interested persons.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The NYSE is submitting this proposed rule change to the Commission
in connection with the proposed acquisition of The Amex Membership
Corporation (``MC''), a New York not-for-profit corporation that owns
100% (99% directly and 1% indirectly through a wholly owned subsidiary)
of American Stock Exchange LLC, a Delaware limited liability company
and registered national securities exchange (``Amex''), by NYSE
Euronext, the Delaware corporation that indirectly owns 100% of the
Exchange.
    The text of the proposed rule change is available on the Exchange's
Web site at http://www.nyse.com, at the Exchange's principal office,
and at the Commission's Public Reference Room. The text of Exhibits 5A
through 5G is also available on the Commission's Web site (http://
www.sec.gov/rules/sro.shtml).

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of 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 is submitting this proposed rule change to the
Commission in connection with the proposed acquisition of MC, a New
York not-for-profit corporation that owns 100% of Amex, by NYSE
Euronext. The proposed acquisition will occur pursuant to the terms of
the Agreement and Plan of Merger, dated as of January 17, 2008 (as it
may be amended from time to time, the ``Merger Agreement''), by and
among NYSE Euronext, Amsterdam Merger Sub, LLC, a Delaware limited
liability company and a wholly owned subsidiary of NYSE Euronext formed
by NYSE Euronext in connection with the Mergers (``Merger Sub''), MC,
AMC Acquisition Sub, Inc., a Delaware corporation and a wholly owned
subsidiary of MC (``AMCAS''), American Stock Exchange Holdings, Inc., a
Delaware corporation and a wholly owned subsidiary of MC created by MC
in connection with the Mergers (``Holdings''), Amex, which is 99
percent owned by MC and 1 percent owned by AMCAS, and American Stock
Exchange 2, LLC, a Delaware limited liability company and a wholly
owned subsidiary of Holdings formed by Holdings in connection with the
Mergers (``Amex Merger Sub'').
    Under the terms of the Merger Agreement, MC will demutualize and
NYSE Euronext will acquire the business of MC and its subsidiaries
through a series of mergers (the ``Mergers''). Following the Mergers,
Merger Sub, a wholly owned subsidiary of NYSE Euronext and a successor
to MC and AMCAS, will directly own 100% of Amex Merger Sub, which will
be the successor to Amex and a registered national securities exchange.
It is intended that Amex Merger Sub will be renamed ``NYSE Alternext
U.S. LLC'' (and therefore is referred to in this document as ``NYSE
Alternext US'').
Corporate Structure
    Immediately following the NYSE/Amex Merger, NYSE Euronext will
contribute 100% of the limited liability company interest of Merger Sub
to NYSE Group, Inc. (``NYSE Group'') (such contribution, the
``Contribution''), causing Merger Sub to become a direct wholly owned
subsidiary of NYSE Group. Immediately following the Contribution,
Merger Sub will merge with and into NYSE Alternext U.S. a direct wholly
owned subsidiary of Merger Sub (``Internal Merger''). As a result of
the Contribution and the Internal Merger, NYSE Alternext U.S. will
become a direct wholly owned subsidiary of NYSE Group. The proposed
rule change will be operative upon completion of the Internal
Merger.\3\
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    \3\ See Amendment No. 1.
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Organizational Documents of NYSE Euronext
    Currently the NYSE Euronext organizational documents provide
certain protections to the Exchange and NYSE Arca, Inc. that are
designed to protect and facilitate their self-regulatory functions. In
general, the organizational documents of NYSE Euronext are being
amended to provide similar protections to NYSE Alternext U.S. as are
currently provided to the Exchange and NYSE Arca, Inc. under those
documents. In addition, in the proposed new Director Independence
Policy for NYSE Euronext directors, the three-year retrospective period
(``look-back period'') over which directors' relationships with members
of the Exchange and NYSE Arca, Inc. are reviewed (which following the
mergers will apply equally to NYSE Alternext US) has been reduced to
one year. The Exchange believes that this reduction will be beneficial
in expanding NYSE Euronext's pool of eligible director candidates with
knowledge of the exchange industry, while still maintaining sufficient
director independence.
    The amended and restated bylaws of NYSE Euronext are being amended
to:
     Include NYSE Alternext U.S. in the definition of ``U.S.
Regulated Subsidiaries,'' which currently includes the Exchange, NYSE
Market, Inc., NYSE Regulation, Inc., NYSE Arca, L.L.C., NYSE Arca, Inc.
and NYSE Arca Equities, Inc. and to provide that the term ``U.S.
Regulated Subsidiaries'' includes those entities listed or their
successors, but only so long as they continue to be controlled,
directly or indirectly, by NYSE Euronext;
     Provide that the provisions referencing the Exchange, NYSE
Market, Inc., NYSE Regulation, Inc., NYSE Arca, L.L.C., NYSE Arca, Inc.
and NYSE Arca Equities, Inc. apply with respect to those entities or
their successors, but only so long as they or their successors continue
to be controlled, directly or indirectly, by NYSE Euronext;
     Provide the same protection to confidential information
pertaining to the self regulatory function of NYSE Alternext U.S. or
its successor (including but not limited to disciplinary matters,
trading data, trading practices and audit information) contained in the
books and records of any of the U.S. Regulated Subsidiaries, that shall
come into the possession of NYSE Euronext, as is currently provided
under the bylaws of NYSE Euronext with respect such confidential
information pertaining to the self regulatory function of the Exchange,
NYSE Market, Inc., NYSE Regulation, Inc., NYSE Arca, Inc. and NYSE Arca
Equities, Inc., but only to the extent that NYSE Alternext U.S. and its
successor continues to be controlled, directly or indirectly by NYSE
Euronext;
     Provide that, subject to its fiduciary obligations under
applicable law, for so long as NYSE Euronext directly or

indirectly controls NYSE Alternext U.S. (or its successor), the board
of directors of NYSE Euronext shall not adopt any resolution pursuant
to clause (2) of section 1(B) of Article V of the certificate of
incorporation of NYSE Euronext unless the board of Directors of NYSE
Euronext shall have determined that:
     In the case of a resolution to approve the exercise of
voting rights in excess of 20% of the then outstanding votes entitled
to be cast on such matter, neither such Person nor any of its Related
Persons (as defined in the certificate of incorporation of NYSE
Euronext) is, with respect to NYSE Alternext U.S. (or its successor), a
``member,'' as defined in sections 3(a)(3)(A)(i), 3(a)(3)(A)(ii),
3(a)(3)(A)(iii) and 3(a)(3)(A)(iv) of the Exchange Act \4\) (a ``NYSE
Alternext Member'') (any such person that is a ``Related Person'' (as
defined in the Certificate of incorporation of NYSE Euronext) of such
NYSE Alternext Member is also deemed to be a ``NYSE Alternext Member''
for the purposes of the proposed Second Amended and Restated Bylaws of
NYSE Euronext, as the context may require); and
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    \4\ 15 U.S.C. 78c(a)(3)(A).
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     In the case of a resolution to approve the entering into
of an agreement, plan or other arrangement under circumstances that
would result in shares of stock of NYSE Euronext that would be subject
to such agreement, plan or other arrangement not being voted on any
matter, or the withholding of any proxy relating thereto, where the
effect of such agreement, plan or other arrangement would be to enable
any person, but for Article V of the certificate of incorporation of
NYSE Euronext, either alone or together with its Related Persons, to
vote, possess the right to vote or cause the voting of shares of stock
of NYSE Euronext that would exceed 20% of the then outstanding votes
entitled to be cast on such matter (assuming that all shares of stock
of NYSE Euronext that are subject to such agreement, plan or other
arrangement are not outstanding votes entitled to be cast on such
matter), neither such Person nor any of its Related Persons is, with
respect to NYSE Alternext U.S. (or its successor), a NYSE Alternext
Member;
     Provide that, subject to its fiduciary obligations under
applicable law, for so long as NYSE Euronext directly or indirectly
controls NYSE Alternext U.S. (or its successor), the board of directors
of NYSE Euronext shall not adopt any resolution pursuant to clause (2)
of Section 2(B) of Article V of the certificate of incorporation of
NYSE Euronext (which relates to NYSE Euronext board of directors
approval of ownership of NYSE Euronext capital stock in excess of 20%),
unless the board of directors of NYSE Euronext shall have determined
that neither such Person nor any of its Related Persons is, with
respect to NYSE Alternext U.S. (or its successor), a NYSE Alternext
Member;
     Provide that, for so long as NYSE Euronext controls any of
the U.S. Regulated Subsidiaries, any amendment to or repeal of the
bylaws of NYSE Euronext must either be (i) filed with or filed with and
approved by the Commission under section 19 of the Exchange Act \5\ and
the rules promulgated thereunder or (ii) submitted to the boards of
directors of the Exchange, NYSE Market, Inc., NYSE Regulation, Inc.,
NYSE Arca, Inc., NYSE Arca Equities, Inc. and NYSE Alternext U.S. or
the boards of directors of their successors, in each case only to the
extent that such entity continues to be controlled directly or
indirectly by the NYSE Euronext, and if any or all of such boards of
directors shall determine that such amendment or repeal must be filed
with or filed with and approved by the Commission under section 19 of
the Exchange Act \6\ and the rules promulgated thereunder before such
amendment or repeal may be effectuated, then such amendment or repeal
shall not be effectuated until filed with or filed with and approved by
the Commission, as the case may be;
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    \5\ 15 U.S.C. 78s.
    \6\ Id.
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     Provide that, for as long as NYSE Euronext controls any
European Market Subsidiary (as defined in the bylaws of NYSE Euronext),
any amendment to or repeal of the bylaws of NYSE Euronext must either
be (i) filed with or filed with and approved by a European Regulator
(as defined in the bylaws of NYSE Euronext) under European Exchange
Regulations (as defined in the bylaws of NYSE Euronext) or (ii)
submitted to the boards of directors of the European Market
Subsidiaries and, if any or all of such boards of directors shall
determine that such amendment or repeal must be filed with or filed
with and approved by a European Regulator under European Exchange
Regulations before such amendment or repeal may be effectuated, then
such amendment or repeal shall not be effectuated until filed with or
filed with and approved by the relevant European Regulator(s);
     Provide that so long as NYSE Euronext shall control,
directly or indirectly, NYSE Alternext U.S. (or its successor), the
board of directors of NYSE Euronext shall not adopt any resolution to
repeal or amend any provision of the Certificate of Incorporation
unless such amendment or repeal shall either (i) be filed with or filed
with and approved by the Commission under section 19 of the Exchange
Act \7\ and the rules promulgated thereunder or (ii) be submitted to
the board of directors of NYSE Alternext U.S. (or the board of
directors of its successor), and if such board of directors determines
that such amendment or repeal must be filed with or filed with and
approved by the Commission under section 19 of the Exchange Act \8\ and
the rules promulgated thereunder before such amendment or repeal may be
effectuated, then such amendment or repeal shall not be effectuated
until filed with or filed with and approved by the Commission, as the
case may be; and
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    \7\ Id.
    \8\ Id.
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     Remove or update certain references to the Combination
Agreement, dated as of June 1, 2006, as amended and restated as of
November 24, 2006, by and among the NYSE Euronext, NYSE Group, Inc.,
Euronext N.V. and Jefferson Merger Sub, Inc.
    The proposed new independence policy of the NYSE Euronext board of
directors will be substantially similar to the current Commission-
approved independence policy of the NYSE Euronext board of
directors,\9\ except that:
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    \9\ See Securities Exchange Act Release No. 55293 (February 14,
2007), 72 FR 8033 (February 22, 2007) (SR-NYSE-2006-120).
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     The independence policy provision relating to
relationships with NYSE and NYSE Arca, Inc. market participants have
been expanded to equally apply to relationships with NYSE Alternext
U.S. market participants (or the market participants of its successor);
     Instead of relying on the definition of ``member'' or
``member organization'' or similar terms in the rules of the individual
exchanges, the proposed new independence policy relies on the
definition of ``member'' in sections 3(a)(3)(A)(i), 3(a)(3)(A)(ii),
3(a)(3)(A)(iii) and 3(a)(3)(A)(iv) of the Exchange Act.\10\ This
technical change is designed to harmonize the use of those terms in the
proposed new independence policy with respect to each of the Exchange,
NYSE Arca, Inc. and NYSE Alternext U.S. and to simplify the language of
the policy;
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    \10\ 15 U.S.C. 78c(a)(3)(A).
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     Independence requirements for the NYSE Alternext U.S.
board of directors

(or the board of directors of its successor) have been added that are
the same as those for the Exchange's board of directors;
     The ``look back period'' with respect to directors'
relationships with members of the Exchange and NYSE Arca, Inc. (which
following the mergers will apply equally to NYSE Alternext US) has been
reduced from three years to one year;
     All references to New York Stock Exchange LLC, NYSE Arca,
Inc., NYSE Arca Equities, Inc. and NYSE Alternext U.S. shall mean each
of those entities or its successor; and
     The provision providing for a transition period so that
the independence requirements of the NYSE Euronext director
independence policy would not apply to the European Persons on the NYSE
Euronext board of directors until the annual meeting of NYSE Euronext
stockholders in 2008 has been deleted since the revised NYSE Euronext
Independence Policy is expected to go into effect after the meeting of
NYSE Euronext Stockholders in 2008.
Organizational Documents of NYSE Group
    Currently the NYSE Group organizational documents provide certain
protections to the Exchange and NYSE Arca, Inc. that are designed to
protect and facilitate their self-regulatory functions. In general, the
organizational documents of NYSE Group are being amended to provide
similar protections to NYSE Alternext U.S. as are currently provided to
the Exchange and NYSE Arca, Inc. under those documents.
    The amended and restated certificate of incorporation of NYSE Group
is being amended to:
     Provide that, subject to its fiduciary obligations under
applicable law, for so long as NYSE Group directly or indirectly
controls NYSE Alternext U.S. (or its successor), the board of directors
of NYSE Group shall not adopt any resolution pursuant to clause (ii) of
section 4(b)(1)(A) of Article IV of the certificate of incorporation of
NYSE Group unless the board of Directors of NYSE Group shall have
determined that:
     In the case of a resolution to approve the exercise of
voting rights in excess of 20% of the then outstanding votes entitled
to be cast on such matter, neither such Person nor any of its Related
Persons (as defined in the certificate of incorporation of NYSE Group)
is, with respect to NYSE Alternext U.S. (or its successor), a
``member,'' as defined in sections 3(a)(3)(A)(i), 3(a)(3)(A)(ii),
3(a)(3)(A)(iii) and (3)(a)(A)(iv) of the Exchange Act \11\ (a ``NYSE
Alternext Member'') (any such person that is a Related Person (as
defined in the Second Amended and Restated Certificate of Incorporation
of NYSE Group) of such NYSE Alternext Member is also deemed to be an
``NYSE Alternext Member'' for purposes of the proposed Second Amended
and Restated Certificate of Incorporation of NYSE Group, as the context
may require); and
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    \11\ 15 U.S.C. 78c(a)(3)(A).
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     In the case of a resolution to approve the entering into
of an agreement, plan or other arrangement under circumstances that
would result in shares of stock of NYSE Group that would be subject to
such agreement, plan or other arrangement not being voted on any
matter, or the withholding of any proxy relating thereto, where the
effect of such agreement, plan or other arrangement would be to enable
any person, but for Article IV of the certificate of incorporation of
NYSE Group, either alone or together with its Related Persons, to vote,
possess the right to vote or cause the voting of shares of stock of
NYSE Group that would exceed 20% of the then outstanding votes entitled
to be cast on such matter (assuming that all shares of stock of NYSE
Group that are subject to such agreement, plan or other arrangement are
not outstanding votes entitled to be cast on such matter), neither such
Person nor any of its Related Persons is, with respect to NYSE
Alternext U.S. (or its successor), a NYSE Alternext Member;
     Provide that, subject to its fiduciary obligations under
applicable law, for so long as NYSE Group directly or indirectly
controls NYSE Alternext U.S. (or its successor), the board of directors
of NYSE Group shall not adopt any resolution pursuant to clause (ii) of
section 4(b)(2)(B) of Article IV of the certificate of incorporation of
NYSE Group (which relates to NYSE Group board of directors approval of
ownership of NYSE Group capital stock in excess of 20%), unless the
board of directors of NYSE Group shall have determined that neither
such Person nor any of its Related Persons is, with respect to NYSE
Alternext U.S. (or its successor), a NYSE Alternext Member;
     Include NYSE Alternext U.S. in the definition of
``Regulated Subsidiaries,'' which currently includes the Exchange, NYSE
Market, Inc., NYSE Regulation, Inc., NYSE Arca, L.L.C., NYSE Arca, Inc.
and NYSE Arca Equities, Inc. and to provide that the term ``Regulated
Subsidiaries'' includes those entities listed or their successors, but
only so long as they continue to be controlled, directly or indirectly,
by NYSE Group;
     Provide the same protections to all confidential
information pertaining to the self-regulatory function of NYSE
Alternext U.S. as are currently provided under the Amended and Restated
Certificate of Incorporation of NYSE Group to confidential information
pertaining to the self regulatory function of the Exchange, NYSE
Market, Inc., NYSE Regulation, Inc., NYSE Arca, Inc. and NYSE Arca
Equities, Inc.;
     Provide that any amendment to or repeal of the certificate
of incorporation of NYSE Group must either be (i) filed with or filed
with and approved by the Commission under section 19 of the Exchange
Act \12\ and the rules promulgated thereunder or (ii) submitted to the
boards of directors of the Exchange, NYSE Market, Inc., NYSE
Regulation, Inc., NYSE Arca, Inc., NYSE Arca Equities, Inc. and NYSE
Alternext U.S. or the boards of directors of their successors, in each
case only to the extent that such entity continues to be controlled
directly or indirectly by the NYSE Group, and if any or all of such
boards of directors shall determine that such amendment or repeal must
be filed with or filed with and approved by the Commission under
section 19 of the Exchange Act \13\ and the rules promulgated
thereunder before such amendment or repeal may be effectuated, then
such amendment or repeal shall not be effectuated until filed with or
filed with and approved by the Commission, as the case may be.
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    \12\ 15 U.S.C. 78s.
    \13\ Id.
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    The amended and restated bylaws of NYSE Group are being amended to:
     Provide that any amendment to or repeal of the bylaws of
NYSE Group must either be (i) filed with or filed with and approved by
the Commission under section 19 of the Exchange Act and the rules
promulgated thereunder or (ii) submitted to the boards of directors of
the Exchange, NYSE Market, Inc., NYSE Regulation, Inc., NYSE Arca,
Inc., NYSE Arca Equities, Inc. and NYSE Alternext U.S. or the boards of
directors of their successors, in each case only to the extent that
such entity continues to be controlled directly or indirectly by the
NYSE Group, and if any or all of such boards of directors shall
determine that such amendment or repeal must be filed with or filed
with and approved by the Commission under section 19 of the Exchange
Act and the rules promulgated thereunder before such amendment or
repeal may be effectuated, then such amendment or repeal shall not be

effectuated until filed with or filed with and approved by the
Commission, as the case may be.
Bylaws of NYSE Regulation
    The amended and restated bylaws of NYSE Regulation currently
provide for the creation of a Committee for Review that is charged with
performing certain functions with respect to the Exchange, including
hearing appeals for disciplinary decisions, conducting reviews of staff
delisting determinations and providing general advice to the NYSE
Regulation Board of Directors in connection with disciplinary, listing
and other regulatory matters. The Committee for Review is currently
comprised of (i) directors of NYSE Regulation and (ii) at least three
non-director committee members associated with member organizations of
the Exchange, at least one of whom is associated with a member
organization of the Exchange that engages in a business involving
substantial direct contact with securities customers, at least one of
whom is associated with a member organization of the Exchange and
registered as a specialist and spends a substantial part of his or her
time on the trading floor of NYSE Market, Inc. and at least one of whom
is associated with a member organization of the Exchange and spends a
majority of his time on the trading floor of NYSE Market, Inc., and has
as a substantial part of his business the execution of transactions on
the trading floor of NYSE Market, Inc. for other than his own account
or the account of his Exchange member organization, but is not
registered as a specialist.
    Following the Mergers, the Committee for Review will also hear
disciplinary appeals for NYSE Alternext U.S.\14\ In connection
therewith, the amended and restated bylaws of NYSE Regulation are being
amended to provide that the Committee for Review be expanded to include
at least four individuals who are associated with member organizations
of NYSE Alternext U.S. at least one of whom is associated with an
member organization of NYSE Alternext U.S. that engages in a business
involving substantial direct contact with securities customers; at
least one of whom is associated with an member organization of NYSE
Alternext U.S. and registered as a specialist and spends a substantial
part of his or her time on the trading floor of NYSE Alternext US; at
least one of whom is associated with a member organization of NYSE
Alternext U.S. and spends a majority of his or her time on the trading
floor of NYSE Alternext U.S. and has as a substantial part of his
business the execution of transactions on the trading floor of NYSE
Alternext U.S. for other than his or her own account or the account of
his NYSE Alternext U.S. member organization but is not registered as a
specialist; and at least of whom is associated with a NYSE Alternext
U.S. Member Organization and spends a majority of his or her time on
the trading floor of NYSE Alternext U.S. and has as a substantial part
of his or her business the execution of transactions on the trading
floor of NYSE Alternext U.S. for his own account or the account of his
or her NYSE Alternext U.S. Member Organization but is not registered as
a specialist.
---------------------------------------------------------------------------

    \14\ Reviews of delisting determinations will be heard by the
same NYSE Alternext U.S. committee as has been reviewing such
matters prior to the Mergers.
---------------------------------------------------------------------------

Trust Agreement of the NYSE Group Trust I
    The Trust Agreement is being amended to make certain technical
changes designed to better provide NYSE Alternext U.S. with the same
protections against certain material adverse changes in European Law
that it currently provides for the Exchange and NYSE Arca, Inc.
Rules of the Exchange
    Solely for the purposes of section 1(L) of Article 5 of the
certificate of incorporation of NYSE Euronext (which is the definition
of ``Related Person''), as it may be in effect from time to time, the
Exchange proposes to amend (1) the definition of ``member'' under Rule
2(a) of the Rules of the Exchange to include any ``member'' (as defined
in section 3(a)(3)(A)(i) of the Exchange Act \15\) of NYSE Alternext
U.S. (or its successor), so long as NYSE Euronext continues to control,
directly or indirectly, NYSE Alternext U.S. or its successor and (2)
the definition of ``Member Organization'' under Rule 2(b) of the
Exchange to include any ``member'' (as defined in section
3(a)(3)(A)(ii), 3(a)(3)(A)(iii) and 3(a)(3)(A)(iv) of the Exchange Act
\16\) of NYSE Alternext U.S. (or its successor), so long as NYSE
Euronext continues to control, directly or indirectly, NYSE Alternext
U.S. or its successor.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78c(a)(3)(A)(i).
    \16\ 15 U.S.C. 78c(a)(3)(A)(ii)-(iv).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that this filing is consistent with section
6(b) of the Exchange Act,\17\ in general, and furthers the objectives
of section 6(b)(1),\18\ in particular, in that it enables the Exchange
to be so organized as to have the capacity to be able to carry out the
purposes of the Exchange Act and to comply, and to enforce compliance
by its exchange members and persons associated with its exchange
members, with the provisions of the Exchange Act, the rules and
regulations thereunder, and the rules of the Exchange. The Exchange
also believes that this filing furthers the objectives of section
6(b)(5) of the Exchange Act \19\ because the rules summarized herein
would create a governance and regulatory structure that 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.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78f(b).
    \18\ 15 U.S.C. 78f(b)(1).
    \19\ 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 that is not necessary or appropriate
in furtherance of the purposes of the Exchange Act.

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

    No written comments were solicited or received with respect to the
proposed rule change.

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

    Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve the proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule
change should be 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, as amended, is consistent with

the Exchange 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 e-mail to<EMAIL_ADDRESS>Please include
File Number SR-NYSE-2008-60 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street, NE., Washington, DC 20549.
All submissions should refer to File Number SR-NYSE-2008-60. This file
number should be included on the subject line if e-mail 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 inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will 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-NYSE-2008-60 and should be
submitted on or before August 28, 2008.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
---------------------------------------------------------------------------

    \20\ 17CFR 200.30-3(a)(12)
---------------------------------------------------------------------------

Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-18146 Filed 8-6-08; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 77, Number 239 (Wednesday, December 12, 2012)]
[Notices]
[Page 74006]
[FR Doc No: 2012-29975]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-R07-SFUND-2012-0897; FRL-9761-9]

Proposed Administrative Cost Recovery Settlement Under the
Comprehensive Environmental Response Compensation and Liability Act, as
Amended, Radiation--Former Air Capitol Dial Superfund Site, Sedgwick
County, KS

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice; request for public comment.

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SUMMARY: In accordance with Section 122(i) of the Comprehensive
Environmental Response Compensation and Liability Act, as amended
(CERCLA), notice is hereby given of a proposed administrative
settlement with Air Capitol Dial, Inc., for recovery of past response
costs concerning the Radiation--Former Air Capitol Dial Superfund Site
(the ``Site'') in Sedgwick County, Kansas. The settlement requires Air
Capitol Dial, Inc. to pay $225,000 plus interest over a three year
period of time, to the Hazardous Substance Superfund. Total past costs
for the Site are approximately $600,000. The settlement includes a
covenant not to sue the settling party pursuant to Section 107(a) of
CERCLA. For thirty (30) days following the date of publication of this
notice, EPA will receive written comments relating to the settlement.
EPA will consider all comments and may modify or withdraw its consent
to the settlement if comments received disclose facts or considerations
which indicate that the settlement is inappropriate, improper, or
inadequate. EPA's response to any comments received will be available
for public inspection at the EPA Region 7 office located at 11201
Renner Boulevard, Lenexa, Kansas.

DATES: Comments must be submitted on or before January 11, 2013.

ADDRESSES: The proposed settlement is available for public inspection
at the EPA Region 7 office, 11201 Renner Boulevard, Lenexa, Kansas,
Monday through Friday, between the hours of 7:00 a.m. through 5:00 p.m.
A copy of the proposed settlement may be obtained from the Regional
Hearing Clerk, 11201 Renner Boulevard, Lenexa, Kansas,<PHONE_NUMBER>.
Requests should reference the Radiation--Former Air Capitol Dial
Superfund Site, EPA Docket No. CERCLA-07-2011-0005. Comments should be
addressed to: Denise L. Roberts, Senior Assistant Regional Counsel,
11201 Renner Boulevard, Lenexa, Kansas 66219.

FOR FURTHER INFORMATION CONTACT: Denise L. Roberts, at telephone: (913)
551-7559; fax number:<PHONE_NUMBER>/Attn: Denise L. Roberts; Email
address<EMAIL_ADDRESS>
    Dated: November 28, 2012.
Cecilia Tapia,
Director, Superfund Division, Region 7.
[FR Doc. 2012-29975 Filed 12-11-12; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 83, Number 58 (Monday, March 26, 2018)]
[Notices]
[Pages 12992-12995]
[FR Doc No: 2018-06013]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82906; File No. SR-CboeBZX-2017-012]

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Order
Approving a Proposed Rule Change, as Modified by Amendment No. 2, To
List and Trade Shares of the LHA Market State[supreg] Tactical U.S.
Equity ETF, a Series of the ETF Series Solutions, Under Rule 14.11(i),
Managed Fund Shares

March 20, 2018.

I. Introduction

    On December 7, 2017, Cboe BZX Exchange, Inc. (``Exchange'' or
``BZX'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Exchange Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to list and trade the shares
(``Shares'') of the LHA Market State[supreg] Tactical U.S. Equity ETF
(``Fund''), a Series of the ETF Series Solutions (``Trust''). The
proposed rule change was published for comment in the Federal Register
on December 28, 2017.\3\ On January 31, 2018, the Exchange filed
Amendment No. 1 to the proposed rule change.\4\ On February 6, 2018,
pursuant to Section 19(b)(2) of the Exchange Act,\5\ the Commission
designated a longer period within which to approve the proposed rule
change, disapprove the proposed rule change, or institute proceedings
to determine whether to disapprove the proposed

rule change.\6\ On February 13, 2018, the Exchange filed Amendment No.
2 to the proposed rule change.\7\ The Commission received no comment
letters on the proposed rule change. This order approves the proposed
rule change, as modified by Amendment No. 2.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 82379 (Dec. 21,
2017), 82 FR 61608.
    \4\ Amendment No. 1, which amended and replaced the proposed
rule change in its entirety, is available on the Commission's
website at: https://www.sec.gov/comments/sr-cboebzx-2017-012/cboebzx2017012-3002921-161895.pdf.
    \5\ 15 U.S.C. 78s(b)(2).
    \6\ See Securities Exchange Act Release No. 82643, 83 FR 6071
(Feb. 12, 2018). The Commission designated March 28, 2018, as the
date by which the Commission shall either approve, disapprove, or
institute proceedings to determine whether to disapprove, the
proposed rule change.
    \7\ In Amendment No. 2, which amended and replaced the proposed
rule change, as modified by Amendment No. 1, in its entirety, the
Exchange: (a) Supplemented the description of the Fund's relative
exposures to the U.S. equity and S&P 500 futures markets; (b) made
conforming informational and rule reference corrections to maintain
internal consistency; (c) updated the status of the registration
statement for the Fund; (d) clarified the use of certain defined
terms; and (e) made other technical and non-substantive changes.
Because Amendment No. 2 does not materially alter the substance of
the proposed rule change or raise unique or novel regulatory issues,
it is not subject to notice and comment. Amendment No. 2 is
available on the Commission's website at: https://www.sec.gov/comments/sr-cboebzx-2017-012/cboebzx2017012-3033817-161904.pdf.
---------------------------------------------------------------------------

II. Exchange's Description of the Proposal, as Modified by Amendment
No. 2

    The Exchange proposes to list and trade the Shares under BZX Rule
14.11(i), which governs the listing and trading of Managed Fund Shares
on the Exchange. The Exchange represents that the Fund will be an
actively managed exchange-traded fund that seeks to provide investment
results that exceed the total return performance of the broader U.S.
equity market on a risk-adjusted basis. The Exchange has submitted this
proposal in order to allow the Fund to hold listed derivatives, in
particular S&P 500 futures, in a manner that would exceed the
limitations of BZX Rule 14.11(i)(4)(C)(iv)(b), which prevents, among
other things, a series of Managed Fund Shares from holding listed
derivatives based on any single underlying reference asset in excess of
30 percent of the weight of its portfolio (including gross notional
exposures) (``30% Limitation'').\8\ Otherwise, the Fund will comply
with all other listing requirements of BZX Rule 14.11(i), including BZX
Rule 14.11(i)(4)(C), on an initial and continued listing basis.
---------------------------------------------------------------------------

    \8\ BZX Rule 14.11(i)(4)(C)(iv)(b) requires that the aggregate
gross notional value of listed derivatives based on any five or
fewer underlying reference assets to not exceed 65% of the weight of
the portfolio (including gross notional exposures), and the
aggregate gross notional value of listed derivatives based on any
single underlying reference asset to not exceed 30% of the weight of
the portfolio (including gross notional exposures). The Exchange
states that the proposal is to allow the Fund to exceed the specific
requirement of BZX Rule 14.11(i)(4)(C)(iv)(b) that prevents the
aggregate gross notional value of listed derivatives based on any
single underlying reference asset from exceeding 30% of the weight
of the portfolio (including gross notional exposures). According to
the Exchange, the Fund will meet the other requirement of BZX Rule
14.11(i)(4)(C)(iv)(b).
---------------------------------------------------------------------------

    The Shares will be offered by the Trust, which is registered with
the Commission as an open-end investment company.\9\ The Fund's
adviser, Little Harbor Advisors, LLC (``Adviser''), is not registered
as a broker-dealer and is not affiliated with a broker-dealer. Adviser
personnel who make decisions regarding the Fund's portfolio are subject
to procedures designed to prevent the use and dissemination of
material, nonpublic information regarding the Fund's portfolio. In the
event that (a) the Adviser becomes registered as a broker-dealer or
newly affiliated with a broker-dealer; or (b) any new adviser or sub-
adviser is a registered broker-dealer or becomes affiliated with a
broker-dealer; it will implement a fire wall with respect to its
relevant personnel or such broker-dealer affiliate, as applicable,
regarding access to information concerning the composition of, or
changes to, the portfolio, and will be subject to procedures designed
to prevent the use and dissemination of material, nonpublic information
regarding such portfolio.
---------------------------------------------------------------------------

    \9\ The Exchange represents that the Trust has filed a post-
effective amendment to its registration statement (``Registration
Statement'') on December 18, 2017. See Registration Statement on
Form N-1A for the Trust (File Nos. 333-179562 and 811-22668). The
Commission has not yet issued an order granting exemptive relief to
the Trust under the Investment Company Act of 1940 applicable to the
activities of the Fund, but the Exchange further represents that the
Fund Shares will not be listed on the Exchange until such an order
is issued and any conditions contained therein are satisfied.
---------------------------------------------------------------------------

    In order to achieve its investment objective, under Normal Market
Conditions,\10\ the Fund will invest approximately 80% of its net
assets at the time of investment in U.S. exchange-listed exchange-
traded funds that principally invest in U.S. equity securities (``U.S.
ETFs'') \11\ or the constituent stock holdings of a U.S. ETF (together
with U.S. ETFs, collectively, ``U.S. Equities''). The Fund generally
will invest in U.S. Equities in order to gain exposure to large cap
U.S. equity securities.
---------------------------------------------------------------------------

    \10\ As defined in BZX Rule 14.11(i)(3)(E), the term ``Normal
Market Conditions'' includes, but is not limited to, the absence of
trading halts in the applicable financial markets generally;
operational issues causing dissemination of inaccurate market
information or system failures; or force majeure type events, such
as natural or man-made disaster, act of God, armed conflict, act of
terrorism, riot or labor disruption, or any similar intervening
circumstance.
    \11\ The Exchange states that, for purposes of the proposal, the
term ``U.S. ETFs'' means Portfolio Depositary Receipts, Index Fund
Shares, and Managed Fund Shares as defined in BZX Rules 14.11(b),
14.11(c), and 14.11(i), respectively, and their equivalents on other
national securities exchanges.
---------------------------------------------------------------------------

    As noted above, BZX Rule 14.11(i)(4)(C)(iv)(b) imposes a 30%
Limitation. The Exchange is proposing to allow the Fund to hold up to
60% of the weight of its portfolio at the time of investment (including
gross notional exposures) in S&P 500 futures contracts traded on the
Chicago Mercantile Exchange (``S&P 500 Futures''). The Fund will
utilize short or long S&P 500 Futures to the extent needed to reduce or
augment, respectively, the Fund's exposure relative to the exposure
resulting from investments in the U.S. Equities in order to achieve the
desired net exposure. The Exchange represents that S&P 500 Futures are
an efficient means of reducing or augmenting exposure to U.S. Equities,
as described above. According to the Exchange, allowing the Fund to
hold a greater portion of its portfolio in S&P 500 Futures would
mitigate the Fund's dependency on holding over-the-counter (``OTC'')
instruments, which would reduce the Fund's operational burden by
allowing the Fund to primarily use listed futures contracts to achieve
its investment objective and would further reduce counter-party risk
associated with holding OTC instruments. The Exchange notes that the
Fund may also hold certain fixed income securities and cash and cash
equivalents in compliance with BZX Rules 14.11(i)(4)(C)(ii) and (iii)
in order to collateralize its S&P 500 Futures positions.
    As noted above, the Fund's investment in U.S. ETFs or the
constituent stocks of a U.S. ETF will constitute approximately 80% of
the Fund's net assets at the time of investment and under Normal Market
Conditions, and such holdings will meet the requirements for U.S.
Component Stocks in BZX Rule 14.11(i)(4)(C)(i)(a). The Fund may hold
approximately 20% of its net assets at the time of investment in fixed
income securities, cash, cash equivalents, and the cash value of
futures positions \12\ under Normal Market Conditions. The combination
of U.S. ETFs, constituent stocks of U.S. ETFs, fixed income securities,
cash, cash equivalents, and the cash value of futures positions will
constitute the entirety of the Fund's holdings and the cash value of
these holdings will be

used to form the basis for these calculations. The Exchange notes that
this is different than the calculation used to measure the Fund's
holdings in S&P 500 Futures (as it relates to the Fund holding up to
60% of the weight of its portfolio), which, as noted above, is
calculated using gross notional exposures gained through the S&P 500
Futures in both the numerator and denominator, and which is consistent
with the derivatives exposure calculation under BZX Rule
14.11(i)(4)(C)(iv). The Exchange represents that, except for the 30%
Limitation, the Fund's proposed investments will satisfy, on an initial
and continued listing basis, all of the generic listing standards under
BZX Rule 14.11(i)(4)(C) and all other applicable requirements for
Managed Fund Shares under BZX Rule 14.11(i).
---------------------------------------------------------------------------

    \12\ The Exchange states that cash value of futures positions is
based on the value of the Fund's daily margin account with the
applicable futures exchange(s).
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    After careful review, the Commission finds that the Exchange's
proposal to list and trade the Shares, as modified by Amendment No. 2,
is consistent with the Exchange Act and the rules and regulations
thereunder applicable to a national securities exchange.\13\ In
particular, the Commission finds that the proposed rule change is
consistent with Section 6(b)(5) of the Exchange Act,\14\ which
requires, among other things, that the Exchange's rules be 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.
---------------------------------------------------------------------------

    \13\ 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).
    \14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission notes that, according to the Exchange, the Shares
will meet each of the initial and continued listing criteria in BZX
Rule 14.11(i), including BZX Rule 14.11(i)(4)(C), with the exception of
the 30% Limitation. According to the Exchange, the liquidity in the S&P
500 Futures markets mitigates the concerns that BZX Rule
14.11(i)(4)(C)(iv)(b) is intended to address and that such liquidity
would prevent the Shares from being susceptible to manipulation.\15\
---------------------------------------------------------------------------

    \15\ According to the Exchange, as of December 7, 2017, the
average daily notional volume for S&P 500 Futures was more than $180
billion over the previous thirty trading days. The Exchange
represents that allowing the Fund to hold a greater portion of its
portfolio in S&P 500 Futures would mitigate the Fund's dependency on
holding OTC instruments, which would reduce the Fund's operational
burden by allowing the Fund to primarily use listed futures
contracts to achieve its investment objective and would further
reduce counter-party risk associated with holding OTC instruments.
Moreover, the Exchange represents that the diversity, liquidity, and
market capitalization of the securities underlying the S&P 500 Index
are sufficient to protect against market manipulation of both the
Fund's holdings and the Shares as it relates to the S&P 500 Futures
holdings.
---------------------------------------------------------------------------

    In addition, the Exchange represents that its surveillance
procedures are adequate to properly monitor the trading of the Shares
on the Exchange during all trading sessions and to deter and detect
violations of Exchange rules and the applicable federal securities
laws. The Exchange further represents that all of the futures contracts
and U.S. ETFs held by the Fund will trade on markets that are members
of the Intermarket Surveillance Group (``ISG'') or affiliated with a
member of ISG or with which the Exchange has in place a comprehensive
surveillance sharing agreement. Moreover, the Exchange represents that
it may obtain information regarding trading in the Shares and the
underlying futures contracts and U.S. ETFs held by the Fund via the ISG
from other exchanges who are members of the ISG or with which the
Exchange has entered into a comprehensive surveillance sharing
agreement.\16\ The Commission also notes that, according to the
Exchange, the Fund's investment in U.S. ETFs or the constituent stocks
of a U.S. ETF will meet the requirements for U.S. Component Stocks in
BZX Rule 14.11(i)(4)(C)(i)(a). BZX Rule 14.11(i)(4)(C)(i)(a) provides
that equity securities in the portfolio shall be listed on a national
securities exchange, except that no more than 10% of the equity weight
of the portfolio may be non-exchange traded ADRs. As all national
securities exchanges are ISG members, the Commission notes that no less
than 90% of constituent stocks of a U.S. ETF that the Fund will hold
will be traded on markets that are members of ISG. In addition, the
Exchange also represents that the Shares of the Fund will comply with
all requirements applicable to Managed Fund Shares, including, but not
limited to, requirements relating to the dissemination of key
information such as the Disclosed Portfolio,\17\ net asset value,\18\
and the Intraday Indicative Value,\19\ suspension of trading or
removal,\20\ trading halts,\21\ surveillance,\22\ minimum price
variation for quoting and order entry,\23\ the information
circular,\24\ and firewalls \25\ as set forth in Exchange rules
applicable to Managed Fund Shares. Likewise, the Exchange represents
that all statements and representations made in this filing regarding
(a) the description of the portfolio or reference assets, (b)
limitations on portfolio holdings or reference assets, (c)
dissemination and availability of reference asset and intraday
indicative values, (d) or the applicability of Exchange listing rules
specified in this filing shall constitute continued listing
requirements for listing the Shares on the Exchange. Moreover,
according to the Exchange, the issuer has represented to the Exchange
that it will advise the Exchange of any failure by the Fund or Shares
to comply with the continued listing requirements, and, pursuant to its
obligations under Section 19(g)(1) of the Exchange Act, the Exchange
will surveil for compliance with the continued listing
requirements.\26\ If the Fund or the Shares are not in compliance with
the applicable listing requirements, the Exchange will commence
delisting procedures under BZX Rule 14.12.
---------------------------------------------------------------------------

    \16\ As stated above, S&P 500 Futures are traded on the Chicago
Mercantile Exchange. The Commission notes that the Chicago
Mercantile Exchange represents a significant market in S&P 500
Futures, is a regulated futures and options market, and is a member
of ISG. See supra note 16. For a list of the current members and
affiliate members of ISG, see www.isgportal.com. The Exchange notes
that not all components of the Disclosed Portfolio for the Fund may
trade on markets that are members of ISG or with which the Exchange
has in place a comprehensive surveillance sharing agreement.
    \17\ See BZX Rules 14.11(i)(4)(A)(ii) and 14.11(i)(4)(B)(ii).
    \18\ See BZX Rule 14.11(i)(4)(A)(ii).
    \19\ See BZX Rule 14.11(i)(4)(B)(i).
    \20\ See BZX Rule 14.11(i)(4)(B)(iii).
    \21\ See BZX Rule 14.11(i)(4)(B)(iv).
    \22\ See BZX Rule 14.11(i)(2)(C).
    \23\ See BZX Rule 14.11(i)(2)(B).
    \24\ See BZX Rule 14.11(i)(6).
    \25\ See BZX Rule 14.11(i)(7).
    \26\ The Exchange represents that FINRA conducts certain cross-
market surveillances on behalf of the Exchange pursuant to a
regulatory services agreement. The Exchange further represents that
it is responsible for FINRA's performance under this regulatory
services agreement.
---------------------------------------------------------------------------

    This approval order is based on all of the Exchange's
representations and description of the Fund, including those set forth
above and in Amendment No. 2 to the proposed rule change.
    For the foregoing reasons, the Commission finds that the proposed
rule change, as modified by Amendment No. 2, is consistent with Section
6(b)(5) of the Exchange Act \27\ and the rules and regulations
thereunder applicable to a national securities exchange.
---------------------------------------------------------------------------

    \27\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act,\28\

that the proposed rule change (SR-CboeBZX-2017-012), as modified by
Amendment No. 2, be, and hereby is, approved.
---------------------------------------------------------------------------

    \28\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
---------------------------------------------------------------------------

    \29\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-06013 Filed 3-23-18; 8:45 am]
 BILLING CODE 8011-01-P