8420 Federal Register / Vol. 86, No. 23 / Friday, February 5, 2021 / Notices 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 90677 

(December 15, 2020), 85 FR 83119. Comments 

received on the proposed rule change are available 

at: https://www.sec.gov/comments/sr-nyse-2020-96/ 

srnyse202096.htm. 

4 15 U.S.C. 78s(b)(2). 

5 Id. 

6 17 CFR 200.30–3(a)(31). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 90775 

(December 22, 2020), 85 FR 86584 (‘‘Notice’’). 

4According to the Exchange, NYSE currently 

trades securities, including ETPs, on its Pillar 

trading platform on an unlisted trading privileges 

(‘‘UTP’’) basis, subject to NYSE Pillar Platform 

Rules 1P—13P. ‘‘UTP Security’’ is defined as a 

security that is listed on a national securities 

exchange other than the Exchange and that trades 

on the Exchange pursuant to unlisted trading 

privileges. See NYSE Rule 1.1. ETPs traded on a 

UTP basis on the Exchange are not assigned to a 

Designated Market Maker (‘‘DMM’’) but are 

available for Floor brokers to trade in Floor-based 

crossing transactions. See Securities Exchange Act 

Release No. 82945 (March 26, 2018), 83 FR 13553, 

13568 (March 29, 2018) (SR–NYSE–2017–36) 

(approving Exchange rules to trade securities on a 

UTP basis on the Pillar trading platform). The 

Exchange states that its rules permit it to list ETPs 

under NYSE Rules 5P and 8P. Specifically, NYSE 

Rules 5P (Securities Traded) and 8P (Trading of 

Certain Exchange-Traded Products) provide for the 

listing of certain ETPs on the Exchange that (1) meet 

the applicable requirements set forth in those rules, 

and (2) do not have any component NMS Stock that 

is listed on the Exchange or is based on, or 

represents an interest in, an underlying index or 

reference asset that includes an NMS Stock listed 

on the Exchange. According to the Exchange, ETPs 

listed under NYSE Rules 5P and 8P would be ‘‘Tape 

notification about sub-advisory changes 

and enhanced Board oversight to protect 

the interests of the Sub-Advised Fund’s 

shareholders. 

4. Section 6(c) of the Act provides that 

the Commission may exempt any 

person, security, or transaction or any 

class or classes of persons, securities, or 

transactions from any provisions of the 

Act, or any rule thereunder, if such 

relief is necessary or appropriate in the 

public interest and consistent with the 

protection of investors and purposes 

fairly intended by the policy and 

provisions of the Act. Applicants 

believe that the requested relief meets 

this standard because, as further 

explained in the application, the 

Investment Management Agreements 

will remain subject to shareholder 

approval while the role of the SubAdvisers is substantially equivalent to 

that of individual portfolio managers, so 

that requiring shareholder approval of 

Sub-Advisory Agreements would 

impose unnecessary delays and 

expenses on the Sub-Advised Funds. 

Applicants believe that the requested 

relief from the Disclosure Requirements 

meets this standard because it will 

improve the Adviser’s ability to 

negotiate fees paid to the Sub-Advisers 

that are more advantageous for the SubAdvised Funds. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–02372 Filed 2–4–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91025; File No. SR–NYSE– 

2020–96] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Designation of a Longer Period for 

Commission Action on a Proposed 

Rule Change To Amend Its Rules 

Establishing Maximum Fee Rates To 

Be Charged by Member Organizations 

for Forwarding Proxy and Other 

Materials to Beneficial Owners 

February 1, 2021. 

On December 2, 2020, New York 

Stock Exchange LLC (‘‘NYSE’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

to Section 19(b)(1) of the Securities 

Exchange Act of 1934 (‘‘Act’’) 1 and rule 

19b–4 thereunder,2 a proposed rule 

change to delete the maximum fee rates 

for processing and forwarding proxy 

and other materials to beneficial owners 

of stock set forth in NYSE Rules 451 and 

465 and Section 402.10 of the NYSE 

Listed Company Manual, and establish 

in their place a requirement for member 

organizations to comply with any 

schedule of approved charges set forth 

in the rules of any other national 

securities organization or association of 

which such member organization is a 

member. The proposed rule change was 

published for comment in the Federal 

Register on December 21, 2020.3

Section 19(b)(2) of the Act 4 provides 

that, within 45 days of the publication 

of notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding, or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day after 

publication of the notice for this 

proposed rule change is February 4, 

2021. The Commission is extending this 

45-day time period. 

The Commission finds that it is 

appropriate to designate a longer period 

within which to take action on the 

proposal so that it has sufficient time to 

consider the proposed rule change and 

the comments received. Accordingly, 

the Commission, pursuant to Section 

19(b)(2) of the Act,5 designates March 

21, 2021, as the date by which the 

Commission shall either approve or 

disapprove, or institute proceedings to 

determine whether to disapprove, the 

proposed rule change (File No. SR– 

NYSE–2020–96). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–02400 Filed 2–4–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91029; File No. SR–NYSE– 

2020–86] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Order 

Approving a Proposed Rule Change To 

Adopt NYSE Rule 5.2(j)(8) Governing 

the Listing and Trading of ExchangeTraded Fund Shares 

February 1, 2021. 

I. Introduction 

On December 18, 2020, New York 

Stock Exchange LLC (‘‘NYSE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and 

Rule 19b–4 thereunder,2 a proposed rule 

change to, among other things, adopt 

new NYSE Rule 5.2(j)(8) to permit the 

generic listing and trading of ExchangeTraded Fund Shares. The proposed rule 

change was published for comment in 

the Federal Register on December 30, 

2020.3 The Commission has received no 

comments on the proposed rule change. 

The Commission is approving the 

proposed rule change. 

II. Exchange’s Description of the 

Proposed Rule Change 

Under the proposal, the Exchange 

states that the Commission recently 

adopted Rule 6c–11 under the 

Investment Company Act of 1940 

(‘‘1940 Act’’) 4 to permit Exchange 


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Federal Register / Vol. 86, No. 23 / Friday, February 5, 2021 / Notices 8421 

A’’ listings and traded pursuant to the rules 

applicable to NYSE-listed securities. Accordingly, 

once an ETP is listed, it would be assigned to a 

DMM pursuant to NYSE Rule 103B and the 

assigned DMM would have obligations vis-a`-vis 

such securities as specified in NYSE Rule 104, 

including facilitating the opening, reopening, and 

closing of such securities. See Securities Exchange 

Act Release No. 87056 (September 23, 2019), 84 FR 

51205 (September 27, 2019) (SR–NYSE–2019–34) 

(order approving amendments to NYSE Rule 104 to 

specify DMM requirements for ETPs listed on the 

Exchange pursuant to NYSE Rules 5P and 8P). 

5NYSE Rule 1.1(k) defines ‘‘Exchange Traded 

Product’’ as a security that meets the definition of 

‘‘derivative securities product’’ in Rule 19b–4(e) 

under the Act. According to the Exchange, ETPs 

include, for example, securities listed and traded on 

NYSE pursuant to the following rules: NYSE Rule 

5.2(j)(3) (Investment Company Units); NYSE Rule 

5.2(j)(5) (Equity Gold Shares); NYSE Rule 5.2 

(j)(6)(Index-Linked Securities); NYSE Rule 8.100 

(Portfolio Depositary Receipts); NYSE Rule 8.200 

(Trust Issued Receipts); NYSE Rule 8.201 

(Commodity-Based Trust Shares); NYSE Rule 8.202 

(Currency Trust Shares); NYSE Rule 8.203 

(Commodity Index Trust Shares); NYSE Rule 8.204 

(Commodity Futures Trust Shares); NYSE Rule 

8.600 (Managed Fund Shares); and NYSE Rule 

8.700 (Managed Trust Securities). 

6See infra note 10. 

7See infra note 11. 

8See Release Nos. 33–10695; IC–33646; File No. 

S7–15–18 (ETFs) (September 25, 2019), 84 FR 

57162 (October 24, 2019). 

9See Securities Exchange Act Release No. 88625 

(April 13, 2020), 85 FR 21479 (April 17, 2020) (SR– 

NYSEArca–2019–81) (Notice of filing of 

Amendment No. 2 and Order granting accelerated 

approval of proposed rule change, as modified by 

Amendment No. 2, to adopt NYSE Arca Rule 5.2– 

E(j)(8) establishing generic listing standards for 

Exchange-Traded Fund Shares). 

10Rule 6c–11(a)(1) defines ‘‘exchange-traded 

fund’’ as a registered open-end management 

company: (i) That issues (and redeems) creation 

units to (and from) authorized participants in 

exchange for a basket and a cash balancing amount 

if any; and (ii) Whose shares are listed on a national 

securities exchange and traded at marketdetermined prices. The terms ‘‘authorized 

participant,’’ ‘‘basket’’ and ‘‘creation unit’’ are 

defined in Rule 6c–11(a). 

11The definition of Exchange-Traded Fund 

Shares is the same as the definition of ‘‘exchangetraded fund shares’’ in Rule 6c–11(a) under the 

1940 Act. 

Traded Products (‘‘ETPs’’) 5 that are 

exchange-traded funds (‘‘ETF’’) 6 shares 

(‘‘Exchange-Traded Fund Shares’’) 7 and 

that satisfy certain conditions to operate 

without obtaining an exemptive order 

from the Commission under the 1940 

Act.8 According to the Exchange, the 

regulatory framework provided in Rule 

6c–11 streamlines procedures and 

reduces the costs and timeframes 

associated with bringing ETFs to 

market, thereby enhancing competition 

among ETF issuers and reducing costs 

for investors. The Exchange proposes to 

adopt new NYSE Rule 5.2(j)(8) to 

establish generic listing standards 

allowing the Exchange to list and trade 

Exchange-Traded Fund Shares in a 

manner consistent with Rule 6c–11 

under the 1940 Act. The Exchange 

represents that proposed NYSE Rule 

5.2(j)(8) is based on NYSE Arca, Inc. 

(‘‘NYSE Arca’’) Rule 5.2–E(j)(8).9 In 

addition, the Exchange proposes to 

adopt new NYSE Rule 7.18(d)(2) based 

on NYSE Arca Rule 7.18–E(d)(2) that 

would govern trading halts for listed 

ETPs (which would include ExchangeTraded Fund Shares). 

Proposed NYSE Rule 5.2(j)(8) 

The Exchange proposes standards that 

would pertain to Exchange-Traded Fund 

Shares to qualify for listing and trading 

pursuant to Rule 19b–4(e) under the 

Act, as follows: 

Proposed NYSE Rule 5.2(j)(8)(a) 

would provide that the Exchange would 

consider for trading, whether by listing 

or on a UTP basis, Exchange-Traded 

Fund Shares that meet the criteria of 

proposed NYSE Rule 5.2(j)(8). Proposed 

NYSE Rule 5.2(j)(8)(a) is based on NYSE 

Arca Rule 5.2–E(j)(8)(a) without any 

differences. 

Proposed NYSE Rule 5.2(j)(8)(b) 

would specify applicability of proposed 

NYSE Rule 5.2(j)(8) and would provide 

that it is applicable only to ExchangeTraded Fund Shares. Proposed NYSE 

Rule 5.2(j)(8)(b) would further provide 

that, except to the extent inconsistent 

with proposed NYSE Rule 5.2(j)(8) or 

unless the context otherwise requires, 

Exchange rules would be applicable to 

the trading on the Exchange of such 

securities and that Exchange-Traded 

Fund Shares would be included within 

the definition of NMS Stock as defined 

in NYSE Rule 1.1. Proposed NYSE Rule 

5.2(j)(8)(b) is based on NYSE Arca Rule 

5.2–E(j)(8)(b) without any differences. 

Proposed NYSE Rule 5.2(j)(8)(c) 

would set forth the proposed rule’s 

applicable definitions, which are based 

on NYSE Arca Rule 5.2–E(j)(8)(c) 

without any differences, as follows: 

• Proposed NYSE Rule 5.2(j)(8)(c)(1) 

would define the term ‘‘1940 Act’’ to 

mean the Investment Company Act of 

1940, as amended. 

• Proposed NYSE Rule 5.2(j)(8)(c)(2) 

would define the term ‘‘ExchangeTraded Fund’’ as having the same 

meaning as the term ‘‘exchange-traded 

fund’’ as defined in Rule 6c–11(a)(1) 

under the 1940 Act.10

• Proposed NYSE Rule 5.2(j)(8)(c)(3) 

would define the term ‘‘ExchangeTraded Fund Share’’ to mean a share of 

stock issued by an Exchange-Traded 

Fund.11

• Proposed NYSE Rule 5.2(j)(8)(c)(4) 

would define the term ‘‘Reporting 

Authority’’ to mean with respect to a 

particular series of Exchange-Traded 

Fund Shares, the Exchange, an 

institution, or a reporting service 

designated by the Exchange or by the 

exchange that lists a particular series of 

Exchange-Traded Fund Shares (if the 

Exchange is trading such series 

pursuant to unlisted trading privileges) 

as the official source for calculating and 

reporting information relating to such 

series, including, but not limited to, any 

current index or portfolio value, the 

current value of the portfolio of any 

securities required to be deposited in 

connection with issuance of ExchangeTraded Fund Shares, the amount of any 

dividend equivalent payment or cash 

distribution to holders of ExchangeTraded Fund Shares, net asset value, or 

other information relating to the 

issuance, redemption or trading of 

Exchange-Traded Fund Shares. A series 

of Exchange-Traded Fund Shares may 

have more than one Reporting 

Authority, each having different 

functions. 

Proposed NYSE Rule 5.2(j)(8)(d) 

would specify the limitations on 

Exchange liability and relates to 

limitations of the Exchange, the 

Reporting Authority, or any agent of the 

Exchange as a result of specified events 

and conditions. Specifying such 

limitations of liability is standard in the 

Exchange’s rules governing the listing of 

Exchange-Traded Products and the 

proposed rule text is substantively 

identical to NYSE Rules 5.2(j)(3)(D), 

8.100(f), 8.201(f), 8.200(f), 8.202(f), 

8.203(f), 8.204(g), 8.300(f), 8.400(f), 

8.500(e), 8.600(e), and 8.700(g). 

Proposed NYSE Rule 5.2(j)(8)(d) is 

based on NYSE Arca Rule 5.2–E(j)(8)(d) 

without any differences. 

Proposed NYSE Rule 5.2(j)(8)(e) 

would provide that the Exchange may 

approve Exchange-Traded Fund Shares 

for listing and/or trading (including on 

a UTP basis) pursuant to Rule 19b–4(e) 

under the Exchange Act provided that 

each series of Exchange-Traded Fund 

Shares must be eligible to operate in 

reliance on Rule 6c–11 under the 1940 

Act and must satisfy the requirements of 

proposed NYSE Rule 5.2(j)(8)(as 

described below) upon initial listing 

and, except for subparagraph (1)(A) of 

proposed Rule NYSE 5.2(j)(8)(e), on a 

continuing basis. As further proposed, 

an issuer of such securities must notify 

the Exchange of any failure to comply 

with such requirements. Proposed 

NYSE Rule 5.2(j)(8)(e) is based on NYSE 

Arca Rule 5.2–E(j)(8)(e) without any 

differences. 

Proposed NYSE Rule 5.2(j)(8)(e)(1) 

sets forth the initial and continued 

listing standards for Exchange-Traded 

Fund Shares to be listed on the NYSE 

and would provide that ExchangeTraded Fund Shares will be listed and 

traded on the Exchange subject to the 

requirement that the investment 


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8422 Federal Register / Vol. 86, No. 23 / Friday, February 5, 2021 / Notices 

12NYSE represents that there are currently no 

securities listed on the Exchange that would be 

eligible for approval under proposed Commentary 

.01 to NYSE Rule 5.2(j)(8). 

13See proposed Commentary .02(a) to NYSE Rule 

5.2(j)(8)). Proposed Commentary .02(a) is based on 

Commentary .01(b)(1) to NYSE Rule 5.2(j)(3) and 

Commentary .02(b)(1) and (b)(3) to NYSE Rule 

5.2(j)(3). 

14See proposed Commentary .02(b) to NYSE Rule 

5.2(j)(8)). Proposed Commentary .02(b) is based in 

part on Commentary .06 to NYSE Rule 8.600. 

company issuing a series of ExchangeTraded Fund Shares is eligible to 

operate in reliance on the requirements 

of Rule 6c–11(c) on an initial and 

continued listing basis. Proposed NYSE 

Rule 5.2(j)(8)(e)(1) is based on NYSE 

Arca Rule 5.2–E(j)(8)(e)(1) without any 

differences. 

Proposed NYSE Rule 5.2(j)(8)(e)(1)(A) 

provides that, for each series of 

Exchange-Traded Fund Shares, the 

Exchange will establish a minimum 

number of Exchange-Traded Fund 

Shares required to be outstanding at the 

time of commencement of trading on the 

Exchange. Proposed NYSE Rule 

5.2(j)(8)(e)(1)(A) is based on NYSE Arca 

Rule 5.2–E(j)(8)(e)(1)(A) without any 

differences. 

Proposed NYSE Rule 5.2(j)(8)(e)(2) 

would set forth the standards for 

suspension of trading or removal of 

Exchange-Traded Fund Shares from 

listing on the Exchange and would 

provide that the Exchange will consider 

the suspension of trading in, and will 

commence delisting proceedings under 

NYSE Rule 5.5(m) of, a series of 

Exchange-Traded Fund Shares under 

any of the following circumstances: 

(A) If the Exchange becomes aware that the 

investment company is no longer eligible to 

operate in reliance on Rule 6c–11; 

(B) if the investment company no longer 

complies with the requirements set forth in 

NYSE Rule 5.2(j)(8); 

(C) if, following the initial twelve-month 

period after commencement of trading on the 

Exchange of a series of Exchange-Traded 

Fund Shares, there are fewer than 50 

beneficial holders of such series of ExchangeTraded Fund Shares; or 

(D) if such other event shall occur or 

condition exists which, in the opinion of the 

Exchange, makes further dealings on the 

Exchange inadvisable (see proposed NYSE 

Rule 5.2(j)(8)(e)(2)(D)). 

Proposed NYSE Rule 5.2(j)(8)(e)(2) is 

based on NYSE Arca Rule 5.2– 

E(j)(8)(e)(2) without any differences. 

Proposed NYSE Rule 5.2(j)(8)(f) 

would provide that transactions in 

Exchange-Traded Fund Shares would 

occur during the trading hours specified 

in Rule 7.34(a) for Exchange-listed 

securities. Proposed NYSE Rule 

5.2(j)(8)(f) is based on NYSE Arca Rule 

5.2–E(j)(8)(f) with a difference to cross 

reference the Exchange’s rule governing 

the hours of trading. In addition, unlike 

NYSE Arca, Exchange-listed securities 

trade on the Exchange only during Core 

Trading Hours. 

Proposed NYSE Rule 5.2(j)(8)(g) 

would provide that the Exchange would 

implement and maintain written 

surveillance procedures for ExchangeTraded Fund Shares. This proposed rule 

is based, for example, on Commentary 

.01(f) to NYSE Rule 5.2(j)(3) (for 

Investment Company Units); 

Commentary .03 to NYSE Rule 8.600 

(for Managed Fund Shares); and 

Commentary .04 to NYSE Rule 8.700 

(for Managed Trust Securities). 

Proposed NYSE Rule 5.2(j)(8)(g) is based 

on NYSE Arca Rule 5.2–E(j)(8)(g) 

without any differences. 

Proposed NYSE Rule 5.2(j)(8)(h) 

would provide that, upon termination of 

an investment company issuing 

Exchange-Traded Fund Shares, the 

Exchange would require that ExchangeTraded Fund Shares issued in 

connection with such entity be removed 

from Exchange listing. Proposed NYSE 

Rule 5.2(j)(8)(h) is based on NYSE Arca 

Rule 5.2–E(j)(8)(h) without any 

differences. 

Proposed Commentary .01 to NYSE 

Rule 5.2(j)(8) would provide that a 

security that has previously been 

approved for listing on the Exchange 

pursuant to the generic listing 

requirements specified in NYSE Rule 

5.2(j)(3) or Commentary .01 to NYSE 

Rule 8.600, or pursuant to a proposed 

rule change approved or subject to a 

notice of effectiveness by the 

Commission, may be considered 

approved for listing solely under NYSE 

Rule 5.2(j)(8) if such security is eligible 

to operate in reliance on Rule 6c–11 

under the 1940 Act. Once so approved 

for listing, the continued listing 

requirements applicable to such 

previously-listed security will be those 

specified in paragraph (e) of NYSE Rule 

5.2(j)(8). Any requirements for listing as 

specified in NYSE Rule 5.2(j)(3) or 

Commentary .01 to NYSE Rule 8.600, or 

an approval order or notice of 

effectiveness of a separate proposed rule 

change that differ from the requirements 

of NYSE Rule 5.2(j)(8) will no longer be 

applicable to such security. 

Commentary .01 to proposed NYSE Rule 

5.2(j)(8) is based on Commentary .01 to 

NYSE Arca Rule 5.2–E(j)(8) without any 

differences.12

Proposed Commentary .02 to NYSE 

Rule 5.2(j)(8) is based on Commentary 

.02 to NYSE Arca Rule 5.2–E(j)(8)(a) 

without any differences, and would 

establish the following requirements 

that each series of Exchange-Traded 

Fund Shares based on an index would 

be required to meet on an initial and 

continued listing basis: 

(1) If the underlying index is 

maintained by a broker-dealer or fund 

adviser, the broker-dealer or fund 

adviser will erect and maintain a ‘‘fire 

wall’’ around the personnel who have 

access to information concerning 

changes and adjustments to the index 

and the index will be calculated by a 

third party who is not a broker-dealer or 

fund adviser, and 

(2) Any advisory committee, 

supervisory board, or similar entity that 

advises a Reporting Authority or that 

makes decisions on the index 

composition, methodology and related 

matters, must implement and maintain, 

or be subject to, procedures designed to 

prevent the use and dissemination of 

material non-public information 

regarding the applicable index.13

In addition, with respect to series of 

Exchange-Traded Fund Shares that are 

actively managed, if the investment 

adviser to the investment company 

issuing Exchange-Traded Fund Shares is 

affiliated with a broker-dealer, such 

investment adviser will erect and 

maintain a ‘‘fire wall’’ between the 

investment adviser and the brokerdealer with respect to access to 

information concerning the composition 

and/or changes to such portfolio. 

Personnel who make decisions on the 

portfolio composition must be subject to 

procedures designed to prevent the use 

and dissemination of material 

nonpublic information regarding the 

applicable portfolio. The Reporting 

Authority that provides information 

relating to the portfolio of a series of 

Exchange-Traded Fund Shares must 

implement and maintain, or be subject 

to, procedures designed to prevent the 

use and dissemination of material nonpublic information regarding the actual 

components of such portfolio.14

The Exchange represents that 

Exchange-Traded Fund Shares will be 

subject to all Exchange rules applicable 

to equities trading. With respect to 

Exchange-Traded Fund Shares, all 

obligations relating to product 

description and prospectus delivery 

requirements will continue to apply in 

accordance with Exchange rules and 

federal securities laws, and the 

Exchange and the Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’) 

will continue to monitor Exchange 

members for compliance with such 

requirements, which are not changing as 

a result of Rule 6c–11 under the 1940 

Act. 

With respect to trading halts, the 

Exchange represents that it may 

consider all relevant factors in 


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15See NYSE Rule 7.12. 

16 In addition, the Exchange states that it may halt 

trading in ETPs if there is an interruption or 

disruption in the dissemination of an underlying 

index value, if applicable, if there are major 

interruptions in securities trading in U.S. or global 

markets, or in the presence of other unusual 

conditions or circumstances detrimental to the 

maintenance of a fair and orderly market. 

17The Exchange represents that the surveillance 

procedures applicable to Exchange-Traded Fund 

Shares on the NYSE would be substantially similar 

to those in place for Investment Company Units, 

Exchange-Traded Fund Shares, and Managed Fund 

Shares, among other product types, on NYSE Arca. 

18As proposed, NYSE Rule 5.2(j)(8) does not 

impose index dissemination requirements, the 

Exchange does not plan to conduct a specific index 

dissemination surveillance for securities listed 

pursuant to such rule. 

19 In approving this proposed rule change, the 

Commission notes that it has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

20 15 U.S.C. 78f(b)(5). 

exercising its discretion to halt or 

suspend trading in a series of ExchangeTraded Fund Shares.15 Trading in 

Exchange-Traded Fund Shares will be 

halted if the circuit breaker parameters 

in NYSE 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 Exchange-Traded Fund Shares 

inadvisable. These may include: (1) The 

extent to which certain information 

about the Exchange-Traded Fund Shares 

that is required to be disclosed under 

Rule 6c11(c) of the 1940 Act is not being 

made available, or (2) whether other 

unusual conditions or circumstances 

detrimental to the maintenance of a fair 

and orderly market are present. 

Proposed NYSE Rule 7.18(d)(2) 

The Exchange proposes to adopt new 

NYSE Rule 7.18(d)(2) modeled on NYSE 

Arca Rule 7.18–E(d)(2) that would 

govern trading halts for listed ETPs 

(which would include Exchange-Traded 

Fund Shares). Proposed NYSE Rule 

7.18(d)(2) would provide that, with 

respect to an ETP listed on the Exchange 

for which a Net Asset Value (‘‘NAV’’) 

(and in the case of Managed Fund 

Shares under NYSE Rule 8.600 and 

Managed Trust Securities under NYSE 

Rule 8.700, a Disclosed Portfolio) is 

disseminated, if the Exchange becomes 

aware that the NAV (or in the case of 

Managed Fund Shares or Managed Trust 

Securities, the Disclosed Portfolio) is 

not being disseminated to all market 

participants at the same time, it will halt 

trading in the affected Exchange Traded 

Product on the NYSE until such time as 

the NAV (or in the case of Managed 

Fund Shares or Managed Trust 

Securities, the Disclosed Portfolio, as 

applicable) is available to all market 

participants.16

Surveillance 

The Exchange represents that its 

surveillance procedures are adequate to 

properly monitor the trading of the 

Exchange-Traded Fund Shares in all 

trading sessions and to deter and detect 

violations of Exchange rules. 

Specifically, the Exchange will 

implement and maintain written 

surveillance procedures to monitor 

trading in Exchange-Traded Fund 

Shares on the NYSE.17 The Exchange or 

FINRA, on behalf of the Exchange, will 

communicate as needed regarding 

trading in Exchange-Traded Fund 

Shares and certain of their applicable 

underlying components with other 

markets that are members of the 

Intermarket Surveillance Group (‘‘ISG’’) 

or with which the Exchange has in place 

a comprehensive surveillance sharing 

agreement. In addition, the Exchange 

may obtain information regarding 

trading in Exchange-Traded Fund 

Shares and certain of their applicable 

underlying components from markets 

and other entities that are members of 

ISG or with which the Exchange has in 

place a comprehensive surveillance 

sharing agreement. Additionally, 

FINRA, on behalf of the Exchange, is 

able to access, as needed, trade 

information for certain fixed income 

securities that may be held by a series 

of Exchange-Traded Fund Shares 

reported to FINRA’s TRACE. FINRA 

also can access data obtained from the 

Municipal Securities Rulemaking 

Board’s Electronic Municipal Market 

Access (‘‘EMMA’’) system relating to 

municipal bond trading activity for 

surveillance purposes in connection 

with trading in a series of ExchangeTraded Fund Shares, to the extent that 

a series of Exchange-Traded Fund 

Shares holds municipal securities. As 

noted below, the issuer of a series of 

Exchange-Traded Fund Shares will be 

required to comply with Rule 10A–3 

under the Act for the initial and 

continued listing of Exchange-Traded 

Fund Shares, as provided under NYSE 

Rule 5.2. 

Pursuant to its obligations under 

Section 19(g)(1) of the Act, the Exchange 

will monitor for compliance with the 

continued listing requirements. As 

provided for under proposed NYSE Rule 

5.2(j)(8)(e)(2), if the investment 

company or series of Exchange-Traded 

Fund Shares is not in compliance with 

the applicable listing requirements, the 

Exchange will commence delisting 

procedures under Rule 5.5(m). 

The Exchange will implement and 

maintain written surveillance 

procedures to monitor issuer 

compliance with the requirements of 

proposed NYSE Rule 5.2(j)(8) for 

Exchange-Traded Funds on the NYSE. 

For example, the Exchange will use 

intraday alerts that will notify Exchange 

personnel of trading activity throughout 

the day that may indicate that certain 

disclosures are not being made 

accurately or that other unusual 

conditions or circumstances are present 

that could be detrimental to the 

maintenance of a fair and orderly 

market. The Exchange will require 

periodic certification from the issuer of 

a series of Exchange-Traded Fund 

Shares that it is in compliance with 

Rule 6c–11 and the requirements of 

NYSE Rule 5.2(j)(8). 

Proposed NYSE Rule 5.2(j)(8)(e)(2)(i) 

provides that the Exchange will 

consider the suspension of trading in, 

and will commence delisting 

proceedings under NYSE Rule 5.5(m) of, 

a series of Exchange-Traded Fund 

Shares if the Exchange becomes aware 

that the investment company is no 

longer eligible to operate in reliance on 

Rule 6c–11. The Exchange’s awareness 

for purposes of determining whether to 

suspend trading or delist a series of 

Exchange-Traded Fund Shares may 

result from notification by the 

investment company or by the Exchange 

learning, through its own efforts, of noncompliance with NYSE Rule 5.2(j)(8).18

In addition, the Exchange will 

periodically review issuer websites to 

monitor whether disclosures are being 

made for a series of Exchange-Traded 

Fund Shares as required by Rule 6c– 

11(c)(1). The Exchange also notes that 

proposed NYSE Rule 5.2(j)(8)(e) would 

require an issuer of Exchange-Traded 

Fund Shares to notify the Exchange that 

it is no longer eligible to operate in 

reliance on Rule 6c–11 or that it does 

not comply with the requirements of 

proposed NYSE Rule 5.2(j)(8). The 

Exchange will rely on the foregoing 

procedures to become aware of any noncompliance with the requirements of 

NYSE Rule 5.2(j)(8). Proposed NYSE 

Rule 5.2(j)(8)(e)(2)(i) is based on NYSE 

Arca Rule 5.2–E(j)(8)(e)(2)(i) without 

any differences. 

III. Discussion and Commission 

Findings 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the Act and rules and 

regulations thereunder applicable to a 

national securities exchange.19 In 

particular, the Commission finds that 

the proposed rule change is consistent 

with Section 6(b)(5) of the Act,20 which 


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8424 Federal Register / Vol. 86, No. 23 / Friday, February 5, 2021 / Notices 

21Rule 19b–4(e)(1) under the Act states that ‘‘[t]he 

listing and trading of a new derivative securities 

product by a self-regulatory organization shall not 

be deemed a proposed rule change, pursuant to 

paragraph (c)(1) of this section, if the Commission 

has approved, pursuant to section 19(b) of the Act 

(15 U.S.C. 78s(b)), the self-regulatory organization’s 

trading rules, procedures and listing standards for 

the product class that would include the new 

derivative securities product and the self-regulatory 

organization has a surveillance program for the 

product class.’’ 17 CFR 240.19b–4(e)(1). ‘‘New 

derivative securities product’’ is defined as ‘‘any 

type of option, warrant, hybrid securities product 

or any other security, other than a single equity 

option or a security futures product, whose value 

is based, in whole or in part, upon the performance 

of, or interest in, an underlying instrument.’’ 17 

CFR 240.19b–4(e). 

22See supra note 9 and accompanying text. 

23See Securities Exchange Act Release Nos. 

88625 (April 13, 2020), 85 FR 21479 (April 17, 

2020) (SR–NYSEArca–2019–81); 88566 (April 6, 

2020), 85 FR 20312 (April 10, 2020) (SR–CboeBZX– 

2019–097); and 88561 (April 3, 2020), 85 FR 19984 

(April 9, 2020) (SR–NASDAQ–2019–090). These 

releases are referred to collectively as the ‘‘Prior 

Rule 6c–11 Generic Listing Orders.’’ 

24 15 U.S.C. 78f(b)(5). 

25When relying on Rule 19b–4(e) under the Act 

to list and trade a new derivative securities product, 

the Commission notes that NYSE must submit Form 

19b–4(e) (17 CFR 249.820) to the Commission 

within five business days after commencement of 

trading the new derivative securities product. See 

17 CFR 240.19b–4(e)(2)(ii). See also 17 CFR 

240.19b–4(e)(2)(i) (setting forth NYSE’s 

recordkeeping requirements relating to all relevant 

records and information pertaining to each new 

derivative securities product traded pursuant to 

Rule 19b–4(e)). 

26 15 U.S.C. 78f(b)(5). 

27See supra note 17 and accompanying text. See 

also supra note 21 (citing to Rule 19b–4(e)(1) under 

the Act requiring the self-regulatory organization to 

have a surveillance program for the product class 

of a new derivative securities product). 

28 15 U.S.C. 78f(b)(5). 

29 15 U.S.C. 78f(b)(2). 

30 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

requires, among other things, that the 

Exchange’s rules be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. 

The Exchange proposes to adopt new 

NYSE Rule 5.2(j)(8) to establish generic 

listing standards pursuant to Rule 19b– 

4(e) under the Act 21 that would permit 

the Exchange to list and trade ExchangeTraded Fund Shares in a manner 

consistent with Rule 6c–11 under the 

1940 Act. The Exchange represents that 

proposed NYSE Rule 5.2(j)(8) is based 

on recently adopted NYSE Arca Rule 

5.2–E(j)(8).22 The Commission believes 

that NYSE’s proposed Rule 5.2(j)(8) is 

substantively identical to proposals that 

the Commission has previously 

approved relating to the listing and 

trading of Exchange-Traded Fund 

Shares that are permitted to operate in 

reliance on Rule 6c–11 under the 1940 

Act.23 Accordingly, for the reasons 

discussed in the Prior Rule 6c–11 

Generic Listing Orders, the Commission 

finds that this proposed rule change is 

consistent with Section 6(b)(5) of the 

Act 24 and the rules and regulations 

thereunder applicable to a national 

securities exchange.25

In addition, as stated above, the 

Exchange represents that proposed 

NYSE Rule 7.18(d)(2) governing trading 

halts for NYSE-listed ETPs (which 

would include Exchange-Traded Fund 

Shares), is based on NYSE Arca Rule 

7.18–E(d)(2). The Commission believes 

that NYSE’s proposed Rule 7.18(d)(2) is 

substantively identical to NYSE Arca 

Rule 7.18–E(d)(2) and concludes that 

this proposed rule does not present any 

novel or unique regulatory issues. The 

Commission therefore finds that this 

proposed rule change relating to trading 

halts is consistent with Section 6(b)(5) 

of the Act 26 and the rules and 

regulations thereunder applicable to a 

national securities exchange. 

This approval order is based on all of 

the Exchange’s representations, 

including those set forth above and in 

the Notice, including the Exchange’s 

representations relating to its 

surveillance procedures. Specifically, 

the Exchange represents, among other 

things, that its surveillance procedures 

are adequate to properly monitor the 

trading of the Exchange-Traded Fund 

Shares in all trading sessions and to 

deter and detect violations of Exchange 

rules, and that the Exchange will 

implement and maintain written 

surveillance procedures to monitor 

trading in Exchange-Traded Fund 

Shares on the NYSE.27

For the foregoing reasons, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act 28 and the rules and 

regulations thereunder applicable to a 

national securities exchange. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,29 that the 

proposed rule change (SR–NYSE–2020– 

86) be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.30

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–02397 Filed 2–4–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91037; File No. SR– 

NYSENAT–2021–01] 

Self-Regulatory Organizations; NYSE 

National, Inc.; Notice of Filing of 

Proposed Rule Change To Amend its 

Schedule of Fees and Rebates Related 

to Co-Location Services 

February 1, 2021. 

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 January 

19, 2021, NYSE National, Inc. (‘‘NYSE 

National’’ or the ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

Schedule of Fees and Rebates (‘‘Fee 

Schedule’’) related to co-location 

services to add two Partial Cabinet 

Solution bundles. 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. 


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