63196 Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Notices 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

4See ISE Rule 1800. 

5See ISE Rule 1800. 

filings will also be available for 

inspection and copying at the principal 

office of CME and on CME’s Web site at 

http://www.cmegroup.com/marketregulation/rule-filings.html. 

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–CME–2014–41 and should 

be submitted on or before November 12, 

2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–25076 Filed 10–21–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73382; File No. SR–MIAX– 

2014–52] 

Self-Regulatory Organizations: Miami 

International Securities Exchange LLC; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend MIAX Rule 1107 

Concerning Exchange Arbitrations 

October 17, 2014. 

Pursuant to the provisions of 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 October 2, 2014, Miami International 

Securities Exchange LLC (‘‘MIAX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

as described in Items I and II below, 

which Items have been substantially 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. The 

Exchange has designated the proposed 

rule change as constituting a ‘‘noncontroversial’’ rule change under Rule 

19b–4(f)(6) of the Act,3 which renders 

the proposal effective upon receipt of 

this filing by the Commission. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

rules to harmonize the language of 

MIAX Rule 1107 (Arbitration) with that 

of another options exchange, the 

International Securities Exchange, LLC 

(‘‘ISE’’). The text of the proposed rule 

change is available on the Exchange’s 

Web site at http://

www.miaxoptions.com/filter/wotitle/

rule_filing, 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 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 

MIAX Rule 1107 (Arbitration) to 

harmonize it with the rules of ISE in 

order to incorporate by reference the 

arbitration rules of Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’).4

The current MIAX Rule 1107 is based 

on ISE Rule 1800, but incorporates by 

reference the arbitration rules of the 

Chicago Board Options Exchange 

(‘‘CBOE’’). This was appropriate when 

the Exchange maintained a Regulatory 

Service Agreement (‘‘RSA’’) with CBOE. 

The Exchange, however, recently 

entered into a RSA with FINRA, which 

became effective on October 1, 2014. 

The Exchange believes the proposed 

rule change to reference the arbitration 

rules of FINRA is consistent with this 

recent change in regulatory service 

providers. 

Proposed Rule Change 

The Exchange proposes to replace 

current references to CBOE arbitration 

rules in MIAX Rule 1107 with 

references to the corresponding 

arbitration rules of FINRA. The 

proposed rule change would align 

MIAX’s arbitration rule with the 

arbitration rule of ISE, which also 

references FINRA’s arbitration rules.5

As proposed, the Rule 12000 Series and 

Rule 13000 Series of the FINRA Manual 

(Code of Arbitration Procedures for 

Customer Disputes and Code of 

Arbitration Procedures for Industry 

Disputes, respectively) (collectively, the 

‘‘FINRA Code of Arbitration’’), as the 

same may be in effect from time to time, 

would govern Exchange arbitrations 

except as may be specified in proposed 

Rule 1107. Definitions in the FINRA 

Code of Arbitration would have the 

same meaning as prescribed therein, 

and procedures in the FINRA Code of 

Arbitration would have the same 

application with respect to Exchange 

arbitrations. 

Under proposed Rule 1107, any 

dispute, claim, or controversy arising 

out of or in connection with the 

business of any member of the Exchange 

(‘‘Member’’), or arising out of the 

employment or termination of 

employment of associated person(s) 

with any Member would be arbitrable, 

except that: (1) A dispute, claim, or 

controversy alleging employment 

discrimination (including a sexual 

harassment claim) in violation of a 

statue may only be arbitrated if the 

parties have agreed to arbitrate it after 

the dispute arose; and (2) any type of 

dispute, claim, or controversy that is not 

permitted to be arbitrated under the 

FINRA Code of Arbitration (such as 

class action claims) shall not be eligible 

for arbitration under proposed Rule 

1107. In addition, under the proposal 

the requirements of FINRA Rule 2268 

(Requirements When Using Predispute 

Arbitration Agreements for Customer 

Accounts) would apply to predispute 

arbitration agreements between 

Members and their customers. 

In addition, under proposed Rule 

1107, if any matter comes to the 

attention of an arbitrator during, and in 

connection with, the arbitrator’s 

participation in a proceeding, either 

from the record of the proceeding or 

from material or communications 

related to the proceeding, that the 

arbitrator has reason to believe may 

constitute a violation of the Exchange’s 

rules or the federal securities laws, the 

arbitrator may initiate a referral of the 

matter to the Exchange for disciplinary 

investigation; provided, however, that 

any such referral could only be initiated 

by an arbitrator after the matter before 

her or him has been settled or otherwise 

disposed of, or after an award finally 

disposing of the matter has been 

rendered pursuant to FINRA Rules 

12904 or 13904, as applicable. 

If the proposal is approved, the 

principle structure of the Exchange’s 

arbitration rule would remain the same, 

except that it would reference the 

applicable FINRA arbitration rules in 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Notices 63197 

6See Proposed MIAX Rule 1107. See also ISE 

Rule 1800. 

7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(5). 

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4(f)(6). 

11Rule 19b–4(f)(6) also requires a self-regulatory 

organization (‘‘SRO’’) to give the Commission 

written notice of its intent to file the proposed rule 

change at least five business days prior to the date 

of filing of the proposed rule change, or such 

shorter time as designated by the Commission. The 

Exchange has satisfied this requirement. 

12 17 CFR 240.19b–4(f)(6)(iii). 

13For purposes of waiving the 30-day operative 

delay, the Commission has considered the proposed 

rule’s impact on efficiency, competition, and capital 

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

14 15 U.S.C. 78s(b)(2)(B). 

lieu of the CBOE arbitration rules. In 

addition, the proposed rule change 

would closely align the Exchange’s 

arbitration rule with the arbitration rule 

of another options exchange (ISE).6 The 

Exchange believes that the proposed 

rule change would provide detailed 

guidelines and framework concerning 

Exchange arbitrations in a manner that 

is easily understood and enforceable not 

only by Members, but also by FINRA, 

with which the Exchange recently 

entered into a RSA. 

2. Statutory Basis 

The Exchange believes that its 

proposed rule change is consistent with 

Section 6(b) of the Act,7 in general, and 

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

of the Act,8 in particular, because 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, to 

remove impediments to and perfect the 

mechanisms of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. 

In particular, the Exchange believes 

that the proposed rule change would 

provide a clear framework concerning 

Exchange arbitrations in a manner 

designed to prevent fraudulent and 

manipulative acts and practices, and to 

promote the protection of investors and 

the public interest. Further, the 

Exchange notes that the proposed rule 

change would provide greater 

harmonization between Exchange rules 

and the rules of similar substance and 

purpose of FINRA resulting in less 

burdensome and more efficient 

regulatory compliance for members of 

both MIAX and FINRA (‘‘Dual 

Members’’). As such, the Exchange 

believes that the proposed rule change 

would foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities and 

would remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system. 

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 not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed rule change is not designed to 

address any competitive issues but 

rather is designed to provide greater 

harmonization between Exchange and 

FINRA rules of similar purpose, 

resulting in less burdensome and more 

efficient regulatory compliance for Dual 

Members. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A) of the Act 9 and Rule 19b– 

4(f)(6) thereunder.10 Because the 

proposed rule change does not: (i) 

Significantly affect the protection of 

investors or the public interest; (ii) 

impose any significant burden on 

competition; and (iii) become operative 

for 30 days from the date on which it 

was filed, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act and Rule 19b– 

4(f)(6) thereunder.11

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative prior to 30 days after 

the date of filing. However, pursuant to 

Rule 19b–4(f)(6)(iii),12 the Commission 

may designate a shorter period of time 

if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposed 

rule may become operative immediately 

upon filing. 

The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest, 

because it allows the Exchange to 

immediately harmonize its arbitration 

rules with those of ISE and, by 

extension, the FINRA Code of 

Arbitration. The Commission notes that 

the Exchange also recently entered into 

an RSA with FINRA, which became 

effective on October 1, 2014. Together, 

the Commission believes that these 

steps help ensure that Dual Members 

would be subject to a single set of SRO 

rules governing arbitration. The 

Commission also believes that this 

would promote less burdensome and 

more efficient regulatory compliance. 

For these reasons, the Commission 

designates the proposed rule change to 

be operative upon filing.13

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) of the Act 14 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– 

MIAX–2014–52 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–MIAX–2014–52. 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 

mstockstill on DSK4VPTVN1PROD with NOTICES

63198 Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Notices 

15 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 72636 

(July 17, 2014), 79 FR 42852. 4See Securities Exchange Act Release No. 73003, 

79 FR 54307 (September 11, 2014). 

5Amendment No. 3 modified the proposed rule 

change by clarifying the holdings of the Funds, 

clarifying the valuation of various assets for 

purposes of calculating the net asset value (‘‘NAV’’) 

of each Fund, providing more information regarding 

the Share creation and redemption process, and 

adding information regarding its surveillance 

capability. With respect to the Funds’ holdings, the 

Exchange specified: (1) That the common stock, 

preferred stock, international stocks, and depositary 

receipts that may be held by the Funds (as 

applicable) will all be exchange-listed (except that 

up to 10% the portfolios of the international Funds 

may be composed of unsponsored depositary 

receipts); (2) the types of fixed income securities 

that may be held by each of the Funds; (3) that the 

debt securities held by the ValueShares U.S. 

Quantitative Value ETF and the MomentumShares 

U.S. Quantitative Momentum ETF would be 

investment grade; (4) that the Funds would not 

invest in private investment funds, vehicles or 

structures; (5) that the 15% limit on illiquid assets 

applicable to each Fund is an overarching 

investment restriction; and (6) the depositary 

receipts in which the ValueShares International 

Quantitative Value ETF and MomentumShares 

International Quantitative Momentum ETF 

(collectively, ‘‘International Funds’’) may invest. 

With respect to NAV calculation, the Exchange: (1) 

Clarified the method for valuation of exchangelisted securities; (2) stated that non-exchange-listed 

equity securities would be valued at their last 

reported sale prices or, if no last reported sale price 

is available, at the most recent bid price; and (3) 

clarified that fixed income securities (with the 

exception of repurchase agreements) would be 

valued by pricing services. With respect to Share 

creations and redemptions, the Exchange provided 

additional information regarding the circumstances 

in which a Fund may accept a custom fund deposit 

in connection with Share creations as well as the 

daily dissemination of the redemption basket. 

Lastly, the Exchange stated that it is able to access, 

as needed, trade information for certain fixed 

income instruments reported to the Trade Reporting 

and Compliance Engine (‘‘TRACE’’) of the Financial 

Industry Regulatory Authority (‘‘FINRA’’). 

6The Trust and has filed a registration statement 

on behalf of the Funds on Form N–1A 

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

See Registration Statement on Form N–1A for the 

Trust, dated April 25, 2014 (File Nos. 333–195493 

and 811–22961). The Commission has issued an 

order granting certain exemptive relief to the Trust 

under the Investment Company Act of 1940 (15 

U.S.C. 80a–1) (‘‘1940 Act’’). See Investment 

Company Act Release No. 31018 (April 16, 2014) 

(File No. 812–14245). 

7The Adviser is an indirect subsidiary of 

Empirical Finance, LLC d/b/a Empiritrage, LLC. 

8BATS Rule 14.11(i)(7) provides that, if the 

investment adviser to the investment company 

issuing Managed Fund Shares is affiliated with a 

broker-dealer, the investment adviser shall erect a 

firewall between the investment adviser and the 

broker-dealer with respect to access to information 

concerning the composition of or changes to the 

investment company portfolio. In addition, Rule 

14.11(i)(7) further requires that personnel who 

make decisions on the investment company’s 

portfolio composition must be subject to procedures 

designed to prevent the misuse and dissemination 

of material nonpublic information regarding the 

applicable investment company portfolio. The 

Exchange states that, in the event that (a) the 

Adviser becomes registered as a broker-dealer or 

newly affiliated with a broker-dealer, or (b) any new 

adviser or sub-adviser is a registered broker-dealer 

or becomes affiliated with a broker-dealer, it will 

implement a firewall with respect to its relevant 

personnel or such broker-dealer affiliate, as 

applicable, regarding access to information 

concerning the composition of or changes to the 

portfolio, and will be subject to procedures 

designed to prevent the use and dissemination of 

material non-public information regarding the 

portfolio. 

9Additional information regarding the Trust, the 

Funds, the Shares, investment strategies, 

investment restrictions, risks, NAV calculation, 

creation and redemption procedures, fees, portfolio 

holdings, disclosure policies, distributions, and 

taxes, among other information, is included in 

Amendment No. 3 and the Registration Statement, 

as applicable. See Amendment No. 3 and 

Registration Statement, supra note 5 and 6, 

respectively. 

10The term ‘‘under normal circumstances’’ 

includes, but is not limited to, the absence of 

adverse market, economic, political, or other 

conditions, including extreme volatility or trading 

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 20549–1090, 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–MIAX–2014–52 and should 

be submitted on or before November 12, 

2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–25148 Filed 10–21–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73376; File No. SR–BATS– 

2014–026] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Notice of Filing of 

Amendment No. 3, and Order Granting 

Accelerated Approval of a Proposed 

Rule Change To List and Trade Shares 

of Certain Funds of the Alpha Architect 

ETF Trust 

October 16, 2014. 

On July 3, 2014, BATS Exchange, Inc. 

(‘‘Exchange’’ or ‘‘BATS’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

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

of the following funds: (1) ValueShares 

U.S. Quantitative Value ETF; (2) 

ValueShares International Quantitative 

Value ETF; (3) MomentumShares U.S. 

Quantitative Momentum ETF; and (4) 

MomentumShares International 

Quantitative Momentum ETF (each 

referred to as the ‘‘Fund’’ and 

collectively the ‘‘Funds’’). The proposed 

rule change was published for comment 

in the Federal Register on July 23, 

2014.3 On August 15, 2014, the 

Exchange filed Amendment No. 1 to the 

proposed rule change, which amended 

and replaced the proposal in its entirety. 

On August 26, 2014, the Exchange filed 

Amendment No. 2 to the proposed rule 

change, which also amended and 

replaced the proposal in its entirety. 

The Commission designated a longer 

period for Commission action on 

September 5, 2014.4 On September 12, 

2014, the Exchange filed Amendment 

No. 3 to the proposed rule change, 

which again amended and replaced the 

proposal in its entirety.5 No comments 

on the proposal have been received. 

This order approves the proposed rule 

change, as modified by Amendment No. 

3, on an accelerated basis. 

I. Description of the Proposed Rule 

Change 

The Exchange proposes to list and 

trade the Shares under BATS Rule 

14.11(i), which governs the listing and 

trading of Managed Fund Shares on the 

Exchange. The Shares will be offered by 

the Alpha Architect ETF Trust 

(‘‘Trust’’), which was established as a 

Delaware statutory trust and is 

registered with the Commission as an 

open-end investment company.6

Empowered Funds, LLC is the 

investment adviser (‘‘Adviser’’) to the 

Funds.7 The Adviser is not a registered 

broker-dealer and is not affiliated with 

any broker-dealers.8 U.S. Bancorp Fund 

Services, LLC is the administrator and 

transfer agent for the Trust. U.S. Bank 

National Association is the custodian 

for the Trust. Quasar Distributors, LLC 

serves as the distributor for the Trust.9

A. ValueShares U.S. Quantitative Value 

ETF 

The investment objective of the Fund 

is to provide long-term capital 

appreciation. Under normal 

circumstances,10 the Fund will invest at 

mstockstill on DSK4VPTVN1PROD with NOTICES