Federal Register / Vol. 80, No. 17 / Tuesday, January 27, 2015 / Notices 4325 

5See SR–BYX–2015–05. 

6See RPI Approval Order, supra note 2, at 77 FR 

at 71657. 

7 17 CFR 200.30–3(a)(83). 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 73410 

(October 23, 2014), 79 FR 64447 (October 29, 2014) 

(SR–BX–2014–048) (proposing RPI program and 

exemption from SEC Rule 612 under Regulation 

NMS, 17 CFR 242.612, in connection therewith); 

see also Securities Exchange Act Release No. 73836 

(December 15, 2014), 79 FR 75852 (December 19, 

2014) (SR–BX–2014–059). 

4A Retail Order is defined in BX Rule 4780(a)(2), 

in part, as ‘‘an agency or riskless principal order 

that satisfies the criteria of FINRA Rule 5320.03, 

that originates from a natural person and is 

submitted to the Exchange by a Retail Member 

Organization, provided that no change is made to 

the terms of the order with respect to price (except 

in the case that a market order is changed to a 

marketable limit order) or side of market and the 

order does not originate from a trading algorithm or 

any other computerized methodology.’’ 

5A Retail Price Improvement Order is defined in 

BX Rule 4780(a)(3), in part, as consisting of ‘‘nondisplayed liquidity on the Exchange that is priced 

better than the Protected NBBO by at least $0.001 

and that is identified as such.’’ 

31, 2016.5 In its request to extend the 

exemption, the Exchange notes that the 

Program was implemented gradually 

over time. Accordingly, the Exchange 

has asked for additional time to allow 

itself and the Commission to analyze 

data concerning the Program, which the 

Exchange committed to provide to the 

Commission.6 For this reason and the 

reasons stated in the Order originally 

granting the limited exemption, the 

Commission finds that extending the 

exemption, pursuant to its authority 

under Rule 612(c) of Regulation NMS, is 

appropriate in the public interest and 

consistent with the protection of 

investors. 

Therefore, it is hereby ordered, that, 

pursuant to Rule 612(c) of Regulation 

NMS, the Exchange is granted a limited 

exemption from Rule 612(c) of 

Regulation NMS that allows it to accept 

and rank orders priced equal to or 

greater than $1.00 per share in 

increments of $0.001, in connection 

with the operation of its RPI Program, 

until January 31, 2016. 

The limited and temporary exemption 

extended by this Order is subject to 

modification or revocation if at any time 

the Commission determines that such 

action is necessary or appropriate in 

furtherance of the purposes of the 

Securities Exchange Act of 1934. 

Responsibility for compliance with any 

applicable provisions of the federal 

securities laws must rest with the 

persons relying on the exemption that is 

the subject of this Order. 

For the Commission, by the Division 

of Trading and Markets, pursuant to 

delegated authority.7

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–01425 Filed 1–26–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74107; File No. SR–BX– 

2015–005] 

Self-Regulatory Organizations; 

NASDAQ OMX BX; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Changes To Amend Rule 7018 To 

Amend Fees and Rebates in 

Connection With BX’s Retail Price 

Improvement Program 

January 21, 2015. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on January 

12, 2015, NASDAQ OMX BX, Inc. (‘‘BX’’ 

or the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I, II, 

and III 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is proposing changes to 

amend BX Rule 7018 to amend fees and 

rebates in connection with BX’s Retail 

Price Improvement Program. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://nasdaqomxbx.cchwall

street.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 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change. The text of 

these 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 aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this proposal is to 

amend BX Rule 7018 to amend fees and 

rebates for execution of orders under 

BX’s Retail Price Improvement (‘‘RPI’’) 

program. BX recently adopted the RPI 

program,3 which provides incentives to 

member firms (or a division thereof) 

approved by the Exchange to participate 

in the program (a ‘‘Retail Member 

Organization’’ or ‘‘RMO’’) to submit 

designated ‘‘Retail Orders’’ 4 for the 

purpose of seeking price improvement. 

All BX members may enter retail price 

improvement orders (‘‘RPI Orders’’),5 a 

form of non-displayed orders that are 

priced more aggressively than the 

Protected National Best Bid or Offer 

(‘‘NBBO’’) by at least $0.001 per share, 

for the purpose of offering such price 

improvement. RMOs may use two types 

of Retail Orders. A Type 1 Retail Order 

is eligible to execute only against RPI 

Orders and other orders (such as 

midpoint pegged orders) that will 

provide price improvement. Type 2 

Retail Orders interact first with 

available RPI Orders and other price 

improving orders, and then are eligible 

to access non-price improving liquidity 

on the BX book and to route to other 

trading venues if so designated. 

BX currently offers a rebate of $0.0025 

per share executed to RMOs with 

respect to Retail Orders that execute 

against RPI Orders. RMO Retail Orders 

that execute against other orders 

providing price improvement with 

respect to the NBBO will receive a 

rebate otherwise applicable to 

executions of orders that access 

liquidity. For Type 2 Retail Orders that 

execute against non-price improving 

orders on the BX book, BX offers a 

rebate otherwise applicable to execution 

of orders that access liquidity. Similarly, 

when Type 2 Retail Orders are routed 

and execute at another trading venue, 

BX charges the fee otherwise applicable 

to execution of routed orders. For RPI 

Orders that provide liquidity, BX 

charges a fee of $0.0025 per share 

executed. Other orders that provide 

liquidity to Retail Orders will receive 

the credit or pay the fee otherwise 

applicable to orders that provide 

liquidity. 

BX is proposing to provide greater 

incentives to RMOs to participate in the 

program by providing two new tiers of 

credits provided under the program. 

Specifically, BX proposes to provide 

RMOs a credit of $0.0005 per share 

executed for a Retail Order that accesses 

non-Retail Price Improvement midpoint 

liquidity. This is the same credit all 

orders that execute against midpoint 

pegged orders currently receive under 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
4326 Federal Register / Vol. 80, No. 17 / Tuesday, January 27, 2015 / Notices 

6 15 U.S.C. 78f. 

7 15 U.S.C. 78f(b)(4) and (5). 

Rule 7018(a). BX is now including the 

credit as a stand-alone credit 

incorporated into the program. BX is 

also providing RMOs with a new credit 

of $0.0017 per share executed for a 

Retail Order that accesses other 

liquidity on the Exchange book. 

Currently, such an order would receive 

a credit ranging from $0.0004 to $0.0015 

per share executed under Rule 7018(a), 

depending on a member firm’s removing 

and adding activity during the month. 

BX is adding the new increased credit 

for a Retail Order that accesses other 

liquidity on the Exchange book, which 

will not be tied to the member firm’s 

average daily volume during the month. 

As a consequence of adding the two 

new credit tiers to the RPI Program, BX 

is eliminating language under the rule 

that encompasses such orders, noting 

that the fees under Rule 7018(a) and (b) 

apply. Specifically, BX is deleting 

language concerning Retail Orders that 

access other liquidity at a price better 

than the national best bid or best offer. 

Such Retail Orders may be either Type 

1 or Type 2. Likewise, BX is deleting 

language concerning Type 2 Retail 

Orders that access other liquidity from 

the Exchange book. The orders covered 

by these two sections are now included 

in the two new credit tiers of the rule. 

For example, an order that would 

qualify under the proposed new tier 

applicable to Retail Orders that accesses 

non-Retail Price Improvement midpoint 

liquidity currently falls under the 

section concerning a Retail Order that 

accesses other liquidity at a price better 

than the national best bid and offer. 

Similarly, an order that would qualify 

under the proposed new tier applicable 

to a Retail Order that accesses other 

liquidity on the Exchange book 

currently falls under one of the deleted 

sections, as such orders must be either 

a Retail Order that accesses other 

liquidity at a price better than the 

national best bid or best offer, or is a 

Type 2 Retail Order that accesses other 

liquidity from the Exchange book. 

2. Statutory Basis 

BX believes that the proposed rule 

change is consistent with the provisions 

of Section 6 of the Act,6 in general, and 

with Sections 6(b)(4) and 6(b)(5) of the 

Act,7 in particular, in that it provides for 

the equitable allocation of reasonable 

dues, fees and other charges among 

members and issuers and other persons 

using any facility or system which BX 

operates or controls, and is not designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The proposed new credits provided to 

RMOs under the RPI program are 

reflective of BX’s ongoing efforts to use 

pricing incentive programs to attract 

orders of retail customers to BX and 

improve market quality. The goal of this 

program and similar pricing incentives 

is to provide meaningful incentives for 

members that represent the orders of 

retail customers to increase their 

participation on BX. The proposed 

credit of $0.0005 per share executed 

with respect to Retail Orders that access 

non-Retail Price Improvement Order 

midpoint liquidity is reasonable because 

it merely incorporates the current credit 

provided for such orders under Rule 

7018(a) into the RPI program. The 

change is consistent with an equitable 

allocation of fees because it will allow 

BX to disassociate the credit from the 

credit provided under Rule 7018(a) so 

that the RPI program credit will not be 

affected by changes to the credit under 

Rule 7018(a). Moreover, all member 

firms that qualify for the new tier will 

receive the credit. BX further believes 

that the proposed credit tier is not 

unreasonably discriminatory because it 

is designed to separate order activity 

under the program from the normal 

credit provided under Rule 7018(a). As 

such, BX may increase the proposed 

credit, or reduce the related credit under 

Rule 7018(a), resulting in a more 

meaningful economic benefit to member 

firms that participate in the RPI 

program. Such incentive pricing in 

consistent with the goal of increasing 

participation in this beneficial program. 

Similarly, BX believes that the 

proposed credit of $0.0017 per share 

executed with respect to Retail Orders 

that access other liquidity on the 

Exchange book is reasonable because it 

provides greater incentive to member 

firms to participate in this beneficial 

program. The proposed credit is greater 

than the highest credit tier currently 

available for such orders under Rule 

7018(a). Moreover, as opposed to the 

other tiers under Rule 7018(a) the new 

credit is not tied to any other measure, 

which provides further incentive to 

member firms to participate in the 

program. The proposed change is 

consistent with an equitable allocation 

of fees because it provides incentive 

pricing to all member firms that qualify 

under the program. BX further believes 

that the proposed credit tier is not 

unreasonably discriminatory because it 

is designed to provide further 

meaningful incentives for members that 

represent the orders of retail customers 

to increase their participation on BX. 

Because retail orders are likely to reflect 

long-term investment intentions, they 

promote price discovery. Accordingly, 

their presence in the BX market has the 

potential to benefit all market 

participants. For this reason, BX 

believes that it is equitable and not 

unfairly discriminatory to provide 

significant financial incentives to 

encourage greater retail participation in 

the market. 

Elimination of the existing sections of 

the RPI Program that note that certain 

orders will be subject to the current fees 

and credits under Rule 7018(a) and (b) 

is reasonable because they are replaced 

by the new credit tiers, as discussed 

above. The Exchange believes that 

elimination of these sections is an 

equitable allocation and not unfairly 

discriminatory because they allow the 

Exchange to offer incentive pricing to a 

wider range of beneficial order activity, 

which will be provided to all member 

firms that meet the requirements for the 

credits. 

Finally, BX notes that it operates in a 

highly competitive market in which 

market participants can readily favor 

competing venues if they deem fee 

levels at a particular venue to be 

excessive. In such an environment, BX 

must continually adjust its fees to 

remain competitive with other 

exchanges and with alternative trading 

systems that have been exempted from 

compliance with the statutory standards 

applicable to exchanges. BX believes 

that the proposed rule change reflects 

this competitive environment because it 

is designed to allow BX to compete with 

other exchanges that offer similar price 

improvement programs for retail orders. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

BX does not believe that the proposed 

rule change will result in any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act, as amended. In this 

instance, the RPI program is designed to 

allow BX to compete more effectively 

with the New York Stock Exchange, 

NYSE MKT LLC, NYSE Arca, Inc. and 

the BATS–Y Exchange, all of which 

offer similar programs designed to 

attract retail order flow. BX believes that 

the proposed higher credit with respect 

to Retail Orders will enhance 

competition by drawing additional retail 

order flow to BX and, as a consequence, 

possibly encouraging other trading 

venues to make competitive pricing 

changes. 

For these reasons and the reasons 

discussed in connection with the 

statutory basis for the proposed rule 

change, BX does not believe that the 

proposed changes will impose any 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 17 / Tuesday, January 27, 2015 / Notices 4327 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f). 

10 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. 

4See Securities Exchange Act Release No. 73716 

(December 2, 2014), 79 FR 72723 (‘‘Notice’’). 

5The Trust is registered under the 1940 Act. On 

April 25, 2014, the Trust filed with the Commission 

an amendment to its registration statement on Form 

N–1A relating to the Fund (File Nos. 333–193560 

and 811–22739) (the ‘‘Registration Statement’’). In 

addition, the Commission has issued an order 

granting certain exemptive relief to the Trust under 

the 1940 Act. See Investment Company Act Release 

No. 30198 (September 10, 2012) (File No. 812– 

13956). 

6An investment adviser to an open-end fund is 

required to be registered under the Investment 

Advisers Act of 1940 (the ‘‘Advisers Act’’). The 

Adviser, Wilshire Associates Incorporated 

(‘‘Wilshire’’) and the underlying managers that are 

sub-advisers to the Fund (the ‘‘Underlying 

Managers’’) are each registered as an investment 

adviser under the Advisers Act. Wilshire will be a 

sub-adviser to the Fund and, in that role, will 

evaluate and recommend strategies and Underlying 

Managers to the Adviser for use by the Fund. 

Additionally, according to the Exchange, Wilshire 

will provide recommendations to the Adviser for 

allocating and reallocating Fund assets among the 

Underlying Managers. Wilshire will not directly 

manage any assets of the Fund, although it may 

provide the Adviser or an Underlying Manager with 

non-discretionary advice on investment decisions 

and underlying positions. 

7See Notice, supra note 4, 79 FR at 72729. 

8See Notice, supra note 4, 79 FR at 72724. 

burden on competition, but rather may 

promote competition among order 

execution venues for orders of retail 

customers. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 8 and paragraph (f) of Rule 

19b–4 thereunder.9 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 rule-comments@

sec.gov. Please include File Number SR– 

BX–2015–005 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–BX–2015–005. 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 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 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 such 

filing also will be available for 

inspection and copying at the principal 

offices of the Exchange. 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–BX– 

2015–005, and should be submitted on 

or before February 17, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–01375 Filed 1–26–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74109; File No. SR–NYSE– 

Arca–2014–134] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Approving a 

Proposed Rule Change To List and 

Trade Shares of the IQ Wilshire 

Alternative Strategies ETF Under NYSE 

Arca Equities Rule 8.600 

January 21, 2015. 

I. Introduction 

On November 18, 2014, NYSE Arca, 

Inc. (the ‘‘Exchange’’ or ‘‘NYSE Arca’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Act’’ or 

‘‘Exchange Act’’) 2 and Rule 19b–4 

thereunder,3 a proposed rule change to 

list and trade shares (‘‘Shares’’) of the IQ 

Wilshire Alternative Strategies ETF (the 

‘‘Fund’’) under NYSE Arca Equities 

Rule 8.600. The proposed rule change 

was published for comment in the 

Federal Register on December 8, 2014.4

The Commission received no comments 

on the proposed rule change. This order 

approves the proposed rule change. 

II. Description of the Proposal 

The Exchange proposes to list and 

trade the Shares under NYSE Arca 

Equities Rule 8.600, which governs the 

listing and trading of Managed Fund 

Shares on the Exchange. The Fund is a 

series of the IndexIQ Active ETF Trust 

(the ‘‘Trust’’).5 The Fund is an activelymanaged exchange-traded fund (‘‘ETF’’) 

and does not seek to replicate the 

performance of a specified index. 

IndexIQ Advisors LLC (the ‘‘Adviser’’) 

is the investment adviser for the Fund.6

The Exchange states that the Adviser is 

a not a registered broker-dealer and is 

not affiliated with a broker-dealer.7 The 

Exchange represents that in the event (a) 

any of the Adviser, Wilshire or the 

Underlying Managers is or becomes a 

broker-dealer or newly affiliated with a 

broker-dealer, or (b) any new adviser or 

sub-adviser is a registered broker-dealer 

or becomes affiliated with a brokerdealer, then, to the extent the brokerdealer or affiliated broker-dealer is not 

a limited purpose broker-dealer used for 

marketing and not trading purposes, it 

will implement a firewall with respect 

to its relevant personnel or its brokerdealer affiliate regarding access to 

information concerning the composition 

and/or changes to a portfolio, and will 

be subject to procedures designed to 

prevent the use and dissemination of 

material non-public information 

regarding such portfolio.8

The Bank of New York Mellon 

(‘‘Administrator’’) is the administrator, 

custodian, transfer agent and securities 

lending agent for the Fund. ALPS 


asabaliauskas on DSK5VPTVN1PROD with NOTICES