[Federal Register Volume 85, Number 85 (Friday, May 1, 2020)]
[Notices]
[Pages 25497-25499]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09252]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88756; File No. SR-NYSEAMER-2020-32]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Rule 1.1E To Modify the Definition of ``UTP Exchange Traded Product''
and Rule 5.1E To Incorporate the Modified Definition of ``UTP Exchange
Traded Product''
April 27, 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, NYSE American LLC (``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 (1) Rule 1.1E to modify the
definition of ``UTP Exchange Traded Product'' and (2) Rule 5.1E to
incorporate the definition of UTP Exchange Traded Product as set forth
in revised Rule 1.1E. 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 (1) Rule 1.1E to modify the
definition of ``UTP Exchange Traded Product'' and (2) Rule 5.1E to
incorporate the definition of UTP Exchange Traded Product as set forth
in revised Rule 1.1E.
Rule 1.1E
Rule 1.1E(bbb) currently provides that the term ``Exchange Traded
Product'' means a security that meets the definition of ``derivative
securities product'' in Rule 19b-4(e) under the Securities Exchange Act
of 1934 and a ``UTP Exchange Traded Product'' means an Exchange Traded
Product that trades on the Exchange pursuant to unlisted trading
privileges. The Exchange proposes to amend the definition of ``UTP
Exchange Traded Product'' to mean one of the following Exchange Traded
Products that trades on the Exchange pursuant to unlisted trading
privileges: Equity Linked Notes, Investment Company Units, Index-Linked
Exchangeable Notes, Equity Gold Shares, Equity Index-Linked Securities,
Commodity-Linked Securities, Currency-Linked Securities, Fixed-Income
Index-Linked Securities, Futures-Linked Securities, Multifactor-Index-
Linked Securities, Trust Certificates, Currency and Index Warrants,
Portfolio Depository Receipts, Trust Issued Receipts, Commodity-Based
Trust Shares, Currency Trust Shares, Commodity Index Trust Shares,
Commodity Futures Trust Shares, Partnership Units, Paired Trust Shares,
Trust Units, Managed Fund Shares, Managed Trust Securities, and Managed
Portfolio Shares.
This proposed change is based on NYSE National, Inc. (``NYSE
National'') Rule 1.1(m) and NYSE Chicago, Inc. (``NYSE Chicago'') Rule
1.1(k).\4\ This list is designed to align the rules of the Exchange
with the rules of NYSE National and NYSE Chicago and to enumerate the
types of Exchange Traded Products to which the Exchange would extend
unlisted trading privileges (``UTP'').
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\4\ NYSE National and NYSE Chicago have filed proposed rule
changes for immediate effectiveness to amend their respective rules
to add Managed Portfolio Shares to their definitions of UTP Exchange
Traded Products. See SR-NYSENAT-2020-16 (filed April 16, 2020) and
SR-NYSECHX-2020-13 (filed April 16, 2020).
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[[Page 25498]]
Rule 5.1E
Rule 5.1E(a)(1) provides that the Exchange may extend UTP to any
security that is an NMS stock (as defined in Rule 600 of Regulation NMS
under the Act) that is listed on another national securities exchange
or with respect to which unlisted trading privileges may otherwise be
extended in accordance with Section 12(f) of the Act. Rule 5.1E(a)(2)
further specifies that a UTP Exchange Traded Product, which is defined
in that Rule as a ``new derivative securities product'' as defined in
Rule 19b-4(e) under the Exchange Act and traded pursuant to Rule 19b-
4(e) under the Act, would be subject to the additional rules enumerated
in Rule 5.1E(a)(2)(A)-(E).
Because the Exchange proposes to modify the definition of UTP
Exchange Trading Product in Rule 1.1E(bbb) to conform to the rules of
NYSE National and NYSE Chicago, the Exchange proposes to amend Rule
5.1E(a)(2) to eliminate redundant text and cross reference the term
``UTP Exchange Traded Product'' as it is defined in Rule 1.1E. This
proposed change would also conform Rule 5.1E(a)(2) with the comparable
NYSE National rule.
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 Exchange believes its proposed rule change ensures that Rule
1.1E identifies and publicly states the complete list of Exchange
Traded Products to which UTP may be extended for trading on the
Exchange. The Exchange also believes that the proposed rule change
removes impediments to and perfects the mechanism of a free and open
market, promotes just and equitable principles of trade, and protects
investors and the public interest by promoting consistency with the
rules of the Exchange's affiliated markets and by providing additional
specificity, clarity, and transparency in the Exchange's rules with
respect to the Exchange Traded Products that may be traded on a UTP
basis on the Exchange.
The Exchange believes that its proposal to amend Rule 5.1E(a)(2)
also removes impediments to and perfects the mechanism of a free and
open market, promotes just and equitable principles of trade, and
protects investors and the public interest because it proposes to
conform this rule governing the trading of UTP Exchange Traded Products
with the comparable rule of the Exchange's affiliated market, NYSE
National, which has been approved by the Commission.\7\ The proposed
rule change would also remove impediments to and perfect the mechanism
of a free and open market and a national market system and protect
investors and the public interest by promoting continuity across
affiliated exchanges.
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\7\ In its Order approving the NYSE National rule on which this
proposed change is based, the Commission found that the NYSE
National rules set forth an ``appropriate framework for the trading
of Exchange Traded Products on a UTP basis on the Exchange'' and are
consistent with Section 6(b)(5) of the Act. See Securities and
Exchange Act Release No. 83289 (May 17, 2018), 83 FR 23968 (May 23,
2018), at 23975.
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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 would
conform Exchange rules, as described herein, with the comparable rules
of its affiliated exchanges, NYSE National and NYSE Chicago, and permit
UTP trading of Exchange Traded Products on the Exchange in a manner
consistent with its affiliated exchanges.
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 \8\ and Rule 19b-
4(f)(6) thereunder.\9\
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 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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A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally
does not become operative for 30 days after the date of the filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\11\ 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 Commission notes that
the Exchange's proposal would conform the Exchange's rules, as
described herein, to the corresponding rules of its affiliated
exchanges.\12\ Accordingly, the Commission believes that the proposal
raises no new or novel regulatory issues and waiver of the 30-day
operative delay is consistent with the protection of investors and the
public interest. The Commission therefore waives the 30-day operative
delay and designates the proposed rule change to be operative upon
filing.\13\
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\10\ 17 CFR 240.19b-4(f)(6).
\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ See NYSE National Rules 1.1 and 5.1 and NYSE Chicago Rule
1.1.
\13\ 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-NYSEAMER-2020-32 on the subject line.
[[Page 25499]]
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-NYSEAMER-2020-32. 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-NYSEAMER-2020-32 and should be submitted
on or before May 22, 2020.
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\14\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-09252 Filed 4-30-20; 8:45 am]
BILLING CODE 8011-01-P