Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices 10187 

29 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 67091 

(May 31, 2012), 77 FR 33498 (June 6, 2012) (File 

No. 4–631) (Order Approving, on a Pilot Basis, the 

Plan). The Plan is designed to prevent trades in 

individual NMS Stocks from occurring outside of 

specified Price Bands, which are described in more 

detail in the Plan. 

4See Securities and Exchange Act Release No. 

69340 (April 8, 2013), 78 FR 22004 (April 12, 2013) 

(SR–NYSEArca–2013–10) (‘‘Approval Order’’). 

5See Securities Exchange Act Release No. 74110 

(January 21, 2015), 80 FR 4321 (January 27, 2015) 

(File No. 4–631) (notice of proposed Eighth 

Amendment to the Plan). 

6Specifically, the Exchange committed to: ‘‘(1) 

Evaluate the options market quality during Limit 

States and Straddle States; (2) assess the character 

of incoming order flow and transactions during 

Limit States and Straddle States; and (3) review any 

complaints from members and their customers 

concerning executions during Limit States and 

Straddle States.’’ See Approval Order, 78 FR at 

22008. 

7See Securities Exchange Act Release No. 71869 

(April 4, 2014), 79 FR 19689 (April 9, 2014) (SR– 

NYSEArca–2014–36). 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–BX– 

2015–010, and should be submitted on 

or before March 18, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.29

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–03819 Filed 2–24–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74308; File No. SR– 

NYSEArca–2015–07] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Extending the Pilot 

Period Applicable to Rule 6.65A(c), 

Obvious and Catastrophic Errors, Until 

October 23, 2015 

February 19, 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 February 

18, 2015, NYSE Arca, Inc. (the 

‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes to extend the 

pilot period applicable to Rule 6.65A(c), 

which addresses how the Exchange 

treats Obvious and Catastrophic Errors 

during periods of extreme market 

volatility, until October 23, 2015. The 

pilot period is currently set to expire on 

February 20, 2015. The text of the 

proposed rule change is available on the 

Exchange’s Web site at www.nyse.com, 

at the principal office of the Exchange, 

and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to extend the 

pilot period applicable to Rule 6.65A(c), 

which addresses how the Exchange 

treats Obvious and Catastrophic Errors 

during periods of extreme market 

volatility, until October 23, 2015. The 

pilot period is currently set to expire on 

February 20, 2015. 

In April 2013, in connection with the 

Plan to Address Extraordinary Market 

Volatility Pursuant to Rule 608 of 

Regulation NMS (the ‘‘Plan’’),3 the 

Exchange adopted Rule 6.65A(c) to 

provide that options executions would 

not be adjusted or nullified if the 

execution occurs during periods of 

extreme market volatility.4 Specifically, 

Rule 6.65A(c) provides that, during the 

pilot period, electronic transactions in 

options that overlay an NMS Stock that 

occur during a Limit State or a Straddle 

State (as defined by the Plan) are not 

subject to review under Rule 6.87(a) for 

Obvious Errors or Rule 6.87(d) for 

Catastrophic Errors. Nothing in Rule 

6.65A(c) prevents electronic 

transactions in options that overlay an 

NMS Stock that occur during a Limit 

State or a Straddle State from being 

reviewed on Exchange motion pursuant 

to 6.87(b)(3). 

The Plan has been amended several 

times since inception and was not 

implemented until February 24, 2014. 

The Participants to the Plan recently 

filed to extend the Plan’s pilot period 

until October 23, 2015 (the ‘‘Eighth 

Amendment’’).5 The purpose of this 

proposed extension is to provide time 

for the Participants to prepare a 

supplemental assessment and 

recommendation regarding the Plan and 

for the public to comment on such 

assessment for the purpose of 

determining whether there should be 

any modifications to the Plan. 

In order to align the pilot period for 

Rule 6.65A(c) with the proposed pilot 

period for the Plan, the Exchange 

similarly proposes to extend the pilot 

period until October 23, 2015. The 

Exchange believes the benefits afforded 

to market participants under Rule 

6.65A(c) should continue on a pilot 

basis during the same period as the Plan 

pilot. The Exchange continues to believe 

that adding certainty to the execution of 

orders in Limit or Straddle States would 

encourage market participants to 

continue to provide liquidity to the 

Exchange, and thus, promote a fair and 

orderly market during those periods. 

Thus, the Exchange believes that the 

protections of current Rule 6.65A(c) 

should continue while the industry 

gains further experience operating the 

Plan. In addition, the Exchange believes 

that extending the pilot period for Rule 

6.65A(c) would allow the Exchange to 

continue to collect and evaluate data, as 

well as to conduct further data analyses, 

related to this provision. 

Specifically, in connection with the 

adoption of Rule 6.65A(c), the Exchange 

committed to review the operation of 

this provision and to analyze the impact 

of Limit and Straddle States 

accordingly.6 The Exchange agreed to 

and has been providing to the 

Commission and the public data for 

each Straddle State and Limit State in 

NMS Stocks underlying options traded 

on the Exchange beginning in April 

2013, limited to those option classes 

that have at least one (1) trade on the 

Exchange during a Straddle State or 

Limit State.7 For each of those option 

classes affected, each data record 

contains the following information: 

• Stock symbol, option symbol, time 

at the start of the Straddle or Limit 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
10188 Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(5). 

10 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b–4(f)(6)(iii). As required under 

Rule 19b–4(f)(6)(iii), the Exchange provided the 

Commission with written notice of its intent to file 

the proposed rule change, along with a brief 

description and the text of the proposed rule 

change, at least five business days prior to the date 

of filing of the proposed rule change, or such 

shorter time as designated by the Commission. 12For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

State, an indicator for whether it is a 

Straddle or Limit State. 

• For activity on the Exchange: 

• executed volume, time-weighted 

quoted bid-ask spread, time-weighted 

average quoted depth at the bid, timeweighted average quoted depth at the 

offer; 

• high execution price, low execution 

price; 

• number of trades for which a 

request for review for error was received 

during Straddle and Limit States; 

• an indicator variable for whether 

those options outlined above have a 

price change exceeding 30% during the 

underlying stock’s Limit or Straddle 

state compared to the last available 

option price as reported by OPRA before 

the start of the Limit or Straddle State 

(1 if observe 30% and 0 otherwise). 

Another indicator variable for whether 

the option price within five minutes of 

the underlying stock leaving the Limit 

or Straddle state (or halt if applicable) 

is 30% away from the price before the 

start of the Limit or Straddle state. 

In addition, the Exchange has 

committed to provide to the 

Commission by May 29, 2015 

assessments relating to the impact of the 

operation of the Obvious Error rules 

during Limit and Straddle States as 

follows: (1) Evaluate the statistical and 

economic impact of Limit and Straddle 

States on liquidity and market quality in 

the options markets; and (2) Assess 

whether the lack of Obvious Error rules 

in effect during the Straddle and Limit 

States are problematic. The Exchange 

notes that, to date, there have not been 

any requests for review of Obvious Error 

of options trades that occur during a 

Limit or Straddle State in the 

underlying security. 

The Exchange believes that the 

extension of the pilot period of Rule 

6.65A(c) would allow the Exchange to 

continue to observe the operation of the 

pilot and conduct its assessments 

relating to the impact of the operation 

of the Rule during Limit and Straddle 

States, which information will continue 

to be shared with the Commission and 

the public as set forth above. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with Section 

6(b) of the Act 8 in general, and furthers 

the objectives of Section 6(b)(5),9 in 

particular, in that it is designed to 

promote just and equitable principles of 

trade, 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. 

Specifically, the proposal to extend 

the pilot program of Rule 6.65A(c) until 

October 23, 2015 would align that pilot 

program with the Pilot Period for the 

Plan, as proposed in the Eighth 

Amendment to the Plan. The Exchange 

believes that aligning the pilot periods 

would ensure that trading in options 

that overlay NMS Stocks continues to be 

appropriately modified to reflect market 

conditions that occur during a Limit 

State or a Straddle State in a manner 

that promotes just and equitable 

principles of trade and removes 

impediments to, and perfects the 

mechanism of, a free and open market 

and a national market system. The 

Exchange believes that the extension of 

Rule 6.65A(c) would help encourage 

market participants to continue to 

provide liquidity during extraordinary 

market volatility. 

Moreover, the Exchange believes that 

extending the pilot period for Rule 

6.65A(c) would remove impediments to, 

and perfect the mechanisms of, a free 

and open market because it would 

enable the Exchange to continue to 

continue to conduct its assessments 

relating to the impact of the operation 

of the Obvious Error rules during Limit 

and Straddle States as set forth above, 

which, in turn, provides the Exchange 

with more information from which to 

assess the impact of Rule 6.65A(c). 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed changes will not impose any 

burden on competition and will instead 

provide certainty regarding the 

treatment and execution of options 

orders, specifically the treatment of 

Obvious and Catastrophic Errors during 

periods of extraordinary volatility in the 

underlying NMS Stock, and will 

facilitate appropriate liquidity during a 

Limit State or Straddle State. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the 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 if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

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

of the Act 10 and Rule 19b–4(f)(6)(iii) 

thereunder.11

The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest, as it 

will allow the obvious error pilot 

program to continue uninterrupted 

while the industry gains further 

experience operating under the Plan, 

and avoid any investor confusion that 

could result from a temporary 

interruption in the pilot program. For 

this reason, the Commission designates 

the proposed rule change to be operative 

upon filing.12

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. 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 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices 10189 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 73960 

(Dec. 30, 2014), 80 FR 540 (‘‘Notice’’). 4According to the Exchange, the Trust has filed 

a registration statement on Form N–1A 

(‘‘Registration Statement’’) with the Commission. 

See Registration Statement on Form N–1A for the 

Trust filed on July 24, 2014 (File Nos. 333–187668 

and 811–22819). In addition, the Exchange states 

that the Trust has obtained certain exemptive relief 

under the 1940 Act. See Investment Company Act 

Release No. 30607 (July 23, 2013) (‘‘Exemptive 

Order’’). 

5See Nasdaq Rule 5735(g). The Exchange states 

that, in the event (a) the Adviser or the Sub-Adviser 

becomes newly affiliated with a broker-dealer or 

registers as a broker-dealer, or (b) any new adviser 

or sub-adviser is a registered broker-dealer or 

becomes affiliated with a broker-dealer, the 

Adviser, the Sub-Adviser, or any new adviser or 

sub-adviser, as the case may be, will implement a 

fire wall with respect to its relevant personnel and 

its broker-dealer affiliate, as applicable, regarding 

access to information concerning the composition 

of or changes to the portfolio, and will be subject 

to procedures designed to prevent the use and 

dissemination of material, non-public information 

regarding the portfolio. 

6See 17 CFR 240.10A–3. 

• Send an email to rulecomments@sec.gov. Please include File 

Number SR–NYSEArca–2015–07 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–NYSEArca–2015–07. 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 

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– 

NYSEArca–2015–07, and should be 

submitted on or before March 18, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–03816 Filed 2–24–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74303; File No. SR– 

NASDAQ–2014–127] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Order 

Granting Approval of Proposed Rule 

Change Relating to the Listing and 

Trading of the Shares of the Tuttle 

Tactical Management U.S. Core ETF of 

ETFis Series Trust I 

February 19, 2015. 

I. Introduction 

On December 19, 2014, The NASDAQ 

Stock Market LLC (‘‘Nasdaq’’ or 

‘‘Exchange’’) 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 

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

the Tuttle Tactical Management U.S. 

Core ETF (‘‘Fund’’) under Nasdaq Rule 

5735. The proposed rule change was 

published for comment in the Federal 

Register on January 6, 2015.3 The 

Commission received no comments on 

the proposal. This order grants approval 

of the proposed rule change. 

II. Description of the Proposed Rule 

Change 

The Exchange proposes to list and 

trade Shares of the Fund under Nasdaq 

Rule 5735, which governs the listing 

and trading of Managed Fund Shares on 

the Exchange. The Shares will be 

offered by ETFis Series Trust I 

(‘‘Trust’’), which is registered with the 

Commission as an investment 

company.4 The Fund is a series of the 

Trust. 

Etfis Capital LLC will be the 

investment adviser (‘‘Adviser’’), and 

Tuttle Tactical Management, LLC will 

be the investment sub-adviser (‘‘SubAdviser’’), to the Fund. ETF Distributors 

LLC will be the principal underwriter 

and distributor of the Fund’s Shares, 

and Bank of New York Mellon will act 

as the administrator, accounting agent, 

custodian, and transfer agent to the 

Fund. 

The Exchange represents that the 

Adviser and Sub-Adviser are not 

registered as broker-dealers, and the 

Sub-Adviser it not affiliated with a 

broker-dealer; however, the Exchange 

represents that the Adviser is affiliated 

with a broker-dealer. The Exchange 

states that the Adviser has implemented 

a fire wall with respect to its broker 

dealer affiliate regarding access to 

information concerning the composition 

of or changes to the portfolio.5 The 

Exchange also represents that the Shares 

will be subject to Nasdaq Rule 5735, 

which sets forth the initial and 

continued listing criteria applicable to 

Managed Fund Shares, and that for 

initial and continued listing, the Fund 

must be in compliance with Rule 10A– 

3 under the Act.6

The Exchange has made the following 

representations and statements in 

describing the Fund and its investment 

strategy, including, among other things, 

portfolio holdings and investment 

restrictions. 

A. Principal Investments of the Fund 

According to the Exchange, the 

Fund’s investment objective will be to 

provide long-term capital appreciation, 

while maintaining a secondary 

emphasis on capital preservation, 

primarily through investments in the 

U.S. equity market. The Sub-Adviser 

will employ four tactical models in 

seeking to achieve the Fund’s 

investment objective: ‘‘S&P 500 

Absolute Momentum,’’ ‘‘Relative 

Strength Equity,’’ ‘‘Beta Opportunities,’’ 

and ‘‘Short-Term S&P 500 Counter 

Trend.’’ While the Sub-Adviser will 

generally seek to maintain an equal 

weighting among these four tactical 

models, market movements may result 

in the Fund being overweight or 

underweight one or more of the tactical 

models. The Fund will be an actively 

managed exchange-traded fund (‘‘ETF’’) 

that seeks to achieve its investment 

objective by utilizing a long-only, multistrategy, tactically-managed exposure to 

the U.S. equity market. To obtain such 

exposure, the Sub-Adviser will invest, 

under normal circumstances, not less 


asabaliauskas on DSK5VPTVN1PROD with NOTICES