7068 Federal Register / Vol. 80, No. 26 / Monday, February 9, 2015 / Notices 

21See Notice, supra note 4, 79 FR at 78131. 

22For a list of the current members of ISG, see 

www.isgportal.org. The Exchange notes that not all 

components of the Disclosed Portfolio for the Fund 

may trade on markets that are members of ISG or 

with which the Exchange has in place a 

comprehensive surveillance sharing agreement. 

23The Pre-Opening Session is from 8:00 a.m. to 

9:30 a.m. Eastern Time. 

24The After Hours Trading Session is from 4:00 

p.m. to 5:00 p.m. Eastern Time. 

25See 17 CFR 240.10A–3. 

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

27 15 U.S.C. 78s(b)(2). 

28 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

information regarding the Fund’s 

portfolio.21 In addition, the Commission 

notes that, consistent with BATS Rule 

14.11(i)(4)(B)(ii)(b), the Reporting 

Authority, as defined in BATS Rule 

14.11(i)(3)(D), must implement and 

maintain, or be subject to, procedures 

designed to prevent the use and 

dissemination of material, non-public 

information regarding the actual 

components of the portfolio. The 

Exchange may obtain information 

regarding trading in the Shares and the 

underlying shares in exchange traded 

equity securities via the Intermarket 

Surveillance Group (‘‘ISG’’), from other 

exchanges that are members or affiliates 

of the ISG, or with which the Exchange 

has entered into a comprehensive 

surveillance sharing agreement.22 In 

addition, the Exchange is able to access, 

as needed, trade information for certain 

fixed income instruments reported to 

FINRA’s Trade Reporting and 

Compliance Engine. 

In support of this proposal, the 

Exchange has made the following 

representations: 

(1) The Shares will be subject to 

BATS Rule 14.11(i), which sets forth the 

initial and continued listing criteria 

applicable to Managed Fund Shares. 

(2) The Exchange has appropriate 

rules to facilitate transactions in the 

Shares during all trading sessions. 

(3) Trading of the Shares through the 

Exchange will be subject to the 

Exchange’s surveillance procedures for 

derivative products, including Managed 

Fund Shares, and that these procedures 

are adequate to properly monitor the 

trading of the Shares on the Exchange 

during all trading sessions and to deter 

and detect violations of Exchange rules 

and the applicable federal securities 

laws. 

(4) Prior to the commencement of 

trading, the Exchange will inform its 

members in an Information Circular of 

the special characteristics and risks 

associated with trading the Shares. 

Specifically, the Information Circular 

will discuss the following: (a) The 

procedures for purchases and 

redemptions of Shares in Creation Units 

(and that Shares are not individually 

redeemable); (b) BATS Rule 3.7, which 

imposes suitability obligations on 

Exchange members with respect to 

recommending transactions in the 

Shares to customers; (c) how 

information regarding the Intraday 

Indicative Value is disseminated; (d) the 

risks involved in trading the Shares 

during the Pre-Opening 23 and After 

Hours Trading Sessions 24 when an 

updated Intraday Indicative Value will 

not be calculated or publicly 

disseminated; (e) the requirement that 

members deliver a prospectus to 

investors purchasing newly issued 

Shares prior to or concurrently with the 

confirmation of a transaction; and (f) 

trading information. 

(5) For initial and/or continued 

listing, the Fund must be in compliance 

with Rule 10A–3 under the Act.25

(6) The Fund may hold up to an 

aggregate amount of 15% of its net 

assets in illiquid assets (calculated at 

the time of investment), as deemed 

illiquid by the Adviser under the 1940 

Act. 

(7) The Fund’s exposure to reverse 

repurchase agreements will be covered 

by liquid assets having a value equal to 

or greater than such commitments. 

(8) Structured securities, when 

combined with those instruments held 

as part of the Other Investments 

described above, will not exceed 20% of 

the Fund’s net assets. 

(9) As it relates to exchange traded 

investment companies, the Fund will 

only invest in investment companies 

that trade on markets that are a member 

of the ISG or with which the Exchange 

has in place a comprehensive 

surveillance sharing agreement. 

(10) To the extent that the Fund 

invests in futures contracts, the Fund 

will only invest in futures contracts that 

are traded on an exchange that is a 

member of the ISG or with which the 

Exchange has in place a comprehensive 

surveillance sharing agreement. 

(11) A minimum of 100,000 Shares 

will be outstanding at the 

commencement of trading on the 

Exchange. 

This approval order is based on all of 

the Exchange’s representations, 

including those set forth above and in 

the Notice. For the foregoing reasons, 

the Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act 26 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 Exchange Act,27

that the proposed rule change (SR– 

BATS–2014–054) is hereby approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–02501 Filed 2–6–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74197; File No. SR–Phlx– 

2015–11] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Add New 

Rule 1016 To Authorize the Exchange 

To Share Phlx XL ParticipantDesignated Risk Settings in Phlx XL 

February 3, 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 

28, 2015, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘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 the Substance 

of the Proposed Rule Change 

The Exchange proposes to add new 

Rule 1016 to authorize the Exchange to 

share any Phlx XL participantdesignated risk settings in Phlx XL, the 

Exchange’s trading system, with the 

clearing member that clears transactions 

on behalf of the Phlx XL participant. 

The text of the proposed rule change 

is below; proposed new language is 

italicized; proposed deletions are in 

brackets. 

NASDAQ OMX PHLX Rules 

Options Rules 

* * * * * 

[Rule 1016. Reserved.] 

Rule 1016. Exchange Sharing of 

Phlx XL Participant-Designated 

Risk Settings 

The Exchange may share any Phlx XL 

participant-designated risk settings in 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 80, No. 26 / Monday, February 9, 2015 / Notices 7069 

3A Specialist is an Exchange member who is 

registered as an options specialist pursuant to Rule 

1020(a). An SQT is defined in Exchange Rule 

1014(b)(ii)(A) as a Registered Options Trader 

(‘‘ROT’’) who has received permission from the 

Exchange to generate and submit option quotations 

electronically in options to which such SQT is 

assigned. An RSQT is defined in Exchange Rule in 

1014(b)(ii)(B) as an ROT that is a member affiliated 

with an RSQTO with no physical trading floor 

presence who has received permission from the 

Exchange to generate and submit option quotations 

electronically in options to which such RSQT has 

been assigned. A Remote Streaming Quote Trader 

Organization or ‘‘RSQTO,’’ which may also be 

referred to as a Remote Market Making Organization 

(‘‘RMO’’), is a member organization in good 

standing that satisfies the RSQTO readiness 

requirements in Rule 507(a). A ROT includes a 

SQT, a RSQT and a Non-SQT, which by definition 

is neither a SQT nor a RSQT and to which Rule 

1016 will not apply. A Registered Options Trader 

is defined in Exchange Rule 1014(b) as a regular 

member of the Exchange located on the trading 

floor who has received permission from the 

Exchange to trade in options for his own account. 

See Exchange Rule 1014(b)(i) and (ii). 

4As noted above, A Registered Options Trader is 

defined in Exchange Rule 1014(b) as a regular 

member of the Exchange located on the trading 

floor who has received permission from the 

Exchange to trade in options for his own account. 

See Exchange Rule 1014(b)(i) and (ii). 

5See Securities Exchange Act Release No. 53166 

(January 23, 2006), 71 FR 4625 (January 27, 2006) 

(SR–Phlx–2006–05). The Mechanism provides 

protection to participants from the risk of multiple 

executions across multiple series of an option. 

Quoting across many series in an option creates the 

possibility of ‘‘rapid fire’’ executions that can create 

large, unintended principal positions that expose 

market makers, who are required to continuously 

quote in assigned options, to potentially significant 

market risk. Specialists, SQTs and RSQTs 

(collectively, ‘‘Phlx XL participants’’) assigned in a 

particular option may establish a specified time 

period, not to exceed 15 seconds, within which a 

counting program will count the number of 

contracts traded in an option by such Phlx XL 

participant. When the Phlx XL participant has 

traded a certain number of contracts during the 

specified time period, the Risk Monitor Mechanism 

will automatically remove such Phlx XL 

participant’s quotations from the Exchange’s 

disseminated quotation in all series of the particular 

option. 

6 15 U.S.C. 78f. 

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

the trading system with the clearing 

member that clears transactions on 

behalf of the Phlx XL participant. For 

purposes of this rule a Phlx XL 

participant is any specialist, streaming 

quote trader or remote streaming quote 

trader. 

* * * * * 

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 proposed to adopt new 

Rule 1016 to authorize the Exchange to 

share any Phlx XL participantdesignated risk settings in Exchange’s 

trading system with the clearing 

member that clears transactions on 

behalf of the Phlx XL participant. For 

purposes of Rule 1016, a Phlx XL 

participant is any specialist, streaming 

quote trader (‘‘SQT’’) or remote 

streaming quote trader (‘‘RSQT’’).3

Phlx XL participants are required to 

be members of the Exchange.4 Rule 1046 

requires a member or member 

organization conducting an options 

business to either be: (i) A clearing 

member of The Options Clearing 

Corporation (‘‘OCC’’); or (ii) have a 

clearing arrangement with an Exchange 

member organization that is a clearing 

member of OCC. Further, pursuant to 

Rule 1052, every member organization 

which is a clearing member of the OCC 

shall be responsible for the clearance of 

the Exchange options transactions of 

each member or member organization 

who gives up the name of such clearing 

member in an Exchange options 

transaction, provided the clearing 

member has authorized such member or 

member organization to give up its 

name with respect to Exchange options 

transactions. 

While not all Phlx XL participants are 

clearing members, all Phlx XL 

participants require a clearing member’s 

consent to clear transactions on their 

behalf in order to conduct business on 

the Exchange. Each Phlx XL participant 

that transacts through a clearing 

member on the exchange executes a 

Letter of Guarantee which codifies the 

relationship between each Phlx XL 

participant and clearing member and 

provides the Exchange with notice of 

which clearing members have 

relationships with which Phlx XL 

participants. The clearing member that 

guarantees the Phlx XL participant’s 

transactions on the Exchange has a 

financial interest in understanding the 

risk tolerance of the Phlx XL 

participant. The proposal would 

provide the Exchange with authority to 

directly provide clearing members with 

information that may otherwise be 

available to such clearing members by 

virtue of their relationship with the 

respective Phlx XL participants. 

At this time, the risk settings covered 

by this proposal are set forth in Rule 

1093, Phlx XL Risk Monitor 

Mechanism.5 The Exchange may adopt 

additional rules providing for Phlx XL 

participant-designated risk settings 

other than those provided in Exchange 

Rule 1093 that could be shared with a 

Phlx XL participant’s clearing member 

under the proposal, and the Exchange 

would announce these additional risk 

settings by issuing an Options Trader 

Alert. 

2. Statutory Basis 

Phlx believes that the proposed rule 

change is consistent with the provisions 

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

with Section 6(b)(5) of the Act 7 in 

particular, in that the proposal 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 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, 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 proposed rule change will allow 

the Exchange to directly provide a Phlx 

XL participant’s designated risk settings 

to the clearing member that clears trades 

on behalf of the Phlx XL participant. 

Because a clearing member that 

executes a clearing Letter of Guarantee 

on behalf of a Phlx XL participant 

guarantees all transactions of that Phlx 

XL participant, and therefore bears the 

risk associated with those transactions, 

it is appropriate for the clearing member 

to have knowledge of what risk settings 

the Phlx XL participant may utilize 

within the Exchange’s trading system. 

The proposal will permit clearing 

members who have a financial interest 

in the risk settings of Phlx XL 

participants with whom the clearing 

member has entered into a clearing 

Letter of Guarantee to better monitor 

and manage the potential risks assumed 

by clearing members, thereby providing 

clearing members with greater control 

and flexibility over setting their own 

risk tolerance and exposure and aiding 

clearing members in complying with the 

Act. To the extent a clearing member 

might reasonably require a Phlx XL 

participant to provide access to its risk 

settings as a prerequisite to continuing 

to clear trades on the Phlx XL 

participant’s behalf, the Exchange’s 

mstockstill on DSK4VPTVN1PROD with NOTICES

7070 Federal Register / Vol. 80, No. 26 / Monday, February 9, 2015 / Notices 

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

9 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

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. 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

proposal to share those risk settings 

directly reduces the administrative 

burden on Phlx XL participants and 

ensures that clearing members are 

receiving information that is up-to-date 

and conforms to the settings active in 

the Exchange’s trading system. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

Phlx 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. 

The proposed rule change is not 

designed to address any competitive 

issues and does not pose an undue 

burden on non-clearing members 

because, unlike clearing members, nonclearing members do not guarantee the 

execution of a Phlx XL participant’s 

transactions on the Exchange. The 

proposal is structured to offer the same 

enhancement to all clearing members, 

regardless of size, and would not 

impose a competitive burden on any 

participant. Any Phlx XL participant 

that does not wish to share its 

designated risk settings with its clearing 

member could avoid sharing such 

settings by becoming a clearing member 

of OCC. 

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 

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)(ii) [sic] of the Act 8 and 

subparagraph (f)(6) 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: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or 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– 

Phlx–2015–11 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–Phlx–2015–11. 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–Phlx– 

2015–11, and should be submitted on or 

before March 2, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–02504 Filed 2–6–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74192; File No. SR–ICC– 

2015–003] 

Self-Regulatory Organizations; ICE 

Clear Credit LLC; Notice of Filing of 

Proposed Rule Change To Provide for 

the Clearance of Additional Standard 

Emerging Market Sovereign Single 

Names 

February 3, 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 

23, 2015, ICE Clear Credit LLC (‘‘ICC’’) 

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 primarily by ICC. 

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 purpose of the proposed rule 

change is to adopt rules that will 

provide the basis for ICC to clear 

additional credit default swap contracts. 

Specifically, ICC is proposing to amend 

Subchapter 26D of its rules to provide 

for the clearance of additional Standard 

Emerging Market Sovereign CDS 

contracts (collectively, ‘‘SES 

Contracts’’). 

ICC has been approved to clear eight 

SES Contracts: The Federative Republic 

of Brazil, the United Mexican States, the 

Bolivarian Republic of Venezuela, the 

Argentine Republic, the Republic of 

Turkey, the Russian Federation, the 

Republic of Hungary, and the Republic 

of South Africa. The proposed change to 

the ICC Rules would provide for the 

clearance of additional SES Contracts, 

specifically the Republic of Chile, the 

Republic of Peru, the Republic of 

mstockstill on DSK4VPTVN1PROD with NOTICES