Federal Register / Vol. 79, No. 220 / Friday, November 14, 2014 / Notices 68321 

12See NASDAQ Rules at Chapter VI, Section 

11(e) (Order Routing). 

13See Chapter VI, Section 11 of the BX Options 

and NOM Rules. 

14BATS assesses lower customer routing fees as 

compared to non-customer routing fees per the 

away market. For example BATS assesses ISE 

customer routing fees of $0.52 per contract and an 

ISE non-customer routing fee of $0.65 per contract. 

See BATS BZX Exchange Fee Schedule. 

15See CBOE’s Fees Schedule and ISE’s Fee 

Schedule. 

16See note 12. 

17See note 13. 

18 15 U.S.C. 78s(b)(3)(A)(ii). 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

and not unfairly discriminatory because 

the Exchange would assess the same 

Fixed Fee that is proposed when routing 

Customer orders to a NASDAQ OMX 

exchange. All market participants that 

route an order to an away market, other 

than PHLX or BX Options, would be 

assessed a uniform fee of $0.13 per 

contract if the away market (nonNASDAQ OMX exchange) pays a rebate. 

These proposals would apply uniformly 

to all market participants when routing 

to an away market that pays a rebate, 

other than PHLX and BX Options. 

Finally, market participants may 

submit orders to the Exchange as 

ineligible for routing or ‘‘DNR’’ to avoid 

Routing Fees.12 Also, orders are routed 

to an away market based on price first.13

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NASDAQ does not believe that the 

proposed rule change will impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. The Exchange does 

not believe that the proposal creates a 

burden on intra-market competition 

because the Exchange is applying the 

same Routing Fees to all market 

participants in the same manner 

dependent on the routing venue, with 

the exception of Customers. The 

Exchange will continue to assess 

separate Customer Routing Fees. 

Customers will continue to receive the 

lowest fees as compared to nonCustomers when routing orders, as is 

the case today. Other options exchanges 

also assess lower Routing Fees for 

customer orders as compared to noncustomer orders.14

The Exchange’s proposal would allow 

the Exchange to continue to recoup its 

costs when routing Customer orders to 

PHLX or BX Options as well as away 

markets that pay a rebate when such 

orders are designated as available for 

routing by the market participant. The 

Exchange continues to pass along 

savings realized by leveraging NASDAQ 

OMX’s infrastructure and scale to 

market participants when Customer 

orders are routed to PHLX and BX 

Options and is providing those savings 

to all market participants. Today, other 

options exchanges also assess fixed 

routing fees to recoup costs incurred by 

the exchange to route orders to away 

markets.15

Market participants may submit 

orders to the Exchange as ineligible for 

routing or ‘‘DNR’’ to avoid Routing 

Fees.16 It is important to note that when 

orders are routed to an away market 

they are routed based on price first.17

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

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)(ii) of the Act.18 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 to determine 

whether the proposed rule 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– 

NASDAQ–2014–098 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–NASDAQ–2014–098. 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– 

NASDAQ–2014–098 and should be 

submitted on or before December 5, 

2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–26946 Filed 11–13–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73557; File No. SR– 

NYSEArca–2014–131] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change Amending the NYSE Arca 

Options Fee Schedule Relating to 

Qualified Contingent Cross (‘‘QCC’’) 

Transactions Fees, Effective November 

1, 2014 

November 7, 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 

31, 2014, NYSE Arca, Inc. (the 

‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) a 

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68322 Federal Register / Vol. 79, No. 220 / Friday, November 14, 2014 / Notices 

3 15 U.S.C. 78f(b). 

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

5See e.g., NASDAQ OMX LLC [sic] Pricing 

Schedule, available here, http://

www.nasdaqtrader.com/

Micro.aspx?id=PHLXPricing. 

6 15 U.S.C. 78f(b)(8). 

7See supra n. 5. 

8 15 U.S.C. 78s(b)(3)(A). 

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 the 

NYSE Arca Options Fee Schedule 

relating to Qualified Contingent Cross 

transaction fees, effective November 1, 

2014. The text of 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this filing is to modify 

the Exchange’s fees for QCC 

transactions. The Exchange proposes to 

implement the fee changes on 

November 1, 2014. 

Currently, the Exchange charges $0.10 

per contract side for QCC transactions, 

regardless of whether a Customer is part 

of the transaction. The Exchange 

proposes to adopt a differentiated fee 

schedule and to instead charge $0.00 

per contract side for Customers and 

$0.20 per contract side for nonCustomers. 

As is the case today, the Exchange 

would continue to offer a Floor Broker 

rebate of $0.035 per contract side for 

executed QCC orders, but proposes to 

introduce one exception: there would be 

no Floor Broker rebate for executions of 

QCC orders where there are Customers 

on both sides of the transaction. For 

example, a QCC transaction where a 

Customer buying 1,000 ABC Dec 40 

Calls trades with a different Customer 

selling 1,000 ABC Dec 40 Calls would 

be ineligible for the Floor Broker rebate. 

However, a QCC transaction with a 

Customer on only one side, executed by 

a Floor Broker, would continue to 

receive the rebate. 

The Exchange believes that 

restructuring the QCC fees as proposed 

would allow OTP Holders and OTP 

Firms to compete on a more equal 

footing with other exchanges offering 

similar QCC fees. 

The Exchange is also proposing a nonsubstantive, formatting change to the 

section of the fee schedule that applies 

to QCC transactions. The Exchange is 

proposing to re-format the ‘‘QUALIFIED 

CONTINGENT CROSS TRANSACTION 

FEES’’ section of the Fee Schedule as a 

table with distinct rows and columns to 

make the Fee Schedule easier for 

participants to navigate. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,3 in general, and 

furthers the objectives of Sections 

6(b)(4) and (5) of the Act,4 in particular, 

because it provides for the equitable 

allocation of reasonable dues, fees, and 

other charges among its members, 

issuers and other persons using its 

facilities and does not unfairly 

discriminate between customers, 

issuers, brokers or dealers. 

The Exchange believes that the 

proposed rates are reasonable, equitable 

and not unfairly discriminatory as they 

are consistent with those charged by 

other markets.5 The Exchange believes 

that proposed rates are likewise not 

unreasonable, inequitable or unfairly 

discriminatory because the same fee 

would be charged to all non-Customers 

alike. It is also not unreasonable, 

inequitable or unfairly discriminatory to 

impose no charge on Customers for QCC 

transactions because this change would 

enable non-Customers to better compete 

for (and, thus, to better attract) Customer 

business. 

In addition, the Exchange believes 

that it is not unreasonable, inequitable 

or unreasonably discriminatory to 

exempt from the Floor Broker rebate 

those QCC transactions where there are 

Customers on both sides of the 

transaction. A rebate is the refunding of 

a portion of an assessed fee; however, 

when there are Customers on both sides 

of a QCC transaction, the Exchange is 

not assessing any fees. Accordingly, the 

Exchange believes that not offering a 

rebate for QCC transactions on which a 

fee that [sic] was never assessed in the 

first instance, cannot be viewed as 

unreasonable, inequitable or 

unreasonably discriminatory. 

For these reasons, the Exchange 

believes that the proposal is consistent 

with the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act,6 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 Exchange believes the proposed fee 

change is reasonably designed to be fair 

and equitable, and therefore, will not 

unduly burden any particular group of 

market participants trading on the 

Exchange vis-a`-vis another group. The 

Exchange believes the proposed change 

to offer QCC transactions to Customers 

free of charge may enhance the 

competitive position of Non-Customers 

and allow OTP Holders and OTP Firms 

to compete more effectively for 

Customer QCC orders. In addition, the 

Exchange believes that the proposed 

changes will enhance the competiveness 

of the Exchange relative to other 

exchanges which offer comparable 

differentiated fees for QCC 

transactions.7

The Exchange notes that it operates in 

a highly competitive market in which 

market participants can readily favor 

competing venues. In such an 

environment, the Exchange must 

continually review, and consider 

adjusting, its fees and credits to remain 

competitive with other exchanges. For 

the reasons described above, the 

Exchange believes that the proposed fee 

change reflects this competitive 

environment. 

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) 8 of the Act and 

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Federal Register / Vol. 79, No. 220 / Friday, November 14, 2014 / Notices 68323 

9 17 CFR 240.19b–4(f)(2). 

10 15 U.S.C. 78s(b)(2)(B). 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Commission notes that the Trust, which 

would be the issuer of the funds, filed an 

Application for an Order under Section 6(c) of the 

Investment Company Act of 1940 (‘‘1940 Act’’) and 

rules thereunder (File No. 812–13953), dated 

September 1, 2011 (‘‘Exemptive Application’’). The 

Commission published notice of this application 

(‘‘Notice of an Application for Exemptive Relief’’) 

on October 21, 2014. See Investment Company Act 

Release No. 31301 (Oct. 21, 2014), 79 FR 63964 

(Oct. 27, 2014). 

4See Securities Exchange Act Release No. 72787 

(Aug. 7, 2014), 79 FR 47488 (‘‘Notice’’). 

5See Letter from Gary L. Gastineau, President, 

ETF Consultants.com, Inc., to Elizabeth M. Murphy, 

Secretary, Commission, dated Aug. 30, 2014 

(‘‘Comment Letter’’). 

6 15 U.S.C. 78s(b)(2). 

7See Securities Exchange Act Release No. 73199, 

79 FR 58844 (September 30, 2014). The 

Commission designated November 11, 2014 as the 

date by which it should approve, disapprove, or 

institute proceedings to determine whether to 

disapprove the proposed rule change. 

8See Notice, supra note 4. 

9Under the proposal, a ‘‘Creation Unit’’ is a 

specified minimum number of Managed Portfolio 

Continued 

subparagraph (f)(2) of Rule 19b–4 9

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) 10 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– 

NYSEArca–2014–131 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–NYSEArca–2014–131. 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 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– 

NYSEArca–2014–131, and should be 

submitted on or before December 5, 

2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–26945 Filed 11–13–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73559; File No. SR–BATS– 

2014–018) 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Order Disapproving a 

Proposed Rule Change To Adopt Rule 

14.11(k) to List Managed Portfolio 

Shares and to List and Trade Shares of 

Certain Funds of the Spruce ETF Trust 

November 7, 2014 

On August 4, 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 (‘‘Exchange 

Act’’) 1 and Rule 19b–4 thereunder,2 a 

proposed rule change to adopt new 

BATS Rule 14.11(k), which would 

permit the Exchange to list Managed 

Portfolio Shares, which are shares of 

actively managed exchange-traded 

funds (‘‘ETFs’’) for which the portfolio 

is disclosed quarterly, and to list and 

trade shares of certain funds of the 

Spruce ETF Trust (‘‘Trust’’) 3 under 

proposed BATS Rule 14.11(k). The 

proposed rule change was published for 

comment in the Federal Register on 

August 13, 2014.4 The Commission 

received one comment letter on the 

proposal.5 On September 24, 2014, 

pursuant to Section 19(b)(2) of the 

Exchange Act,6 the Commission 

designated a longer period within which 

to approve the proposed rule change, 

disapprove the proposed rule change, or 

institute proceedings to determine 

whether to disapprove the proposed 

rule change.7

This Order disapproves the proposed 

rule change. 

I. Description of the Proposal 

The Exchange proposes to: (1) Add 

new BATS Rule 14.11(k) which would 

permit the listing of Managed Portfolio 

Shares; and (2) list and trade shares 

(‘‘Shares’’) of the following funds (each 

a ‘‘Fund’’ and, collectively, the 

‘‘Funds’’) under the proposed rule: 

Large Cap Fund, Large Cap Value Fund, 

Large Cap Growth Fund, Large/Mid Cap 

Fund, Large/Mid Cap Value Fund, 

Large/Mid Cap Growth Fund, Large Cap 

Long-Short Fund, Large Cap Value 

Long-Short Fund, Large Cap Growth 

Long-Short Fund, Large/Mid Cap LongShort Fund, and Large/Mid Cap Value 

Long-Short Fund, Large/Mid Cap 

Growth Long-Short Fund, and Large Cap 

Growth Active Insights Fund. The 

discussion below summarizes the 

Exchange’s proposal, details of which 

are described in the Notice.8

A. Proposed Listing Rules 

The Exchange’s proposal would 

define the term ‘‘Managed Portfolio 

Share’’ as a security that (a) is issued by 

an investment company (‘‘Investment 

Company’’) organized as an open-end 

management investment company or 

similar entity, that invests in a portfolio 

of securities selected by the Investment 

Company’s investment adviser 

consistent with the Investment 

Company’s investment objectives and 

policies; (b) is issued in a 

predetermined Creation Unit 9 size in 

mstockstill on DSK4VPTVN1PROD with NOTICES