Federal Register / Vol. 79, No. 197 / Friday, October 10, 2014 / Notices 61355 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4Rule 2(a)—Equities states that the term 

‘‘member,’’ when referring to a natural person, 

means a natural person associated with a member 

organization who has been approved by the 

Exchange and designated by such member 

organization to effect transactions on the Exchange 

trading Floor or any facility thereof. 

5Floor Officials are delegated certain authority 

from the Board of Directors of the Exchange to 

supervise and regulate active openings and unusual 

situations that arise in connection with the making 

of bids, offers or transactions on the trading Floor, 

and to review and approve certain trading actions, 

such as trades to be effected at wide variations in 

price and delayed openings and trading halts. 

6Pursuant to Rules 46 and 46A—Equities, Floor 

Governors are one of several ranks of the broader 

category of Floor Officials, including, in order of 

increasing seniority, Floor Officials, Senior Floor 

Officials, Executive Floor Officials, Floor Governors 

and Executive Floor Governors. See Securities 

Exchange Act Release No. 57627 (April 4, 2008), 73 

FR 19919 (April 11, 2008) (SR–NYSE–2008–19) 

(discussing New York Stock Exchange LLC 

(‘‘NYSE’’) Rules 46 and 46A that NYSE MKT 

adopted following the NYSE’s acquisition of the 

Continued 

which any purchase in an Affiliated 

Underwriting occurred, the first two 

years in an easily accessible place, a 

written record of each purchase of 

securities in Affiliated Underwritings 

once an investment by a Fund of Funds 

in the securities of the Fund exceeds the 

limit of section 12(d)(1)(A)(i) of the Act, 

setting forth from whom the securities 

were acquired, the identity of the 

underwriting syndicate’s members, the 

terms of the purchase, and the 

information or materials upon which 

the Board’s determinations were made. 

9. Before investing in a Fund in 

excess of the limit in section 

12(d)(1)(A), a Fund of Funds and the 

applicable Trust will execute a FOF 

Participation Agreement stating without 

limitation that their respective boards of 

directors or trustees and their 

investment advisers, or trustee and 

Sponsor, as applicable, understand the 

terms and conditions of the order, and 

agree to fulfill their responsibilities 

under the order. At the time of its 

investment in Shares of a Fund in 

excess of the limit in section 

12(d)(1)(A)(i), a Fund of Funds will 

notify the Fund of the investment. At 

such time, the Fund of Funds will also 

transmit to the Fund a list of the names 

of each Fund of Funds Affiliate and 

Underwriting Affiliate. The Fund of 

Funds will notify the Fund of any 

changes to the list of the names as soon 

as reasonably practicable after a change 

occurs. The Fund and the Fund of 

Funds will maintain and preserve a 

copy of the order, the FOF Participation 

Agreement, and the list with any 

updated information for the duration of 

the investment and for a period of not 

less than six years thereafter, the first 

two years in an easily accessible place. 

10. Before approving any advisory 

contract under section 15 of the Act, the 

board of directors or trustees of each 

Investing Management Company 

including a majority of the disinterested 

directors or trustees, will find that the 

advisory fees charged under such 

contract are based on services provided 

that will be in addition to, rather than 

duplicative of, the services provided 

under the advisory contract(s) of any 

Fund, or its respective Master Fund, in 

which the Investing Management 

Company may invest. These findings 

and their basis will be fully recorded in 

the minute books of the appropriate 

Investing Management Company. 

11. Any sales charges and/or service 

fees charged with respect to shares of a 

Fund of Funds will not exceed the 

limits applicable to a fund of funds as 

set forth in NASD Conduct Rule 2830. 

12. No Fund, or its respective Master 

Fund, will acquire securities of an 

investment company or company 

relying on section 3(c)(1) or 3(c)(7) of 

the Act in excess of the limits contained 

in section 12(d)(1)(A) of the Act, except 

to the extent (i) the Fund, or its 

respective Master Fund, acquires 

securities of another investment 

company pursuant to exemptive relief 

from the Commission permitting the 

Fund, or its respective Master Fund, to 

acquire securities of one or more 

investment companies for short-term 

cash management purposes or (ii) the 

Fund acquires securities of the Master 

Fund pursuant to the Master-Feeder 

Relief. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–24209 Filed 10–9–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73302; File No. SR– 

NYSEMKT–2014–85] 

Self-Regulatory Organizations; NYSE 

MKT LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change That Constitutes a Stated 

Interpretation With Respect to the 

Meaning, Administration, and 

Enforcement of Rule 46—Equities 

October 6, 2014. 

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 October 

2, 2014, NYSE MKT LLC (the 

‘‘Exchange’’ or ‘‘NYSE MKT’’) 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 a rule change 

that constitutes a stated interpretation 

with respect to the meaning, 

administration, and enforcement of Rule 

46—Equities. The Exchange is not 

proposing any changes to the text of the 

current version of Rule 46– Equities. 

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 

NYSE MKT LLC (‘‘NYSE MKT’’ or the 

‘‘Exchange’’) proposes a rule change that 

constitutes a stated interpretation with 

respect to the meaning, administration, 

and enforcement of Rule 46—Equities 

(‘‘Rule 46’’) in connection with the 

transfer of qualified Intercontinental 

Exchange, Inc. (‘‘ICE’’) staff Floor 

Governors to NYSE Regulation, Inc. 

(‘‘NYSE Regulation’’). 

Rule 46 permits the Exchange to 

appoint active NYSE MKT members 4 as 

Floor Officials.5 Rule 46 also permits 

the Exchange to appoint ‘‘qualified’’ ICE 

employees to act as Floor Governors, 

one of the more senior types of Floor 

Officials.6 Supplementary Material .10 

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61356 Federal Register / Vol. 79, No. 197 / Friday, October 10, 2014 / Notices 

Exchange. See Securities Exchange Act Release No. 

58705 (October 1, 2008), 73 FR 46075 (July 30, 

2008) (SR–Amex–2008–63)). 7See Securities Exchange Act Release No. 34– 

57627 (April 4, 2008), 73 FR 19919 (April 11, 2008) 

(SR–NYSE–2007–2). As noted, NYSE’s version of 

Rule 46 was later adopted by the Exchange. 8NYSE Regulation examined the fitness of 

prospective Floor Officials and administered a 

mandatory education program, which all candidates 

for Floor Official, including Floor Governor, had to 

complete. NYSE Regulation also administered a 

qualifying examination. See Securities Exchange 

Act Release No. 34–57627 (April 4, 2008), 73 FR 

19919 (April 11, 2008) (SR–NYSE–2007–2). NYSE 

Regulation performed these tasks for Exchange 

Floor Officials following the NYSE’s acquisition of 

NYSE MKT in late 2008. On June 14, 2010, the 

Exchange, NYSE Regulation and FINRA [sic] 

retained the Financial Industry Regulatory 

Authority (‘‘FINRA’’) pursuant to a Regulatory 

Services Agreement (‘‘RSA’’) to perform the market 

surveillance, enforcement and other miscellaneous 

functions that up to that point had been performed 

by NYSE Regulation, including all education and 

testing-related regulatory services on behalf of 

NYSE Regulation, including the Floor Official 

mandatory education program and qualification 

testing. See Securities Exchange Act Release No. 

62354 (June 22, 2010), 75 FR 36730 (June 28, 2010) 

(SR–NYSEAmex–2010–57). 

9See Securities Exchange Act Release No. 34– 

57627 (April 4, 2008), 73 FR 19919 (April 11, 2008) 

(SR–NYSE–2007–2) (discussing NYSE Rule later 

adopted by the Exchange). These safeguards 

include, among other things, that qualified 

Exchange employees, like qualified members, need 

to be appointed by the Exchange’s chairman in 

consultation with the Executive Floor Governors 

and NYSE Regulation Board of Directors and 

approved by the Board of Directors. 

10 15 U.S.C. 78f(b). 

11 15 U.S.C. 78f(b)(5). 

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 240.19b–4(f)(6). 

defines ‘‘qualified’’ employees as 

‘‘employees of ICE or any of its 

subsidiaries, excluding employees of 

NYSE Regulation, Inc., who shall have 

satisfied any applicable testing or 

qualification required by the Exchange 

for all Floor Governors.’’ 

The prohibition on appointing NYSE 

Regulation employees to act as Floor 

Governors was put in place when the 

‘‘qualified Exchange employee’’ 

category of Floor Official was adopted 

in 2008.7 The prohibition was necessary 

to avoid potential conflicts of interest 

insofar as the process for qualifying 

Floor Officials, including Floor 

Governors, was performed by NYSE 

Regulation.8 However, while Rule 46 

prohibits appointment of NYSE 

Regulation employees to act as Floor 

Governors, the Exchange believes that 

the Rule does not prohibit already 

qualified Floor Governors from 

becoming NYSE Regulation employees. 

The hiring by NYSE Regulation of ICE 

employees or members who are already 

qualified to act as Floor Governors 

would not involve NYSE Regulation in 

qualifying those individuals to act as 

Floor Governors under Rule 46 and 

would therefore not give rise to the real 

or apparent conflict of interest the 

prohibition was intended to avoid. 

The Exchange believes that the 

proposed interpretation would facilitate 

the contemplated transfer of existing 

ICE staff Floor Governors to NYSE 

Regulation. The individuals that would 

transfer to NYSE Regulation are 

experienced former Floor members who 

served as senior-level Floor Officials 

before becoming employees of ICE and 

are already qualified and have been 

appointed to act as staff Floor 

Governors. Because NYSE Regulation is 

not proposing to qualify additional staff 

not already approved as Floor 

Governors, the Exchange believes there 

would be no violation of Rule 46. 

In addition, the interpretation does 

not in any way affect the role of Floor 

Officials or alter the safeguards in place 

to ensure that staff Floor Governors are 

knowledgeable and able to effectively 

intervene when needed on the Exchange 

trading Floor.9 Finally, NYSE 

Regulation does not propose to seek to 

qualify existing NYSE Regulation 

employees as staff Floor Governors. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,10 in general, and 

furthers the objectives of Section 6(b)(5) 

of the Act,11 in particular, because it is 

designed to prevent fraudulent and 

manipulative acts and practices, 

promote just and equitable principles of 

trade, remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and protect investors and the 

public interest. The Exchange believes 

that the proposed stated interpretation 

helps prevent fraudulent and 

manipulative acts and practices by 

continuing to require high standards for 

qualified Exchange employees to act as 

Floor Governors in addition to 

members. Similarly, the proposed stated 

interpretation promotes just and 

equitable principles of trade and 

removes impediments to and perfects 

the mechanism of a free and open 

market by ensuring that qualified 

Exchange employees are knowledgeable 

and able to effectively intervene on the 

Exchange trading Floor as needed. For 

the same reasons, the proposal is also 

designed to protect investors as well as 

the public interest. 

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 rule change is intended to 

effect a change that constitutes a stated 

policy, practice or interpretation with 

respect to the meaning, administration, 

or enforcement of an existing rule and 

therefore would not impose any burden 

on competition. 

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 has become 

effective pursuant to Section 

19(b)(3)(A) 12 of the Act and Rule 19b– 

4(f)(1) 13 thereunder. The proposed rule 

change effects a change that constitutes 

a stated policy, practice or 

interpretation with respect to the 

meaning, administration, or 

enforcement of an existing rule. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

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– 

NYSEMKT–2014–85 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–NYSEMKT–2014–85. 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 

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Federal Register / Vol. 79, No. 197 / Friday, October 10, 2014 / Notices 61357 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3C2 initially filed the proposed fee change on 

September 2, 2014 (SR–C2–2014–021). On 

September 10, 2014, C2 withdrew that filing and 

submitted filing SR–C2–2014–022. On September 

18, 2014, C2 withdrew SR–C2–2014–022 and 

submitted SR–C2–2014–023. On September 30, 

2014, C2 withdrew SR–C2–2014–023 and submitted 

this filing. 

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

5 15 U.S.C. 78f(b)(4). 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549 on official 

business days between the hours of 

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

filing also will be available for 

inspection and copying at the principal 

offices of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR– 

NYSEMKT–2014–85, and should be 

submitted on or before October 31, 

2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–24226 Filed 10–9–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73306; File No. SR–C2– 

2014–025] 

Self-Regulatory Organizations; C2 

Options Exchange, Incorporated; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend the Fees Schedule 

October 6, 2014. 

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 

September 30, 2014, C2 Options 

Exchange, Incorporated (the ‘‘Exchange’’ 

or ‘‘C2’’) 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 Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes to amend its 

Fees Schedule. The text of the proposed 

rule change is available on the 

Exchange’s Web site (http://

www.c2exchange.com/Legal/), at the 

Exchange’s Office of the Secretary, 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 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 amend its 

Fees Schedule.3 Specifically, the 

Exchange proposes to increase the 

Linkage Routing fee from $0.50 per 

contract to $0.65 per contract in 

addition to the applicable C2 taker fee. 

The Linkage Routing fee is assessed to 

all orders routed pursuant to the 

Options Order Protection and Locked/

Crossed Market Plan, excluding Public 

Customer orders in equity option 

classes. The purpose of the proposed 

change is to cover increased costs 

associated with routing orders through 

Linkage and paying the transaction fees 

for such executions at other exchanges. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.4 Specifically, 

the Exchange believes the proposed rule 

change is consistent with Section 6(b)(4) 

of the Act,5 which requires that 

Exchange rules provide for the equitable 

allocation of reasonable dues, fees, and 

other charges among its Trading Permit 

Holders and other persons using its 

facilities. 

In particular, the Exchange’s proposal 

to increase the Linkage Routing fee from 

$0.50 per contract to $0.65 per contract 

is reasonable because such increase will 

help offset the costs associated with 

routing orders through Linkage and 

paying the transaction fees for such 

executions at other exchanges. 

Additionally, the Exchange notes that if 

a non-customer market participant 

wishes to avoid the Linkage fee, it may 

choose to specify that C2 not route 

orders away on its behalf or designate 

the order as Immediate or Cancel, which 

would prevent the order from linking 

[sic] away to another Exchange [sic]. 

Moreover, a non-customer market 

participant may route directly to 

exchanges posting the best market if 

desired to avoid Linkage routing fees. 

The Exchange next notes that this fee 

amount will be assessed to all orders 

routed via Linkage (excluding Public 

Customer orders in equity options 

classes). The Exchange believes that this 

proposed change is equitable and not 

unfairly discriminatory because noncustomer (e.g., broker-dealer 

proprietary) orders originate from 

broker-dealers who are by and large 

more sophisticated than public 

customers and can readily control the 

exchange to which their orders are 

routed. While there may be some 

sophisticated customers who are 

capable of directing the exchange to 

which their orders are routed, generally, 

retail customers submit orders to their 

brokerages but do not or cannot specify 

the exchange to which a customer order 

is sent. Therefore, non-customer order 

flow can, in most cases, more easily 

route directly to other markets if desired 

and thus avoid Linkage routing fees. 

Therefore, it is equitable to assess a 

reasonable fee to cover the costs 

incurred for processing non-customer 

Linkage orders while continuing to 

exempt such Public Customer orders. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

C2 does not believe that the proposed 

rule change will impose any burden on 

competition that is not necessary or 

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