40178 Federal Register / Vol. 82, No. 163 / Thursday, August 24, 2017 / Notices 

16 Id. 17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Equity Index-Linked Securities are securities 

that provide for the payment at maturity (or earlier 

redemption) based on the performance of an 

underlying index or indexes of equity securities, 

securities of closed-end management investment 

companies registered under the Investment 

Company Act of 1940 and/or Investment Company 

Units (‘‘Units’’). See NYSE Arca Rule 5.2– 

E(j)(6)(B)(I)(1). 

4See Securities Exchange Act Release No. 80707 

(May 17, 2017), 82 FR 23636. 

5 15 U.S.C. 78s(b)(2). 

6See Securities Exchange Act Release No. 81081, 

82 FR 32218 (July 12, 2017). 

7 In Amendment No. 1 the Exchange: (1) Revised 

proposed NYSE Arca Rules-5.2– 

E(j)(6)(B)(I)(1)(b)(iii) and 5.2–E(j)(6)(B)(I)(2)(a)(i) to 

provide that the index concentration limit 

applicable to the five highest dollar-weighted 

components would apply only to an index with five 

or more components that are not Derivative 

Securities Products or Index-Linked Securities (as 

those terms are defined below) and to provide that 

these securities would only be excluded from the 

numerator of the index concentration limit 

calculation; (2) modified proposed NYSE Arca Rule 

5.2–E(j)(6)(B)(I)(1)(a) to specify that Derivative 

Securities Products and Index-Linked Securities (as 

those terms are defined below) also include 

CNS Fails Positions. Therefore, NSCC 

believes any burden on competition 

imposed by the CNS Fails Charge would 

be necessary and appropriate in 

furtherance of the Act in order to limit 

NSCC’s exposures to the risks being 

mitigated by such charge. 

NSCC does not believe that the 

proposed rule change to clarify NSCC’s 

current practices with respect to the 

assessment and collection of the CNS 

Fails Charge would impact 

competition.16 The proposed rule 

change would increase the transparency 

of the Rules regarding this existing 

charge and codify NSCC’s current 

practices with respect to the assessment 

and imposition of the charge. As such, 

NSCC believes that this proposed rule 

change would not impact Members or 

have any impact on competition. 

(C) Clearing Agency’s Statement on 

Comments on the Proposed Rule 

Change Received From Members, 

Participants, or Others 

Written comments relating to this 

proposed rule change have not been 

solicited or received. NSCC will notify 

the Commission of any written 

comments received by NSCC. 

III. Date of Effectiveness of the 

Proposed Rule Change, and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

such proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be 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– 

NSCC–2017–015 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–NSCC–2017–015. 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 20549–1090 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 NSCC and on DTCC’s Web site 

(http://dtcc.com/legal/sec-rulefilings.aspx). 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–NSCC– 

2017–015 and should be submitted on 

or before September 14, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2017–17911 Filed 8–23–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No 34–81442; File No. SR– 

NYSEArca–2017–54] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of 

Amendment No. 1 and Order Granting 

Accelerated Approval of a Proposed 

Rule Change, as Modified by 

Amendment No. 1, To Amend the 

Generic Listing Criteria Applicable to 

Equity Index-Linked Securities 

August 18, 2017. 

I. Introduction 

On May 4, 2017, NYSE Arca, Inc. 

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

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

to Section 19(b)(1) of the Securities 

Exchange Act of 1934 (‘‘Act’’ or 

‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

amend the generic listing criteria 

applicable to Equity Index-Linked 

Securities.3 The proposed rule change 

was published for comment in the 

Federal Register on May 23, 2017.4 On 

July 6, 2017, pursuant to Section 

19(b)(2) of the Act,5 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.6 On August 17, 2017, the 

Exchange filed Amendment No. 1 to the 

proposed rule change, which replaced 

and superseded the original proposal in 

its entirety.7 The Commission received 


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Federal Register / Vol. 82, No. 163 / Thursday, August 24, 2017 / Notices 40179 

securities listed on another national securities 

exchange pursuant to substantially equivalent 

listing rules; and (3) made a technical correction to 

Rule 5.2–E(j)(6)(B)(I)(1)(b)(iv) to change its reference 

to ‘‘NYSE Arca Rule 5.3’’ to read ‘‘NYSE Arca Rule 

5.3–O.’’ Amendment No. 1 is available at: https:// 

www.sec.gov/comments/sr-nysearca-2017-54/ 

nysearca201754-2227310-160780.pdf. Amendment 

No. 1 also reflects numbering changes effected by 

the recently approved merger of NYSE Arca 

Equities and NYSE Arca Options rules. See 

Securities Exchange Act Release No. 81419 (August 

17, 2017) (SR–NYSEArca–2017–40). 

8Units are securities that represent an interest in 

a registered investment company that could be 

organized as a unit investment trust, an open-end 

management investment company, or a similar 

entity, that holds securities comprising, or 

otherwise based on or representing an interest in, 

an index or portfolio of securities or securities in 

another registered investment company that holds 

such securities. See NYSE Arca Rule-5.2–E(j)(3). 

9The following securities currently are included 

in Section 2 of NYSE Arca Rule 8–E: Portfolio 

Depositary Receipts (Rule 8.100–E); Trust Issued 

Receipts (Rule 8.200–E); Commodity-Based Trust 

Shares (Rule 8.201–E); Currency Trust Shares (Rule 

8.202–E); Commodity Index Trust Shares (Rule 

8.203–E); Commodity Futures Trust Shares (Rule8.204–E); Partnership Units (Rule 8.300–E); Paired 

Trust Shares (Rule-8.400–E);Trust Units (Rule 

8.500–E); Managed Fund Shares (Rule 8.600–E); 

and Managed Trust Securities (Rule 8.700–E). 

10See proposed NYSE Arca Rule 5.2– 

E(j)(6)(B)(I)(1)(a). 

11See proposed NYSE Arca Rule 5.2– 

E(j)(6)(B)(I)(1)(b)(1). 

12See proposed NYSE Arca Rule 5.2– 

E(j)(6)(B)(I)(1)(b)(2). 

13Currently, these requirements must also be met 

whenever the index is rebalanced. See NYSE Arca 

Rule 5.2–E(j)(6)(B)(I)(2)(a)(i). 

14See proposed NYSE Arca Rule 5.2– 

E(j)(6)(B)(I)(1)(b)(3). As discussed above, the 

Exchange also proposes that the index 

concentration limit applicable to the five highest 

dollar-weighted components would apply only to 

an index with five or more components that are not 

Derivative Securities Products or Index-Linked 

Securities. See supra note 7. Further, the Exchange 

proposes that these proposed index concentration 

limits be met whenever the index is rebalanced. See 

proposed NYSE Arca Rule-5.2–E(j)(6)(B)(I)(2)(a)(i). 

15See proposed NYSE Arca Rule 5.2– 

E(j)(6)(B)(I)(1)(b)(iv). 

16See proposed NYSE Arca Rule 5.2– 

E(j)(6)(B)(I)(2)(a)(ii). 

no comments on the proposed rule 

change. The Commission is publishing 

this notice to solicit comments on 

Amendment No. 1 from interested 

persons, and is approving the proposed 

rule change, as modified by Amendment 

No. 1, on an accelerated basis. 

II. The Exchange’s Description of the 

Proposed Rule Change, as Modified by 

Amendment No. 1 

The Exchange proposes to amend 

NYSE Arca Rule 5.2–E(j)(6) to exclude 

the following types of index 

components from certain generic listing 

requirements applicable to an index 

underlying Equity Index-Linked 

Securities: (1) Investment Company 

Units (‘‘Units’’); 8 (2) securities defined 

in Section 2 of NYSE Arca Rule 8–E 

(collectively with Units, ‘‘Derivative 

Securities Products’’); 9 (3) Index-Linked 

Securities; and (4) securities listed on 

other national securities exchanges 

pursuant to rules that are substantially 

equivalent to NYSE Arca Rule 5.2– 

E(j)(3), NYSE Arca Rule 5.2–E(j)(6), and 

Section 2 of NYSE Arca Rule 8–E. 

Specifically, the Exchange proposes the 

following: 

• Currently, for an issue of Equity 

Index-Linked Securities to qualify for 

initial listing, each underlying index 

must have at least ten component 

securities. The Exchange would modify 

this requirement to reflect no minimum 

number of index components if one or 

more issues of Derivative Securities 

Products or Index-Linked Securities 

constitute, at least in part, component 

securities underlying an issue of Equity 

Index-Linked Securities.10

• Currently, for an issue of Equity 

Index-Linked Securities to qualify for 

initial listing, each component security 

must have a minimum market value of 

at least $75 million, except that the 

market value for each of the lowest 

dollar-weighted component securities in 

the index that in the aggregate account 

for no more than 10% of the dollar 

weight of the index may be at least $50 

million. The Exchange proposes to 

exclude Derivative Securities Products 

and Index-Linked Securities from those 

minimum market value requirements, as 

well as to exclude from the calculation 

of the aggregate dollar value of the index 

the market value(s) of all components 

that are Derivative Securities Products 

or Index-Linked Securities.11

• Currently, for an issue of Equity 

Index-Linked Securities to qualify for 

initial listing, component stocks that in 

the aggregate account for at least 90% of 

the weight of the underlying index each 

must have a minimum global monthly 

trading volume of 1,000,000 shares or 

minimum global notional volume traded 

per month of $25,000,000, averaged over 

the last six months. The Exchange 

proposes to apply those requirements 

only to index components that are not 

Derivative Securities Products or IndexLinked Securities, and would exclude 

components that are Derivative 

Securities Products or Index-Linked 

Securities from the calculation of the 

index’s weight.12

• Currently, for an issue of Equity 

Index-Linked Securities to qualify for 

initial listing, no component security 

may represent more than 25% of the 

dollar weight of the index and the five 

highest dollar-weighted component 

securities in the index may not in the 

aggregate account for more than 50%, or 

60% for an index consisting of fewer 

than 25 component securities, of the 

dollar weight of the index.13 The 

Exchange proposes to exclude 

Derivative Securities Products and 

Index-Linked Securities from these 

index concentration limits and would 

exclude Derivative Securities Products 

and Index-Linked Securities from the 

dollar value of the index for purposes of 

calculating the total dollar value of the 

index components.14

• Currently, for an issue of Equity 

Index-Linked Securities to qualify for 

initial listing, 90% of the underlying 

index’s numerical value, and at least 

80% of the total number of component 

securities, must meet the then current 

criteria for standardized option trading 

set forth in NYSE Arca Rule 5.3–O; 

except that an index will not be subject 

to this requirement if (1) no underlying 

component security represents more 

than 10% of the dollar weight of the 

index, and (2) the index has a minimum 

of 20 components. The Exchange 

proposes to apply this requirement only 

to index components that are not 

Derivative Securities Products or IndexLinked Securities and, for purposes of 

this requirement would exclude all 

components that are a Derivative 

Securities Product or Index-Linked 

Security from the calculations of the 

index’s numerical value, total number of 

components, and dollar value.15

• Currently, on a continuous basis, 

component stocks that in the aggregate 

account for at least 90% of the weight 

of the index each must have a minimum 

global monthly trading volume of 

500,000 shares, or minimum global 

notional volume traded per month of 

$12,500,000, averaged over the last six 

months. The Exchange proposes to 

apply those requirements only to index 

components that are not Derivative 

Securities Products or Index-Linked 

Securities, and would exclude 

components that are Derivative 

Securities Products or Index-Linked 

Securities from the calculation of the 

index’s total weight.16

The Exchange also proposes nonsubstantive changes to the text of NYSE 

Arca Rule 5.2–E(j)(6). 

III. Discussion and Commission’s 

Findings 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to a national 


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40180 Federal Register / Vol. 82, No. 163 / Thursday, August 24, 2017 / Notices 

17 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

18 15 U.S.C. 78f(b)(5). 

19See Commentary .01 to NYSE Arca Rule 5.2– 

E(j)(3). See also Securities Exchange Act Release 

No. 57751 (May 1, 2008), 73 FR 25818 (May 7, 

2008) (SR–NYSEArca–2008–29) (approving 

amendments to the eligibility criteria for 

components of an index underlying Investment 

Company Units). 

20See Commentary .01 to NYSE Arca Rule 8.600– 

E. See also Securities Exchange Act Release No. 

78397 (July 22, 2016), 81 FR 49320 (July 27, 2016) 

(SR–NYSEArca–2015–110) (approving the adoption 

of generic listing standards for Managed Fund 

Shares) (‘‘MFS Order’’). 

21Amendment No. 1, supra note 7, at 9, text 

accompanying n.20. 

22See MFS Order, supra note 20, at 49325. 

23 15 U.S.C. 78f(b)(5). 

24 15 U.S.C. 78s(b)(2). 

25 15 U.S.C. 78s(b)(2). 

26 17 CFR 200.30–3(a)(12). 

securities exchange.17 In particular, the 

Commission finds that the proposed 

rule change, as modified by Amendment 

No. 1 thereto, is consistent with Section 

6(b)(5) of the Act,18 which requires, 

among other things, that the Exchange’s 

rules be designed to prevent fraudulent 

and manipulative acts and practices, to 

promote just and equitable principles of 

trade, 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. 

In support of its proposal, the 

Exchange notes that Derivative 

Securities Products are excluded from 

consideration when determining 

whether the components of Units satisfy 

the applicable listing criteria in NYSE 

Arca Rule 5.2–E(j)(3),19 and both 

Derivative Securities Products and 

Index-Linked Securities are excluded 

from the applicable listing criteria for 

Managed Fund Shares holding equity 

securities in Commentary .01 to NYSE 

Arca Rule 8.600–E.20

Specifically, the Exchange states: 

‘‘both Derivative Securities Products 

and Index-Linked Securities are 

excluded from the applicable listing 

criteria for Managed Fund Shares 

holding equity securities in 

Commentary .01 to Rule 8.600–E.’’ 21 In 

approving the exclusion of Derivative 

Securities Products and Index-Linked 

Securities from certain generic listing 

requirements applicable to Managed 

Fund Shares, the Commission stated 

that such exclusions would not increase 

the susceptibility of Managed Fund 

Shares to manipulation because IndexLinked Securities and Derivative 

Securities Products each: (1) Have assetexposure concentration limits and 

requirements promoting price 

transparency within their own listing 

standards; (2) are listed and traded on 

national securities exchanges; and (3) 

provide trading and price information 

and other quantitative data for investors 

and other market participants.22 For 

these same reasons, the Commission 

believes that excluding Derivative 

Securities Products and Index-Linked 

Securities from the same type of generic 

listing requirements would not increase 

the susceptibility of Equity IndexLinked Securities to manipulation. 

Additionally, the Exchange represents 

that it has in place surveillance 

procedures that are adequate to properly 

monitor trading in Index-Linked 

Securities in all trading sessions and to 

deter and detect violations of Exchange 

rules and applicable federal securities 

laws. 

For the foregoing reasons, the 

Commission finds that the proposed 

rule change, as modified by Amendment 

No. 1 thereto, is consistent with Section 

6(b)(5) of the Act 23 and the rules and 

regulations thereunder applicable to a 

national securities exchange. 

IV. Solicitation of Comments on 

Amendment No. 1 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether Amendment No. 1 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–2017–54 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–2017–54. 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– 

NYSEArca–2017–54 and should be 

submitted on or before September 14, 

2017. 

V. Accelerated Approval of the 

Proposed Rule Change, as Modified by 

Amendment No. 1 

The Commission finds good cause to 

approve the proposed rule change, as 

modified by Amendment No. 1, prior to 

the thirtieth day after the date of 

publication of Amendment No. 1 in the 

Federal Register. As noted above, 

Amendment No. 1 modified proposed 

NYSE Arca Rules-5.2– 

E(j)(6)(B)(I)(1)(b)(iii) and 5.2– 

E(j)(6)(B)(I)(2)(a)(i) to provide that the 

index concentration limit applicable to 

the five highest dollar-weighted 

components would apply only to an 

index with five or more components 

that are not Derivative Securities 

Products or Index-Linked Securities. 

These provisions are consistent with 

Commentary .01(a)(1)(C) to NYSE Arca 

Rule 8.600–E, and therefore the 

Commission finds good cause, pursuant 

to Section 19(b)(2) of the Act,24 to 

approve the proposed rule change, as 

modified by Amendment No. 1, on an 

accelerated basis. 

VI. Conclusion 

It Is Therefore Ordered, pursuant to 

Section 19(b)(2) of the Exchange Act,25

that the proposed rule change (SR– 

NYSEArca–2017–54), as modified by 

Amendment No. 1, be, and it hereby is, 

approved on an accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2017–17920 Filed 8–23–17; 8:45 am] 

BILLING CODE 8011–01–P 


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