184 Federal Register / Vol. 83, No. 1 / Tuesday, January 2, 2018 / Notices 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

5The term ‘‘Member’’ is defined as ‘‘any 

registered broker or dealer that has been admitted 

to membership in the Exchange.’’ See Exchange 

Rule 1.5(n). 

6 ‘‘Firm’’ applies to any transaction identified by 

a Member for clearing in the Firm range at the OCC, 

excluding any Joint Back Office transaction. See the 

Exchange’s fee schedule available at http://

markets.cboe.com/us/options/membership/fee_

schedule/bzx/. 

7 ‘‘Broker Dealer’’ applies to any order for the 

account of a broker dealer, including a foreign 

broker dealer, that clears in the Customer range at 

the Options Clearing Corporation (‘‘OCC’’). See id. 

8 ‘‘Joint Back Office’’ applies to any transaction 

identified by a Member for clearing in the Firm 

range at the OCC that is identified with an origin 

code as Joint Back Office. A Joint Back Office 

participant is a Member that maintains a Joint Back 

Office arrangement with a clearing broker-dealer. 

See id. 

9 ‘‘Penny Pilot Securities’’ are those issues quoted 

pursuant to Exchange Rule 21.5, Interpretation and 

Policy .01. 

10The Exchange initially filed the proposed rule 

changes on December 1, 2017 (SR–CboeBZX–2017– 

10). On December 12, 2017 the Exchange withdrew 

SR–CboeBZX–2017–10 and then subsequently 

submitted this filing (SR–CboeBZX–2017–14). 

11Fee code PF is appended to Firm, Broker Dealer 

and Joint Back Office orders in Penny Pilot 

Securities that add liquidity. Orders that yield fee 

code PF are provided a standard rebate of $0.25 per 

contract. See the Exchange’s fee schedule available 

at http://markets.cboe.com/us/options/ 

membership/fee_schedule/bzx/. 

12 ‘‘ADAV’’ means average daily added volume 

calculated as the number of contracts added per 

day. See id. 

13 ‘‘Away Market Maker’’ applies to any 

transaction identified by a Member for clearing in 

the Market Maker range at the OCC, where such 

Member is not registered with the Exchange as a 

Market Maker, but is registered as a market maker 

on another options exchange. See id. 

14 ‘‘OCV’’ means the total equity and ETF options 

volume that clears in the Customer range at the 

Options Clearing Corporation (‘‘OCC’’) for the 

month for which the fees apply, excluding volume 

on any day that the Exchange experiences an 

Exchange System Disruption and on any day with 

a scheduled early market close. See id. 

15 ‘‘ADV’’ means average daily volume calculated 

as the number of contracts added or removed, 

combined, per day. See id. 

16 15 U.S.C. 78f. 

17 15 U.S.C. 78f(b)(4). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Brent J. Fields, 

Secretary. 

[FR Doc. 2017–28309 Filed 12–29–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82401; File No. SR– 

CboeBZX–2017–014] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change Related to Fees 

for Use on the Cboe BZX Exchange, 

Inc. Equity Options Platform 

December 26, 2017. 

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 December 

12, 2017, Cboe BZX Exchange, Inc. 

(‘‘BZX’’ or the ‘‘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 Exchange has designated the 

proposed rule change as one 

establishing or changing a member due, 

fee, or other charge imposed by the 

Exchange under Section 19(b)(3)(A)(ii) 

of the Act 3 and Rule 19b–4(f)(2) 

thereunder,4 which renders the 

proposed rule change effective upon 

filing with the Commission. 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 filed a proposal to 

amend its fees and rebates applicable to 

Members 5 and non-Members of the 

Exchange pursuant to BZX Rule 15.1(a) 

and (c). 

The text of the proposed rule change 

is available at the Exchange’s website at 

www.markets.cboe.com, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

fee schedule for its equity options 

platform (‘‘BZX Options’’) to adopt a 

new Firm,6 Broker Dealer 7 and Joint 

Back Office 8 Penny Pilot 9 Add Volume 

Tier under footnote 2, effective 

immediately.10

The Exchange currently offers one 

Firm, Broker Dealer and Joint Back 

Office Penny Add Volume Tier under 

footnote 2, which provides an enhanced 

rebate of $0.46 per contract for 

qualifying orders that add liquidity in 

Penny Pilot Securities and yield fee 

code PF.11 The Exchange now proposes 

to add a new Tier 1 and to re-number 

current Tier 1 as Tier 2. 

Currently under Tier 1, to be renumbered as Tier 2, a Member’s orders 

that yield fee code PF receive an 

enhanced rebate of $0.46 per contract 

where the Member has an: (i) ADAV 12

in Away Market Maker 13, Firm, Broker 

Dealer and Joint Back Office orders 

greater than or equal to 1.05% of 

average OCV 14; and (ii) ADV 15 equal to 

or greater than 1.95% of average OCV. 

The Exchange proposes to adopt new 

Tier 1, which would be similar to renumbered Tier 2 but would have lower 

criteria (but with different qualifying 

volume, as described below) and a 

lower rebate. In order to provide an 

incentive to encourage additional 

participation by Members that do not 

participate on the Exchange as Market 

Makers or Away Market Makers, new 

Tier 1 would not take Away Market 

Maker volume into account for purposes 

of the Tier calculation. Specifically, 

pursuant to new Tier 1 a Member’s 

orders that yield fee code PF would 

receive an enhanced rebate of $0.38 per 

contract where the Member has an 

ADAV in Firm, Broker Dealer and Joint 

Back Office orders greater than or equal 

to 0.20% of average OCV. 

Implementation Date 

The Exchange proposes to implement 

the above changes to its fee schedule 

immediately. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule changes are consistent 

with the objectives of Section 6 of the 

Act,16 in general, and furthers the 

objectives of Section 6(b)(4),17 in 

particular, as it is designed to provide 

for the equitable allocation of reasonable 

dues, fees and other charges among its 

Members and other persons using its 

facilities. The Exchange believes that 

the proposed modification to the 

Exchange’s tiered pricing structure is 

reasonable, fair and equitable, and nondiscriminatory. The Exchange operates 

in a highly competitive market in which 


daltland on DSKBBV9HB2PROD with NOTICES
Federal Register / Vol. 83, No. 1 / Tuesday, January 2, 2018 / Notices 185 

18 15 U.S.C. 78s(b)(3)(A). 19 17 CFR 240.19b–4(f). 

market participants may readily send 

order flow to many competing venues if 

they deem fees at the Exchange to be 

excessive or incentives provided to be 

insufficient. The proposed structure 

remains intended to attract order flow to 

the Exchange by offering market 

participants a competitive pricing 

structure. The Exchange believes it is 

reasonable to offer and incrementally 

modify incentives intended to help to 

contribute to the growth of the 

Exchange. 

Volume-based pricing structures such 

as that maintained by the Exchange 

have been widely adopted by 

exchanges, including the Exchange, and 

are equitable because they are open to 

all Members on an equal basis and 

provide additional benefits or discounts 

that are reasonably related to: (i) The 

value to an exchange’s market quality; 

(ii) associated higher levels of market 

activity, such as higher levels of 

liquidity provisions and/or growth 

patterns; and (iii) introduction of higher 

volumes of orders into the price and 

volume discovery processes. In 

particular, the proposed change to 

footnote 2 is a minor change intended 

to provide an incentive similar to an 

existing incentive. The proposed 

incentive, in turn, is intended to 

incentivize Members to send increased 

order flow to the Exchange in an effort 

to qualify for the enhanced rebates made 

available by the tier. This increased 

order flow, in turn, contributes to the 

growth of the Exchange. The Exchange 

also believes the rebate associated with 

the tier is reasonable as it reflects the 

difficulty in achieving the tier, requiring 

less participation than existing Tier 1 

but also providing a lower rebate. The 

Exchange again notes that the proposed 

tier also does not include the same 

volume as is included when 

determining whether a Member has 

qualified for existing Tier 1, specifically, 

the new tier would not take Away 

Market Maker volume into account, 

whereas existing Tier 1 does. The 

Exchange believes that the proposal to 

only count Firm, Broker Dealer and 

Joint Back Office volume for purposes of 

Tier 1 is reasonable, fair and equitable 

and not unreasonably discriminatory 

because it is intended to encourage 

participants that do not participate as 

Market Makers or Away Market Makers 

on the Exchange to increase their 

participation on the Exchange. The 

Exchange also believes the proposal is 

reasonable, equitably allocated and not 

unreasonably discriminatory because 

there are other existing incentives 

offered by the Exchange that are 

provided to Market Makers and Away 

Market Makers, and because a 

participant with Away Market Maker 

volume could still qualify for the new 

tier to the extent they also have Firm, 

Broker Dealer and Joint Back Office 

volume that reaches the required level, 

it is just that their Away Market Maker 

Volume will not be included in the 

calculation. The Exchange believes that 

the incentives it provides remain 

reasonably related to the value to the 

Exchange’s market quality associated 

with higher levels of market activity, 

including liquidity provision and the 

introduction of higher volumes of orders 

into the price and volume discovery 

processes. The proposed change to the 

tiered pricing structure is not unfairly 

discriminatory because it will apply 

equally to all Members. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange believes the proposed 

amendment to its fee schedule would 

not impose any burden on competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act. 

The Exchange does not believe that the 

proposed change represents a significant 

departure from previous pricing offered 

by the Exchange or pricing offered by 

the Exchange’s competitors. 

Additionally, Members may opt to 

disfavor the Exchange’s pricing if they 

believe that alternatives offer them 

better value. Accordingly, the Exchange 

does not believe that the proposed 

change will impair the ability of 

Members or competing venues to 

maintain their competitive standing in 

the financial markets. The Exchange 

does not believe that the proposed 

change to the Exchange’s tiered pricing 

structure burdens competition, but 

instead, enhances competition, as it is 

intended to increase the 

competitiveness of the Exchange. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any written 

comments from members or other 

interested parties. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

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

of the Act 18 and paragraph (f) of Rule 

19b–4 thereunder.19 At any time within 

60 days of the filing of the proposed rule 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

CboeBZX–2017–014 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-CboeBZX–2017–014. 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 website (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 website 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 this 

filing will also be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 


daltland on DSKBBV9HB2PROD with NOTICES
186 Federal Register / Vol. 83, No. 1 / Tuesday, January 2, 2018 / Notices 

20 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Commission approved Nasdaq Rule 5745 in 

Securities Exchange Act Release No. 34–73562 

(Nov. 7, 2014), 79 FR 68309 (Nov. 14, 2014) (SR– 

NASDAQ–2014–020). 

4Additional information regarding the Fund will 

be available on the free public website for the Fund 

at www.reinhartfunds.com and in the Registration 

Statement for the Fund. 

5See Post-Effective Amendment number 316 to 

the Registration Statement on Form N–1A for 

Managed Portfolio Series dated Oct. 26, 2017 (File 

Nos. 333–172080 and 811–22525). The descriptions 

of the Fund and the Shares contained herein 

conform to the initial Registration Statement. 

6The Commission has issued an order granting 

Managed Portfolio Series and certain affiliates 

exemptive relief under the Investment Company 

Act of 1940, as amended (the ‘‘Investment Company 

Act’’). See Investment Company Act Release No. 

32893 (Nov. 28, 2017) (File No. 812–14830). 

7An investment adviser to an open-end fund is 

required to be registered under the Advisers Act. As 

a result, the Adviser and its related personnel are 

subject to the provisions of Rule 204A–1 under the 

Advisers Act relating to codes of ethics. This Rule 

requires investment advisers to adopt a code of 

ethics that reflects the fiduciary nature of the 

relationship to clients as well as compliance with 

other applicable securities laws. Accordingly, 

procedures designed to prevent the communication 

and misuse of non-public information by an 

investment adviser must be consistent with Rule 

204A–1 under the Advisers Act. In addition, Rule 

206(4)–7 under the Advisers Act makes it unlawful 

for an investment adviser to provide investment 

advice to clients unless such investment adviser has 

(i) adopted and implemented written policies and 

procedures reasonably designed to prevent 

violation, by the investment adviser and its 

supervised persons, of the Advisers Act and the 

Commission rules adopted thereunder; (ii) 

implemented, at a minimum, an annual review 

regarding the adequacy of the policies and 

procedures established pursuant to subparagraph (i) 

above and the effectiveness of their 

implementation; and (iii) designated an individual 

(who is a supervised person) responsible for 

administering the policies and procedures adopted 

under subparagraph (i) above. 

8Additional information regarding the Fund will 

be available on a free public website for the Fund 

(www.reinhartfunds.com which may contain links 

for certain information to www.nextshares.com) and 

in the Registration Statement for the Fund. 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–CboeBZX–2017–014 and 

should be submitted on or before 

January 23, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Brent J. Fields, 

Secretary. 

[FR Doc. 2017–28228 Filed 12–29–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82408; File No. SR– 

NASDAQ–2017–131] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing of Proposed Rule Change To 

List and Trade the Shares of the 

Reinhart Intermediate Bond 

NextShares Fund 

December 27, 2017. 

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 December 

20, 2017, The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’ or ‘‘Exchange’’) 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 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 list and 

trade under Nasdaq Rule 5745 

(Exchange-Traded Managed Fund 

Shares (‘‘NextShares’’)) the common 

shares (‘‘Shares’’) of the Reinhart 

Intermediate Bond NextShares (the 

‘‘Fund’’). 

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 list and 

trade the Shares of the Fund under 

Nasdaq Rule 5745, which governs the 

listing and trading of exchange-traded 

managed fund shares, as defined in 

Nasdaq Rule 5745(c)(1), on the 

Exchange.3 Managed Portfolio Series, 

which is discussed below, is registered 

with the Commission as an open-end 

investment company and has filed a 

registration statement on Form N–1A 

(‘‘Registration Statement’’) with the 

Commission. The Fund is a series of 

Managed Portfolio Series and will be 

advised by an investment adviser 

registered under the Investment 

Advisers Act of 1940 (‘‘Advisers Act’’), 

as described below. The Fund will be 

actively managed and will pursue the 

principal investment strategy noted 

below.4

I. Managed Portfolio Series 

Managed Portfolio Series is registered 

with the Commission as an open-end 

investment company and has filed a 

Registration Statement with the 

Commission.5 The following Fund is a 

series of Managed Portfolio Series.6

Reinhart Partners, Inc. (the ‘‘Adviser’’) 

will be the adviser to the Fund. The 

Adviser is not a registered broker-dealer, 

and is not affiliated with a brokerdealer. Personnel who make decisions 

on the Fund’s portfolio composition 

must be subject to procedures designed 

to prevent the use and dissemination of 

material, non-public information 

regarding the open-end fund’s 

portfolio.7

In the event that (a) the Adviser 

registers as a broker-dealer or becomes 

newly affiliated with a broker-dealer, or 

(b) any new adviser or sub-adviser to the 

Fund is a registered broker-dealer or is 

affiliated with a broker-dealer, such 

adviser or sub-adviser will implement 

and will maintain a fire wall with 

respect to its relevant personnel and/or 

such broker-dealer affiliate, as 

applicable, regarding access to 

information concerning the composition 

and/or changes to the Fund’s portfolio 

and will be subject to procedures 

designed to prevent the use and 

dissemination of material non-public 

information regarding such portfolio. 

Quasar Distributors, LLC will be the 

principal underwriter and distributor of 

the Fund’s Shares. U.S. Bancorp Fund 

Services, LLC will act as the 

administrator and accounting agent to 

the Fund; U.S. Bancorp Fund Services, 

LLC will act as transfer agent to the 

Fund; and U.S. Bank, NA will act as 

custodian to the Fund. 

The Fund will be actively managed 

and will pursue the principal 

investment strategies described below.8

Reinhart Intermediate Bond NextShares 

The investment objective of the 

Reinhart Intermediate Bond NextShares 

is that the Fund will seek to outperform 

its benchmark, the Barclays Capital 

Intermediate Government/Credit Index, 

measured over an entire market cycle, 

while maintaining key risks (interest 


daltland on DSKBBV9HB2PROD with NOTICES