[Federal Register Volume 85, Number 80 (Friday, April 24, 2020)]
[Notices]
[Pages 23119-23120]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-08695]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88693 File No. SR-NYSECHX-2020-13]
Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Rule 1.1 To Include Managed Portfolio Shares in the Definition of ``UTP
Exchange Traded Product''
April 20, 2020.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on April 16, 2020, the NYSE Chicago, Inc. (``NYSE Chicago'' 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 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 amend Rule 1.1 to include Managed
Portfolio Shares in the definition of ``UTP Exchange Traded Product.''
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 amend Rule 1.1(k), which sets forth the
meanings of ``Exchange Traded Product'' and ``UTP Exchange Traded
Product'' as those terms are used in Exchange rules. Specifically, the
Exchange proposes to amend the definition of ``UTP Exchange Traded
Product'' to include Managed Portfolio Shares \4\ as an additional type
of Exchange Traded Product (``ETP'') that may trade on the Exchange
pursuant to unlisted trading privileges (``UTP'').
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\4\ Managed Portfolio Shares are shares of actively managed
exchange-traded funds for which the portfolio is disclosed in
accordance with standard mutual fund disclosure rules. See, e.g.,
Cboe BZX Exchange, Inc. (``BZX'') Rule 14.11(k). On April 2, 2020,
BZX commenced trading its first securities listed under BZX Rule
14.11(k) (American Century Focused Dynamic Growth ETF (FDG) and
American Century Focused Large Cap Value ETF (FLV)).
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To effect this change, the Exchange proposes to add a bullet point
listing ``Managed Portfolio Shares'' in Rule 1.1(k) to include them in
the enumerated list of ETPs that may trade on the Exchange on a UTP
basis. The Exchange also proposes a non-substantive grammatical change
to accommodate the addition of ``Managed Portfolio Shares'' as the
final item in the bulleted list in Rule 1.1(k).
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\5\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\6\ in particular, because it
is designed to remove impediments to and perfect the mechanism of a
free and open market, to promote just and equitable principles of
trade, and, in general, to protect investors and the public interest.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(4) & (5).
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The proposed rule change is designed to remove impediments to and
perfect the mechanism of a free and open market, promote just and
equitable principles of trade, and, in general, to protect investors
and the public interest because it ensures that Rule 1.1(k) correctly
identifies and publicly states the complete list of ETPs that may trade
on a UTP basis on the Exchange, providing additional specificity,
clarity, and transparency in the Exchange's rules. Moreover, the
proposed rule change will facilitate the trading of an additional type
of ETP on the Exchange pursuant to UTP, thereby enhancing competition
among market participants for the benefit of investors and the
marketplace.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed change would
provide the public and investors with up-to-date information about the
types of ETPs that can trade on the Exchange on a UTP basis and would
promote competition by adding an additional type of ETP that may trade
on the Exchange pursuant to UTP.
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
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \7\ and Rule 19b-
4(f)(6) thereunder.\8\
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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[[Page 23120]]
A proposed rule change filed under Rule 19b-4(f)(6) \9\ normally
does not become operative for 30 days after the date of the filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\10\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. The Exchange states that
waiver of the operative delay would allow trading of Managed Portfolio
Shares on the Exchange on a UTP basis without delay. The Exchange
further states that Managed Portfolio Shares listed on BZX commenced
trading on April 2, 2020. Based on the foregoing, the Commission
believes that waiver of the 30-day operative delay is consistent with
the protection of investors and the public interest. Accordingly, the
Commission waives the 30-day operative delay and designates the
proposed rule change operative upon filing.\11\
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\9\ 17 CFR 240.19b-4(f)(6).
\10\ 17 CFR 240.19b-4(f)(6)(iii).
\11\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NYSECHX-2020-13 on the subject line.
Paper Comments
Send paper comments in triplicate to: Secretary,
Securities and Exchange Commission, 100 F Street NE, Washington, DC
20549-1090.
All submissions should refer to File Number SR-NYSECHX-2020-13. 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. 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-NYSECHX-2020-13 and should be submitted
on or before May 15, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-08695 Filed 4-23-20; 8:45 am]
BILLING CODE 8011-01-P