Federal Register / Vol. 79, No. 249 / Tuesday, December 30, 2014 / Notices 78507 

1The Commission notes that AMSE’s application 

only seeks a limited volume exemption under 

Section 5 of the Exchange Act from registration as 

a national securities exchange under Section 6 of 

the Exchange Act. AMSE’s application does not 

seek to register as a national securities exchange. 

2See Securities Exchange Act Release No. 72661 

(July 23, 2014), 79 FR 44070 (‘‘Notice’’). 

3See Securities Exchange Act Release No. 73419 

(October 23, 2014), 79 FR 64421 (October 29, 2014) 

(‘‘Order Instituting Proceedings’’). 

4 15 U.S.C. 78e. 

5For more detail on AMSE’s proposed system, 

see AMSE’s full amended exemption application 

and exhibits, which are published with this notice 

on the Commission’s Web site at http://

www.sec.gov/rules/other.shtml. 

6See email from Michael Stegawski, Chief 

Regulatory Officer, AMSE, to SEC staff, dated 

November 14, 2014. 7See Order Instituting Proceedings, supra note 3, 

at 64422. 8See Regulation ATS Adopting Release, 63 FR at 

70898–70901 (discussing the Commission’s revised 

interpretation of the ‘‘exchange’’ definition). Among 

other things, the Commission stated that ‘‘the first 

essential element of an exchange is the bringing 

together of orders of multiple buyers and sellers.’’ 

Id. at 70900. 

Form No. Annual 

responses 

Time 

(minutes) 

Burden 

(hours) 

G–3EMP ...................................................................................................................................... 600 10 100 

G–197 .......................................................................................................................................... 6,000 10 1,000 

G–250 .......................................................................................................................................... 11,950 30 5,975 

G–250A ........................................................................................................................................ 50 20 17 

G–260 .......................................................................................................................................... 100 25 42 

RL–11B ........................................................................................................................................ 5,000 10 833 

RL–11D ........................................................................................................................................ 250 10 42 

RL–250 ........................................................................................................................................ 11,950 10 1,992 

35,900 ........................ 10,001 

Additional Information or Comments: 

Copies of the forms and supporting 

documents can be obtained from Dana 

Hickman at (312) 751–4981 or 

Dana.Hickman@RRB.GOV. 

Comments regarding the information 

collection should be addressed to 

Charles Mierzwa, Railroad Retirement 

Board, 844 North Rush Street, Chicago, 

Illinois 60611–2092 or 

Charles.Mierzwa@RRB.GOV and to the 

OMB Desk Officer for the RRB, Fax: 

202–395–6974, Email address: OIRA_

Submission@omb.eop.gov. 

Charles Mierzwa, 

Chief of Information Resources Management. 

[FR Doc. 2014–30497 Filed 12–29–14; 8:45 am] 

BILLING CODE 7905–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73911; File No. 10–214] 

Automated Matching Systems 

Exchange, LLC; Notice of Filing of 

Amendment No. 1 to an Application for 

Limited Volume Exemption From 

Registration as a National Securities 

Exchange Under Section 5 of the 

Securities Exchange Act of 1934 

December 22, 2014. 

On July 7, 2014, Automated Matching 

Systems Exchange, LLC (‘‘AMSE’’) 

submitted to the Securities and 

Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) an application seeking a 

limited volume exemption under 

Section 5 of the Securities Exchange Act 

(‘‘Exchange Act’’) from registration as a 

national securities exchange under 

Section 6 of the Exchange Act.1 Notice 

of AMSE’s exemption application was 

published for comment in the Federal 

Register on July 29, 2014.2 On October 

23, 2014, the Commission issued an 

order instituting proceedings to 

determine whether to grant or deny 

AMSE’s exemption application.3 On 

November 10, 2014, AMSE submitted 

Amendment No. 1 to its exemption 

application. The Commission is 

publishing this notice in order to solicit 

views of interested persons on AMSE’s 

exemption application as amended by 

Amendment No. 1. 

I. Description of AMSE’s System 

AMSE proposes to conduct business 

in reliance upon an exemption from 

registration as a national securities 

exchange pursuant to Section 5 of the 

Exchange Act.4 In general, AMSE seeks 

to operate as an exchange for alternative 

trading systems.5 AMSE proposes to 

operate solely on an ‘‘off-order-book’’ 

trading basis. AMSE does not intend to 

have a physical exchange trading floor, 

centralized order book, or specialists or 

market makers with affirmative and 

negative market making obligations. 

Each member of AMSE would maintain 

its own automated matching system or 

electronic order book. Each member of 

AMSE would adopt its own rules 

governing the execution and priority of 

orders on its system. Trades would 

occur when an order to buy and an 

order to sell match on a member’s 

electronic order book. Each member 

would report its transactions to AMSE 

at such intervals as required by AMSE. 

II. Amendment No. 1 to AMSE’s 

Exemption Application 

On November 10, 2014, AMSE 

submitted Amendment No. 1 to its 

exemption application. AMSE has 

represented that the only substantive 

change to its exemption application 

made by Amendment No. 1 is the 

addition of the following paragraph to 

Exhibit E: 6

The Exchange will bring together orders for 

multiple buyers and sellers and such will be 

done by the use of consolidated quotation 

systems which effect transactions for 

multiple buyers and sellers. The consolidated 

quotation systems will display, or otherwise 

represent, trading interests entered on the 

AMSE system to its system users. AMSE may 

use a centralized order router which would 

match trading interests on the electronic 

order book of one member with the trading 

interests on the electronic order book of a 

second member. 

III. Additional Grounds for Denial 

Under Consideration 

In the Order Instituting Proceedings, 

the Commission provided notice of the 

grounds for denial under 

consideration.7 Specifically, the 

Commission noted that it was 

concerned that AMSE’s exemption 

application does not meet a key 

threshold requirement for being granted 

an exemption from exchange 

registration—namely, that the applicant 

actually be an ‘‘exchange’’ as defined 

under Section 3(a)(1) of the Exchange 

Act and Rule 3b–16 thereunder.8 The 

Commission continues to have this 

concern. 

The Commission is providing notice 

of additional grounds for denial under 

consideration. Specifically, the 

Commission is concerned that it would 

not be necessary or appropriate in the 

public interest or for the protection of 

investors to grant a limited volume 

exemption under Section 5 of the 

Exchange Act because it appears from 

the exemption application that the 

operation of the proposed exchange 

would be inconsistent with the 

Exchange Act. 

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78508 Federal Register / Vol. 79, No. 249 / Tuesday, December 30, 2014 / Notices 

9See, e.g., AMSE Operating Agreement Article III, 

Section 1(e) (‘‘In light of the unique nature of the 

Company, its operations, its status as a SRO. . . .’’ 

(emphasis added)); Article XI, Section 2 (‘‘All 

meetings of the Board (and any committees of the 

Board) pertaining to the self-regulatory function of 

the Company (including disciplinary 

matters). . . .’’ (emphasis added)); and Article XI, 

Section 3 (‘‘to the extent necessary or appropriate 

to discharge properly the self-regulatory 

responsibilities of the Company.’’ (emphasis 

added)). 

10 15 U.S.C. 78c(a)(26). 

11 15 U.S.C. 78e. 

12 15 U.S.C. 78f(a). 

13 In an order granting a limited volume 

exemption from registration as a national securities 

exchange under Section 5 of the Exchange Act to 

Wunsch Auction Systems Inc., the Commission 

stated ‘‘[b]y virtue of this exemption from 

registration, the Wunsch System falls outside the 

definition of a national securities exchange because 

the term ‘‘national securities exchange’’ implies a 

registered entity (see, e.g., sections 3(a)(26) of the 

[Exchange] Act (defining the term ‘‘self-regulatory 

organization’’) and section 6(a) of the [Exchange] 

Act.’’ See Securities Exchange Act Release No. 

28899 (February 20, 1991), 56 FR 8377, 8382 

(February 28, 1991) (File No. 10–100). 

14The Commission notes that, even if AMSE’s 

exemption application were to be approved, the 

broker-dealer members of AMSE would not be able 

to satisfy their requirement to be members of a selfregulatory organization by their membership with 

AMSE; rather such broker-dealers would be 

required to be members of a registered securities 

association or a national securities exchange if such 

broker-dealers effect transactions solely on that 

exchange, pursuant to Section 15(b)(1)(B) of the 

Exchange Act. See 15 U.S.C. 78o(b)(1)(B). 15See supra note 5. 

AMSE’s exemption application states 

that AMSE would operate as a selfregulatory organization that would 

exercise self-regulatory authority over 

its members.9 A ‘‘self-regulatory 

organization’’ is defined under Section 

3(a)(26) of the Exchange Act as ‘‘any 

national securities exchange, registered 

securities association, or registered 

clearing agency. . . .’’ 10 Section 5 of 

the Exchange Act provides that an 

exchange must be either (1) registered as 

a national securities exchange under 

Section 6 of the Exchange Act or (2) 

exempted from such registration on the 

basis of limited volume of transactions 

effected on the exchange.11 An 

exchange can only become a ‘‘national 

securities exchange,’’ and thus a selfregulatory organization, by registering 

under Section 6 of the Exchange Act.12

An exchange that is exempt under 

Section 5 of the Exchange Act on the 

basis of limited volume of transactions, 

however, is relieved from registering as 

a national securities exchange under 

Section 6 of the Exchange Act and 

therefore is not a self-regulatory 

organization.13 If the Commission were 

to grant AMSE’s exemption application, 

however, AMSE would not be a 

registered national securities exchange 

and, therefore, would not become a selfregulatory organization as defined under 

Section 3(a)(26) of the Exchange Act.14

Accordingly, it appears that any 

attempts by AMSE to hold itself out as 

a self-regulatory organization while 

simultaneously seeking an exemption 

under Section 5 would be contrary to 

the Exchange Act. 

The Commission notes that it has not 

reached any conclusions with respect to 

AMSE’s exemption application. Rather, 

the Commission seeks and encourages 

interested persons to provide additional 

comment on the exemption application 

as amended by Amendment No. 1. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning AMSE’s 

exemption application as amended by 

Amendment No. 1, including whether 

AMSE’s exemption application as 

amended by Amendment No. 1 is 

consistent with the Exchange Act. 

1. While the Commission requests 

comment on all aspects of AMSE’s 

exemption application as amended by 

Amendment No. 1, the Commission 

specifically requests comment on 

whether statements made in 

Amendment No. 1 are consistent with 

other statements in the exemption 

application, including those made in 

Exhibit E thereto. For example: 

• In Amendment No. 1, in Exhibit E, 

AMSE states that ‘‘[t]he Exchange will 

bring together orders for multiple buyers 

and sellers and such will be done by the 

use of consolidated quotation systems 

which effect transactions for multiple 

buyers and sellers. The consolidated 

quotation systems will display, or 

otherwise represent, trading interests 

entered on the AMSE system to its 

system users. AMSE may use a 

centralized order router which would 

match trading interests on the electronic 

order book of one member with the 

trading interests on the electronic order 

book of a second member.’’ 15

• But Exhibit E to AMSE’s exemption 

application also states ‘‘[t]he Exchange 

has designed its System to allow its 

Exchange Members to individually 

determine the best method for display of 

quotations and entry of orders through 

the Exchange. Thus, Exchange Members 

may develop their own customized 

electronic order books and routing 

systems, but shall report their 

transactions to the Exchange at such 

intervals as required by the Exchange.’’ 

In addition, Exhibit E states ‘‘[t]rades 

shall occur when an order to buy and 

an order to sell match on the Exchange 

Member’s electronic order book. Each 

Exchange Member shall adopt rules to 

govern the execution and priority of 

orders.’’ 

2. The Commission specifically 

requests comment on whether the 

following are sufficiently clear from 

AMSE’s exemption application, as 

amended by Amendment No. 1: 

• How would AMSE’s consolidated 

quotation systems, which according to 

AMSE ‘‘will display, or otherwise 

represent, trading interests entered on 

the AMSE system to its system users,’’ 

effect transactions? 

• If AMSE’s consolidated quotation 

systems do effect transactions, how is 

that consistent with the statement in 

Exhibit E that ‘‘[t]rades shall occur 

when an order to buy and an order to 

sell match on the Exchange Member’s 

electronic order book?’’ 

• If AMSE’s consolidated quotation 

systems do effect transactions, what are 

the established non-discretionary 

methods (e.g., execution priority rules) 

by which orders from members interact 

with each other through AMSE’s 

consolidated quotation systems? 

• Amendment No. 1 states that 

‘‘AMSE may use a centralized order 

router’’ (emphasis added). Under what 

circumstances would AMSE use or not 

use the centralized order router? How 

would the centralized order router 

function? What methods (discretionary 

or non-discretionary) would determine 

how the centralized order router ‘‘would 

match trading interests on the electronic 

order book of one member with the 

trading interests on the electronic order 

book of a second member?’’ 

• What does it mean for AMSE’s 

centralized order router to ‘‘match 

trading interest?’’ Does ‘‘match trading 

interest’’ mean bringing together orders 

using established non-discretionary 

methods in the consolidated quotation 

system, or does it mean routing an order 

from one member’s order book to 

another member’s order book for a 

transaction to occur on the member’s 

order book? If the former, what are the 

established non-discretionary methods 

by which orders from members interact 

with each other through the centralized 

router (e.g., execution priority rules)? 

• What other functions, if any, does 

the centralized order router do other 

than provide the technology and 

systems to route trading interest from 

one member’s order book to another 

member’s order book? In particular, 

does the centralized order router decide 

when to send trading interest from one 

member’s electronic order book to 

another member’s electronic order book, 

or does the AMSE member have to take 

action to route the trading interest? If 

the centralized order router decides 

when to route trading interest from one 

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Federal Register / Vol. 79, No. 249 / Tuesday, December 30, 2014 / Notices 78509 

16 17 CFR 200.30–3(a)(71)(ii). 

member’s book to another member’s 

book, under what rules or protocols 

does it make such decisions? 

• Would an AMSE member be 

required to use AMSE’s consolidated 

quotations systems or would the AMSE 

member be allowed to display trading 

interest submitted to its order book 

through other means, including its own 

data feed? 

• Are members required to use 

AMSE’s centralized order router? Are 

members required to route trading 

interest to other members if an 

execution could occur, or is routing 

between members discretionary? For 

example, assume Member 1’s order book 

has no sell interest in XYZ stock. If 

Member 1 receives buy interest in XYZ 

stock that could execute against sell 

interest in XYZ stock on Member 2’s 

order book, would Member 1 be 

required to route such buy interest to 

Member 2 or could Member 1 post such 

buy interest to its order book? 

3. The Commission specifically 

requests comment on whether 

statements made in AMSE’s exemption 

application pertaining to its intent to 

operate as an SRO are consistent with 

statements in the application pertaining 

to its exemption request. As noted 

above, AMSE’s application states that it 

intends to operate as an SRO. But, 

AMSE’s application also states that it is 

seeking an exemption from registering 

as a national securities exchange. If 

AMSE were granted an exemption from 

registering as a national securities 

exchange, AMSE would not be a 

registered national securities exchange 

and hence would not be an SRO. The 

Commission seeks comment on the 

inconsistencies between these 

statements in AMSE’s application. 

Comments may be submitted by any 

of the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/

rules/other.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number 10– 

214 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, Station Place, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number 10–214. 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/other.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to AMSE’s exemption 

application filed with the Commission, 

and all written communications relating 

to the application 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. 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 10–214 and 

should be submitted on or before 

January 20, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–30437 Filed 12–29–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

31394; 812–14347] 

Pacer Funds Trust, et al.; Notice of 

Application 

December 22, 2014. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of an application for an 

order under section 6(c) of the 

Investment Company Act of 1940 (the 

‘‘Act’’) for an exemption from sections 

2(a)(32), 5(a)(1), 22(d), and 22(e) of the 

Act and rule 22c–1 under the Act, under 

sections 6(c) and 17(b) of the Act for an 

exemption from sections 17(a)(1) and 

17(a)(2) of the Act, and under section 

12(d)(1)(J) for an exemption from 

sections 12(d)(1)(A) and 12(d)(1)(B) of 

the Act. 

Summary of Application:Applicants 

request an order that would permit (a) 

series of certain open-end management 

investment companies to issue shares 

(‘‘Shares’’) redeemable in large 

aggregations only (‘‘Creation Units’’); (b) 

secondary market transactions in Shares 

to occur at negotiated market prices 

rather than at net asset value (‘‘NAV’’); 

(c) certain series to pay redemption 

proceeds, under certain circumstances, 

more than seven days after the tender of 

Shares for redemption; (d) certain 

affiliated persons of the series to deposit 

securities into, and receive securities 

from, the series in connection with the 

purchase and redemption of Creation 

Units; and (e) certain registered 

management investment companies and 

unit investment trusts outside of the 

same group of investment companies as 

the series to acquire Shares. 

Applicants: Pacer Funds Trust (the 

‘‘Trust’’), Pacer Advisors, Inc. (‘‘Initial 

Adviser’’), and Pacer Financial, Inc. (the 

‘‘Distributor’’). 

Filing Dates: The application was 

filed on August 15, 2014, and amended 

on September 24, 2014, and December 

4, 2014. 

Hearing or Notification of Hearing: An 

order granting the requested relief will 

be issued unless the Commission orders 

a hearing. Interested persons may 

request a hearing by writing to the 

Commission’s Secretary and serving 

applicants with a copy of the request, 

personally or by mail. Hearing requests 

should be received by the Commission 

by 5:30 p.m. on January 16, 2015, and 

should be accompanied by proof of 

service on applicants, in the form of an 

affidavit or, for lawyers, a certificate of 

service. Pursuant to rule 0–5 under the 

Act, hearing requests should state the 

nature of the writer’s interest, any facts 

bearing upon the desirability of a 

hearing on the matter, the reason for the 

request, and the issues contested. 

Persons who wish to be notified of a 

hearing may request notification by 

writing to the Commission’s Secretary. 

ADDRESSES: Secretary, Securities and 

Exchange Commission, 100 F Street, 

NE., Washington, DC 20549–1090; 

Applicants, 16 Industrial Blvd., Suite 

201, Paoli, PA 19301. 

FOR FURTHER INFORMATION CONTACT: 

Christine Y. Greenlees, Senior Counsel, 

at (202) 551–6879, or David P. Bartels, 

Branch Chief, at (202) 551–6821 

(Division of Investment Management, 

Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

Web site by searching for the file 

number, or for an applicant using the 

Company name box, at http://

www.sec.gov/search/search.htm or by 

calling (202) 551–8090. 

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