[Federal Register Volume 75, Number 238 (Monday, December 13, 2010)]
[Notices]
[Pages 77681-77685]
[FR Doc No: 2010-31132]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63447; File No. SR-NYSEArca-2010-107]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
Relating to Listing and Trading of AdvisorShares Active Bear ETF Under
NYSE Arca Equities Rule 8.600

December 7, 2010.
    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 November 23, 2010, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the Exchange. 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 list and trade the following under NYSE
Arca Equities Rule 8.600 (``Managed Fund Shares''): AdvisorShares
Active Bear ETF. The text of the proposed rule change is available at
the Exchange, the Commission's Public Reference Room, and http://www.nyse.com.

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 list and trade the following Managed Fund
Shares \4\ (``Shares'') under NYSE Arca Equities Rule 8.600:
AdvisorShares Active Bear ETF (the ``Fund'').\5\ The Shares will be
offered by AdvisorShares Trust (the ``Trust''), a statutory trust
organized under the laws of the State of Delaware and registered with
the Commission as an open-end management investment company.\6\ The
investment advisor to the Fund is AdvisorShares Investments, LLC (the
``Advisor''). Ranger Alternative Management, L.P. (``Ranger'') is the
sub-advisor (``Sub-Advisor'') to the Fund and the portfolio manager.
Foreside Fund Services LLC (``Distributor'') is the distributor for the
Fund. The Bank of New York Mellon Corporation (``Administrator'') is
the administrator, custodian, transfer agent and fund accounting agent
for the Fund.
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    \4\ A Managed Fund Share is a security that represents an
interest in an investment company registered under the Investment
Company Act of 1940 (15 U.S.C. 80a) (``1940 Act'') organized as an
open-end investment company or similar entity that invests in a
portfolio of securities selected by its investment advisor
consistent with its investment objectives and policies. In contrast,
an open-end investment company that issues Investment Company Units,
listed and traded on the Exchange under NYSE Arca Equities Rule
5.2(j)(3), seeks to provide investment results that correspond
generally to the price and yield performance of a specific foreign
or domestic stock index, fixed income securities index or
combination thereof.
    \5\ The Commission has previously approved the listing and
trading on the Exchange of other actively managed funds under Rule
8.600. See, e.g., Securities Exchange Act Release Nos. 57801 (May 8,
2008), 73 FR 27878 (May 14, 2008) (SR-NYSEArca-2008-31) (order
approving Exchange listing and trading of twelve actively-managed
funds of the WisdomTree Trust); 60460 (August 7, 2009) (SR-NYSEArca-
2009-55) (order approving Exchange listing and trading of
AdvisorShares Dent Tactical ETF); 61842 (April 5, 2010-10), 75 FR
18554 (April 12, 2010) (SR-NYSEArca-2010-10) (order approving
listing of Mars Hill Global Relative Value ETF).
    \6\ The Trust is registered under the 1940 Act. On September 22,
2010, the Trust filed with the Commission Post-Effective Amendment
No. 12 to Form N-1A under the Securities Act of 1933 (15 U.S.C.
77a), and under the 1940 Act relating to the Fund (File Nos. 333-
157876 and 811-22110) (the ``Registration Statement''). The Trust
has also filed an Amended Application for an Order under Section
6(c) of the 1940 Act for exemptions from various provisions of the
1940 Act and rules thereunder (File No. 812-13677 dated May 28,
2010) (``Exemptive Application''). The description of the operation
of the Trust and the Fund herein is based on the Registration
Statement.
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    Commentary .06 to Rule 8.600 provides that, if the investment
adviser to the Investment Company issuing Managed Fund Shares is
affiliated with a broker-dealer, such investment adviser shall erect a
``fire wall'' between the investment adviser and the broker-dealer with
respect to access to information concerning the composition and/or
changes to such Investment Company portfolio. In addition, Commentary
.06 further requires that personnel who make decisions on the open-end
fund's portfolio composition must be subject to procedures designed to
prevent the use and dissemination of material nonpublic information
regarding the open-end fund's portfolio.\7\ Commentary .06 to Rule
8.600 is similar to Commentary .03(a)(i) and (iii) to NYSE Arca
Equities Rule 5.2(j)(3); however, Commentary .06 in connection with the
establishment of a ``fire wall'' between the investment adviser and the
broker-dealer reflects the applicable open-end fund's portfolio, not an
underlying benchmark index, as is the case with index-based funds.
Neither the Advisor nor the Sub-Advisor is affiliated with a broker-
dealer.\8\ In the event the Advisor or Sub-

Advisor become affiliated with a broker-dealer, they will be required
to implement a fire wall with respect to such broker-dealer regarding
access to information concerning the composition and/or changes to a
portfolio.
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    \7\ An investment adviser to an open-end fund is required to be
registered under the Investment Advisers Act of 1940 (the ``Advisers
Act''). As a result, the Adviser and Sub-adviser are subject to the
provisions of Rule 204A-1 under the Advisers Act relating to codes
of ethics. This Rule requires investment advisers to adopt a code of
ethics that reflects the fiduciary nature of the relationship to
clients as well as compliance with other applicable securities laws.
Accordingly, procedures designed to prevent the communication and
misuse of non-public information by an investment adviser must be
consistent with Rule 204A-1 under the Advisers Act.
    \8\ With respect to the Fund, the Exchange represents that the
Advisor, as the investment advisor of the Fund, as well as the Sub-
Advisor to the Fund and their related personnel, are subject to
Investment Advisers Act Rule 204A-1. This Rule specifically requires
the adoption of a code of ethics by an investment advisor to
include, at a minimum: (i) Standards of business conduct that
reflect the firm's/personnel fiduciary obligations; (ii) provisions
requiring supervised persons to comply with applicable Federal
securities laws; (iii) provisions that require all access persons to
report, and the firm to review, their personal securities
transactions and holdings periodically as specifically set forth in
Rule 204A-1; (iv) provisions requiring supervised persons to report
any violations of the code of ethics promptly to the chief
compliance officer (``CCO'') or, provided the CCO also receives
reports of all violations, to other persons designated in the code
of ethics; and (v) provisions requiring the investment advisor to
provide each of the supervised persons with a copy of the code of
ethics with an acknowledgement by said supervised persons. In
addition, Rule 206(4)-7 under the Advisers Act makes it unlawful for
an investment advisor to provide investment advice to clients unless
such investment advisor has (i) adopted and implemented written
policies and procedures reasonably designed to prevent violation, by
the investment advisor 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.
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    According to the Registration Statement, the Fund's investment
objective is to seek capital appreciation through short sales of
domestically traded equity securities. The Sub-Advisor seeks to achieve
the Fund's investment objective by short selling a portfolio of liquid
mid- and large-cap U.S. exchange-traded equity securities, exchange-
traded funds (``ETFs'') registered pursuant to the 1940 Act, exchange-
traded notes (``ETNs''), and exchange-traded products (``ETPs'').\9\ In
contrast to ETFs, ETNs and ETPs are not registered pursuant to the 1940
Act.
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    \9\ The Fund may sell short only equity securities traded in the
U.S. on registered exchanges. The Fund will not purchase or borrow
illiquid securities or securities registered pursuant to Rule 144A
under the Securities Act of 1933.
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Operation of the Fund
    According to the Registration Statement, the Sub-Advisor will
utilize a disciplined, consistent investment approach to both security
selection and risk management and will implement a bottom-up,
fundamental, research driven security selection process. In addition to
extensive quantitative analysis, careful consideration is given to
qualitative analysis. The assessment of the management team, accounting
practices, corporate governance and the company's competitive advantage
are all key items. Once these quantitative and qualitative
characteristics are thoroughly analyzed, the Sub-Advisor then
determines if there is sufficient return to the stock price to warrant
an investment. Once a position is included in the Fund's portfolio, it
is subject to regular fundamental and technical risk management review.
    According to the Registration Statement, in selecting short
positions, the Sub-Advisor seeks to identify securities with market
capitalizations typically of $1 billion and above, and with low
earnings quality or aggressive accounting. Key factors include, but are
not limited to: Quality and sustainability of revenue, as indicated by
extended payment terms, changes in revenue policies or other factors;
deterioration of cash flows or declining quality of earnings; reserve
reversals or an increase in ``soft'' assets which could indicate the
capitalization of expenses; and an analysis of irregular items
affecting operating or gross margins including inventory, payables and
taxes. The Sub-Advisor will also seek out the following qualitative
factors: Poor corporate governance or significant related party
transactions; heavy insider selling; and unique competitive challenges.
    According to the Registration Statement, once it is determined that
a company possesses the proper characteristics, it must then be
determined whether to include that position in the Fund's portfolio.
During this analysis, the Sub-Advisor considers specific factors
described in the Registration Statement, including assessment on
individual merits, valuation metrics and technical factors.
    The Fund generally targets composition of 20 to 50 equity short
positions, with an average individual position size which generally
ranges between 2-7% of the aggregate portfolio exposure. Typically,
short positions will be initiated at the lower end of the position size
range in order to gain exposure to a particular stock.
    ETFs registered pursuant to the 1940 Act or other exchange-traded
products not registered pursuant to the 1940 Act will also be utilized
to manage exposure to broad indexes or certain sectors. Exchange traded
products positions will typically range between 10-15% of the Fund's
portfolio. Exchange-traded products may be used to gain exposure in
instances when the Sub-Advisor has a more bearish posture with respect
to the broad market.
    The Fund, from time to time, in the ordinary course of business,
may purchase securities on a when-issued or delayed-delivery basis
(i.e., delivery and payment can take place between a month and 120 days
after the date of the transaction). The Fund may invest in U.S.
government securities and U.S. Treasury zero-coupon bonds.\10\
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    \10\ As stated in the Registration Statement, the Fund may not,
with respect to 75% of its total assets, (i) purchase securities of
any issuer (except securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities or shares of
investment companies) if, as a result, more than 5% of its total
assets would be invested in the securities of such issuer; or (ii)
acquire more than 10% of the outstanding voting securities of any
one issuer. In addition, the Fund may not purchase any securities
which would cause 25% or more of its total assets to be invested in
the securities of one or more issuers conducting their principal
business activities in the same industry or group of industries,
provided that this limitation does not apply to investments in
securities issued or guaranteed by the U.S. Government, its agencies
or instrumentalities, or shares of investment companies. According
to the Registration Statement, the Fund will seek to qualify for
treatment as a Regulated Investment Company (``RIC'') under the
Internal Revenue Code.
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    To respond to adverse market, economic, political or other
conditions, the Fund may invest 100% of its total assets, without
limitation, in high-quality short-term debt securities and money market
instruments. The Fund may be invested in these instruments for extended
periods, depending on the Sub-Advisor's assessment of market
conditions. These debt securities and money market instruments include
shares of other mutual funds, commercial paper, certificates of
deposit, bankers' acceptances, U.S. Government securities, repurchase
agreements and bonds that are BBB or higher.
Creations and Redemptions
    Creations and redemptions of Shares occur in large specified blocks
of Shares, referred to as ``Creation Units.'' According to the
Registration Statement, the Shares of the Fund are ``created'' at their
net asset value (``NAV'') by market makers, large investors and
institutions only in block-size Creation Units of 25,000 shares or
more. A ``creator'' enters into an authorized participant agreement (a
``Participant Agreement'') with the Distributor or a DTC participant
that has executed a Participant Agreement with the Distributor (an
``Authorized Participant''), and deposits into the Fund a specified
amount of cash totaling the NAV of the Creation Unit(s), in exchange
for 25,000 shares of the Fund (or multiples thereof). Similarly, Shares
can only be redeemed in Creation Units, generally 25,000 shares or
more, for a specified amount of cash totaling the NAV of the Creation
Unit(s). Shares are not redeemable from the Fund except when aggregated
in Creation Units. The prices at which creations and redemptions occur
are based on the next calculation of NAV after an order is received in
a form prescribed in the Participant Agreement.
    According to the Registration Statement, unlike many other ETFs,
Creation Units of the Fund are sold only for cash. Creation Units are
sold at the NAV next computed, plus a fixed creation transaction fee,
assessed per transaction. In all cases, such fees will be limited in
accordance with SEC requirements applicable to management investment
companies offering redeemable securities.
    All orders to create must be received by the Distributor no later
than the close of the Core Trading Session on NYSE Arca (ordinarily 4
p.m. Eastern Time

(``E.T.'')); on the date such order is placed in order for the creation
of Creation Units to be effected based on the NAV of Shares of the Fund
as next determined on such date after receipt of the order in proper
form. Orders to redeem must be received by the Administrator no later
than 4 p.m. E.T.
    The Shares will conform to the initial and continued listing
criteria under NYSE Arca Equities Rule 8.600. The Exchange represents
that, for initial and/or continued listing, the Fund will be in
compliance with Rule 10A-3 \11\ under the Exchange Act, as provided by
NYSE Arca Equities Rule 5.3. A minimum of 100,000 Shares will be
outstanding at the commencement of trading on the Exchange. The
Exchange will obtain a representation from the issuer of the Shares
that the NAV and the Disclosed Portfolio will be made available to all
market participants at the same time.
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    \11\ 17 CFR 240.10A-3.
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Net Asset Value
    According to the Registration Statement, the NAV per Share of the
Fund is computed by dividing the value of the net assets of the Fund
(i.e., the value of its total assets less total liabilities) by the
total number of Shares of the Fund outstanding, rounded to the nearest
cent. Expenses and fees, including without limitation, the management,
administration and distribution fees, are accrued daily and taken into
account for purposes of determining NAV. The NAV per Share for the Fund
is calculated by the Administrator and determined as of the close of
the regular trading session on NYSE Arca (ordinarily 4 p.m., Eastern
Time) on each day that the Exchange is open.
    In computing the Fund's NAV, the Fund's securities positions are
valued based on their last readily available market price. Price
information on listed securities is taken from the exchange where the
security is primarily traded. Securities regularly traded in an over-
the-counter market are valued at the latest quoted sales price.
Securities not listed on an exchange or national securities market, or
securities in which there was no last reported sales price, are valued
at the most recent bid price. Other portfolio securities and assets for
which market quotations are not readily available are valued based on
fair value as determined in good faith by the Sub-Advisor in accordance
with procedures adopted by the Fund's Board of Trustees.
Availability of Information
    The Fund's Web site (http://www.advisorshares.com), which will be
publicly available prior to the public offering of Shares, will include
a form of the Prospectus for the Fund that may be downloaded. The
Fund's Web site will include additional quantitative information
updated on a daily basis, including, for the Fund, (1) daily trading
volume, the prior business day's reported closing price, NAV and mid-
point of the bid/ask spread at the time of calculation of such NAV (the
``Bid/Ask Price''),\12\ and a calculation of the premium and discount
of the Bid/Ask Price against the NAV, and (2) data in chart format
displaying the frequency distribution of discounts and premiums of the
daily Bid/Ask Price against the NAV, within appropriate ranges, for
each of the four previous calendar quarters. On each business day,
before commencement of trading in Shares in the Core Trading Session on
the Exchange, the Fund will disclose on its Web site the Disclosed
Portfolio as defined in NYSE Arca Equities Rule 8.600(c)(2) that will
form the basis for the Fund's calculation of NAV at the end of the
business day.\13\
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    \12\ The Bid/Ask Price of the Fund is determined using the
highest bid and the lowest offer on the Exchange as of the time of
calculation of the Fund's NAV. The records relating to Bid/Ask
Prices will be retained by the Fund and its service providers.
    \13\ Under accounting procedures 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''). 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.
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    On a daily basis, for each portfolio security position of the Fund,
the Fund will disclose on its Web site the following information:
ticker symbol, name of security, positions \14\ held long or short in
the portfolio, and percentage weighting of the security in the
portfolio. The Web site information will be publicly available at no
charge.
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    \14\ See e-mail from Tim Malinowski, Senior Director, NYSE
Euronext, Global Index and Exchange Traded Funds, to Christopher
Chow and Kristie Diemer, Special Counsels, Division of Trading and
Markets, Commission, dated November 24, 2010.
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    In addition, a portfolio composition file which includes the cash
amount required to be delivered in exchange for each Fund share, will
be publicly disseminated daily prior to the opening of the New York
Stock Exchange (``NYSE'') via the National Securities Clearing
Corporation. The NAV of the Fund will normally be determined as of the
close of the regular trading session on the NYSE (ordinarily 4 p.m.
Eastern Time) on each business day.
    Investors can also obtain the Trust's Statement of Additional
Information (``SAI''), the Fund's Shareholder Reports, and its Form N-
CSR and Form N-SAR, filed twice a year. The Trust's SAI and Shareholder
Reports are available free upon request from the Trust, and those
documents and the Form N-CSR and Form N-SAR may be viewed on-screen or
downloaded from the Commission's Web site at http://www.sec.gov.
Information regarding market price and trading 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.
Information regarding the previous day's closing price and trading
volume information will be published daily in the financial section of
newspapers. Quotation and last sale information for the Shares will be
available via the Consolidated Tape Association (``CTA'') high-speed
line. In addition, the Portfolio Indicative Value, as defined in NYSE
Arca Equities Rule 8.600(c)(3), will be disseminated by one or more
major market data vendors at least every 15 seconds during the Core
Trading Session.
    Additional information regarding the Trust and the Shares,
including investment strategies, risks, creation and redemption
procedures, fees, portfolio holdings disclosure policies, distributions
and taxes is included in the Registration Statement. All terms relating
to the Fund that are referred to, but not defined in, this proposed
rule change are defined in the Registration Statement.
Trading Halts
    With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares of the Fund.\15\ Trading in Shares of the Fund
will be halted if the circuit breaker parameters in NYSE Arca Equities
Rule 7.12 have been reached. Trading also may be halted because of
market conditions or for reasons that, in the view of the Exchange,
make trading in the Shares inadvisable. These may include: (1) The
extent to which trading is not occurring in the securities comprising
the Disclosed Portfolio and/or the financial instruments of the Fund;
or (2) whether other unusual conditions or circumstances detrimental to
the maintenance of a fair and orderly market are present. Trading in
the Shares will be subject to NYSE Arca Equities Rule 8.600(d)(2)(D),
which sets

forth circumstances under which Shares of the Fund may be halted.
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    \15\ See NYSE Arca Equities Rule 7.12, Commentary .04.
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Trading Rules
    The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. Shares will trade on
the NYSE Arca Marketplace from 4 a.m. to 8 p.m. E.T. in accordance with
NYSE Arca Equities Rule 7.34 (Opening, Core, and Late Trading
Sessions). The Exchange has appropriate rules to facilitate
transactions in the Shares during all trading sessions. As provided in
NYSE Arca Equities Rule 7.6, Commentary .03, the minimum price
variation (``MPV'') for quoting and entry of orders in equity
securities traded on the NYSE Arca Marketplace is $0.01, with the
exception of securities that are priced less than $1.00 for which the
MPV for order entry is $0.0001.
Surveillance
    The Exchange intends to utilize its existing surveillance
procedures applicable to derivative products (which include Managed
Fund Shares) to monitor trading in the Shares. The Exchange represents
that these procedures are adequate to properly monitor Exchange trading
of the Shares in all trading sessions and to deter and detect
violations of Exchange rules and applicable Federal securities laws.
    The Exchange's current trading surveillance focuses on detecting
securities trading outside their normal patterns. When such situations
are detected, surveillance analysis follows and investigations are
opened, where appropriate, to review the behavior of all relevant
parties for all relevant trading violations.
    The Exchange may obtain information via the Intermarket
Surveillance Group (``ISG'') from other exchanges that are members of
ISG.\16\
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    \16\ For a list of the current members of ISG, see http://www.isgportal.org. 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.
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    In addition, the Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.
Information Bulletin
    Prior to the commencement of trading, the Exchange will inform its
Equity Trading Permit (``ETP'') Holders in an Information Bulletin
(``Bulletin'') of the special characteristics and risks associated with
trading the Shares. Specifically, the Bulletin will discuss the
following: (1) The procedures for purchases and redemptions of Shares
in Creation Unit aggregations (and that Shares are not individually
redeemable); (2) NYSE Arca Equities Rule 9.2(a), which imposes a duty
of due diligence on its ETP Holders to learn the essential facts
relating to every customer prior to trading the Shares; (3) the risks
involved in trading the Shares during the Opening and Late Trading
Sessions when an updated Portfolio Indicative Value will not be
calculated or publicly disseminated; (4) how information regarding the
Portfolio Indicative Value is disseminated; (5) the requirement that
ETP Holders deliver a prospectus to investors purchasing newly issued
Shares prior to or concurrently with the confirmation of a transaction;
and (6) trading information.
    In addition, the Bulletin will reference that the Fund is subject
to various fees and expenses described in the Registration Statement.
The Bulletin will discuss any exemptive, no-action, and interpretive
relief granted by the Commission from any rules under the Exchange Act.
The Bulletin will also disclose that the NAV for the Shares will be
calculated after 4 p.m. E.T. each trading day.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Exchange Act,\17\ in general, and furthers the objectives
of Section 6(b)(5) of the Exchange Act,\18\ 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. The Exchange believes that the proposed rule change
will facilitate the listing and trading of additional types of actively
managed exchange-traded products that will enhance competition among
market participants, to the benefit of investors and the marketplace.
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    \17\ 15 U.S.C. 78f(b).
    \18\ 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.

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 45 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 or disapprove 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 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 e-mail to<EMAIL_ADDRESS>Please include
File Number SR-NYSEArca-2010-107 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEARCA-2010-107. 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 Web site viewing and printing in the Commission's Public
Reference Section, 100 F Street, NE., Washington, DC 20549-1090 on
official business days between the hours of 10 a.m. and 3 p.m. Copies
of the filing will also be available for inspection and copying at the
NYSE's principal office and on its Internet Web site at http://www.nyse.com. 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-
NYSEArca-2010-107 and should be submitted on or before January 3, 2011.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-31132 Filed 12-10-10; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 211 (Monday, November 2, 2015)]
[Notices]
[Page 67398]
[FR Doc No: 2015-27885]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-R10-CERCLA-10-2015-0134; FRL-9936-44-Region-10]

Proposed CERCLA Administrative Cost Recovery Settlement; Ashue
Road Site, Wapato, Yakima County, WA

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), 42 U.S.C. 9622(i), notice is hereby given of a proposed
administrative settlement for recovery of response costs incurred for
the Ashue Road Site located at Section 17, Township 11, Range 19 in
Wapato, Yakima County, Washington. Under this proposed settlement, the
settling parties are Groat Bros., Inc., T.W. Clark Construction, LLC,
and the Wapato School District No. 207. The proposed settlement
requires the settling parties to pay $95,000 to the Environmental
Protection Agency Hazardous Substance Superfund. Upon payment of this
sum to Environmental Protection Agency (EPA), the settling parties will
be released from their obligations for payments to EPA for costs EPA
incurred at the Site prior to the effective date of the proposed
settlement.
    For 30 days following the date of publication of this notice, the
EPA will receive written comments relating to the proposed settlement.
The EPA will consider all comments received 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. The EPA's response to any comments received
will be available for public inspection at the U.S. EPA Region 10
Office, located at 1200 Sixth Avenue, Seattle, Washington 98101.

DATES: Comments must be received on or before December 2, 2015.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R10-
CERCLA-10-2015-0134, to the Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting
comments. Once submitted, comments cannot be edited or withdrawn. The
EPA may publish any comment received to its public docket. Do not
submit electronically any information you consider to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Multimedia submissions (audio, video, etc.) must
be accompanied by a written comment. The written comment is considered
the official comment and should include discussion of all points you
wish to make. The EPA will generally not consider comments or comment
contents located outside of the primary submission (i.e. on the web,
cloud, or other file sharing system). For additional submission
methods, the full EPA public comment policy, information about CBI or
multimedia submissions, and general guidance on making effective
comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Ted Yackulic, Assistant Regional
Counsel, Office of Regional Counsel, Mail Stop ORC-113, Environmental
Protection Agency, 1200 Sixth Avenue, Suite 900, Seattle, Washington
98101; telephone number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>;
email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. General Information

    The ASHUE ROAD SITE is located at Section 17, Township 11, Range 19
in Wapato, Yakima County, WA, and is located on fee property within the
reservation for the Yakama Nation. The Site covers approximately 2.46
acres. There is a residential home within the Site. The area
surrounding the Site supports agricultural and residential uses. During
2012 a portion of the Wapato High School in Wapato, Washington was
demolished. The Wapato School District No. 207 engaged T.W. Clark
Construction, LLC as the general contractor for the demolition work.
T.W. Clark Construction, LLC hired Groat Bros., Inc. as sub-contractor
for performing demolition work and transporting demolition materials
from the High School. The demolition work included the demolition of
materials that contained asbestos. A portion of materials generated
during the Wapato High School demolition project were transported to
the Site for disposal. The Site is not licensed by the State of
Washington, Yakima County, or the Yakama Nation to receive demolition
materials or materials that contain hazardous substances for disposal.
EPA conducted a field investigation of the Site on October 5, 2012.
EPA's investigation revealed the presence of asbestos in the demolished
materials disposed of at the Site. Asbestos is a hazardous substance.
EPA oversaw the performance of a removal action at the Site by T.W.
Clark Construction, LLC, and Groat Bros. Inc. The removal action
involved the excavation and off-Site disposal of the high school
demolition wastes. EPA incurred approximately $311,330.96 performing or
overseeing the performance of response costs at the Site. Pursuant to
the terms of the CERCLA Section 122(h)(1) Settlement Agreement for
Recovery of Response Costs, the settling parties will pay EPA $95,000.
In return for the payment of this amount, EPA covenants not to sue the
settling parties for past response costs--response costs incurred by
EPA prior to the effective date of the Settlement Agreement--at the
Site. In the event that EPA continues to incur response costs at the
Site, EPA's covenant not to sue does not include costs incurred by EPA
after the effective date of the Settlement Agreement.

    Dated: October 15, 2015.
Chris D. Field,
Manager, Emergency Management Program, EPA Region 10.
[FR Doc. 2015-27885 Filed 10-30-15; 8:45 am]
BILLING CODE 6560-50-P


                                 ATTACHMENT C

     Screening Questionnaire for "Leaning Green" Consumer Focus Group

                           OMB Control No. 2070-0189
                           Approval expires 02/28/17

 The annual public burden for this collection of information is estimated at 0.17 hours per response for screened respondents. Send comments on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including through the use of automated collection techniques to the Director, Collection Strategies Division, U.S. Environmental Protection Agency (2822T), 1200 Pennsylvania Ave., NW, Washington, D.C. 20460. Include the OMB control number in any correspondence. Do not send the completed application to this address.
      Screening Questionnaire for "Leaning Green" Consumer Focus Group

Interviewer:               _______________

Date:                          _______________

Letter sent:                 _______________

Reconfirmation Call:  _______________

                        CALL FROM DATABASE OR AT RANDOM
                      RECRUIT 9 PER GROUP FOR 8-9 TO SHOW

Hello, I'm __________ with __________________, an independent consumer research firm. We are not selling or promoting any product or service. We are conducting a research study on behalf of the United States Environmental Protection Agency about providing information to help consumers select products that are safer for people, families and pets and can help protect the environment, and would like to include your views. My questions will only take a couple of minutes.

1.	First, do you, or does any member of your household or immediate family, work for or is retired from:
                                                A market research company _____
                        A direct mail company or direct marketing company _____
                           An advertising agency or public relations firm _____
                                                                   The media (TV/radio/newspapers/magazines) _____

                      [IF YES TO ANY >> TERMINATE]

2.	Are you a chemist, chemical engineer, or organic farmer  -  or do you work for EPA, an environmental agency or environmental non-profit, or the organic food industry?

                      [IF YES TO ANY >> TERMINATE]

3.	In a typical month, how frequently do you shop at a grocery store, supermarket, hardware store, home improvement store (such as Home Depot or Lowe's) or general retail store (such as Walmart, Target, Costco, or Sam's Club) for your household?
                                                          4 or more times _____
                                                             2 or 3 times _____
                                    TERMINATE >> Fewer than 2 times _____

4. 	When you select products for your household, such as cleaning products or personal care, how important is it to you to select products that can help protect the health of yourself, your family, or your pet?  Please rate this on a scale from 1 to 5, where 1 is "not at all important" and 5 is "very important."

                             TERMINATE >> 1  -  Not at all important ____
                             TERMINATE >> 2  -  Somewhat unimportant ____
                            TERMINATE >> 3  -  No opinion either way ____
                                                   4  -  Somewhat important____
                                    TERMINATE >> 5  -  Very important____

5. In the last three months, did you choose to buy a product over another because it was better for the environment?
                                                                       Yes ____
                                                                        No ____

6. If "Yes," about how many times did you choose a product that was better for the environment?

                                                               # of times ____

7. How knowledgeable are you about environment issues (climate change, pollution...)? Please rate this on a scale from 1 to 4, where 1 is "not at all knowledgeable" and 4 is "very knowledgeable."
                         TERMINATE >> 1  -  Not at all knowledgeable ____
                                              2  -  Not very knowledgeable ____
                                              3  -  Somewhat knowledgeable ____
                                TERMINATE >> 4  -  Very knowledgeable____

8. How knowledgeable are you about selecting products that can help protect the environment? Please rate this on a scale from 1 to 4, where 1 is "not at all knowledgeable" and 4 is "very knowledgeable."
                         TERMINATE >> 1  -  Not at all knowledgeable ____
                                              2  -  Not very knowledgeable ____
                                              3  -  Somewhat knowledgeable ____
                                TERMINATE >> 4  -  Very knowledgeable____

9. Which of the following categories best describes your total annual household income? [GOOD MIX]
                                         TERMINATE >> Under $15,000 _____
                                                        $15,000 - $24,999 _____
                                                        $25,000 - $34,999 _____
                                                        $35,000 - $54,999 _____
                                                        $55,000 - $74,999 _____
                                                       $75,000 - $100,000 _____
                                         TERMINATE >> Over $100,000 _____

10. 	Please tell us your age. [Record age;

11.	What is your current marital status?  Are you ..... ?
                                          Married or living with a partner_____
                                                                   Single _____
                                                                 Divorced _____
                                                                  Widowed _____

12.	What is the highest level of education you have completed?
                                           Less than high school graduate _____
                                                     High school graduate _____
                                                             Some college _____
                                						                College graduate _____
                                          Post graduate studies or degree _____

13.	So that we can be sure that all backgrounds are represented in our study, please tell me your ethnic or race background. Are you ... ?
                                                Ethnicity

                                                        Hispanic or Latino_____
                                                   Not Hispanic or Latino_____

                                                Race

                                         American-Indian or Alaska Native _____
                                                                    Asian _____
                                                Black or African American _____
                         Native Hawaiian-Indian or Other Pacific Islander _____
                                                                    White _____
                                                                    Other _____

14.	[Record gender]
                                                                     Male _____
                                                                   Female _____

15.	Have you ever attended a focus group discussion or individual interview?  By that we mean an informal, round-table discussion, conducted by a professional moderator in which you were asked your opinions regarding a product, a service, or advertising?
                             MAX. (1/2) GROUP  >> ASK A-C >> Yes _____
                                              INVITE TO GROUP >> No _____
 How many of these groups have you attended?
            ______________________________  [MAX. 3 EVER]
 What was/were the topics discussed?
            ______________________________  [IF CHEMICAL SAFETY, TERMINATE]
 How long ago was the last one of these groups you attended?
            ______________________________  [MUST BE AT LEAST 6 MONTHS AGO]
                               [INVITE TO GROUP]
Thank you for answering all of my questions. As I mentioned earlier, we are conducting a research study regarding information to help consumers select products that are safer for families and pets and can help protect the environment. We are conducting an informal, round-table discussion to be held on ________ at _____. The discussion will last about two hours and will be both fun and informative. No one will attempt to sell you anything and no one will call on you as a result of your participation. As a token of our appreciation for your help in our research effort, you will receive a $100 cash honorarium at the time of the session. This is an important research effort and we hope that you will be part of it. We can only invite about a dozen people to take part. Can we schedule your attendance?
[If yes, read ... ]
If you need glasses for reading or for watching TV, please be sure to bring them with you to the group.

ID Number	_________________________________________________

NAME:	_________________________________________________
ADDRESS:	_________________________________________________
CITY:		_________________________________________________
ZIP CODE:	_________________________________________________
PHONE:	(DAY)		_____________________________________
		(EVE)		_____________________________________
		(CELL)		_____________________________________
(EMAIL)		_____________________________________

Interviewer:		____________________
Supervisor Confirm:	____________________


[Federal Register Volume 83, Number 64 (Tuesday, April 3, 2018)]
[Notices]
[Page 14268]
[FR Doc No: 2018-06703]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. ER18-1197-000]

Camilla Solar Energy, LLC; Supplemental Notice That Initial
Market-Based Rate Filing Includes Request for Blanket Section 204
Authorization

    This is a supplemental notice in the above-referenced proceeding of
Camilla Solar Energy, LLC's application for market-based rate
authority, with an accompanying rate tariff, noting that such
application includes a request for blanket authorization, under 18 CFR
part 34, of future issuances of securities and assumptions of
liability.
    Any person desiring to intervene or to protest should file with the
Federal Energy Regulatory Commission, 888 First Street NE, Washington,
DC 20426, in accordance with Rules 211 and 214 of the Commission's
Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone
filing a motion to intervene or protest must serve a copy of that
document on the Applicant.
    Notice is hereby given that the deadline for filing protests with
regard to the applicant's request for blanket authorization, under 18
CFR part 34, of future issuances of securities and assumptions of
liability, is April 17, 2018.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://www.ferc.gov. To facilitate electronic service, persons with internet
access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the
eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically should submit an original and
5 copies of the intervention or protest to the Federal Energy
Regulatory Commission, 888 First Street NE, Washington, DC 20426.
    The filings in the above-referenced proceeding are accessible in
the Commission's eLibrary system by clicking on the appropriate link in
the above list. They are also available for electronic review in the
Commission's Public Reference Room in Washington, DC. There is an
eSubscription link on the website that enables subscribers to receive
email notification when a document is added to a subscribed docket(s).
For assistance with any FERC Online service, please email
[email protected]. or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.

    Dated: March 28, 2018.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2018-06703 Filed 4-2-18; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register: March 24, 2006 (Volume 71, Number 57)]
[Notices]
[Page 14877]
[DOCID:fr24mr06-52]

-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RP06-271-000]

Iroquois Gas Transmission System, L.P.; Notice of Proposed
Changes in FERC Gas Tariff

March 16, 2006.
    Take notice that on March 10, 2006, Iroquois Gas Transmission
System, L.P. (Iroquois) tendered for filing as part of its FERC Gas
Tariff, First Revised Volume No. 1, Fifth Revised Sheet No. 145, to be
effective on April 9, 2006.
    Iroquois states that copies of its filing were served on all
jurisdictional customers and interested state regulatory agencies and
all parties to the proceeding.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211 and 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed in accordance with the provisions of
Section 154.210 of the Commission's regulations (18 CFR 154.210).
Anyone filing an intervention or protest must serve a copy of that
document on the Applicant. Anyone filing an intervention or protest on
or before the intervention or protest date need not serve motions to
intervene or protests on persons other than the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://www.ferc.gov.
 Persons unable to file electronically should submit an

original and 14 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426.
    This filing is accessible online at http://www.ferc.gov, using the

``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For

TTY, call<PHONE_NUMBER>.

Magalie R. Salas,
Secretary.
[FR Doc. E6-4256 Filed 3-23-06; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 82, Number 190 (Tuesday, October 3, 2017)]
[Notices]
[Pages 46111-46114]
[FR Doc No: 2017-21163]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81739; File No. SR-MIAX-2017-39]

Self-Regulatory Organizations; Miami International Securities
Exchange LLC; Order Granting Approval of a Proposed Rule Change To
Adopt Rules Relating to Trading in Index Options

September 27, 2017.

I. Introduction

    On August 9, 2017, Miami International Securities Exchange, LLC
(``MIAX Options'' or ``Exchange'') filed with the Securities and
Exchange Commission (``Commission''), pursuant to the provisions of
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\
and Rule 19b-4 thereunder,\2\ a proposed rule change to adopt rules
relating to trading in index options. The proposed rule change was
published for comment in the Federal Register on August 16, 2017.\3\
The Commission received no comments regarding the proposal. This order
approves the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 81371 (August 10,
2017), 82 FR 38942 (``Notice'').
---------------------------------------------------------------------------

II. Description of the Proposal

A. Overview

    The Exchange proposes to adopt new Chapter 18 and amend certain
rules in the MIAX Options rulebook. The purpose of the Exchange's
proposal is to establish: (1) Trading rules enabling MIAX Options
Members to trade index options on the Exchange and (2) generic listing
standards and maintenance standards to permit the Exchange to list
``broad-based'' and ``narrow-based'' index options on the Exchange
pursuant to Rule 19b-4(e) under the Act.\4\ The proposed generic
listing and maintenance standards for broad-based indices listed and
traded on the Exchange require, among other things, that options on the
index be a.m.-settled; that the index be capitalization-weighted,
modified capitalization-weighted, price-weighted, or equal dollar-
weighted; and that the index be comprised of at least fifty securities,
all of which must be ``NMS stocks,'' as defined in Rule 600 of
Regulation NMS.\5\ The proposed generic listing and maintenance
standards for narrow-based indices require, among other
characteristics, that the proposed indices must consist of ten or more
component securities.\6\
---------------------------------------------------------------------------

    \4\ 17 CFR 240.19b-4(e). The term ``broad-based index'' is
defined as an index designed to be representative of a stock market
as a whole or of a range of companies in unrelated industries. See
Proposed Rule 1801(k). The term ``narrow-based index'' is defined as
an index designed to be representative of a particular industry or a
group of related industries or an index whose constituents are all
headquartered within a single country. See Proposed Rule 1801(j).
    \5\ See Proposed Rule 1802(d)(4).
    \6\ See Proposed Rule 1802(b)(2).
---------------------------------------------------------------------------

    In accordance with the proposal, the Exchange will need to file
additional proposed rule changes with the Commission when the Exchange
identifies specific products, because the rules related to trading
options in indices are product specific in many areas.\7\ For purposes
of this proposed

rule change, certain rules will indicate that they apply to
``Specified'' indices. Proposed Rules 1800, 1801(n), 1804(a), 1807(a),
1809, and 1811 all contain provisions that are dependent upon the
Exchange identifying specific index products in the rule. Accordingly,
Proposed Rule 1800 states that where the rules in Chapter 18 indicate
that particular indices or requirements with respect to particular
indices will be ``Specified,'' the Exchange will file a proposed rule
change with the Commission pursuant to Section 19 of the Act \8\ and
Rule 19b-4 \9\ thereunder to specify such indices or requirements. As
more fully set forth in the Notice and further described below, the
proposed new Exchange Rules and changes to existing Exchange Rules, are
based on the existing rules of other options exchanges.\10\
---------------------------------------------------------------------------

    \7\ See Notice, supra note 3, at 38942-43.
    \8\ 15 U.S.C. 78s.
    \9\ 17 CFR 240.19b-4.
    \10\ See, e.g., Nasdaq ISE, LLC (``ISE'') Rules, Chapter 20,
Index Rules; NASDAQ PHLX LLC (``Phlx'') Rules 1000A-1108A; and
Chicago Board Options Exchange, Inc. (``CBOE'') Rules, Chapter XXIV,
Index Options. See also Notice, supra note 3, at 38942.
---------------------------------------------------------------------------

B. Index Options Trading Rules

    MIAX Options proposes to add new Chapter 18 to the Exchange rules
and make conforming changes to certain existing Exchange rules.\11\ The
proposed rules, among other things, set forth general rules that will
govern the trading sessions for index options, including the days and
hours of business, the rules governing trading rotations at the
opening, and the rules related to trading halts or suspensions.\12\ The
proposed rules further provide for the procedures Members must follow
with respect to the exercise of American-style, cash settled index
options.\13\
---------------------------------------------------------------------------

    \11\ The Exchange also proposes to amend the following rules to
account for the trading of index options: MIAX Rule 503 (index
options in the opening); MIAX Rule 504 (handling of trade
nullification in index options due to trading halts); MIAX Rule 527
(limitation of liability regarding the calculation or dissemination
of index information); and MIAX Rule 603 (obligations of market
makers).
    \12\ See Proposed Rule 1808.
    \13\ See Proposed Rules 313(a)(3) and 700(h).
---------------------------------------------------------------------------

    The proposed rules also establish position limit and exercise
limits for index options.\14\ In addition, the proposed rules provide
for exemption standards from position limits and procedures for
requesting exemptions from those proposed rules.\15\ The proposed
position limits and exercise limits, as well as the proposed
exemptions, are different for broad-based index options and narrow-
based index options.\16\
---------------------------------------------------------------------------

    \14\ See Proposed Rules 1804, 1805, and 1807.
    \15\ See Proposed Rule 308(b) and 1806.
    \16\ See Proposed Rules 1804 to 1807.
---------------------------------------------------------------------------

C. Generic Listing Standards and Maintenance Standards for Broad-Based
Index Options

    The Exchange also proposes to establish generic listing and
maintenance standards in proposed Rule 1802 to enable the Exchange to
list and trade new broad-based index options pursuant to Rule 19b-4(e)
under the Act.\17\ Proposed Rule 1802(d) sets forth the initial listing
standards for broad-based index options. The listing standards require,
among other things, that the underlying index be broad-based, as
defined in Rule 1801(k); that options on the index be a.m. settled;
that the index be capitalization-weighted, modified capitalization-
weighted, price-weighted, or equal dollar-weighted; and that the index
consist of 50 or more component securities, each of which must be an
``NMS stock'' as defined in Rule 600 of Regulation NMS under the
Exchange Act.\18\ In addition, Proposed Rule 1802(d) requires that the
index's component securities meet certain minimum market capitalization
and average daily trading volume requirements; that no single component
account for more than 10% of the weight of the index and that the five
highest weighted component securities represent no more than 33% of the
weight of the index; that the index value be widely disseminated at
least once every 15 seconds; and that the Exchange have written
surveillance procedures in place with respect to the index options.
Proposed Rule 1802(e) establishes maintenance standards for broad-based
index options listed pursuant to Proposed Rule 1802(d). The Exchange
states that the proposed listing and maintenance standards are modeled
after standards approved by the Commission for other options
exchanges.\19\
---------------------------------------------------------------------------

    \17\ 17 CFR 240.19b-4(e). Rule 19b-4(e) provides that the
listing and trading of a new derivative securities product by a
self-regulatory organization (``SRO'') shall not be deemed a
proposed rule change, pursuant to paragraph (c)(1) of Rule 19b-4, if
the Commission has approved, pursuant to Section 19(b) of the Act,
the SRO's trading rules, procedures, and listing standards for the
product class that includes the new derivative securities product
and the SRO has a surveillance program for the product class. When
relying on Rule 19b-4(e), the SRO must submit Form 19b-4(e) to the
Commission within five business days after the exchange begins
trading the new derivative securities products. See Securities
Exchange Act Release No. 40761 (December 8, 1998), 63 FR 70952
(December 22, 1998) (File No. S7-13-98).
    \18\ See 17 CFR 242.600.
    \19\ See, e.g., NYSE American LLC (``NYSE American'') Rule
901C.02(a) and (b); CBOE Rule 24.2(f) and (g); NYSE Arca, Inc.
(``NYSE Arca'') Rule 5.12-O; Phlx Rule 1009A(d) and (e); and ISE
Rule 2002(d) and (e).
---------------------------------------------------------------------------

D. Generic Listing Standards and Maintenance Standards for Narrow-Based
Index Options

    The Exchange further proposes to establish generic listing and
maintenance standards in Proposed Rule 1802 to enable the Exchange to
list and trade new narrow-based index options pursuant to Rule 19b-4(e)
under the Act.\20\ Proposed Rule 1802(b) sets forth the initial listing
standards for narrow-based index options. The listing standards
require, among other things, that options on the index be a.m. settled;
that the index be capitalization-weighted, price-weighted, equal
dollar-weighted, or modified capitalization-weighted; and that the
index consist of 10 or more component securities, each of which must be
an ``NMS stock'' as defined in Rule 600 of Regulation NMS under the
Exchange Act.\21\ In addition, Proposed Rule 1802(b) requires that the
index's component securities meet certain minimum market capitalization
and average daily trading volume requirements; that no single component
account for more than 30% of the weight of the index and that the five
highest weighted component securities represent no more than 50% (65%
for an index consisting of fewer than 25 component securities) of the
weight of the index; that the index value be widely disseminated at
least once every 15 seconds; and that non-U.S. component securities
(stocks or ADRs) that are not subject to comprehensive surveillance
agreements do not in the aggregate represent more than 20% of the
weight of the index. Proposed Rule 1802(c) establishes maintenance
standards for narrow-based index options listed pursuant to Proposed
Rule 1802(b). The Exchange states that the proposed listing and
maintenance standards are modeled after standards approved by the
Commission for other options exchanges.\22\
---------------------------------------------------------------------------

    \20\ 17 CFR 240.19b-4(e). See also supra note 18.
    \21\ See 17 CFR 242.600.
    \22\ See, e.g., NYSE American Rule 901C.03; CBOE Rule 24.2(b)
and (c); NYSE Arca Rule 5.13-O; Phlx Rule 1009A(b) and (c); and ISE
Rule 2002(b) and (c).
---------------------------------------------------------------------------

E. Surveillance and Capacity

    The Exchange represents that it has an adequate surveillance
program in place for index options. The Exchange is a member of the
Intermarket Surveillance Group (``ISG''), which is comprised of an
international group of exchanges, market centers, and market
regulators.\23\

The Exchange further represents that it has analyzed its capacity and
believes the Exchange and the Options Price Reporting Authority
(``OPRA'') have the necessary systems capacity to handle the additional
traffic associated with the listing and trading of index options.\24\
---------------------------------------------------------------------------

    \23\ See Notice, supra note 3, at 38957. The ISG was formed on
July 14, 1983, to, among other things, coordinate more effectively
surveillance and investigative information sharing arrangements in
the stock and options markets. The purpose of the ISG is to provide
a framework for the sharing of information and the coordination of
regulatory efforts among exchanges trading securities and related
products to address potential intermarket manipulations and trading
abuses. Id. The ISG plays a crucial role in information sharing
among markets that trade securities, options on securities, security
futures products, and futures and options on broad-based security
indexes. Id.
    \24\ See id.
---------------------------------------------------------------------------

F. Implementation

    The Exchange will announce the implementation date of the proposed
rule change by Regulatory Circular to be published no later than 90
days following the approval of the proposed rule change. The
implementation date will be no later than 90 days following the
issuance of the Regulatory Circular.

III. Discussion and Commission Findings

    After careful review, 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
and, in particular, with Section 6(b) of the Act.\25\ In particular,
the Commission believes that the Exchange's proposal to establish
trading rules and procedures applicable to index options and establish
generic listing and maintenance standards for broad-based and narrow-
based index options is consistent with Section 6(b)(5) of the Act,\26\
which requires, among other things, that the rules of a national
securities exchange 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 mechanisms 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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    \25\ 15 U.S.C. 78f(b). 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).
    \26\ 15 U.S.C. 78f(b)(5).
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    The Commission's approval of the Exchange's proposed listing
standards for broad-based and narrow-based index options will allow
those index option products that satisfy the generic listing standards
to begin trading pursuant to Rule 19b-4(e) under the Act, without the
need for notice and comment and Commission approval. The Exchange's
ability to rely on Rule 19b-4(e) under the Act for these products
potentially reduces the time frame for listing and trading these
securities, and thus enhances investors' opportunities.\27\
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    \27\ The Exchange, however, must maintain regulatory oversight
over any products listed under the generic listing standards through
adequate surveillance. The Exchange represents that it has an
adequate surveillance program in place for index options. See
Notice, supra note 3, at 38957.
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A. Index Options Trading Rules

    The Commission believes that trading options on an index of
securities (including a narrow-based index) permits investors to
participate in the price movements of the index's underlying securities
and allows investors holding positions in some or all of such
securities to hedge the risks associated with their portfolios. The
Commission further believes that trading options on an index provides
investors with an important trading and hedging mechanism that is
designed to reflect accurately the overall movement of the component
stocks. In particular, the Commission believes that the proposed
position and exercise limits should serve to minimize potential
manipulation concerns.

B. Generic Listing and Maintenance Standards for Broad-Based and
Narrow-Based Index Options

    In considering the proposed generic listing and maintenance
standards for broad-based and narrow-based index options, the
Commission notes that they are consistent with the listing and
maintenance standards for broad-based and narrow-based index options
that other exchanges \28\ have developed and that the Commission has
previously approved.\29\ The Commission finds that the generic
standards covering minimum capitalization, monthly trading volume, and
relative weightings of component stocks are designed to ensure that the
trading markets for component stocks are adequately capitalized and
sufficiently liquid, and that no one stock or stock group dominates the
index. Thus, the Commission believes that the satisfaction of these
requirements significantly minimizes the potential for manipulation of
the index.
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    \28\ See, e.g., NYSE American Rules 901C.02 and 901C.03; CBOE
Rule 24.2; NYSE Arca Rules 5.12-O and 5.13-O; Phlx Rule 1009A; and
ISE Rule 2002.
    \29\ See, e.g., Securities Exchange Act Release Nos. 48405
(August 25, 2003), 68 FR 52257 (September 2, 2003) (SR-ISE-2003-05)
(order approving trading rules for index options and generic listing
and maintenance standards for narrow-based index options); 52578
(October 7, 2005), 70 FR 60590 (October 18, 2005) (SR-ISE-2005-27)
(order approving generic listing and maintenance standards for
broad-based index options); and 75650 (August 7, 2015), 80 FR 48600
(August 13, 2015) (SR-EDGX-2015-18) (order approving options trading
rules, including generic listing and maintenance standards for
broad-based and narrow-based index options).
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    The Commission also finds the requirements that all securities
comprising the index be an ``NMS stock'' as defined in Rule 600 of
Regulation NMS under the Act,\30\ and that the index value be
disseminated at least once every 15 seconds during trading hours of the
index, will contribute significantly to the transparency of the market
for such index options.
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    \30\ See 17 CFR 242.600.
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    The Commission further notes that the Exchange's rules that are
applicable to broad-based and narrow-based index options, including
provisions addressing sales practices, floor trading procedures,
position and exercise limits, margin requirements, and trading halts
and suspensions, will continue to apply to any broad-based or narrow-
based index options listed pursuant to Rule 19b-4(e) under the Act.

C. Surveillance

    As noted above,\31\ the Commission believes that the Exchange must
maintain regulatory oversight over any products listed under the
generic listing standards through adequate surveillance, and the
Exchange represents that it has an adequate surveillance program in
place for index options. The Commission also believes that a
surveillance sharing agreement between an Exchange proposing to list a
stock index derivative product and the exchange(s) trading the stocks
underlying the derivative product is an important measure for
surveillance of the derivative and underlying securities markets. The
Commission notes that such agreements ensure the availability of
information necessary to detect and deter potential manipulations and
other trading abuses, thereby making the stock index product less
readily susceptible to manipulation. When a new derivative securities
product based upon domestic securities is listed and traded on an
exchange pursuant to Rule 19b-4(e) under the Act, the exchange should
determine that the markets upon which all of the U.S. component
securities trade are members of the ISG, which provides information
relevant to the surveillance of the trading of securities on other
market centers.\32\ In this regard, all of the registered national
securities exchanges, including the Exchange, as

well as the Financial Industry Regulatory Authority (FINRA), are
members of the ISG.
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    \31\ See supra note 27.
    \32\ See Securities Exchange Act Release No. 40761 (December 8,
1998), 63 FR 70952 (December 22, 1998) (File No. S7-13-98).
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    For new derivative securities products based on securities from a
foreign market, the SRO should have a comprehensive Intermarket
Surveillance Agreement with the market for the securities underlying
the new securities product.\33\ Accordingly, the Commission finds that
the requirement that no more than 20% of the weight of the index may be
comprised of non-U.S. component securities (stocks or ADRs) that are
not subject to a comprehensive surveillance sharing agreement between
the particular U.S. exchange and the primary market of the underlying
security will continue to ensure that the Exchange has the ability to
adequately surveil trading in the broad-based and narrow-based index
options and the ADR components of the index.\34\
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    \33\ Id.
    \34\ See Proposed Rule 1802(b)(9) and (d)(10).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\35\ that the proposed rule change (SR-MIAX-2017-39), be and hereby
is approved.
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    \35\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\36\
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    \36\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-21163 Filed 10-2-17; 8:45 am]
 BILLING CODE 8011-01-P