Federal Register / Vol. 80, No. 67 / Wednesday, April 8, 2015 / Notices 18909 

12 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, e.g., BATS Exchange, Inc. (‘‘BATS’’) Rules 

22.3(a),(b) (Market Maker Registration); NASDAQ 

OMX PHLX (‘‘PHLX) Rule 3212(b) (Registration as 

a Market Maker); NASDAQ Options Market 

(‘‘NOM’’), Chapter VII (Market Participants), 

Section 3(a),(b) (Continuing Market Maker 

Registration). 

5See Rule 6.33 (Registration of Market Makers). 

See also Rule 6.32(a) (Market Maker Defined) (A 

‘‘Market Maker is an individual who is registered 

with the Exchange for the purpose of making 

transactions as a dealer-specialist on the Floor of 

the Exchange or for the purpose of submitting 

quotes electronically and making transactions as a 

dealer-specialist through the NYSE Arca OX 

electronic trading system. Registered Market Makers 

are designated as specialists on the Exchange for all 

purposes under the Securities Exchange Act of 1934 

and the Rules and Regulations thereunder. A 

Market Maker on the Exchange will be either a 

Market Maker or a Lead Market Maker. Unless 

specified, or unless the context requires otherwise, 

the term Market Maker refers to both Market Makers 

and Lead Market Maker.’’). 

6See Rule 6.35(a). 

7An LMM is ‘‘is an individual or entity that has 

been deemed qualified by the Exchange for the 

purpose of making transactions on the Exchange in 

accordance with the provisions of Rule 6.82. Each 

LMM or nominee thereof must be registered with 

the Exchange as a Market Maker. Any OTP Holder 

or OTP Firm registered as a Market Maker with the 

Exchange is eligible to be qualified as an LMM.’’ 

See Rule 6.82(a)(1). 

8See Rule 6.35(b). 

9See Rule 6.35(c). 

10See Rule 6.35(d). 

11See Rule 6.35(e). In considering the change 

request, the Exchange will consider the factors set 

forth in Rule 6.35(c). 

12See Rule 6.35(f). 

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– 

NASDAQ–2015–028 and should be 

submitted on or before April 29, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–07965 Filed 4–7–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74635; File No. SR– 

NYSEArca–2015–17] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change Amending Rule 6.35 To 

Refine the Appointment Process 

Utilized by the Exchange 

April 2, 2015. 

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 March 

20, 2015, NYSE Arca, Inc. (the 

‘‘Exchange’’ or ‘‘NYSE Arca’’) 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 the Substance 

of the Proposed Rule Change 

The Exchange proposes to amend 

Rule 6.35 (Appointment of Market 

Makers) to refine the appointment 

process utilized by the Exchange. 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 amend 

Rule 6.35 to refine the appointment 

process utilized by the Exchange. The 

Exchange believes this proposal, which 

is consistent with the rules of other 

option exchanges,4 would simplify and 

enhance the efficiency of the 

appointment process for both Market 

Makers and the Exchange and add 

clarity to Exchange rules. 

Current Appointment Process 

To register as a Market Maker, an 

applicant must file an application with 

the Exchange on a form or forms 

prescribed by the Exchange.5 Once 

registered, a Market Maker may seek an 

appointment in one or more option 

classes pursuant to Rule 6.35. 

Specifically, this Rule provides that 

‘‘[o]n a form or forms prescribed by the 

Exchange, a Market Maker must apply 

for an appointment in one or more 

classes of option contracts.’’ 6

In addition to having the authority to 

appoint one Lead Market Maker 

(‘‘LMM’’) 7 per option class, ‘‘[t]he 

Exchange may appoint an unlimited 

number of Market Makers in each class 

unless the number of Market Makers 

appointed to a particular option class 

should be limited’’ based on the 

Exchange’s judgment.8 Further, the Rule 

provides that ‘‘Market Makers may 

select from among any option issues 

traded on the Exchange for inclusion in 

their appointment, subject to the 

approval of the Exchange. In 

considering the approval of the 

appointment of a Market Maker in each 

security,’’ the Exchange will consider 

the Market Maker’s preference; the 

financial resources available to the 

Market Maker; the Market Maker’s 

experience, expertise and past 

performance in making markets, 

including the Market Maker’s 

performance in other securities; the 

Market Maker’s operational capability; 

and the maintenance and enhancement 

of competition among Market Makers in 

each security in which they are 

appointed.9 The Rule also sets forth the 

number of Options Trading Permits 

(‘‘OTPs’’) required of a Market Maker in 

order to have a specified number of 

options issues included in the Market 

Maker’s appointment (e.g., 1 OTP 

affords a Market Maker up to 100 option 

issues in their appointment, whereas 4 

OTPs enables a Market Maker to include 

in their appointment all option issues 

traded on the Exchange).10

Under the current Rule, ‘‘Market 

Makers may change the option issues in 

their appointment, subject to the 

approval of the Exchange’’ provided 

requests for changes are ‘‘made in a 

form and manner prescribed by the 

Exchange.’’ 11 In addition, ‘‘Market 

Makers may withdraw from trading an 

option issue that is within their 

appointment by providing the Exchange 

with three business days’ written notice 

of such withdrawal.’’ 12 If Market 

Makers fail to provide this notice, they 

‘‘may be subject to formal disciplinary 


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13 Id. Rule 10 sets forth the procedures for 

Exchange disciplinary proceedings and appeals, 

with Rule 10.5 specifically providing the due 

process for the formal hearing process and Rule 

10.7 requiring that any decision by the Exchange 

must include a statement of findings and 

conclusions, with the reasons therefore upon all 

material issues presented in the record. Further, 

where a penalty is imposed, the Exchange’s 

decision must include a statement specifying the 

acts or practices in which the Respondent has been 

found to have engaged, or which the Respondent 

has been found to have omitted. 

14See Rule 6.35(g). 

15See Rule 6.35(h). Per Rule 6.35(i), Market 

Makers are also subject to a trading requirement, 

such that ‘‘[a]t least 75% of the trading activity of 

a Market Maker (measured in terms of contract 

volume per quarter) must be in classes within the 

Market Maker’s appointment’’ and a failure to 

comply with the 75% contract volume requirement 

may result in the imposition of a fine or initiation 

of formal disciplinary action, pursuant to Rule 10 

(Disciplinary Proceedings and Appeals). The 

Exchange is not proposing any changes to Rule 

6.35(i). 

16See Rule 6.25(j) [sic]. 

17See Rule 6.35(j)(1). See also Rule 6.35(j)(2) (‘‘If 

a Market Maker’s appointment in an option issue 

or issues has been terminated pursuant to this 

subsection (j), the Market Maker may not be reappointed as a Market Maker in that option issue 

or issues for a period not to exceed 6 months.’’). 

18See proposed Rule 6.35(a) (‘‘On a form or forms 

prescribed by the Exchange, a Market Maker may 

register for an appointment in one or more classes 

of option contracts, subject to paragraph (d) of this 

Rule.’’). As discussed, paragraph (d) of the Rule 

provides that the number of options permitted in 

a Market Maker’s appointment is determined by the 

number of OTPs that the Market Maker has. 

19See proposed Rule 6.35(b) (‘‘The Exchange may 

appoint one LMM per option class. An unlimited 

number of Market Makers may register in each class 

unless the number of Market Makers appointed to 

a particular option class should be limited 

whenever, in the Exchange’s judgment, quotation 

system capacity in an option class or classes is not 

sufficient to support additional Market Makers in 

such class or classes.’’). 

20See proposed Rule 6.35(c). 

21 Id. 

22 Id. Proposed changes to Rule 6.35(d) are 

discussed below. 

23The Exchange is also required to confirm 

receipt of requests to withdraw option issues from 

a Market Maker’s appointment. See proposed Rule 

6.35(c). 

24The Exchange will announce by Trader Update 

the email address that Market Makers should utilize 

to make selections in, or changes to, their 

appointment pursuant to this Rule. 

25The Exchange proposes to designate 

subparagraphs (e) and (f) as Reserved. 

26See Rule 6.35(g). The Exchange, however, 

proposes to correct the possessive form of 

‘‘Exchange’’ (from ‘‘Exchanges’ judgment’’ to 

‘‘Exchange’s judgment’’) in this paragraph to correct 

a typo in the existing rule text, which adds clarity 

to Exchange rules. See proposed Rule 6.35(g) (‘‘The 

Exchange may suspend or terminate any 

appointment of a Market Maker in one or more 

option issues under this Rule whenever, in the 

Exchange’s judgment, the interests of a fair and 

orderly market are best served by such action.’’). 

action pursuant to Rule 10.’’ 13

Moreover, the Exchange ‘‘may suspend 

or terminate any appointment of a 

Market Maker in one or more option 

issues under this Rule whenever, in the 

Exchanges’ judgment, the interests of a 

fair and orderly market are best served 

by such action’’ 14 A Market Maker may 

seek review of any action taken by the 

Exchange.15

Finally, under the current Rule, the 

Exchange periodically conducts 

evaluations of Market Makers to 

determine whether they have fulfilled 

performance standards.16 If the 

Exchange finds that a Market Maker has 

not met the performance standards, the 

Exchange may take action, including 

suspending, terminating or restricting a 

Market Maker’s appointment or 

registration, after providing the Market 

Maker an opportunity to be heard.17

Proposed Appointment Process 

The Exchange proposes to modify 

Rule 6.35 to refine the current 

appointment process. Presently, Market 

Makers must apply for an appointment 

in an options class, which, as discussed 

further below, is done by submitting an 

email to the Exchange. The Exchange 

proposes to modify Rule 6.35(a) to 

provide that, rather than apply for an 

appointment, ‘‘a Market Maker may 

register for an appointment in one or 

more classes of option contracts,’’ in a 

form and manner prescribed the 

Exchange.18 The Exchange would 

continue to have authority to appoint 

one LMM per option class. Similarly, 

there would continue to be an unlimited 

number of Market Makers appointed to 

an options class, unless the Exchange 

restricted such appointments following 

Commission review and approval. The 

Exchange is proposing a change to the 

text in Rule 6.36(b) [sic] to reflect the 

proposed changes in Rule 6.35(a) to 

provide that ‘‘[a]n unlimited number of 

Market Makers may register in each 

class,’’ subject to any limits imposed by 

the Exchange.19

In addition, to simplify a Market 

Maker’s ability to select and make 

changes to its appointment, the 

Exchange proposes to modify Rule 

6.35(c) to replace the existing rule text 

with text that provides that ‘‘[a] Market 

Maker may select or withdraw option 

issues included in their appointment by 

submitting a request via an Exchangeapproved electronic interface with the 

Exchange on a day when the Exchange 

is open for business.’’ 20 The modified 

rule would also provide that an 

appointment would become effective by 

no later than the following business day, 

whereas a Market Maker’s request to 

withdraw option issues from its 

appointment would not become 

effective until the following business 

day.21 Thus, as proposed, a Market 

Maker could be appointed to an options 

issue on the same day it submits a 

request to the Exchange, depending on 

availability of Exchange resources to 

process the request that day, but such 

addition to its appointment would be 

effective no later than the following 

business day. A Market Maker, however, 

would not be able to withdraw an 

options issue from its appointment on 

the same day that it submits the request; 

instead, the Exchange will only process 

such requests on an overnight basis for 

effectiveness on the following business 

day. Before any additions to a Market 

Maker’s appointment would become 

effective, the Exchange would be 

required to confirm ‘‘that the Market 

Maker’s appointment will not exceed 

that permitted under paragraph (d) of 

this Rule’’ 22 and confirm receipt of the 

Market Maker’s request.23 Confirmation 

of receipt is designed to ensure that the 

request was successfully transmitted to 

the Exchange (i.e., there was no system 

failure or human error on either side of 

the electronic transaction that prevented 

transmission and receipt of the Market 

Maker’s request). Presently, Market 

Makers can select issues in their 

appointment or make changes thereto, 

pursuant to proposed Rule 6.35(c), by 

submitting an email [sic] the Exchange 

which is ‘‘the Exchange-approved 

electronic interface’’ at this time.24

Consistent with this proposed change, 

the Exchange proposes to delete 

paragraphs (e) and (f) of Rule 6.35, 

which describe how Market Makers can 

change their appointment or withdraw 

from issues in their appointment 

because these provisions are rendered 

superfluous by the proposed changes to 

Rule 6.35(c).25

The Exchange believes that the 

proposed changes to how Market 

Makers select and modify their appoints 

would enable Market Makers to manage 

their appointments with more flexibility 

and in a timelier manner which, in turn, 

would reduce the time and resources 

expended by Market Makers and the 

Exchange on the appointment process. 

The Exchange believes this proposal 

would provide Market Makers with 

more efficient access to the securities in 

which they want to make markets and 

disseminate competitive quotations, 

which would provide additional 

liquidity and enhance competition in 

those securities. The Exchange would 

retain the ability to suspend or 

terminate any appointment of a Market 

Maker if necessary to maintain a fair 

and orderly market.26 The Exchange 

also notes that the proposed changes to 


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27See e.g., BATS Rules 22.3(a) (‘‘An Options 

Member that has qualified as an Options Market 

Maker may register to make markets in individual 

series of options’’); NOM, Chapter VII, Section 3(a) 

(‘‘An Options Participant that has qualified as an 

Options Market Maker may register to make markets 

in individual options.’’). 

28See e.g., PHLX Rule 3212(b) (‘‘A PSX Market 

Maker may become registered in an issue by 

entering a registration request via an Exchange 

approved electronic interface with PSX’s systems or 

by contacting PSX Market Operations. Registration 

shall become effective on the day the registration 

request is entered’’); PHLX Rule 3220(a) (‘‘A market 

maker may voluntarily terminate its registration in 

a security by withdrawing its two-sided quotation 

from PSX. A PSX Market Maker that voluntarily 

terminates its registration in a security may not reregister as a market maker for one (1) business 

day.’’). See also BATS Rules 22.3(b) (‘‘An Options 

Market Maker may become registered in a series by 

entering a registration request via an Exchange 

approved electronic interface with the Exchange’s 

systems by 9:00 a.m. Eastern time. Registration shall 

become effective on the day the registration request 

is entered’’); NOM, Chapter VII, Section 3(b) (‘‘An 

Options Market Maker may become registered in an 

option by entering a registration request via a 

Nasdaq approved electronic interface with Nasdaq’s 

systems. Registration shall become effective on the 

day the registration request is entered.’’). 

29See Securities Exchange Act Release No. 34– 

74382 (February 26, 2015), 80 FR 11713 (March 4, 

2015) (SR–NYSEARCA–2015–10). See also NYSE 

Arca Options Fee Schedule (describing ‘‘Number of 

Option Issues Permitted in Market Maker’s 

Assignment’’ based on the number of OTPs held 

and the associated costs), available here, https://

www.nyse.com/publicdocs/nyse/markets/arcaoptions/NYSE_Arca_Options_Fee_Schedule.pdf. 

30See proposed Rule 6.35(d). 

31See, e.g., NYSE Amex Options Fee Schedule 

(Section III.A., Monthly ATP Fees) (describing 

‘‘Number Of Issues Permitted In A Market Makers 

Quoting Assignment’’ based on the number of 

permits held and the associated costs), available 

here, https://www.nyse.com/publicdocs/nyse/

markets/amex-options/NYSE_Amex_Options_Fee_

Schedule.pdf. See also Securities Exchange Act 

Release No. 67505 (July 26, 2012), 77 FR 45292 [sic] 

(July 31, 2012) (SR–NYSEMKT–2012–24) (filing for 

immediate effectiveness to add information 

regarding ATP Fees previously found in NYSE 

Amex Rule 923NY(d)(1)–(4) to Fee Schedule). 

32See Rule 6.35(h) (‘‘A Market Maker may seek 

review of any action taken by the Exchange 

pursuant to this Rule in accordance with Rule 10, 

as applicable.’’). 

33 Id. 

34See proposed Rule 6.35(j) (‘‘The Exchange will 

periodically conduct an evaluation of Market 

Makers to determine whether they have fulfilled 

performance standards relating to, among other 

things, quality of markets, competition among 

Market Makers, observance of ethical standards, 

and administrative factors. The Exchange may 

consider any relevant information including, but 

not limited to, the results of a Market Maker 

evaluation, trading data, a Market Maker’s 

regulatory history, the financial resources available 

to the Market Maker, the Market Maker’s 

operational capability, and such other factors and 

data as may be pertinent in the circumstances.’’). 

35See Rule 6.35(c)(2) and (4). 

36The Exchange is not proposing any changes to 

Rule 6.35(j)(1), which sets forth the actions that the 

Exchange may take, after affording a Market Maker 

written notice and an opportunity for hearing 

pursuant to Rule 10.5, should the Exchange find a 

Market Maker is failing to meet minimum 

performance standards. See Rule 6.35(j)(1). 

37See proposed Rule 6.35(j)(2) (‘‘If a Market 

Maker’s appointment in an option issue or issues 

has been terminated pursuant to this subsection (j), 

the Market Maker may not register as a Market 

Maker in that option issue or issues for a period not 

to exceed 6 months.’’). 

38 15 U.S.C. 78f(b). 

39 15 U.S.C. 78f(b)(5). 

Rule 6.35(a), (b) 27 and (c) 28 are 

consistent with the rules of other 

exchanges and therefore raise no new or 

novel issues. 

As noted above, paragraph (d) of Rule 

6.35 sets forth the number of OTPs a 

Market Maker must have in order to 

have a specified number of options 

issues included in the Market Maker’s 

appointment. The Exchange recently 

amended the Arca Options Fee 

Schedule to include this information 

together with its OTP fees for Market 

Makers.29 Accordingly, the Exchange 

proposes to delete the detailed 

information on the number of option 

issues a Market Maker may include in 

its assignment in relation to the number 

of OTPs the Market Maker has and 

modify paragraph (d) of the Rule to read 

that ‘‘[a] Market Maker must have the 

number of OTPs required under the Fee 

Schedule for its appointment as a 

Market Maker in option issues.’’ 30 The 

Exchange believes that removing this 

redundancy would improve the clarity 

of its rules.31

The Exchange also proposes to modify 

the text in paragraph (h) of the Rule. As 

proposed, a Market Maker would 

continue to be permitted to ‘‘seek 

review of any action taken by the 

Exchange, in accordance with Rule 10, 

as applicable.’’ However, to clarify the 

rule text, the Exchange proposes to 

delete the unnecessary clause 

‘‘including the denial of the 

appointment for, or the termination or 

suspension of, a Market Maker’s 

appointment in an option issue or 

issues.’’ 32 The Exchange’s denial, 

termination, or suspension of a Market 

Maker’s appointment would continue to 

be reviewable under Rule 10, as would 

other applicable actions taken by the 

Exchange under Rule 6.35.33

Rule 6.35(j) states that the Exchange 

will conduct periodic evaluations of 

Market Makers to determine whether 

they have fulfilled the requisite 

performance standards. The Exchange 

proposes to add ‘‘the financial resources 

available to the Market Maker’’ and ‘‘the 

Market Maker’s operational capability’’ 

as factors the Exchange will consider in 

its evaluations conducted pursuant to 

Rule 6.35(j).34 The additional 

considerations the Exchange proposes to 

include in its periodic evaluations 

under Rule 6.35(j) are currently among 

the considerations of the Exchange in 

approving a Market Maker’s 

appointment.35 In connection with the 

Exchange’s proposed changes to the 

process for Market Makers’ 

appointments to options classes, the 

Exchange proposes to eliminate these 

approval provisions. Because financial 

resources and operational capability are 

important considerations in a Market 

Maker’s performance, the Exchange 

proposes to retain these factors for 

consideration in the Exchange’s 

periodic evaluation of Market Maker 

performance.36

Finally, the Exchange proposes to 

modify Rule 6.35(j)(2) to reflect the 

proposed changes to the Market Maker 

appointment process. Specifically, the 

Exchange proposes to change the 

reference to a Market Maker being ‘‘reappointed’’ by the Exchange if an option 

issue or issues has been terminated 

pursuant to this subsection (j), and to 

instead provide that ‘‘the Exchange may 

restrict a Market Maker’s registration as 

a Market Maker in that option issue or 

issues for a period not to exceed 6 

months.’’ 37 This proposal continues to 

give the Exchange discretion to suspend 

that Market Maker’s appointment in the 

affected option issue(s) for a full six 

months, or to allow that Market Maker 

to resume that appointment earlier than 

the prescribed six-month period, based 

on the Exchange’s evaluation of the facts 

and circumstances. The Exchange 

believes the proposed change is 

necessary so that Rule 6.35(j)(2) is 

consistent with the proposed changes in 

paragraphs (a), (b), and (c) of Rule 6.35 

to the process for Market Makers to 

register and change their appointments 

to options classes. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) 38 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’), in general, and furthers the 

objectives of Section 6(b)(5),39 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, and to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system. 

The Exchange believes that the 

proposed rule change removes 

impediments to a free and open market 

because it would enable Market Makers 

to manage their appointments with 

more flexibility and in a timelier 

manner. The Exchange believes the 


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40See Rule 6.35(g). See also Rule 6.33 (regarding 

the Exchange’s ability to suspend or terminate a 

Market Maker’s registration based on ‘‘a 

determination of any substantial or continued 

failure by such Market Maker to engage in dealings 

in accordance with Rules 6.37, 6.37A or 6.37B’’, 

which outline the obligations of Market Makers). 

41 15 U.S.C. 78f(d). 

42See Rule 6.37B. 

43See supra nn. 4, 27, 28. 

44 Id. 

proposed change would reduce the 

burden on both Market Makers and 

Exchange staff, which would result in a 

fair and reasonable use of resources to 

the benefit of all market participants. In 

particular, the proposal to allow Market 

Makers to select their appointments, 

and make changes thereto, via an 

Exchange-approved electronic interface 

is consistent with [sic] Act because it 

would provide Market Makers with 

more efficient access to the securities in 

which they want to make markets and 

thus more quickly begin disseminating 

competitive quotations in those 

securities, which would provide 

additional liquidity and enhance 

competition in those securities. The 

Exchange also believes that preventing 

Market Makers from being able to 

withdraw an option issue from its 

appointment on the same day that it 

submits the request (as such requests are 

processed on an overnight basis for 

effectiveness on the following business 

day) would serve to promote just and 

equitable principles of trade and benefit 

investors and the public interest. 

In addition, the Exchange believes 

that the proposal to allow Market 

Makers to make selections or changes to 

their appointment without first 

obtaining explicit Exchange approval is 

likewise consistent with the Act. First, 

because financial resources and 

operational capability are important 

considerations in a Market Maker’s 

performance, the Exchange proposes to 

retain these factors for consideration in 

the Exchange’s periodic evaluation of 

Market Maker performance. The 

Exchange believes that adding these 

factors to the Exchange’s consideration 

would remove impediments to and 

perfect the mechanism of a free and 

open market and would benefit 

investors and the public interest. In 

addition, as noted above, the Exchange 

would continue to have authority to 

suspend or terminate any Market Maker 

appointment in the interest of a fair and 

orderly market, including if necessary to 

prevent fraudulent and manipulative 

acts and practices and protect investors, 

or if a Market Maker does not satisfy its 

obligations with respect to an 

appointment.40 The Exchange would 

also retain the ability to restrict a Market 

Maker’s registration in option issues for 

up to six months if a Market Maker’s 

appointment in that option issue or 

issues had been previously terminated 

under the rule, and continues to give the 

Exchange discretion to allow the Market 

Maker to resume that appointment 

earlier than the prescribed six-month 

period or to maintain the suspension for 

the entire period. Finally, the Exchange 

is not proposing changes to the 

disciplinary and appeals process for 

Market Makers that do not meet the 

minimum performance standards. 

Accordingly, the Exchange believes this 

proposal is consistent with Section 6(d) 

of the Exchange Act.41

The proposed rule change would not 

result in unfair discrimination, as it 

applies to all Market Makers. Further, 

the proposed rule change would reduce 

the burden on Market Makers to manage 

their appointments and thus provide 

liquidity to the Exchange. Nevertheless, 

Market Makers would still be required 

to comply with certain obligations to 

maintain their status as a Market Maker, 

including that they provide continuous, 

two-sided quotations in their appointed 

securities.42

Finally, as noted above, the proposed 

modifications to the appointment 

process would align the rules of the 

Exchange with the rules of other options 

exchanges, where Market Makers 

presently have the ability to select and 

make changes to their appointment via 

an Exchange-approved electronic 

interface.43 The Exchange believes this 

consistency across exchanges would 

remove impediments to and perfect the 

mechanism of a free and open market by 

ensuring that members, regulators and 

the public can more easily navigate the 

Exchange’s rulebook and better 

understand the appointment process. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change would impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act because it 

provides the same relief to a group of 

similarly situated market participants— 

Market Makers. The proposed rule 

change would reduce the burden on 

Market Makers to manage their 

appointments and thus provide 

liquidity to the Exchange. 

The Exchange does not believe the 

proposed rule change would help 

Market Makers to the detriment of 

market participants on other exchanges, 

particularly because the proposed 

functionality is similar to functionality 

already available on other exchanges.44

Market Makers would still be subject to 

the same obligations with respect to its 

appointments; the proposed rule change 

would make the appointment process 

more efficient for Market Makers. The 

Exchange believes that the proposed 

rule change would relieve any burden 

on, or otherwise promote, competition, 

as it would enable Market Makers to 

manage their appointments with more 

flexibility and in a timelier manner. The 

Exchange believes this would provide 

Market Makers with more efficient 

access to the securities in which they 

want to make markets and thus more 

quickly begin disseminating competitive 

quotations in those securities, which 

would provide additional liquidity and 

enhance competition in those securities. 

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 

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 self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

the 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– 

NYSEArca–2015–17 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. 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 67 / Wednesday, April 8, 2015 / Notices 18913 

45 17 CFR 200.30–3(a)(12). 

All submissions should refer to File 

Number SR–NYSEArca–2015–17. 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–2015–17, and should be 

submitted on or before April 29, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.45

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–07963 Filed 4–7–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

31544; File No. 812–14401] 

Janus ETF Trust, et al.; Notice of 

Application 

April 1, 2015. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of an application for an 

order under section 6(c) of the 

Investment Company Act of 1940 (the 

‘‘Act’’) for an exemption from sections 

2(a)(32), 5(a)(1), 22(d), and 22(e) of the 

Act and rule 22c-1 under the Act, under 

sections 6(c) and 17(b) of the Act for an 

exemption from sections 17(a)(1) and 

17(a)(2) of the Act, and under section 

12(d)(1)(J) for an exemption from 

sections 12(d)(1)(A) and 12(d)(1)(B) of 

the Act. 

SUMMARY: Applicants request an order 

that would permit (a) series of certain 

open-end management investment 

companies to issue shares (‘‘Shares’’) 

redeemable in large aggregations only 

(‘‘Creation Units’’); (b) secondary market 

transactions in Shares to occur at 

negotiated market prices rather than at 

net asset value (‘‘NAV’’); (c) certain 

series to pay redemption proceeds, 

under certain circumstances, more than 

seven days after the tender of Shares for 

redemption; (d) certain affiliated 

persons of the series to deposit 

securities into, and receive securities 

from, the series in connection with the 

purchase and redemption of Creation 

Units; (e) certain registered management 

investment companies and unit 

investment trusts outside of the same 

group of investment companies as the 

series to acquire Shares; and (f) certain 

series to perform creations and 

redemptions of Creation Units in-kind 

in a master-feeder structure. 

Applicants: Janus ETF Trust (the 

‘‘Trust’’), Janus Capital Management 

LLC (the ‘‘Initial Adviser’’), and Janus 

Distributors LLC (the ‘‘Distributor’’). 

DATES: Filing Dates: The application was 

filed on December 18, 2014, and 

amended on March 20, 2015. 

Hearing or Notification of Hearing: An 

order granting the requested relief will 

be issued unless the Commission orders 

a hearing. Interested persons may 

request a hearing by writing to the 

Commission’s Secretary and serving 

applicants with a copy of the request, 

personally or by mail. Hearing requests 

should be received by the Commission 

by 5:30 p.m. on April 27, 2015, and 

should be accompanied by proof of 

service on applicants, in the form of an 

affidavit, or for lawyers, a certificate of 

service. Pursuant to rule 0–5 under the 

Act, hearing requests should state the 

nature of the writer’s interest, any facts 

bearing upon the desirability of a 

hearing on the matter, the reason for the 

request, and the issues contested. 

Persons who wish to be notified of a 

hearing may request notification by 

writing to the Commission’s Secretary. 

ADDRESSES: The Commission: Secretary, 

U.S. Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549–1090; 

Applicants: 151 Detroit Street, Denver, 

Colorado 80206. 

FOR FURTHER INFORMATION CONTACT: 

David J. Marcinkus, Senior Counsel at 

(202) 551–6882, or David P. Bartels, 

Branch Chief, at (202) 551–6821 

(Division of Investment Management, 

Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

Web site by searching for the file 

number, or for an applicant using the 

Company name box, at http://

www.sec.gov/search/search.htm or by 

calling (202) 551–8090. 

Applicants’ Representations 

1. Janus ETF Trust is organized as a 

Delaware statutory trust. The Trust will 

be registered under the Act as an openend management investment company. 

2. The Initial Adviser is registered as 

an investment adviser under the 

Investment Advisers Act of 1940 (the 

‘‘Advisers Act’’) and will be the 

investment adviser to the initial series 

of the Trust (the ‘‘Initial Fund’’). Any 

other Adviser (defined below) will also 

be registered as an investment adviser 

under the Advisers Act. Each Adviser 

may enter into sub-advisory agreements 

with one or more investment advisers to 

act as sub-advisers to particular Funds 

(each, a ‘‘Sub-Adviser’’). Any SubAdviser will either be registered under 

the Advisers Act or will not be required 

to register thereunder. 

3. The Trust will enter into a 

distribution agreement with the 

Distributor. The distributor for the 

Initial Fund will be the Distributor. The 

Distributor is a broker-dealer (‘‘Broker’’) 

registered under the Securities 

Exchange Act of 1934 (the ‘‘Exchange 

Act’’) and will act as distributor and 

principal underwriter of one or more of 

the Funds. The distributor of any Fund 

may be an affiliated person, as defined 

in section 2(a)(3) of the Act (‘‘Affiliated 

Person’’), or an affiliated person of an 

Affiliated Person (‘‘Second-Tier 

Affiliate’’), of that Fund’s Adviser and/ 

or Sub-Advisers. No distributor will be 

affiliated with any Exchange (defined 

below). 

4. Applicants request that the order 

apply to the Initial Fund and any 

additional series of the Trust, and any 

other open-end management investment 

company or series thereof, that may be 

created in the future that operate as an 

exchanged-traded fund (‘‘ETF’’) and that 

track a specified index comprised of 

domestic or foreign equity and/or fixed 

income securities (each, an ‘‘Underlying 

Index’’) (together, the ‘‘Future Funds’’). 

Any Future Fund will (a) be advised by 

the Initial Adviser or an entity 

controlling, controlled by, or under 

common control with the Initial Adviser 

(each, an ‘‘Adviser’’) and (b) comply 


asabaliauskas on DSK5VPTVN1PROD with NOTICES