78522 Federal Register / Vol. 79, No. 249 / Tuesday, December 30, 2014 / Notices 

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

2 17 CFR 240.19b–4. 

3The Exchange notes that there are efforts by the 

exchanges to create a uniform trade nullification 

and adjustment rule. Should the uniform rule be 

approved and effective, the Exchange will amend 

its rules appropriately. 

4The Exchange notes that, as proposed, Rule 

6.77A would only apply to trades that were 

executed on the Exchange and, as such, any orders 

that were either fully or partially routed to, or 

executed, on another exchange would not be subject 

to the proposed Rule 6.77A. 

5See Rule 6.87(a)(3) and (7) and 6.87(d)(3). 

6See CBOE Rule 6.19 and Securities Exchange 

Act Release No. 72970 (September 3, 2014), 79 FR 

53498 (September 9, 2014) (SR–CBOE–2014–066) 

and MIAX Rule 531 and Release No. 73463 (October 

29, 2014), 79 FR 65445 (November 4, 2014) (SR– 

MIAX–2014–54). 

7See note 5 supra. 

8See Commentary .02 of Rule 6.77. 

Temporary Order 

The Commission has considered the 

matter and finds that Applicants have 

made the necessary showing to justify 

granting a temporary exemption. 

Accordingly, 

It is hereby ordered, pursuant to 

section 9(c) of the Act, that the Fund 

Servicing Applicants and any other 

Covered Persons are granted a 

temporary exemption from the 

provisions of section 9(a), solely with 

respect to the Injunction, subject to the 

representations and conditions in the 

application, from December 18, 2014, 

until the Commission takes final action 

on their application for a permanent 

order. 

By the Commission. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–30225 Filed 12–29–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73909; File No. SR–

NYSEArca–2014–140] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending Exchange 

Rules Regarding Trade Nullification 

and Price Adjustment 

December 22, 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 

16, 2014, NYSE Arca, Inc. (the 

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

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. 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 proposes to amend 

exchange rules regarding trade 

nullification and price adjustment. 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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange is proposing to add 

Rule 6.77A, ‘‘Trade Nullification and 

Price Adjustment Procedure.’’ 3 As 

proposed, Rule 6.77A would allow for 

transactions to be nullified if both 

parties to the transaction agree to the 

nullification and allow the price of 

executions to be adjusted if the price 

adjustment is agreed to by both parties 

to the transaction and authorized by the 

Exchange.4 The Exchange is also 

proposing to make other conforming 

administrative changes to streamline the 

rules governing this subject with the 

Exchange’s rules. 

Background 

Currently, pursuant to Commentary 

.02 of Rule 6.77, the Exchange allows for 

parties to agree to nullify an execution. 

Commentary .02 of Rule 6.77 also states 

that once both parties agree to the trade 

nullification, one party must ‘‘promptly 

notify the Exchange for dissemination of 

cancellation information to the Options 

Price Reporting Authority.’’ In addition, 

the Exchange currently allows for a 

mutual price adjustment for trades that 

meet the obvious error (or catastrophic 

error) requirements pursuant to 

Exchange Rule 6.87 if those mutual 

agreements are done within specific 

timeframes.5 The Exchange is now 

proposing to relocate the 

aforementioned trade nullification 

language and add a provision to allow 

parties to mutually adjust prices of 

executions outside of those done in 

obvious error. The Exchange’s proposal 

is based upon similar rules of the 

Chicago Board Options Exchange 

(‘‘CBOE’’) and Miami International 

Securities Exchange, LLC (‘‘MIAX’’).6

Proposed Rule 6.77A 

The Exchange is proposing to add 

Rule 6.77A, ‘‘Trade Nullification and 

Price Adjustment Procedure,’’ which 

would: (a) Allow for any trades on the 

Exchange to be nullified if both parties 

to the trade agree to such nullification, 

and (b) allow for prices of executions to 

be adjusted if the price adjustment is 

agreed upon by both parties to the trade 

and authorized by the Exchange.7

As stated above, the Exchange 

currently allows for trades to be 

nullified based upon mutual 

agreement.8 With the proposed addition 

of Rule 6.77A, the Exchange is only 

renumbering and relocating this 

provision and is not proposing a 

substantive change to the rule itself. The 

Exchange believes that having the 

provision as a standalone rule would 

make it easier for OTP Holders to locate. 

In addition, the Exchange believes this 

administrative change would streamline 

the provisions surrounding this notion 

to put in one place. 

The Exchange is also proposing to add 

a provision allowing OTP Holders to 

mutually agree to adjust a price of an 

execution. The Exchange believes this 

provision is necessary given the benefits 

of adjusting a trade price rather than 

nullifying the trade completely. Because 

options trades are used to hedge 

transactions in other markets, including 

securities and futures, many OTP 

Holders, and their customers, would 

rather adjust prices of executions rather 

than nullify the transactions and, thus, 

lose a hedge altogether. As such, the 

Exchange believes it is in the best 

interest of investors to allow for price 

adjustments as well as nullifications. In 

addition, the Exchange believes it is in 

the nature of a fair and orderly market 

to allow for price adjustments rather 

than only cancellations because an 

adjustment would result in the least 

amount of disruption to the overall 

market. The Exchange also notes that 

current Exchange rules allow for prices 

of trades to be adjusted at the consent 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 79, No. 249 / Tuesday, December 30, 2014 / Notices 78523 

9The Exchange notes that no changes are being 

proposed to the procedures for nullification or 

adjustment of a trade by mutual agreement in the 

Exchanges’ obvious error and catastrophic error 

rules. See note 5 supra. With the effectiveness of 

proposed Rule 6.77A, OTP Holders would have two 

options to choose from in order to have their trades 

nullified or adjusted by mutual agreement: (i) 

Request under the procedures of Rule 6.87 

(including the timeframes); or (ii) request under the 

procedures of Proposed Rule 6.77A which requires 

the authorization of the Exchange prior to the 

nullification or adjustment. The Exchange believes 

both provisions are complimentary [sic] in that they 

provide protections in different situations under 

procedures that are correspondingly appropriate 

based on the situation in which a nullification or 

an adjustment is requested. 

10Upon authorization, the Exchange will 

continue to report any price adjustment or trade 

nullification to the Options Price Reporting 

Authority. 

11Specifically, the Exchange would ensure that 

the mutually-agreed upon price would not have 

traded through resting interest on the Exchange or 

would have been in violation of Rule 991NY [sic] 

at the time of the initial execution. 

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

13 15 U.S.C. 78f(b)(5). 14See note 7 supra. 

of both parties if such transactions are 

within the current obvious error and 

catastrophic error provisions.9 The 

Exchange is now proposing to merely 

allow this practice for any trade. 

As proposed, Rule 6.77A expressly 

states that trades may be subject to 

nullification or price adjustment only if 

such trades are authorized by the 

Exchange. The Exchange notes that this 

process is very similar to the process 

OTP Holders follow today for trade 

nullification based upon mutual 

consent. As described in more detail 

above, Commentary .02 of current Rule 

6.77 allows two parties to agree to a 

trade nullification and ‘‘notify the 

Exchange for dissemination of 

cancellation information to the Options 

Price Reporting Authority.’’ The 

Exchange is only slightly changing this 

procedure by expressly requiring 

Exchange authorization prior to the 

effectuation of such nullification or 

mutual price adjustment. The Exchange 

would only authorize a proposed 

nullification or adjustment if the 

Exchange received verification from 

both parties to the trade that a mutual 

agreement has been made.10 In addition, 

prior to an authorization for a mutual 

price adjustment, the Exchange would 

ensure the agreed upon price would 

have been permissible and in 

compliance with any applicable rules of 

the Exchange and Securities and 

Exchange Commission, as amended, at 

the time the original transaction was 

executed.11 Finally, the proposed rule 

would state that the format and 

information required by the Exchange 

for this submission would be released 

by the Exchange via Trader Update. As 

such, prior to Rule 6.77A becoming 

operative, the Exchange would provide 

OTP Holders with specific requirements 

via an Exchange-issued Trader Update. 

The Trader Update would, among other 

things, state specific timeframes 

required for requests and the format in 

which the requests would be accepted 

by the Exchange. 

Administrative Changes 

Finally, the Exchange is proposing to 

make administrative conforming 

changes to ensure Exchange rules on the 

subject are consistent. More specifically, 

the Exchange is proposing to delete 

Commentary .02 of Rule 6.77. The 

Exchange believes that deleting current 

Commentary .02 to Exchange Rule 6.77 

would avoid any confusion with the 

proposed Rule 6.77A. 

Conclusion 

To conclude, the Exchange believes 

that the proposed changes are in 

furtherance of the Act because the 

proposed Rule 6.77A will allow OTP 

Holders to agree to nullify transactions 

or adjust prices of transactions to 

maintain a fair and orderly market. As 

stated above, the Exchange intends to 

release a Trade [sic] Update to announce 

the implementation of the Rule and 

other specifics surrounding the 

procedures of the implementation. In 

addition, prior to implementation, the 

Exchange will ensure it has proper 

policies and procedures in place to 

correctly administer the Rule. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) 12 of the 

Act, in general, and furthers the 

objectives of Section 6(b)(5),13 in 

particular, in that it is designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in 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) requirement that the 

rules of an exchange not be designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

More specifically, the Exchange 

believes that the proposed changes are 

consistent with the Act as they are 

designed to promote just and equitable 

principles and protect investors and the 

public interest. In particular, the 

Exchange believes the proposed change 

to move the provision authorizing 

parties to mutually agree to nullify a 

trade to a separate, stand-alone rule 

protects investors by eliminating 

confusion and making the provision 

more clear. Because options trades are 

used to hedge transactions in other 

markets, including securities and 

futures, many market participants 

would rather adjust prices of executions 

rather than nullify the transactions and, 

thus, lose a hedge altogether. As such, 

the Exchange believes it is in the best 

interest of investors to allow for price 

adjustments as well as nullifications. In 

addition, the Exchange believes it is in 

the nature of a fair and orderly market 

to allow for price adjustments rather 

than only cancellations because an 

adjustment would result in the least 

amount of disruption to the overall 

market. Further, the Exchange believes 

that, harmonizing its nullification and 

adjustment rules with other options 

markets would promote just and 

equitable principles of trade by better 

allowing the market participants to be 

treated similarly across exchanges. The 

Exchange also believes that the other 

administrative changes would remove 

impediments to and perfect the 

mechanism of a fair and orderly market 

as they are merely trying to create more 

transparency in the Exchange’s rules. 

Finally, the Exchange does not believe 

that the proposed changes are unfairly 

discriminatory because they will be 

applied to all OTP Holders equally. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange 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 

proposed rule change is not designed to 

address any aspect of competition, 

whether between the Exchange and its 

competitors, or among market 

participants. Instead, the proposed rule 

change is designed to adopt the 

nullification and adjustment of trades 

on similar terms to that of other options 

exchanges.14

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. 

mstockstill on DSK4VPTVN1PROD with NOTICES

78524 Federal Register / Vol. 79, No. 249 / Tuesday, December 30, 2014 / Notices 

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

16 17 CFR 240.19b–4(f)(6). 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 73141 

(Sept. 18, 2014), 79 FR 57161 (‘‘Notice’’). 

4 15 U.S. C. 78s(b)(2). 

5See Securities Exchange Act Release No. 73515, 

79 FR 66758 (Nov. 10, 2014). The Commission 

designated a longer period within which to take 

action on the proposed rule change and designated 

December 23, 2014, as the date by which it should 

approve, disapprove, or institute proceedings to 

determine whether to disapprove the proposed rule 

change. 

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

7The Trust is registered under the Investment 

Company Act of 1940 (‘‘1940 Act’’). According to 

the Exchange, on September 20, 2012, the Trust 

filed with the Commission an amendment to its 

registration statement on Form N–1A under the 

Securities Act of 1933 (‘‘Securities Act’’) and under 

the 1940 Act relating to the Fund (File Nos. 333– 

173276 and 811–22542) (‘‘Registration Statement’’). 

In addition, the Exchange states that the Trust has 

obtained from the Commission certain exemptive 

relief under the 1940 Act. See Investment Company 

Act Release No. 29524 (Dec. 13, 2010) (File No. 

812–13487). 

8Commentary .06 to Rule 8.600 provides that, if 

the investment adviser to the investment company 

issuing Managed Fund Shares is affiliated with a 

broker-dealer, such investment adviser shall erect a 

‘‘fire wall’’ between the investment adviser and the 

broker-dealer with respect to access to information 

concerning the composition of or changes to the 

investment company portfolio. 

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 15 and Rule 19b– 

4(f)(6) thereunder.16

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. 

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–2014–140 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–NYSEArca–2014–140. 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 

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– 

NYSEArca–2014–140, and should be 

submitted on or before January 20, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Brent J. Fields, 

Secretary. 

[FR Doc. 2014–30445 Filed 12–29–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73914; File No. SR–

NYSEArca–2014–100] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Instituting 

Proceedings to Determine Whether to 

Approve or Disapprove Proposed Rule 

Change Relating to Listing and Trading 

of Shares of the SPDR SSgA Global 

Managed Volatility ETF under NYSE 

Arca Equities Rule 8.600 

December 22, 2014. 

I. Introduction 

On September 5, 2014, NYSE Arca, 

Inc. (‘‘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 shares (‘‘Shares’’) of the 

SPDR SSgA Global Managed Volatility 

ETF (‘‘Fund’’) under NYSE Arca 

Equities Rule 8.600. The proposed rule 

change was published for comment in 

the Federal Register on September 24, 

2014.3 On November 4, 2014, pursuant 

to Section 19(b)(2) of the Act,4 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.5 The Commission 

has received no comment letters on the 

proposed rule change. This Order 

institutes proceedings under Section 

19(b)(2)(B) of the Act 6 to determine 

whether to approve or disapprove the 

proposed rule change. 

II. Description of the Proposal 

A. Generally 

The Exchange proposes to list and 

trade Shares of the Fund under NYSE 

Arca Equities Rule 8.600, which governs 

the listing and trading of Managed Fund 

Shares. The Shares will be offered by 

SSgA Active ETF Trust (‘‘Trust’’), which 

is organized as a Massachusetts business 

trust and is registered with the 

Commission as an open-end 

management investment company.7

SSgA Funds Management, Inc. will 

serve as the investment adviser to the 

Fund (‘‘Adviser’’). State Street Global 

Markets, LLC will be the principal 

underwriter and distributor of the 

Fund’s Shares, and State Street Bank 

and Trust Company (‘‘Custodian’’ or 

‘‘Transfer Agent’’) will serve as 

administrator, custodian, and transfer 

agent for the Fund. The Exchange 

represents that the Adviser is not a 

registered broker-dealer but is affiliated 

with a broker-dealer and has 

implemented a ‘‘fire wall’’ with respect 

to such broker-dealer regarding access to 

information concerning the composition 

of or changes to the Fund’s portfolio.8

The Exchange further represents that, in 

the event (a) the Adviser or any submstockstill on DSK4VPTVN1PROD with NOTICES