5148 Federal Register / Vol. 81, No. 20 / Monday, February 1, 2016 / Notices 

30 15 U.S.C. 78s(b)(3)(A). 

31 17 CFR 240.19b–4(f)(2). 

32 15 U.S.C. 78s(b)(2)(B). 33 17 CFR 200.30–3(a)(12). 

Arca, NASDAQ OMX, BATS, and Direct 

Edge. 

The fact that proprietary data from 

ATSs, internalizing broker-dealers, and 

vendors can bypass SROs is significant 

in two respects. First, non-SROs can 

compete directly with SROs for the 

production and sale of proprietary data 

products. By way of example, BATS and 

NYSE Arca both published proprietary 

data on the Internet before registering as 

exchanges. Second, because a single 

order or transaction report can appear in 

an SRO proprietary product, a non-SRO 

proprietary product, or both, the amount 

of data available via proprietary 

products is greater in size than the 

actual number of orders and transaction 

reports that exist in the marketplace. 

Because market data users can find 

suitable substitutes for most proprietary 

market data products, a market that 

overprices its market data products 

stands a high risk that users may 

substitute another source of market data 

information for its own. 

Those competitive pressures imposed 

by available alternatives are evident in 

the Exchange’s proposed pricing. 

In addition to the competition and 

price discipline described above, the 

market for proprietary data products is 

also highly contestable because market 

entry is rapid and inexpensive. The 

history of electronic trading is replete 

with examples of entrants that swiftly 

grew into some of the largest electronic 

trading platforms and proprietary data 

producers: Archipelago, Bloomberg 

Tradebook, Island, RediBook, Attain, 

TrackECN, BATS Trading and Direct 

Edge. As noted above, BATS launched 

as an ATS in 2006 and became an 

exchange in 2008, while Direct Edge 

began operations in 2007 and obtained 

exchange status in 2010. 

In determining the proposed change 

to the fees for NYSE Order Imbalances 

and NYSE Alerts, the Exchange 

considered the competitiveness of the 

market for proprietary data and all of 

the implications of that competition. 

The Exchange believes that it has 

considered all relevant factors and has 

not considered irrelevant factors in 

order to establish fair, reasonable, and 

not unreasonably discriminatory fees 

and an equitable allocation of fees 

among all users. The existence of 

numerous alternatives to the Exchange’s 

products, including proprietary data 

from other sources, ensures that the 

Exchange cannot set unreasonable fees, 

or fees that are unreasonably 

discriminatory, when vendors and 

subscribers can elect these alternatives 

or choose not to purchase a specific 

proprietary data product if the attendant 

fees are not justified by the returns that 

any particular vendor or data recipient 

would achieve through the purchase. 

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 

The foregoing rule change is effective 

upon filing pursuant to section 

19(b)(3)(A) 30 of the Act and 

subparagraph (f)(2) of Rule 19b–4 31

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

Exchange. 

At any time within 60 days of the 

filing of such 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 

under section 19(b)(2)(B) 32 of the Act to 

determine whether the proposed rule 

change 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– 

NYSE–2016–08 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–NYSE–2016–08. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–NYSE– 

2016–08 and should be submitted on or 

before February 22, 2016. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.33

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2016–01712 Filed 1–29–16; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Proposed Collection; Comment 

Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE., Washington, DC 

20549–2736. 

Extension: 

Rule 17e–1; SEC File No. 270–224, OMB 

Control No. 3235–0217. 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.) (‘‘Paperwork 

Reduction Act’’), the Securities and 

Exchange Commission (the 

‘‘Commission’’) is soliciting comments 

on the collection of information 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 


rmajette on DSK2TPTVN1PROD with NOTICES
Federal Register / Vol. 81, No. 20 / Monday, February 1, 2016 / Notices 5149 

1Based on data from Morningstar, as of 

September, 2015, there are 12,426 registered funds 

(open-end funds, closed-end funds, and exchangetraded funds), 4,683 funds of which have 

subadvisory relationships (approximately 38%). 

Based on data from the 2015 ICI Factbook, 843 new 

funds were established in 2014 (654 open-end 

funds + 176 exchange-traded funds + 13 closed-end 

funds (from the ICI Research Perspective, April 

2015)). 843 new funds × 38% = 320 funds. 

2 3 hours ÷ 4 rules = 0.75 hours. 3This estimate is based on the following 

calculation: 0.75 hours × 320 funds = 240 burden 

hours. 4 1,696 funds × 0.6 = 1,018 funds. 5 1,018 funds × 50 hours per fund = 50,900 hours. 6 240 hours + 50,900 hours = 51,140 hours. 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 76486 

(Nov. 20, 2015), 80 FR 74169 (‘‘Notice’’). 

Management and Budget (‘‘OMB’’) for 

extension and approval. 

Rule 17e–1 (17 CFR 270.17e–1) under 

the Investment Company Act of 1940 

(15 U.S.C. 80a–1 et seq.) (the 

‘‘Investment Company Act’’) deems a 

remuneration as ‘‘not exceeding the 

usual and customary broker’s 

commission’’ for purposes of Section 

17(e)(2)(A) if, among other things, a 

registered investment company’s 

(‘‘fund’s’’) board of directors has 

adopted procedures reasonably 

designed to provide that the 

remuneration to an affiliated broker is a 

reasonable and fair amount compared to 

that received by other brokers in 

connection with comparable 

transactions involving similar securities 

being purchased or sold on a securities 

exchange during a comparable period of 

time and the board makes and approves 

such changes as it deems necessary. In 

addition, each quarter, the board must 

determine that all transactions effected 

under the rule during the preceding 

quarter complied with the established 

procedures. Rule 17e–1 also requires the 

fund to (i) maintain permanently a 

written copy of the procedures adopted 

by the board for complying with the 

requirements of the rule; and (ii) 

maintain for a period of six years, the 

first two in an easily accessible place, a 

written record of each transaction 

subject to the rule, setting forth the 

amount and source of the commission, 

fee, or other remuneration received; the 

identity of the broker; the terms of the 

transaction; and the materials used to 

determine that the transactions were 

effected in compliance with the 

procedures adopted by the board. The 

recordkeeping requirements under rule 

17e–1 enable the Commission to ensure 

that affiliated brokers receive 

compensation that does not exceed the 

usual and customary broker’s 

commission. Without the recordkeeping 

requirements, Commission inspectors 

would have difficulty ascertaining 

whether funds were complying with 

rule 17e–1. 

Based on an analysis of fund filings, 

the staff estimates that approximately 

320 funds enter into subadvisory 

agreements each year.1 Based on 

discussions with industry 

representatives, the staff estimates that 

it will require approximately 3 attorney 

hours to draft and execute additional 

clauses in new subadvisory contracts in 

order for funds and subadvisers to be 

able to rely on the exemptions in rule 

17e–1. Because these additional clauses 

are identical to the clauses that a fund 

would need to insert in their 

subadvisory contracts to rely on rules 

12d3–1, 10f–3, and 17a–10, and because 

we believe that funds that use one such 

rule generally use all of these rules, we 

apportion this 3 hour time burden 

equally to all four rules. Therefore, we 

estimate that the burden allocated to 

rule 17e–1 for this contract change 

would be 0.75 hours.2 Assuming that all 

320 funds enter into new subadvisory 

contracts each year make the 

modification to their contract required 

by the rule, we estimate that the rule’s 

contract modification requirement will 

result in 240 burden hours annually.3

Based on an analysis of fund filings, 

we estimate that approximately 1,696 

funds use at least one affiliated broker. 

Based on staff experience and 

conversations with fund representatives, 

the staff estimates approximately 40 

percent of transactions (and thus, 40% 

of funds) that occur under the rule 17e– 

1 would be exempt from its 

recordkeeping and review requirements. 

This would leave approximately 1,018 

funds 4 still subject to the rule’s 

recordkeeping and review requirements. 

Based on staff experience and 

conversations with fund representatives, 

we estimate that the burden of 

compliance with rule 17e–1 is 

approximately 50 hours per fund per 

year. This time is spent, for example, 

reviewing the applicable transactions 

and maintaining records. Accordingly, 

we calculate the total estimated annual 

internal burden of complying with the 

review and recordkeeping requirements 

of rule 17e–1 to be approximately 

50,900 hours 5 and the total annual 

burden of the rule’s paperwork 

requirements is 51,140 hours.6

Estimates of average burden hours are 

made solely for the purposes of the 

Paperwork Reduction Act and are not 

derived from a comprehensive or even 

a representative survey or study of the 

costs of Commission rules and forms. 

The collection of information under rule 

17e–1 is mandatory. The information 

provided under rule 17e–1 will not be 

kept confidential. An agency may not 

conduct or sponsor, and a person is not 

required to respond to, a collection of 

information unless it displays a 

currently valid OMB control number. 

Written comments are invited on: (a) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information will have practical utility; 

(b) the accuracy of the Commission’s 

estimate of the burden of the collection 

of information; (c) ways to enhance the 

quality, utility, and clarity of the 

information collected; and (d) ways to 

minimize the burden of the collection of 

information on respondents, including 

through the use of automated collection 

techniques or other forms of information 

technology. Consideration will be given 

to comments and suggestions submitted 

in writing within 60 days of this 

publication. 

Please direct your written comments 

to Pamela Dyson, Director/Chief 

Information Officer, Securities and 

Exchange Commission, C/O Remi 

Pavlik-Simon, 100 F Street NE., 

Washington, DC 20549; or send an email 

to: PRA_Mailbox@sec.gov. 

Dated: January 25, 2016. 

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2016–01717 Filed 1–29–16; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–76974; File No. SR– 

NYSEArca–2015–110] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of 

Amendment No. 2 to Proposed Rule 

Change Amending NYSE Arca Equities 

Rule 8.600 To Adopt Generic Listing 

Standards for Managed Fund Shares 

January 26, 2016. 

On November 6, 2015, NYSE Arca, 

Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) 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 adopt generic listing 

standards for Managed Fund Shares. 

The proposed rule change was 

published for comment in the Federal 

Register on November 27, 2015.3 On 

November 23, 2015, after issuance of the 

Notice but before its publication, the 

Exchange filed Amendment No. 1 to the 


rmajette on DSK2TPTVN1PROD with NOTICES