Federal Register / Vol. 79, No. 214 / Wednesday, November 5, 2014 / Notices 65749 

21 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The System is the automated trading system 

used by the Exchange for the trading of options 

contracts. 

4The Exchange notes that, for singly listed series, 

the national best bid is equivalent to the Exchange’s 

best bid and the national best offer is equivalent to 

the Exchange’s best offer. 

5For example, the Exchange receives a market 

order to sell prior to the opening of a series and the 

series opens with a sell market order imbalance 

pursuant to Rule 6.11(e)(4). When the series opens 

the market order to sell, which was resting in the 

book prior to the opening of the series, will be 

routed according to the no-bid procedures in Rule 

6.12. 

6 If the order does not execute during the trading 

day as a limit order and remains outstanding after 

the close of trading (i.e., a GTC order), the System 

at that time will no longer consider the order as a 

limit order and will again handle the order as a 

market order to sell after the close of trading. The 

market order will stay on the Book until the 

opening of the next trading day (or until cancelled), 

at which point it may execute during the open or, 

if it remains unexecuted after the opening of 

trading, it will either execute with the best bid at 

the time or, if the series is still no-bid, again be 

handled pursuant to proposed Rule 6.12(h). 

7The acceptable APR parameter is determined by 

the Exchange on a class-by-class basis. See Rule 

6.17 and C2 Regulatory Circular RG14–020 

(Operational System Settings—APR and OEPW). 

8Rule 6.17 also provides that the System will not 

automatically execute eligible orders that are 

marketable if the execution would follow an initial 

partial execution on the Exchange and would be at 

a subsequent price that is not within an acceptable 

tick distance from the initial execution. The APR 

for purposes of Rule 6.17 is determined by the 

Exchange on a class-by-class basis and may not be 

less than $0.375 between the bid and offer for each 

option contract for which the bid is less than $2, 

$0.60 where the bid is at least $2 but does not 

exceed $5, $0.75 where the bid is more than $5 but 

does not exceed $10, $1.20 where the bid is more 

than $10 but does not exceed $20, and $1.50 where 

Continued 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Brent J. Fields, 

Secretary. 

[FR Doc. 2014–26233 Filed 11–4–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73488; File No. SR–C2– 

2014–020] 

Self-Regulatory Organizations; C2 

Options Exchange, Incorporated; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change Relating to the Automatic 

Handling Process in No-Bid Series 

October 31, 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 October 

22, 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 Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

rules regarding its automatic order 

handling process. The text of the 

proposed rule change is available on the 

Exchange’s Web site (http://www.cboe.

com/AboutCBOE/CBOELegalRegulatory

Home.aspx), 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 

rules regarding its automatic order 

handling process. The proposed rule 

change seeks to modify subparagraph 

(h) to Rule 6.12, which sets forth how 

the C2 System (the ‘‘System’’) 3 handles 

market orders to sell in option series for 

which the national best bid in the series 

is zero (‘‘no-bid series’’).4 Currently, if 

the System receives during the trading 

day or has resting in the electronic book 

(the ‘‘Book’’) 5 after the opening of 

trading a market order to sell in a nobid series, it handles the order as 

follows: 

• If the Exchange best offer in that 

series is less than or equal to $0.30, then 

the System will consider, for the 

remainder of the trading day, the market 

order as a limit order to sell with a limit 

price equal to the minimum trading 

increment applicable to the series and 

enter the order into the Book behind 

limit orders to sell at the minimum 

increment that are already resting in the 

Book. 

• If the Exchange best offer in that 

series is greater than $0.30, then the 

market order will be cancelled. 

Based on experience since the 

implementation of this parameter, the 

Exchange now proposes to change the 

parameter from $0.30 to $0.50. The 

Exchange believes that the automatic 

handling of market orders to sell in nobid series if the Exchange best offer is 

less than or equal to $0.50 would reduce 

the number of orders that are 

automatically cancelled. Additionally, 

the $0.50 threshold serves as a 

protection feature for investors in 

certain situations, such as when a series 

is no-bid because the last bid traded just 

prior to the entry of the market order to 

sell. The purpose of this threshold is to 

limit the automatic booking of market 

orders to sell at minimum increments to 

only those for true zero-bid options, as 

options in no-bid series with an offer of 

more than $0.50 are less likely to be 

worthless. 

For example, if the CBOE Hybrid 

System receives a market order to sell in 

a no-bid series with a minimum 

increment of $0.01 and the Exchange 

best offer is $0.01, the System will 

consider, for the remainder of the 

trading day, the order as a limit order 

with a price of $0.01 and submit it to 

the Book behind other limit orders to 

sell at the minimum increment that are 

already resting in the Book. At that 

point, even if the series is no-bid 

because, for example, the last bid just 

traded and the limit order trades at 

$0.01, the next bid entered after the 

trade would not be higher than $0.01.6

However, if the System receives a 

market order to sell in a no-bid series 

with a minimum increment of $0.01 and 

the Exchange best offer is $1.20 

(because, for example, the last bid of 

$1.00 just traded and a new bid has not 

yet populated the Exchange’s quote), the 

System will instead cancel the order. It 

would be unfair to the entering firm to 

let its market order trade as a limit order 

for $0.01 because, for example, the firm 

submitted the order during the brief 

time when there were no disseminated 

bids in a series trading significantly 

higher than the minimum increment. 

The Exchange believes the threshold 

of $0.50 is reasonable. The Exchange 

notes that this threshold is less than the 

current acceptable price range (‘‘APR’’) 

parameter for series with a bid price of 

less than $100.00.7 Pursuant to the price 

check provision in Rule 6.17 8 the 

mstockstill on DSK4VPTVN1PROD with NOTICES

65750 Federal Register / Vol. 79, No. 214 / Wednesday, November 5, 2014 / Notices 

the bid is more than $20. An ‘‘acceptable tick 

distance’’ shall be no less than two minimum 

increments. 9 15 U.S.C. 78f(b). 

10 15 U.S.C. 78f(b)(5). 11 Id. 

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

13 17 CFR 240.19b–4(f)(6). 

System will not automatically execute a 

marketable order if the width between 

the national best bid and national best 

offer is not within the APR, which the 

Exchange has currently set at $10.00 for 

any bid price between $0.00 and $100. 

Instead, the System will cancel the 

order. Notwithstanding this provision, 

proposed Rule 6.12(h), as amended, 

would allow for the potential execution 

of market orders to sell in no-bid series 

with offers less than $0.50 as limit 

orders at the price of a minimum 

increment. If the threshold in proposed 

Rule 6.12(h) were higher, the risk of 

having a market order trade at a 

minimum increment in a series that is 

not truly no-bid would increase. 

After the rule change is effective, the 

Exchange will announce the 

implementation date of the proposed 

rule change in a Regulatory Circular to 

be published no later than 90 days 

following the effective date. The 

implementation date will be no later 

than 180 days following the effective 

date and at least two weeks after the 

publication of the above Regulatory 

Circular. 

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.9 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 10 requirements that the rules of 

an exchange be 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 regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 11 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

In particular, the Exchange believes 

that the automated handling of market 

orders to sell in no-bid series if the 

Exchange best offer is $0.50 or less 

assists with the maintenance of fair and 

orderly markets and protects investors 

and the public interest because it 

provides for automated handling of 

these orders, ultimately resulting in 

more efficient executions of these 

orders. The Exchange believes that the 

$0.50 threshold also protects investors 

and assists with the maintenance of fair 

and orderly markets by preventing 

executions of market orders to sell in 

no-bid series with higher offers at 

potentially extreme prices in series that 

are not truly no-bid. The Exchange 

believes this threshold appropriately 

reflects the interests of investors, as 

options in no-bid series with offers 

higher than $0.50 are less likely to be 

worthless, and cancelling the orders 

will prevent the execution of these 

orders at unfavorable prices. The 

Exchange also believes that the $0.50 

threshold promotes fair and orderly 

markets because market orders to sell in 

no-bid series with offers of $0.50 or less 

are likely to be individuals seeking to 

close out a worthless position for which 

automatic handling is appropriate. 

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 

appropriate in furtherance of the 

purposes of the Act. More specifically, 

the Exchange does not believe that the 

proposed rule changes will impose any 

burden on intramarket competition 

because it will be applicable to all TPHs 

trading on the Exchange trading floor. In 

addition, the Exchange does not believe 

the proposed changes will impose any 

intermarket burden because the 

Exchange will operate in a similar 

manner only with a more applicable nobid series threshold. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing 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 12 and Rule 19b–4(f)(6) 13

thereunder. 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 will institute proceedings 

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– 

C2–2014–020 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–C2–2014–020. 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 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 79, No. 214 / Wednesday, November 5, 2014 / Notices 65751 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 In Amendment No. 1, the Exchange changed the 

name of the ‘‘PowerShares Diversified Commodity 

Strategy Portfolio’’ to ‘‘PowerShares DB Optimum 

Yield Diversified Commodity Strategy Portfolio,’’ 

and changed the name of the ‘‘PowerShares 

Balanced Commodity Strategy Portfolio’’ to 

‘‘PowerShares Bloomberg Commodity Strategy 

Portfolio.’’ 

4See Securities Exchange Act Release No. 73078 

(Sept. 11, 2014), 79 FR 55851 (‘‘Notice’’). 

5According to the Exchange, the Trust is 

registered with the Commission as an investment 

company and has filed a registration statement on 

Form N–1A (‘‘Registration Statement’’) with the 

Commission. See Registration Statement on Form 

N–1A for the Trust, dated May 20, 2014 (File Nos. 

333–193135 and 811–22927). The Exchange states 

that the Commission has issued an order granting 

certain exemptive relief to affiliates of the Trust, 

and which extends to the Trust, under the 

Investment Company Act of 1940 (‘‘1940 Act’’). See 

Investment Company Act Release No. 30029 (Apr. 

10, 2012) (File No. 812–13795). 

6The Exchange states that, although the Adviser 

is not a broker-dealer, the Adviser is affiliated with 

the Distributor, which is a broker-dealer. The 

Exchange represents that the Adviser has 

implemented a fire wall with respect to its brokerdealer affiliate regarding access to information 

concerning the composition and/or changes to a 

Fund’s portfolio (including the portfolio of a 

Subsidiary, as defined herein). Nasdaq Rule 5735(g) 

requires that personnel who make decisions on the 

open-end 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 

(including the portfolio of a Subsidiary, as defined 

herein). In addition, the Exchange represents that in 

the event (a) the Adviser registers as a broker-dealer 

or becomes newly affiliated with a broker-dealer, or 

(b) any new adviser or sub-adviser is a registered 

broker-dealer or becomes affiliated with a brokerdealer, the Adviser will implement a fire wall with 

respect to its relevant personnel or such brokerdealer affiliate, as applicable, regarding access to 

information concerning the composition and 

changes to the portfolio, and the Adviser will be 

subject to procedures designed to prevent the use 

and dissemination of material non-public 

information regarding such portfolio. The Exchange 

also states that the Funds do not currently intend 

to use a sub-adviser. 

7The Commission notes that additional 

information regarding the Trust, the Funds, and the 

Shares, including investment strategies, risks, 

creation and redemption procedures, calculation of 

net asset value (‘‘NAV’’), fees, portfolio holdings 

disclosure policies, distributions, and taxes, among 

other things, can be found in the Notice and 

Registration Statement, as applicable. See supra 

notes 4 and 5, respectively. 

8The term ‘‘under normal circumstances’’ 

includes, but is not limited to, the absence of 

extreme volatility or trading halts in the equity, 

commodities and futures markets or the financial 

markets generally; operational issues causing 

dissemination of inaccurate market information; or 

force majeure type events such as systems failure, 

natural or man-made disaster, act of God, armed 

conflict, act of terrorism, riot or labor disruption, or 

any similar intervening circumstance. 

9According to the Exchange, all of the exchangetraded securities held by a Fund will be traded in 

a principal trading market that is a member of the 

Intermarket Surveillance Group (‘‘ISG’’) or a market 

with which the Exchange has a comprehensive 

surveillance sharing agreement. The Exchange 

states that with respect to futures contracts held 

indirectly through a Subsidiary, not more than 10% 

of the weight of such futures contracts in the 

aggregate shall consist of instruments whose 

principal trading market is not a member of the ISG 

or a market with which the Exchange does not have 

a comprehensive surveillance sharing agreement. 

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–C2– 

2014–020 and should be submitted on 

or before November 26, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–26347 Filed 11–4–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73471; File No. SR– 

NASDAQ–2014–080] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Order 

Granting Approval of a Proposed Rule 

Change, as Modified by Amendment 

No. 1 Thereto, Relating to the Listing 

and Trading of the Shares of the 

PowerShares DB Optimum Yield 

Diversified Commodity Strategy 

Portfolio, PowerShares Agriculture 

Commodity Strategy Portfolio, 

PowerShares Precious Metals 

Commodity Strategy Portfolio, 

PowerShares Energy Commodity 

Strategy Portfolio, PowerShares Base 

Metals Commodity Strategy Portfolio 

and PowerShares Bloomberg 

Commodity Strategy Portfolio, Each a 

Series of PowerShares Actively 

Managed Exchange-Traded 

Commodity Fund Trust 

October 30, 2014. 

I. Introduction 

On August 29, 2014, The NASDAQ 

Stock Market LLC (‘‘Nasdaq’’ or 

‘‘Exchange’’) 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 the shares (‘‘Shares’’) of 

the PowerShares DB Optimum Yield 

Diversified Commodity Strategy 

Portfolio, PowerShares Agriculture 

Commodity Strategy Portfolio, 

PowerShares Precious Metals 

Commodity Strategy Portfolio, 

PowerShares Energy Commodity 

Strategy Portfolio, PowerShares Base 

Metals Commodity Strategy Portfolio, 

and PowerShares Bloomberg 

Commodity Strategy Portfolio 

(individually, ‘‘Fund,’’ and collectively, 

‘‘Funds’’), each a series of PowerShares 

Actively Managed Exchange-Traded 

Commodity Fund Trust (‘‘Trust’’). On 

September 8, 2014, the Exchange filed 

Amendment No. 1 to the proposed rule 

change.3 The proposed rule change, as 

modified by Amendment No. 1 thereto, 

was published for comment in the 

Federal Register on September 17, 

2014.4 The Commission received no 

comments on the proposed rule change. 

This order grants approval of the 

proposed rule change. 

II. Description of Proposed Rule Change 

The Exchange proposes to list and 

trade the Shares of each Fund under 

Nasdaq Rule 5735, which governs the 

listing and trading of Managed Fund 

Shares on the Exchange. Each Fund will 

be an actively managed exchange-traded 

fund (‘‘ETF’’). Each Fund’s Shares will 

be offered by the Trust, which was 

established as a Delaware statutory trust 

on December 23, 2013.5 Each Fund is a 

series of the Trust. Invesco PowerShares 

Capital Management LLC will be the 

investment adviser (‘‘Adviser’’) to the 

Funds.6 Invesco Distributors, Inc. 

(‘‘Distributor’’) will be the principal 

underwriter and distributor of each 

Fund’s Shares. The Bank of New York 

Mellon will act as the administrator, 

accounting agent, custodian, and 

transfer agent to the Funds. 

The Exchange has made the following 

representations and statements in 

describing the Funds and their principal 

investments (including those of the 

Subsidiaries, as defined herein), other 

investments, and investment 

restrictions.7

Principal Investment Strategies 

Applicable to Each Fund 

Each Fund’s investment objective will 

be to seek long term capital 

appreciation. Each Fund will be an 

actively managed ETF that will seek to 

achieve its investment objective by 

investing, under normal circumstances,8

in a combination of securities and 

futures contracts, either directly or 

through each Fund’s own wholly-owned 

subsidiary controlled by such Fund and 

organized under the laws of the Cayman 

Islands (individually, ‘‘Subsidiary,’’ and 

collectively, ‘‘Subsidiaries’’).9 Each 

Fund will invest in: (i) Its respective 

Subsidiary; (ii) exchange-traded 

mstockstill on DSK4VPTVN1PROD with NOTICES