Federal Register / Vol. 79, No. 247 / Wednesday, December 24, 2014 / Notices 77545 

1Currently, certain series of SSgA Active Trust 

are part of a Master-Feeder Structure as Feeder 

Funds investing in corresponding Master Funds 

that are series of SSgA Master Trust. A ‘‘MasterFeeder Structure’’ involves a ‘‘Feeder Fund’’ 

investing in a corresponding ‘‘Master Fund.’’ 

2Applicants also request relief with respect to 

future series of the Trust and any other existing or 

future registered open-end management investment 

company or series thereof that: (a) Is advised by 

SSgA FM or an entity controlling, controlled by, or 

under common control with SSgA FM (collectively, 

the ‘‘Adviser’’) or its successors; (b) uses the multimanager structure described in the application 

(‘‘Manager of Managers Structure’’); and (c) 

complies with the terms and conditions of the 

application (included in the term ‘‘Funds’’). Every 

entity that currently intends to rely on the 

requested order is named as an Applicant. For 

purposes of the requested order, ‘‘successor’’ is 

limited to an entity or entities that result from a 

reorganization into another jurisdiction or a change 

in the type of business organization. If the name of 

any Fund contains the name of a Sub-Adviser (as 

defined below), the name of the Adviser, or a 

trademark or trade name that is owned or licensed 

by the Adviser, will precede the name of the SubAdviser. 

of the Adviser on a per Subadvised 

Series basis. The information will reflect 

the impact on profitability of the hiring 

or termination of any sub-adviser during 

the applicable quarter. 

9. Whenever a sub-adviser is hired or 

terminated, the Adviser will provide the 

Board with information showing the 

expected impact on the profitability of 

the Adviser. 

10. Whenever a sub-adviser change is 

proposed for an Affiliated Sub-Adviser 

or Wholly-Owned Sub-Adviser to a 

Subadvised Series, the Board, including 

a majority of the Independent Board 

Members, will make a separate finding, 

reflected in the Board minutes, that 

such change is in the best interests of 

the Subadvised Series and its 

shareholders, and does not involve a 

conflict of interest from which the 

Adviser or the Affiliated Sub-Adviser or 

the Wholly-Owned Sub-Adviser derives 

an inappropriate advantage. 

11. No Board Member or officer of a 

Subadvised Series, or partner, director, 

manager, or officer of the Adviser, will 

own directly or indirectly (other than 

through a pooled investment vehicle 

that is not controlled by such person), 

any interest in a Sub-Adviser, except for 

(i) ownership of interests in the Adviser 

or any entity, other than a WhollyOwned Sub-Adviser, that controls, is 

controlled by, or is under common 

control with the Adviser; or (ii) 

ownership of less than 1% of the 

outstanding securities of any class of 

equity or debt of a publicly-traded 

company that is either a Sub-Adviser or 

an entity that controls, is controlled by 

or is under common control with a SubAdviser. 

12. Each Subadvised Series will 

disclose the Aggregate Fee Disclosure in 

its registration statement. 

13. In the event the Commission 

adopts a rule under the Act providing 

substantially similar relief to that 

requested in the Application, the 

requested order will expire on the 

effective date of that rule. 

14. Any new Sub-Advisory 

Agreement or any amendment to a 

Subadvised Series’ existing Investment 

Management Agreement or SubAdvisory Agreement that directly or 

indirectly results in an increase in the 

aggregate advisory fee rate payable by 

the Subadvised Series will be submitted 

to the Subadvised Series’ shareholders 

for approval. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–30130 Filed 12–23–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

31384; 812–13961] 

SSgA Funds Management, Inc., et al.; 

Notice of Application 

December 18, 2014. 

AGENCY: Securities and Exchange 

Commission (the ‘‘Commission’’). 

ACTION: Notice of an application under 

section 6(c) of the Investment Company 

Act of 1940 (‘‘Act’’) for an exemption 

from section 15(a) of the Act and rule 

18f–2 under the Act, as well as from 

certain disclosure requirements. 

SUMMARY OF APPLICATION: Applicants 

request an order that would permit them 

to enter into and materially amend 

subadvisory agreements without 

shareholder approval and would grant 

relief from certain disclosure 

requirements. 

APPLICANTS: SSgA Funds Management, 

Inc. (‘‘SSgA FM’’) and SPDR Series 

Trust, SPDR Index Shares Funds, SSgA 

Master Trust and SSgA Active Trust 

(each, a ‘‘Trust,’’ and collectively, the 

‘‘Trusts,’’ and together with SSgA FM, 

‘‘Applicants’’). 

DATES: Filing Dates: The application 

was filed on September 16, 2011, and 

amended on March 13, 2012, August 18, 

2014 and December 12, 2014. 

Applicants have agreed to file an 

amendment during the notice period, 

the substance of which is reflected in 

this notice. 

HEARING OR NOTIFICATION OF HEARING: An 

order granting the application 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 12, 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: The Commission: Secretary, 

U.S. Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549–1090. 

Applicants: Joshua A. Weinberg, Esq., 

State Street Global Advisors, State Street 

Financial Center, One Lincoln Street, 

Boston, MA 02111. 

FOR FURTHER INFORMATION CONTACT: 

Mark N. Zaruba, Senior Counsel, at 

(202) 551–6878, or Mary Kay Frech, 

Branch Chief, at (202) 551–6821 

(Division of Investment Management, 

Office of Investment Company 

Regulation). 

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 an applicant using the 

‘‘Company’’ name box, at http://

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

calling (202) 551–8090. 

Applicants’ Representations 

1. Each Trust is organized as a 

business trust under the laws of the 

Commonwealth of Massachusetts and 

registered under the Act as an open-end 

management investment company. Each 

Trust will offer multiple series (each a 

‘‘Fund’’),1 some of which currently 

operate, or may in the future operate, as 

exchange-traded funds.2 SSgA FM, a 

Massachusetts corporation, is a whollyowned subsidiary of State Street 

Corporation. SSgA FM is, and any other 

Adviser will be, registered as an 

investment adviser under the 

Investment Advisers Act of 1940 (the 

mstockstill on DSK4VPTVN1PROD with NOTICES

77546 Federal Register / Vol. 79, No. 247 / Wednesday, December 24, 2014 / Notices 

3The term ‘‘Board’’ also includes the board of 

trustees or directors of a future Fund, if different. 4Currently, Nuveen Asset Management LLC, 

GSO/Blackstone Debt Funds Management LLC, and 

Massachusetts Financial Services Company serve as 

Sub-Advisers to certain Funds. 

5 If the Fund utilizing the Manager of Managers 

Structure is a Master Fund, for purposes of the 

Modified Notice and Access Procedures, 

‘shareholders’ include both the shareholders of the 

applicable Master Fund and the shareholders of its 

Feeder Funds. 

6A ‘‘Multi-manager Notice’’ will be modeled on 

a Notice of Internet Availability as defined in rule 

14a–16 under the Securities Exchange Act of 1934 

(‘‘Exchange Act’’), and specifically will, among 

other things: (a) Summarize the relevant 

information regarding the new Sub-Adviser; (b) 

inform shareholders that the Multi-manager 

Information Statement is available on a Web site; 

(c) provide the Web site address; (d) state the time 

period during which the Multi-manager Information 

Statement will remain available on that Web site; 

(e) provide instructions for accessing and printing 

the Multi-manager Information Statement; and (f) 

instruct the shareholder that a paper or email copy 

of the Multi manager Information Statement may be 

obtained, without charge, by contacting the Funds. 

A ‘‘Multi-manager Information Statement’’ will 

meet the requirements of Regulation 14C, Schedule 

14C and Item 22 of Schedule 14A under the 

Exchange Act for an information statement, except 

as modified by the requested order to permit 

Aggregate Fee Disclosure. Multi-manager 

Information Statements will be filed electronically 

with the Commission via the EDGAR system. 

‘‘Advisers Act’’). SSgA FM serves as the 

investment adviser to each of the Funds 

pursuant to a separate investment 

advisory agreement (each, an 

‘‘Investment Advisory Agreement’’ and 

collectively, the ‘‘Investment Advisory 

Agreements’’) with the relevant Trust. 

Each Investment Advisory Agreement 

was approved by the Trust’s board of 

trustees (the ‘‘Board’’),3 including a 

majority of the trustees who are not 

‘‘interested persons,’’ as defined in 

section 2(a)(19) of the Act (for any 

Board, the ‘‘Independent Trustees’’), 

and by the initial shareholder of each 

Fund in the manner required by 

sections 15(a) and 15(c) of the Act and 

rule 18f–2 under the Act. 

2. Under the terms of each Investment 

Advisory Agreement, the Adviser, 

subject to the oversight of the Board, 

manages the investment operations and 

determines the composition of the 

portfolio of each Fund, including the 

purchase, retention and disposition of 

the securities and other instruments 

held by the Fund. For its services to 

each Fund, the Adviser receives an 

investment advisory fee from that Fund 

as specified in the applicable 

Investment Advisory Agreement 

computed as a percentage of the Fund’s 

average daily net assets. Each 

Investment Advisory Agreement also 

permits the Adviser, subject to the 

approval of the Board, including a 

majority of the Independent Trustees, 

and the shareholders of the applicable 

Fund (if required by applicable law), to 

delegate portfolio management 

responsibilities of all or a portion of a 

Fund to one or more subadvisers (‘‘SubAdvisers’’). The Adviser has entered 

into subadvisory agreements (‘‘SubAdvisory Agreements’’) with various 

Sub-Advisers to provide investment 

advisory services to certain Funds.4

Each Sub-Adviser is, and each future 

Sub-Adviser will be, an ‘‘investment 

adviser’’ as defined in section 2(a)(20) of 

the Act as well as registered with the 

Commission as an investment adviser 

under the Advisers Act or exempt from 

such registration. The Adviser will 

evaluate and recommend Sub-Advisers 

to the Board and will monitor and 

evaluate each Sub-Adviser’s investment 

programs, performance and compliance. 

The Adviser will recommend to the 

Board whether Sub-Advisory 

Agreements should be renewed, 

modified or terminated. The Adviser 

currently compensates each SubAdviser out of the fee paid by a Fund 

to the Adviser under the Investment 

Advisory Agreement. However, 

Applicants note that future 

arrangements with one or more SubAdvisers may be implemented whereby 

a Fund will be responsible for paying 

subadvisory fees directly to the SubAdviser. 

3. Applicants request an order 

(‘‘Order’’) to permit the Adviser, subject 

to Board approval, to select certain SubAdvisers to manage all or a portion of 

the assets of a Fund pursuant to a SubAdvisory Agreement and materially 

amend Sub-Advisory Agreements 

without obtaining shareholder approval. 

The requested relief will not extend to 

any Sub-Adviser that is an affiliated 

person, as defined in section 2(a)(3) of 

the Act, of a Fund, any Feeder Fund, or 

the Adviser, other than by reason of 

serving as a Sub-Adviser to a Fund 

(‘‘Affiliated Sub-Adviser’’). 

4. Applicants also request an order 

exempting the Funds from certain 

disclosure provisions described below 

that may require the Applicants to 

disclose fees paid by the Adviser or a 

Fund to each Sub-Adviser. Applicants 

seek an order to permit each Fund to 

disclose (as a dollar amount and a 

percentage of a Fund’s net assets) only: 

(a) The aggregate fees paid to the 

Adviser and any Affiliated SubAdvisers; and (b) the aggregate fees paid 

to Sub-Advisers other than Affiliated 

Sub-Advisers (collectively, the 

‘‘Aggregate Fee Disclosure’’). A Fund 

that employs an Affiliated Sub-Adviser 

will provide separate disclosure of any 

fees paid to the Affiliated Sub-Adviser. 

5. The Funds will inform 

shareholders of the hiring of a new SubAdviser pursuant to the following 

procedures (‘‘Modified Notice and 

Access Procedures’’): (a) Within 90 days 

after a new Sub-Advisor is hired for any 

Fund, that Fund will send its 

shareholders 5 either a Multi-manager 

Notice or a Multi-manager Notice and 

Multi-manager Information Statement; 6

and (b) the Fund will make the Multimanager Information Statement 

available on the Web site identified in 

the Multi-manager Notice no later than 

when the Multi-manager Notice (or 

Multi-manager Notice and Multimanager Information Statement) is first 

sent to shareholders, and will maintain 

it on that Web site for at least 90 days. 

Applicants’ Legal Analysis 

1. Section 15(a) of the Act provides, 

in relevant part, that it is unlawful for 

any person to act as an investment 

adviser to a registered investment 

company except pursuant to a written 

contract that has been approved by the 

vote of a majority of the company’s 

outstanding voting securities. Rule 18f– 

2 under the Act provides that each 

series or class of stock in a series 

investment company affected by a 

matter must approve that matter if the 

Act requires shareholder approval. 

2. Form N–1A is the registration 

statement used by open-end investment 

companies. Item 19(a)(3) of Form N–1A 

requires disclosure of the method and 

amount of the investment adviser’s 

compensation. 

3. Rule 20a–1 under the Act requires 

proxies solicited with respect to an 

investment company to comply with 

Schedule 14A under the Exchange Act. 

Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) 

and 22(c)(9) of Schedule 14A, taken 

together, require a proxy statement for a 

shareholder meeting at which the 

advisory contract will be voted upon to 

include the ‘‘rate of compensation of the 

investment adviser,’’ the ‘‘aggregate 

amount of the investment adviser’s 

fees,’’ a description of the ‘‘terms of the 

contract to be acted upon,’’ and, if a 

change in the advisory fee is proposed, 

the existing and proposed fees and the 

difference between the two fees. 

4. Regulation S–X sets forth the 

requirements for financial statements 

required to be included as part of a 

registered investment company’s 

registration statement and shareholder 

reports filed with the Commission. 

Sections 6–07(2)(a), (b) and (c) of 

Regulation S–X require a registered 

investment company to include in its 

financial statement information about 

the investment advisory fees. 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 79, No. 247 / Wednesday, December 24, 2014 / Notices 77547 

7Applicants will only comply with conditions 

12, 13, 14 and 15 with respect to those series that 

rely on the relief that would allow them to provide 

Aggregate Fee Disclosure. Each Trust will comply 

with condition 13 if any series of the respective 

Trust provides Aggregate Fee Disclosure in its 

registration statement. 

8For purposes of this condition, (i) a ‘‘Controlling 

Feeder Fund’’ is a Feeder Fund investing in a 

Master Fund relying on the Order that controls such 

Master Fund, within the meaning of section 2(a)(9) 

of the Act; and (ii) an ‘‘Affiliated Feeder Fund’’ is 

a Feeder Fund investing in a Master Fund relying 

on the Order that is either (a) in the same ‘‘group 

of investment companies’’ (within the meaning of 

section 12(d)(1)(G)(ii) of the Act) as any Fund; (b) 

an affiliated person (within the meaning of section 

2(a)(3) of the Act) or an affiliated person of such an 

affiliated person of any Fund or of the Adviser; or 

(c) advised by the Adviser. 

5. Section 6(c) of the Act provides that 

the Commission may exempt any 

person, security, or transaction or any 

class or classes of persons, securities, or 

transactions from any provisions of the 

Act, or from any rule thereunder, if such 

exemption is necessary or appropriate 

in the public interest and consistent 

with the protection of investors and the 

purposes fairly intended by the policy 

and provisions of the Act. Applicants 

state that the requested relief meets this 

standard for the reasons discussed 

below. 

6. Applicants assert that the 

shareholders expect the Adviser, subject 

to the review and approval of the Board, 

to select the Sub-Advisers who are best 

suited to achieve the Fund’s investment 

objective. Applicants assert that, from 

the perspective of the shareholder, the 

role of the Sub-Adviser is substantially 

equivalent to the role of the individual 

portfolio managers employed by 

traditional investment company 

advisory firms. Applicants state that 

requiring shareholder approval of each 

Subadvisory Agreement would impose 

unnecessary delays and expenses on the 

Funds, and may preclude the Fund from 

acting promptly when the Board and the 

Adviser believe that a change would 

benefit a Fund and its shareholders. 

Applicants note that the Investment 

Advisory Agreement and any SubAdvisory Agreement with an Affiliated 

Sub-Adviser (if any) will continue to be 

subject to the shareholder approval 

requirements of section 15(a) of the Act 

and rule 18f–2 under the Act. 

7. Applicants assert that the requested 

disclosure relief would benefit 

shareholders of the Funds because it 

would improve the Adviser’s ability to 

negotiate the fees paid to Sub-Advisers. 

Applicants state that the Adviser may be 

able to negotiate rates that are below a 

Sub-Adviser’s ‘‘posted’’ amounts, if the 

Adviser is not required to disclose the 

Sub-Advisers’ fees to the public. 

Applicants submit that the requested 

relief will encourage Sub-Advisers to 

negotiate lower subadvisory fees with 

the Adviser if the lower fees are not 

required to be made public. 

Applicants’ Conditions 

Applicants agree that any order 

granting the requested relief will be 

subject to the following conditions: 7

1. Before a Fund may rely on the 

Order, the operation of the Fund in the 

manner described in the application 

will be approved by a majority of the 

Fund’s outstanding voting securities, as 

defined in the Act, which in the case of 

a Master Fund will include voting 

instructions provided by shareholders of 

the Feeder Funds investing in such 

Master Fund or other voting 

arrangements that comply with section 

12(d)(1)(E)(iii)(aa) of the Act, or, in the 

case of a Fund whose public 

shareholders purchase shares on the 

basis of a prospectus containing the 

disclosure contemplated by condition 2 

below, by the initial shareholder(s) 

before offering the Fund’s shares to the 

public. 

2. Each Fund that relies on the Order, 

and in the case of Master Fund relying 

on the Order, each Feeder Fund 

investing in such Master Fund, will 

disclose in its prospectus the existence, 

substance, and effect of any Order 

granted pursuant to the application. 

Each Fund relying on the Order (and 

any such Feeder Fund) will hold itself 

out to the public as utilizing the 

Manager of Managers Structure. Each 

prospectus will prominently disclose 

that the Adviser has ultimate 

responsibility (subject to oversight by 

the Board) to oversee the Sub-Advisers 

and recommend their hiring, 

termination and replacement. 

3. Funds will inform shareholders, 

and if the Fund relying on the Order is 

a Master Fund, shareholders of any 

Feeder Funds of the hiring of a new 

Sub-Adviser within 90 days after the 

hiring of the new Sub-Adviser pursuant 

to the Modified Notice and Access 

Procedures. 

4. The Adviser will not enter into a 

Sub-Advisory Agreement with any 

Affiliated Sub-Adviser without such 

agreement, including the compensation 

to be paid thereunder, being approved 

by the shareholders of the applicable 

Fund. 

5. At all times, at least a majority of 

the Board will be Independent Trustees 

and the nomination of new or additional 

Independent Trustees will be at the 

discretion of the then-existing 

Independent Trustees. 

6. Whenever a Sub-Adviser change is 

proposed for a Fund with an Affiliated 

Sub-Adviser, the Board, including a 

majority of the Independent Trustees, 

will make a separate finding, reflected 

in the applicable Board minutes, that 

such change is in the best interests of 

such Fund and its shareholders, and if 

the Fund relying on the Order is a 

Master Fund, the best interests of any 

applicable Feeder Funds and their 

respective shareholders, and does not 

involve a conflict of interest from which 

the Adviser or an Affiliated Sub-Adviser 

derives an inappropriate advantage. 

7. The Adviser will provide general 

management services to each Fund 

relying on the Order, including overall 

supervisory responsibility for the 

general management and investment of 

the Fund’s assets and, subject to review 

and approval by the Board, will: (i) Set 

the Fund’s overall investment strategies; 

(ii) evaluate, select and recommend 

Sub-Advisers to provide purchase and 

sale recommendations to the Adviser or 

investment advice to all or a portion of 

the Fund’s assets; (iii) allocate and, 

when appropriate, reallocate the Fund’s 

assets among multiple Sub-Advisers; 

(iv) monitor and evaluate the SubAdvisers’ performance; and (v) 

implement procedures reasonably 

designed to ensure that Sub-Adviser(s) 

comply with the relevant Fund’s 

investment objectives, policies and 

restrictions. 

8. (a) No trustee or officer of a Fund 

relying on the Order or a Controlling 

Feeder Fund or director or officer of the 

Adviser will own, directly or indirectly, 

any interest in a Sub-Adviser and (b) no 

trustee or officer of an Affiliated Feeder 

Fund will own, directly or indirectly, 

any interest in a Sub-Adviser of the 

corresponding Master Fund; provided, 

however, that the foregoing limitations 

shall not apply to: (x) Interests owned 

through a pooled investment vehicle 

that is not controlled by such person; (y) 

ownership of less than 1% of the 

outstanding securities of any class of 

equity or debt of a publicly traded 

company that is either a Sub-Adviser or 

an entity that controls, is controlled by 

or is under common control with a SubAdviser; or, (z) solely with respect to 

clause (a) above, ownership of interests 

in the Adviser or any entity that 

controls, is controlled by or is under 

common control with the Adviser.8

9. Whenever the Board approves a 

Sub-Advisory Agreement for a Fund, the 

Board, including a majority of the 

Independent Trustees, will make a 

separate finding that such approval is 

being made free of any influence from 

any other Fund or Feeder Fund or its 

respective trustees and officers. The 

finding required by this condition will 

mstockstill on DSK4VPTVN1PROD with NOTICES

77548 Federal Register / Vol. 79, No. 247 / Wednesday, December 24, 2014 / Notices 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

5A Member is defined as ‘‘any registered broker 

or dealer that has been admitted to membership in 

the Exchange.’’ See Exchange Rule 1.5(n). 

be documented in the minutes of the 

meeting of the Board, together with the 

trustees’ basis for the finding. 

10. Any new Sub-Advisory 

Agreement or any amendment to an 

existing Investment Advisory 

Agreement or Sub-Advisory Agreement 

for a Fund relying on the Order that 

directly or indirectly results in an 

increase in the aggregate advisory fee 

rate payable by the Fund will be 

submitted to the Fund’s shareholders for 

approval. 

11. In the event the Commission 

adopts a rule under the Act providing 

substantially similar relief to that in the 

Order, the requested Order will expire 

on the effective date of that rule. 

12. Each Fund relying on the Order 

and any Feeder Fund will disclose in its 

registration statement the Aggregate Fee 

Disclosure. 

13. Independent Legal Counsel, as 

defined in rule 0–1(a)(6) under the Act, 

has been and will continue to be 

engaged to represent the Independent 

Trustees. The selection of such counsel 

will be within the discretion of the thenexisting Independent Trustees. 

14. The Adviser will provide the 

Board, no less frequently than quarterly, 

with information about the profitability 

of the Adviser on a per-Fund basis for 

each Fund relying on the Order. The 

information will reflect the impact on 

profitability of the hiring or termination 

of any Sub-Adviser during the 

applicable quarter. 

15. Whenever a Sub-Adviser is hired 

or terminated, the Adviser will provide 

the Board with information showing the 

expected impact on the profitability of 

the Adviser. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–30128 Filed 12–23–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73881; File No. SR–BYX– 

2014–040] 

Self-Regulatory Organizations; BATS 

Y-Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Related to Fees for Use 

of BATS Y-Exchange, Inc. 

December 18, 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 December 

12, 2014, BATS Y-Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BYX’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Exchange has designated the proposed 

rule change as one establishing or 

changing a member due, fee, or other 

charge imposed by the Exchange under 

section 19(b)(3)(A)(ii) of the Act 3 and 

Rule 19b–4(f)(2) thereunder,4 which 

renders the proposed rule change 

effective upon filing with the 

Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange filed a proposal to 

make several non-substantive 

amendments to the fee schedule 

applicable to Members 5 and nonmembers of the Exchange pursuant to 

BYX Rules 15.1(a) and (c). Changes to 

the fee schedule pursuant to this 

proposal are effective upon filing. 

The text of the proposed rule change 

is available at the Exchange’s Web site 

at http://www.batstrading.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 

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 parts 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 make a 

number of clarifying, non-substantive 

changes to its fee schedule in order to 

convert the existing fee schedule into a 

chart format, including eliminating 

certain redundancies from and 

providing additional clarity to the 

language in the existing fee schedule. 

The Exchange believes that these 

changes will provide greater 

transparency to Members about how the 

Exchange assesses fees and calculates 

rebates, as well as allowing Members to 

more easily validate their bills on a 

monthly basis. The Exchange notes that 

none of these changes substantively 

amend any fee or rebate, nor do they 

alter the manner in which the Exchange 

assesses fees or calculates rebates. 

Specifically, the Exchange is proposing 

the following: 

• To make clear that rebates are 

indicated by parentheses. 

• To state the following: The rates 

listed in the Standard Rates table apply 

unless a Member’s transaction is 

assigned a fee code other than a 

standard fee code. If a Member’s 

transaction is assigned a fee code other 

than a standard fee code, the rates listed 

in the Fee Codes table will apply. 

Footnotes provide further explanatory 

text or, where annotated to fee codes, 

indicate variable rate changes, provided 

the conditions in the footnote are met. 

Unless otherwise noted, all routing fees 

or rebates in the Fee Codes and 

Associated Fees table are for removing 

liquidity from the destination venue. 

• To add a section and chart titled 

‘‘Standard Rates,’’ which will include 

the standard fees and rebates for 

securities priced both at or above $1.00 

and below $1.00 for adding liquidity, 

removing liquidity, and routing and 

removing liquidity from another venue 

as well as the standard fee codes 

associated with these rates. 

• To add a section titled ‘‘Fee Codes 

and Associated Fees,’’ which will 

include the fee or rebate, the fee code, 

and a description for each possible 

execution that could occur on the 

Exchange or on another venue. 

• To add a section titled 

‘‘Definitions,’’ which will include 

definitions that are defined in the 

current fee schedule. The Exchange also 

notes that ‘‘Other Non-Displayed 

Liquidity’’ will not be included in 

‘‘Definitions’’ because, as proposed, it is 

captured in the section titled ‘‘Fee 

Codes and Associated Fees.’’ These 

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