[Federal Register Volume 85, Number 144 (Monday, July 27, 2020)]
[Notices]
[Pages 45270-45271]
[FR Doc No: 2020-16163]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89369; File No. SR-NYSE-2020-60]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to
Amend Rule 7.37

July 21, 2020.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on July 14, 2020, New York Stock Exchange LLC (``NYSE'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 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 Exchange proposes to amend Rule 7.37 to specify the Exchange's
source of data feeds from MEMX LLC (``MEMX'') for purposes of order
handling, order execution, order routing, and regulatory compliance.
The proposed rule change is available on the Exchange's website at
www.nyse.com, at the principal office of the Exchange, and at the
Commission's Public Reference Room.

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

    In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

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

1. Purpose
    The Exchange proposes to update and amend the use of data feeds
table in Rule 7.37, which sets forth on a market-by-market basis the
specific securities information processor (``SIP'') and proprietary
data feeds that the Exchange utilizes for the handling, execution, and
routing of orders, and for performing the regulatory compliance checks
related to each of those functions. Specifically, the Exchange proposes
to amend the table in Rule 7.37(e) to specify that, with respect to
MEMX, the Exchange will receive the SIP feed as its primary source of
data for order handling, order

execution, order routing, and regulatory compliance. The Exchange will
not have a secondary source for data from MEMX.
    The Exchange proposes that this proposed rule change would be
operative on the day that MEMX launches operations as an equities
exchange, which is currently expected on September 4, 2020.\4\
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    \4\ See https://memx.com/memx-timeline-update-launch-set-for-september-4th/.
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the
Act,\5\ in general, and furthers the objectives of Section 6(b)(5),\6\
in particular, because it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, to remove
impediments to, and perfect the mechanism of, a free and open market
and a national market system and, in general, to protect investors and
the public interest. The Exchange believes its proposal to amend the
table in Rule 7.37(e) to include the data feed source for MEMX will
ensure that Rule 7.37 correctly identifies and publicly states on a
market-by-market basis all of the specific SIP and proprietary data
feeds that the Exchange utilizes for the handling, execution, and
routing of orders, and for performing the regulatory compliance checks
for each of those functions. The proposed rule change also removes
impediments to and perfects the mechanism of a free and open market and
protects investors and the public interest by providing additional
specificity, clarity, and transparency in the Exchange's rules.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed change is not
designed to address any competitive issue, but rather would provide the
public and market participants with up-to-date information about the
data feeds the Exchange will use for the handling, execution, and
routing of orders, as well as for regulatory compliance.

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

    The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \7\ and Rule 19b 4(f)(6) thereunder.\8\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate, it has become effective pursuant to Section
19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(6).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \9\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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    \9\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSE-2020-60 on the subject line.

Paper Comments

     Send paper comments in triplicate to: Secretary,
Securities and Exchange Commission, 100 F StreetF NE, Washington, DC
20549-1090.

All submissions should refer to File Number SR-NYSE-2020-60. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (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 website viewing and printing in
the Commission's Public Reference Room, 100 F Street, NE, Washington,
DC 20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange and on its internet
website at https://www.nyse.com. All comments received will be posted
without change. Persons submitting comments are cautioned that we do
not redact or edit personal identifying information from comment
submissions. You should submit only information that you wish to make
available publicly.
    All submissions should refer to File Number SR-NYSE-2020-60 and
should be submitted on or before August 17, 2020.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-16163 Filed 7-24-20; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 38 (Thursday, February 26, 2015)]
[Notices]
[Pages 10524-10526]
[FR Doc No: 2015-03967]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74348; File No. TP 14-02]

Order Granting Limited Exemptions From Exchange Act Rule 10b-17
and Rules 101 and 102 of Regulation M to AccuShares S&P GSCI Spot Fund,
AccuShares S&P GSCI Agriculture and Livestock Spot Fund, AccuShares S&P
GSCI Industrial Metals Spot Fund, AccuShares S&P GSCI Crude Oil Spot
Fund, AccuShares S&P GSCI Brent Oil Spot Fund, AccuShares S&P GSCI
Natural Gas Spot Fund, and AccuShares Spot CBOE VIX Fund, Pursuant to
Exchange Act Rule 10b-17(b)(2) and Rules 101(d) and 102(e) of
Regulation M

February 20, 2015.
    On February 18, 2015, the Commission approved a proposed rule
change by NASDAQ Stock Market LLC to adopt new listing standards for
``Paired Class Shares'' as new NASDAQ Rule 5713, as well as to permit
the listing and trading of ``Paired Class Shares'' issued by AccuShares
Commodity Trust I (the ``Trust'').\1\ By letter dated February 20, 2015
(the ``Letter''), as supplemented by conversations with the staff of
the Division of Trading and Markets, counsel for AccuShares Investment
Management LLC (the ``Sponsor''), the Trust, AccuShares S&P GSCI Spot
Fund, AccuShares S&P GSCI Agriculture and Livestock Spot Fund,
AccuShares S&P GSCI Industrial Metals Spot Fund, AccuShares S&P GSCI
Crude Oil Spot Fund, AccuShares S&P GSCI Brent Oil Spot Fund,
AccuShares S&P GSCI Natural Gas Spot Fund, and AccuShares Spot CBOE VIX
Fund (the ``Funds''), the listing exchange, any national securities
exchange on or through which shares issued by the Funds (``Shares'')
may subsequently trade, and persons or entities engaging in
transactions in Shares (collectively, the ``Requestors'') requested
exemptions, or interpretive or no-action relief, from Rule 10b-17 under
the Securities Exchange Act of 1934, as amended (``Exchange Act''), and
Rules 101 and 102 of Regulation M, in connection with secondary market
transactions in Shares and the creation or redemption of aggregations
of Shares of at least 50,000 shares (``Creation Units'').\2\
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    \1\ Exchange Act Release No. 74299 (Feb. 18, 2015) (SR-NASDAQ-
2014-065).
    \2\ Creation Units of shares are composed of 25,000 ``Up''
Shares and 25,000 ``Down'' Shares, as explained infra.
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    As the Requestors explain in the Letter, the Trust is a Delaware
statutory trust that is organized into separate Funds. Each Fund will
have a distinctive objective to track the movements in a specified spot
commodity, commodity futures contract, or measures of price volatility
of a broad-based equity index as measured by such Fund's underlying
index (``Underlying Index'') during each Fund's ``Measuring Period.''
\3\ Each Fund will engage in issuing, offering, and redeeming
``paired'' ``Up'' and ``Down'' Shares, two types of Shares that reflect
different views on the future direction of the Underlying Index.
Entitlements of a Fund's Up Shares to distributions are related to any
increases of such Fund's Underlying Index, and entitlements of a Fund's
Down Shares to distributions from such Fund are related to any
decreases of the same Underlying Index, during each Measuring Period.
The Funds will not hold commodities, futures, or other assets that are
referenced by the Underlying Index but will instead hold cash, certain
U.S. Treasury securities, and certain overnight repurchase agreements.
Creations and redemptions are permitted only in Creation Units.
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    \3\ The Underlying Indexes for the Funds are (1) S&P GSCI Spot
Index, (2) S&P GSCI Agricultural and Livestock Spot Index, (3) S&P
GSCI Industrial Metals Spot Index, (4) S&P GSCI Crude Oil Spot
Index, (5) S&P GSCI Brent Crude Oil Spot Index, (6) S&P GSCI Natural
Gas Spot Index, and (7) CBOE Volatility Index (also known as the
``VIX'').
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    The Requestors also represent, among other things, the following:
     Shares of the Funds will be listed and traded on a
national securities exchange that has obtained approval of a rule
change from the Commission pursuant to Rule 19b-4;
     Neither the Trust nor any of its Funds will be an
investment company registered under the Investment Company Act of 1940,
as amended (``1940 Act''), and will not be required to register under
the 1940 Act;
     Each Fund will continuously issue and redeem Shares in
aggregations of at least 50,000 Shares (25,000 Up Shares and 25,000
Down Shares) in exchange for specified amounts of cash, with the
objective of tracking the performance of a specified commodity or
volatility index;
     Throughout the trading day, the listing exchange will
publicly disseminate intra-day prices of Fund Shares and their
respective Underlying Indexes;
     The market value of Shares should be in close alignment
with the increases and decreases in the value of each Fund's Underlying
Index which tracks one or more physical commodities, a basket of
particular commodities, commodity futures contracts, other commodity
derivatives, or measures of price volatility of a broad-based equity
index;
     Like other exchange-traded products, the secondary market
price of Shares should not vary substantially from their respective
Class Values (as defined in the Letter) per Share because the
redeemability and the continuous offering features of the Funds provide
opportunities for arbitrage activity that should eliminate any
significant disparity between the market price of Shares and their
respective Class Values per Share.
     Significant disparities between the market price of each
Fund's Shares and the liquidation value of the Shares and between the
market price of each Fund's Shares and the value of the Underlying
Index should be eliminated by the arbitrage mechanism afforded by the
open-ended character of the Funds and the redeemability of their
Shares;
     The ``Corrective Distribution'' mechanism (as described in
the Letter) is designed to supplement the aforementioned arbitrage
mechanism in those rare situations where the arbitrage mechanism fails;
     The presence of each Fund's pre-established Corrective
Distribution Thresholds (as defined in the Letter) is also intended to
aid in driving the alignment of market prices with Class Value per
Share;
     Special Distributions (as defined in the Letter) will be
triggered only if a Fund's Underlying Index experiences an unexpected
level of volatility and exceeds a fixed rate of change (for example,
75% for the AccuShares S&P GSCI Spot and AccuShares S&P GSCI Natural
Gas Spot Funds) since the beginning of the Measuring Period (as defined
in the Letter);
     Special Distributions are not expected to occur regularly
and will occur, if at all, only under the limited circumstances and
according to the fixed formula stated in each Fund's prospectus;
     Each Fund will alert shareholders in a prominent manner on
its Web site at the close of the business day during any Measuring
Period when such Fund's Underlying Index first experiences a 50%
increase or decrease in its level since the beginning of that Measuring
Period and, if and when a Fund's Underlying Index exceeds its threshold
for issuing a Special Distribution during such Measuring Period, at the
close of business on such day the relevant Fund will immediately notify
the listing exchange, and will thereafter issue a press release and
post a notice of such event and its details on

its Web site, including notice of any other distributions to be made
therewith; \4\
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    \4\ Other distributions, specifically previously announced
distributions of a Fund's net income or a Corrective Distribution,
may occasionally simultaneously accompany a Special Distribution
(``Accompanying Distributions''). In some cases, these Accompanying
Distributions may be triggered without sufficient time to make the
notice required by Rule 10b-17 in the time frame mandated in the
rule. The exemption contained herein only extends to those
Accompanying Distributions that cannot be disclosed ten days prior
to the record date because the Accompanying Distribution was
triggered within that ten-day time frame (``Exempted Accompanying
Distributions'').
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     The Funds will provide at least three business days'
notice to the listing exchange in advance of the related record date
for Special Distributions and any Exempted Accompanying Distribution;
     The listing exchange has confirmed that publication of a
Special Distribution Notice (as defined in the Letter) three business
days in advance of a Special Distribution Record Date (as defined in
the Letter) can be made in the normal course, and will not require any
system changes, technology alterations or other type of
reconfigurations by the exchange and that it will be able to adequately
disseminate the distribution information contained in the Special
Distribution Notice to its members and the investing public within the
three-day time period and, as a result, the Sponsor believes that the
parties transacting in Fund Shares, as well as their broker-dealers,
will be able to timely reflect Special Distributions and Exempted
Accompanying Distributions in the price ultimately paid; and
     The Sponsor has agreed to compile the following data and
provide it to the Commission staff on a quarterly basis for each Fund
during the first year of operation:
    [cir] Daily Class Values and daily Class Values per Share;
    [cir] Daily end of day secondary market price per Class (as defined
in the Letter) per Share;
    [cir] Per Share, the date, form (i.e., shares, dollars, etc.), and
size of any distributions including any stock split; and
    [cir] Per Share, with respect to any stock split, whether it was a
reverse or forward split.

Regulation M

    While redeemable securities issued by an open-end management
investment company are excepted from the provisions of Rule 101 and 102
of Regulation M, the Requestors may not rely upon that exception for
the Shares as they are not issued by an open-end management investment
company. However, we find that it is appropriate in the public interest
and is consistent with the protection of investors to grant limited
exemptions from Rules 101 and 102 to persons who may be deemed to be
participating in a distribution of Shares of the Funds as well as the
Funds, as described in more detail below.

Rules 101 and 102 of Regulation M

    Generally, Rule 101 of Regulation M is an anti-manipulation rule
that, subject to certain exceptions, prohibits any ``distribution
participant'' and its ``affiliated purchasers'' from bidding for,
purchasing, or attempting to induce any person to bid for or purchase
any security which is the subject of a distribution until after the
applicable restricted period, except as specifically permitted in the
rule. Rule 100 of Regulation M defines ``distribution'' to mean any
offering of securities that is distinguished from ordinary trading
transactions by the magnitude of the offering and the presence of
special selling efforts and selling methods. The provisions of Rule 101
of Regulation M apply to underwriters, prospective underwriters,
brokers, dealers, or other persons who have agreed to participate or
are participating in a distribution of securities. The Shares are in a
continuous distribution and, as such, the restricted period in which
distribution participants and their affiliated purchasers are
prohibited from bidding for, purchasing, or attempting to induce others
to bid for or purchase extends indefinitely.
    Similarly, Rule 102 of Regulation M prohibits issuers, selling
security holders, and any affiliated purchaser of such person from
bidding for, purchasing, or attempting to induce any person to bid for
or purchase a covered security during the applicable restricted period
in connection with a distribution of securities effected by or on
behalf of an issuer or selling security holder.
    Based on the representations and facts presented in the Letter,
particularly that the market value of Shares should be in close
alignment with the increases and decreases in the value of each Fund's
Underlying Index, that significant disparities between the market price
of each Fund's Shares and the liquidation value of the Shares and
between the market price of each Fund's Shares and the value of the
Underlying Index should be eliminated by the arbitrage mechanism, and
that the Corrective Distribution mechanism is designed to supplement
the arbitrage mechanism in those rare situations where the arbitrage
mechanism fails (which will be infrequent and, for most Funds, a
Corrective Distribution may never occur), the concerns that the
Commission raised in adopting Rules 101 and 102 of Regulation M should
not be implicated because these mechanisms should reduce the potential
that the purchases effected during the restricted period by these
distribution participants and the Funds may artificially affect the
secondary market price of the Shares.\5\ As a result, the Commission
finds that it is appropriate in the public interest and consistent with
the protection of investors to grant the Trust an exemption (1) under
paragraph (d) of Rule 101 of Regulation M with respect to the Funds,
thus permitting persons participating in a distribution of Shares of
the Funds to bid for or purchase such Shares during the applicable
restricted period and (2) under paragraph (e) of Rule 102 of Regulation
M with respect to the Funds, thus permitting the Funds to redeem Shares
of the Funds during the applicable restricted period.
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    \5\ See Securities Exchange Act Release No. 33924 (Apr. 19,
1994); 59 FR 21681 (Apr. 26, 1994) (stating that the purpose of the
prohibitions of Rules 101 and 102 are to ``prevent those persons
participating in a distribution of securities . . . from
artificially conditioning the market for the securities in order to
facilitate the distribution'' as well as ``to protect the integrity
of the securities trading market as an independent pricing
mechanism.'').
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Rule 10b-17

    Rule 10b-17, with certain exceptions, requires an issuer of a class
of publicly traded securities to give notice of certain specified
actions (for example, a dividend distribution) relating to such class
of securities in accordance with Rule 10b-17(b). Based on the
representations from the Fund, Sponsor, and listing exchange that
timely notification of the existence and timing of such Special
Distributions and Exempted Accompanying Distributions will be provided
to market participants and that Special Distributions and Exempted
Accompanying Distributions are not expected to occur frequently and
only under the limited circumstances, if at all, according to a pre-
determined formula published in each Fund's prospectus, the concerns
that the Commission raised in adopting Rule 10b-17 should not be
implicated. As a result, the Commission finds that it is appropriate in
the public interest and consistent with the protection of investors to
grant the Trust a conditional exemption from Rule 10b-17 with respect
to the Special Distributions and Exempted Accompanying Distributions.

Conclusion

    It is hereby ordered, pursuant to Rule 101(d) of Regulation M, that
the Trust, based on the representations and facts presented in the
Letter, is exempt from the requirements of Rule 101 with respect to the
Funds, thus permitting persons who may be deemed to be participating in
a distribution of Shares of the Funds to bid for or purchase such
Shares during their participation in such distribution.
    It is further ordered, pursuant to Rule 102(e) of Regulation M,
that the Trust, based on the representations and the facts presented in
the Letter, is exempt from the requirements of Rule 102 with respect to
the Funds, thus permitting the Funds to redeem Shares of the Funds
during the continuous offering of such Shares.
    It is further ordered, pursuant to Rule 10b-17(b)(2), that the
Trust, based on the representations and the facts presented in the
Letter, subject to the conditions that the Funds will provide at least
three business days' notice in advance of the related record date for
Special Distributions and any Exempted Accompanying Distribution and
that the Funds will otherwise comply with Rule 10b-17 with regard to
any distributions except Special Distributions and Exempted
Accompanying Distributions as described above and in the Letter, is
exempt from the requirements of Rule 10b-17 with respect to Special
Distributions and any Exempted Accompanying Distribution.
    This exemptive relief is subject to modification or revocation at
any time the Commission determines that such action is necessary or
appropriate in furtherance of the purposes of the Exchange Act. This
exemption is based on the facts presented and the representations made
in the Letter. Any different facts or representations may require a
different response. In the event that any material change occurs in the
facts or representations in the Letter, transactions in Shares of the
Funds must be discontinued, pending presentation of the facts for our
consideration. In addition, persons relying on this exemption are
directed to the anti-fraud and anti-manipulation provisions of the
Exchange Act, particularly Sections 9(a) and 10(b), and Rule 10b-5
thereunder. Responsibility for compliance with these and any other
applicable provisions of the federal securities laws must rest with the
persons relying on this exemption. This order should not be considered
a view with respect to any other question that the proposed
transactions may raise, including, but not limited to the adequacy of
the disclosure concerning, and the applicability of other federal or
state laws to, the proposed transactions.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(6) and (9).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-03967 Filed 2-25-15; 8:45 am]
BILLING CODE 8011-01-P