Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Notices 5161 

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

2 17 CFR 240.19b–4. 

3See e.g., NYSE MKT Rule 1000 Commentary 

.03(a)(B); NYSE Arca Equities Rule 5.2(j)(3) 

Commentary .01(a)(B); NASDAQ Rule 

5705(a)(3)(A)(ii); and BATS Rule 14.11(b)(3)(A)(ii). 

4 17 CFR 240.19b–4(e). 

5When relying on Rule 19b–4(e), the SRO must 

submit Form 19b–4(e) to the Commission within 

five business days after the SRO begins trading the 

new derivative securities products. See Securities 

Exchange Act Release No. 40761 (December 8, 

1998), 63 FR 70952 (December 22, 1998). 

6See NYSE MKT Rule 1000 Commentary 

.03(a)(B); NYSE Arca Equities Rule 5.2(j)(3) 

Commentary .01(a)(B); NASDAQ Rule 

5705(a)(3)(A)(ii); and BATS Rule 14.11(b)(3)(A)(ii). 

See also Securities Exchange Act Release Nos. 

54739 (November 9, 2006), 71 FR 66993 (SR– 

Amex–2006–78); 55269 (February 9, 2007), 72 FR 

7490 (February 15, 2007) (SR–NASDAQ–2006–050); 

55621 (April 12, 2007), 72 FR 19571 (April 18, 

2007) (SR–NYSEArca–2006–86). 

7See Rule 402(i)(5)(ii)(A). 

8See Rule 402(i)(5)(ii)(B). 

that will be in addition to, rather than 

duplicative of, the services provided 

under the advisory contract(s) of any 

Fund (or its respective Master Fund) in 

which the Investing Management 

Company may invest. These findings 

and their basis will be recorded fully in 

the minute books of the appropriate 

Investing Management Company. 

11. Any sales charges and/or service 

fees charged with respect to shares of an 

Investing Fund will not exceed the 

limits applicable to a fund of funds as 

set forth in NASD Conduct Rule 2830. 

12. No Fund (or its respective Master 

Fund) relying on the section 12(d)(1) 

relief will acquire securities of any 

investment company or company 

relying on section 3(c)(1) or 3(c)(7) of 

the Act in excess of the limits contained 

in section 12(d)(1)(A) of the Act, other 

than any Wholly-Owned Subsidiary, 

and except to the extent (i) permitted by 

exemptive relief from the Commission 

permitting the Fund (or its respective 

Master Fund) to purchase shares of 

other investment companies for shortterm cash management purposes or (ii) 

the Fund acquires securities of the 

Master Fund pursuant to the MasterFeeder Relief. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–01749 Filed 1–29–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74131; File No. SR–MIAX– 

2015–04] 

Self-Regulatory Organizations; Miami 

International Securities Exchange LLC; 

Notice of Filing of a Proposed Rule 

Change To Amend MIAX Rule 402 

January 26, 2015. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on January 

16, 2015, Miami International Securities 

Exchange LLC (‘‘MIAX’’ or ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘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 proposes to amend 

Rule 402 to allow the listing of options 

overlying Exchange-Traded Fund Shares 

(‘‘ETFs’’) that are listed pursuant to 

generic listing standards on equities 

exchanges for series of portfolio 

depositary receipts and index fund 

shares based on international or global 

indexes under which a comprehensive 

surveillance agreement is not required. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.miaxoptions.com/filter/

wotitle/rule_filing, at MIAX’s principal 

office, 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 and discussed 

any comments it received on 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 Exchange proposes to amend 

Rule 402 to allow the listing of options 

overlying ETFs that are listed pursuant 

to generic listing standards on equities 

exchanges for series of portfolio 

depositary receipts and index fund 

shares based on international or global 

indexes under which a comprehensive 

surveillance sharing agreement 

(‘‘comprehensive surveillance 

agreement’’ or ‘‘CSSA’’) is not required.3

This proposal will enable the Exchange 

to list and trade options on ETFs 

without a CSSA provided that the ETF 

is listed on an equities exchange 

pursuant to the generic listings 

standards that do not require a CSSA 

pursuant to Rule 19b–4(e) 4 of the 

Exchange Act. Rule 19b–4(e) provides 

that the listing and trading of a new 

derivative securities product by a selfregulatory 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 

Exchange Act, the SRO’s trading rules, 

procedures and listing standards for the 

product class that would include the 

new derivatives securities product, and 

the SRO has a surveillance program for 

the product class.5 In other words, the 

proposal will amend the listing 

standards to allow the Exchange to list 

and trade options on ETFs based on 

international or global indexes to a 

similar degree that they are allowed to 

be listed on several equities exchanges.6

Exchange-Traded Funds 

The Exchange allows for the listing 

and trading of options on ETFs. Rule 

402(i)(5)(ii)(A)–(C) provide the listings 

standards for options on ETFs with nonU.S. component securities, such as ETFs 

based on international or global indexes. 

Rule 402(i)(5)(ii)(A) requires that any 

non-U.S. component securities of an 

index or portfolio of securities on which 

the Exchange-Traded Fund Shares are 

based that are not subject to 

comprehensive surveillance agreements 

do not in the aggregate represent more 

than 50% of the weight of the index or 

portfolio.7 Rule 402(i)(5)(ii)(B) requires 

that component securities of an index or 

portfolio of securities on which the 

Exchange-Traded Fund Shares are based 

for which the primary market is in any 

one country that is not subject to a 

comprehensive surveillance agreement 

do not represent 20% or more of the 

weight of the index.8 Rule 

402(i)(5)(ii)(C) requires that component 

securities of an index or portfolio of 

securities on which the ExchangeTraded Fund Shares are based for which 

the primary market is in any two 

countries that are not subject to 

comprehensive surveillance agreements 


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5162 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Notices 

9See Rule 402(i)(5)(ii)(C). 

10 17 CFR 240.19b–4(e). 

11See Commentary .03 to Amex Rule 1000 and 

Commentary .02 to Amex Rule 1000A. See also 

Securities Exchange Act Release No. 42787 (May 

15, 2000), 65 FR 33598 (May 24, 2000). 

12See, e.g., Securities Exchange Act Release Nos. 

50189 (August 12, 2004), 69 FR 51723 (August 20, 

2004) (approving the listing and trading of certain 

Vanguard International Equity Index Funds); 44700 

(August 14, 2001), 66 FR 43927 (August 21, 2001) 

(approving the listing and trading of series of the 

iShares Trust based on certain S&P global indexes). 

13 17 CFR 240.19b–4(e). 

14 17 CFR 240.19b–4(e). 

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

16See i.e., NYSE Arca Rule 5.3(g). 

17 15 U.S.C. 78f(b). 

18 15 U.S.C. 78f(b)(5). 

do not represent 33% or more of the 

weight of the index.9

Generic Listing Standards for ExchangeTraded Funds 

The Exchange notes that the 

Commission has previously approved 

generic listing standards pursuant to 

Rule 19b–4(e) 10 of the Exchange Act for 

ETFs based on indexes that consist of 

stocks listed on U.S. exchanges.11 In 

general, the criteria for the underlying 

component securities in the 

international and global indexes are 

similar to those for the domestic 

indexes, but with modifications as 

appropriate for the issues and risks 

associated with non-U.S. securities. 

In addition, the Commission has 

previously approved the listing and 

trading of ETFs based on international 

indexes—those based on non-U.S. 

component stocks—as well as global 

indexes—those based on non-U.S. and 

U.S. component stocks.12

In approving ETFs for equities 

exchange trading, the Commission 

thoroughly considered the structure of 

the ETFs, their usefulness to investors 

and to the markets, and SRO rules that 

govern their trading. The Exchange 

believes that allowing the listing of 

options overlying ETFs that are listed 

pursuant to the generic listing standards 

on equities exchanges for ETFs based on 

international and global indexes and 

applying Rule 19b–4(e) 13 should fulfill 

the intended objective of that Rule by 

allowing options on those ETFs that 

have satisfied the generic listing 

standards to commence trading, without 

the need for the public comment period 

and Commission approval. The 

proposed rule has the potential to 

reduce the time frame for bringing 

options on ETFs to market, thereby 

reducing the burdens on issuers and 

other market participants. The failure of 

a particular ETF to comply with the 

generic listing standards under Rule 

19b–4(e) 14 would not, however, 

preclude the Exchange from submitting 

a separate filing pursuant to Section 

19(b)(2),15 requesting Commission 

approval to list and trade options on a 

particular ETF. 

Requirements for Listing and Trading 

Options Overlying ETFs Based on 

International and Global Indexes 

Options on ETFs listed pursuant to 

these generic standards for international 

and global indexes would be traded, in 

all other respects, under the Exchange’s 

existing trading rules and procedures 

that apply to options on ETFs and 

would be covered under the Exchange’s 

surveillance program for options on 

ETFs. 

Pursuant to proposed Rule 

402(i)(E)(2)(i), the Exchange may list 

and trade options on an ETF without a 

CSSA provided that the ETF is listed 

pursuant to generic listing standards for 

series of portfolio depositary receipts 

and index fund shares based on 

international or global indexes under 

which a comprehensive surveillance 

agreement is not required. MIAX 

believes that these generic listing 

standards are intended to ensure that 

stocks with substantial market 

capitalization and trading volume 

account for a substantial portion of the 

weight of an index or portfolio. 

The Exchange believes that this 

proposed listing standard for options on 

ETFs is reasonable for international and 

global indexes, and, when applied in 

conjunction with the other listing 

requirements, and [sic] will result in 

options overlying ETFs that are 

sufficiently broad-based in scope and 

not readily susceptible to manipulation. 

The Exchange also believes that 

allowing the Exchange to list options 

overlying ETFs that are listed on 

equities exchanges pursuant to generic 

standards for series of portfolio 

depositary receipts and index fund 

shares based on international or global 

indexes under which a CSSA is not 

required, will result in options 

overlying ETFs that are adequately 

diversified in weighting for any single 

security or small group of securities to 

significantly reduce concerns that 

trading in options overlying ETFs based 

on international or global indexes could 

become a surrogate for trading in 

unregistered securities. 

The Exchange believes that ETFs 

based on international and global 

indexes that have been listed pursuant 

to the generic standards are sufficiently 

broad-based enough as to make options 

overlying such ETFs not susceptible 

instruments for manipulation. The 

Exchange believes that the threat of 

manipulation is sufficiently mitigated 

for underlying ETFs that have been 

listed on equities exchanges pursuant to 

generic listing standards for series of 

portfolio depositary receipts and index 

fund shares based on international or 

global indexes under which a 

comprehensive surveillance agreement 

is not required and for the overlying 

options, that the Exchange does not see 

the need for CSSA [sic] to be in place 

before listing and trading options on 

such ETFs. The Exchange notes that its 

proposal does not replace the need for 

a CSSA as provided in current Rule 

402(i)(5)(ii). The provisions of current 

Rule 402(i)(5)(ii), including the need for 

a CSSA, remain materially unchanged 

in proposed Rule 402(i)(E)(2)(ii) and 

will continue to apply to options on 

ETFs that are not listed on an equities 

exchange pursuant to generic listing 

standards for series of portfolio 

depositary receipts and index fund 

shares based on international or global 

indexes under which a comprehensive 

surveillance agreement is not required. 

Instead, proposed Rule 402(i)(E)(2)(i) 

adds an additional listing mechanism 

for certain qualifying options on ETFs to 

be listed on the Exchange. 

Finally, the Exchange proposes 

several technical changes to the 

formatting of Rule 402(i), including 

relocating current Rule 402(i)(5)(ii)(E) to 

proposed Rule 402(i)(E)(1)(iii) and the 

re-numbering of current Rule 

402(i)(5)(ii) to proposed Rule 

402(i)(E)(2)(ii). In addition, the 

Exchange proposes making corrections 

to inaccurate citations located in Rule 

403(g)(1) and (2), so that Rule 403(g)(1) 

properly cites to Rule 402(i)(E)(1)(i) 

regarding closed-end ETFs and Rule 

403(g)(2) properly cites to Rule 

402(i)(E)(1)(ii) regarding open-end ETFs. 

The Exchange believes that these 

technical changes are necessary for Rule 

402(i) and Rule 403(g) to correspond 

with other option exchanges.16

2. Statutory Basis 

MIAX believes that its proposed rule 

change is consistent with Section 6(b) of 

the Act 17 in general, and furthers the 

objectives of Section 6(b)(5) of the 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 foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities, 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. In particular, the 

proposed rules have the potential to 


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Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Notices 5163 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

reduce the time frame for bringing 

options on ETFs to market, thereby 

reducing the burdens on issuers and 

other market participants. The Exchange 

also believes enabling the listing and 

trading of options on ETFs pursuant to 

this new listing standard will benefit 

investors by providing them with 

valuable risk management tools. The 

Exchange notes that its proposal does 

not replace the need for a CSSA as 

provided in current Rule 402(i)(5)(ii). 

The provisions of current Rule 

402(i)(5)(ii), including the need for a 

comprehensive surveillance sharing 

agreement, remain materially 

unchanged in proposed Rule 

402(i)(E)(2)(ii) and will continue to 

apply to options on ETFs that are not 

listed on an equities exchange pursuant 

to generic listing standards for series of 

portfolio depositary receipts and index 

fund shares based on international or 

global indexes under which a 

comprehensive surveillance agreement 

is not required. Instead, proposed Rule 

402(i)(E)(2)(i) adds an additional listing 

mechanism for certain qualifying 

options on ETFs to be listed on the 

Exchange in a manner that is designed 

to prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities, 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. 

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 not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange believes this proposed rule 

change will benefit investors by 

providing additional methods to trade 

options on ETFs, and by providing them 

with valuable risk management tools. 

Specifically, the Exchange believes that 

market participants on MIAX would 

benefit from the introduction and 

availability of options on ETFs in a 

manner that is similar to equities 

exchanges and will provide investors 

with a venue on which to trade options 

on these products. For all the reasons 

stated above, the Exchange does not 

believe that the proposed rule change 

will impose any burden on competition 

not necessary or appropriate in 

furtherance of the purposes of the Act, 

and believes the proposed change will 

enhance competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

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 Exchange consents, 

the Commission shall: (a) by order 

approve or disapprove such 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 email to rule-comments@

sec.gov. Please include File Number SR– 

MIAX–2015–04 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–MIAX–2015–04. 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 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; 

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–MIAX– 

2015–04 and should be submitted on or 

before February 20, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–01748 Filed 1–29–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74135; File No. SR–C2– 

2015–001] 

Self-Regulatory Organizations; C2 

Options Exchange, Incorporated; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend the Fees Schedule 

January 26, 2015. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on January 

14, 2015, C2 Options Exchange, 

Incorporated (the ‘‘Exchange’’ or ‘‘C2’’) 

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 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 proposes to amend its 

Fees Schedule. The text of the proposed 

rule change is available on the 

Exchange’s Web site (http://

www.c2exchange.com/Legal/), at the 

Exchange’s Office of the Secretary, and 

at the Commission’s Public Reference 

Room. 


asabaliauskas on DSK5VPTVN1PROD with NOTICES