Federal Register / Vol. 82, No. 171 / Wednesday, September 6, 2017 / Notices 42201 

7 15 U.S.C. 78s(b)(3)(A)(ii). 

8 17 CFR 240.19b–4(f)(2). 9 17 CFR 200.30–3(a)(12). 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Exchange Act 7 and 

Rule 19b–4(f)(2) thereunder,8 because it 

establishes or changes a due, or fee. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend the rule change if 

it appears to the Commission that the 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or would otherwise further 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

BOX–2017–29 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–BOX–2017–29. 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–BOX– 

2017–29, and should be submitted on or 

before September 27, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–18800 Filed 9–5–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

32801; 812–14802] 

SL Advisors, LLC, et al. 

August 30, 2017. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice. 

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. The requested order would 

permit (a) index-based series of certain 

open-end management investment 

companies (‘‘Funds’’) to issue shares 

redeemable in large aggregations only 

(‘‘Creation Units’’); (b) secondary market 

transactions in Fund shares to occur at 

negotiated market prices rather than at 

net asset value (‘‘NAV’’); (c) certain 

Funds to pay redemption proceeds, 

under certain circumstances, more than 

seven days after the tender of shares for 

redemption; (d) certain affiliated 

persons of a Fund to deposit securities 

into, and receive securities from, the 

Fund 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 

Funds (‘‘Funds of Funds’’) to acquire 

shares of the Funds. 

APPLICANTS: SL Advisors, LLC (the 

‘‘Initial Adviser’’), a New Jersey limited 

liability company that is registered as an 

investment adviser under the 

Investment Advisers Act of 1940, ETF 

Series Solutions (the ‘‘Trust’’), a 

Delaware statutory trust registered 

under the Act as an open-end 

management investment company with 

multiple series, and Quasar Distributors, 

LLC (the ‘‘Distributor’’), a Delaware 

limited liability company and brokerdealer registered under the Securities 

Exchange Act of 1934 (‘‘Exchange Act’’). 

FILING DATES: The application was filed 

on July 20, 2017. 

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 September 25, 2017, 

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: Brent J. Fields, Secretary, 

Securities and Exchange Commission, 

100 F Street NE., Washington, DC 

20549–1090; Applicants: W. John 

McGuire, Esq., Morgan, Lewis & Bockius 

LLP, 1111 Pennsylvania Avenue NW., 

Washington, DC 20004–2541 and 

Michael D. Barolsky, Esq., U.S. Bancorp 

Fund Services, LLC, 615 E. Michigan 

Street, Milwaukee, WI 53202. 

FOR FURTHER INFORMATION CONTACT: 

Deepak T. Pai, Senior Counsel, at (202) 

551–6876, or Robert H. Shapiro, 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. 


asabaliauskas on DSKBBXCHB2PROD with NOTICES
42202 Federal Register / Vol. 82, No. 171 / Wednesday, September 6, 2017 / Notices 

1Applicants request that the order apply to the 

new series of the Trust and any additional series of 

the Trust, and any other open-end management 

investment company or series thereof (each, 

included in the term ‘‘Fund’’), each of which will 

operate as an ETF and will track a specified index 

comprised of domestic or foreign equity and/or 

fixed income securities (each, an ‘‘Underlying 

Index’’). Any Fund will (a) be advised by the Initial 

Adviser or an entity controlling, controlled by, or 

under common control with the Initial Adviser 

(each, an ‘‘Adviser’’) and (b) comply with the terms 

and conditions of the application. 

2Each Self-Indexing Fund will post on its Web 

site the identities and quantities of the investment 

positions that will form the basis for the Fund’s 

calculation of its NAV at the end of the day. 

Applicants believe that requiring Self-Indexing 

Funds to maintain full portfolio transparency will 

help address, together with other protections, 

conflicts of interest with respect to such Funds. 

3The requested relief would apply to direct sales 

of shares in Creation Units by a Fund to a Fund of 

Funds and redemptions of those shares. Applicants, 

moreover, are not seeking relief from section 17(a) 

for, and the requested relief will not apply to, 

transactions where a Fund could be deemed an 

Affiliated Person, or a Second-Tier Affiliate, of a 

Fund of Funds because an Adviser or an entity 

controlling, controlled by or under common control 

with an Adviser provides investment advisory 

services to that Fund of Funds. 

Summary of the Application 

1. Applicants request an order that 

would allow Funds to operate as index 

exchange traded funds (‘‘ETFs’’).1 Fund 

shares will be purchased and redeemed 

at their NAV in Creation Units only. All 

orders to purchase Creation Units and 

all redemption requests will be placed 

by or through an ‘‘Authorized 

Participant’’, which will have signed a 

participant agreement with the 

Distributor. Shares will be listed and 

traded individually on a national 

securities exchange, where share prices 

will be based on the current bid/offer 

market. Any order granting the 

requested relief would be subject to the 

terms and conditions stated in the 

application. 

2. Each Fund will hold investment 

positions selected to correspond 

generally to the performance of an 

Underlying Index. In the case of SelfIndexing Funds, an affiliated person, as 

defined in section 2(a)(3) of the Act 

(‘‘Affiliated Person’’), or an affiliated 

person of an Affiliated Person (‘‘SecondTier Affiliate’’), of the Trust or a Fund, 

of the Adviser, of any sub-adviser to or 

promoter of a Fund, or of the Distributor 

will compile, create, sponsor or 

maintain the Underlying Index.2

3. Shares will be purchased and 

redeemed in Creation Units and 

generally on an in-kind basis. Except 

where the purchase or redemption will 

include cash under the limited 

circumstances specified in the 

application, purchasers will be required 

to purchase Creation Units by 

depositing specified instruments 

(‘‘Deposit Instruments’’), and 

shareholders redeeming their shares 

will receive specified instruments 

(‘‘Redemption Instruments’’). The 

Deposit Instruments and the 

Redemption Instruments will each 

correspond pro rata to the positions in 

the Fund’s portfolio (including cash 

positions) except as specified in the 

application. 

4. Because shares will not be 

individually redeemable, applicants 

request an exemption from section 

5(a)(1) and section 2(a)(32) of the Act 

that would permit the Funds to register 

as open-end management investment 

companies and issue shares that are 

redeemable in Creation Units only. 

5. Applicants also request an 

exemption from section 22(d) of the Act 

and rule 22c–1 under the Act as 

secondary market trading in shares will 

take place at negotiated prices, not at a 

current offering price described in a 

Fund’s prospectus, and not at a price 

based on NAV. Applicants state that (a) 

secondary market trading in shares does 

not involve a Fund as a party and will 

not result in dilution of an investment 

in shares, and (b) to the extent different 

prices exist during a given trading day, 

or from day to day, such variances occur 

as a result of third-party market forces, 

such as supply and demand. Therefore, 

applicants assert that secondary market 

transactions in shares will not lead to 

discrimination or preferential treatment 

among purchasers. Finally, applicants 

represent that share market prices will 

be disciplined by arbitrage 

opportunities, which should prevent 

shares from trading at a material 

discount or premium from NAV. 

6. With respect to Funds that effect 

creations and redemptions of Creation 

Units in kind and that are based on 

certain Underlying Indexes that include 

foreign securities, applicants request 

relief from the requirement imposed by 

section 22(e) in order to allow such 

Funds to pay redemption proceeds 

within fifteen calendar days following 

the tender of Creation Units for 

redemption. Applicants assert that the 

requested relief would not be 

inconsistent with the spirit and intent of 

section 22(e) to prevent unreasonable, 

undisclosed or unforeseen delays in the 

actual payment of redemption proceeds. 

7. Applicants request an exemption to 

permit Funds of Funds to acquire Fund 

shares beyond the limits of section 

12(d)(1)(A) of the Act; and the Funds, 

and any principal underwriter for the 

Funds, and/or any broker or dealer 

registered under the Exchange Act, to 

sell shares to Funds of Funds beyond 

the limits of section 12(d)(1)(B) of the 

Act. The application’s terms and 

conditions are designed to, among other 

things, help prevent any potential (i) 

undue influence over a Fund through 

control or voting power, or in 

connection with certain services, 

transactions, and underwritings, (ii) 

excessive layering of fees, and (iii) 

overly complex fund structures, which 

are the concerns underlying the limits 

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

Act. 

8. Applicants request an exemption 

from sections 17(a)(1) and 17(a)(2) of the 

Act to permit persons that are Affiliated 

Persons, or Second-Tier Affiliates, of the 

Funds, solely by virtue of certain 

ownership interests, to effectuate 

purchases and redemptions in-kind. The 

deposit procedures for in-kind 

purchases of Creation Units and the 

redemption procedures for in-kind 

redemptions of Creation Units will be 

the same for all purchases and 

redemptions and Deposit Instruments 

and Redemption Instruments will be 

valued in the same manner as those 

investment positions currently held by 

the Funds. Applicants also seek relief 

from the prohibitions on affiliated 

transactions in section 17(a) to permit a 

Fund to sell its shares to and redeem its 

shares from a Fund of Funds, and to 

engage in the accompanying in-kind 

transactions with the Fund of Funds.3

The purchase of Creation Units by a 

Fund of Funds directly from a Fund will 

be accomplished in accordance with the 

policies of the Fund of Funds and will 

be based on the NAVs of the Funds. 

9. Section 6(c) of the Act permits the 

Commission to exempt any persons or 

transactions from any provision of the 

Act 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. Section 12(d)(1)(J) 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 provision of section 12(d)(1) if the 

exemption is consistent with the public 

interest and the protection of investors. 

Section 17(b) of the Act authorizes the 

Commission to grant an order 

permitting a transaction otherwise 

prohibited by section 17(a) if it finds 

that (a) the terms of the proposed 

transaction are fair and reasonable and 

do not involve overreaching on the part 

of any person concerned; (b) the 

proposed transaction is consistent with 

the policies of each registered 

investment company involved; and (c) 


asabaliauskas on DSKBBXCHB2PROD with NOTICES
Federal Register / Vol. 82, No. 171 / Wednesday, September 6, 2017 / Notices 42203 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6)(iii). 

4See Securities Exchange Act Release No. 80295 

(March 22, 2017), 82 FR 15564 (March 29, 2017) 

(Securities Transaction Settlement Cycle) (File No. 

S7–22–16) (stating that, as amended, SEA Rule 

15c6–1(a) will prohibit broker-dealers from 

effecting or entering into a contract for the purchase 

or sale of a security (other than an exempted 

security, government security, municipal security, 

commercial paper, bankers’ acceptances or 

commercial bills) that provides for payment of 

funds and delivery of securities later than the 

second business day after the date of the contract, 

unless otherwise expressly agreed to by the parties 

at the time of the transaction). 

5See id. 

6See, e.g., Securities Exchange Act Release No. 

34–80640 (May 16, 2017), 82 FR 22598 (May 10, 

2017) (Order Approving File No. SR–NASDAQ– 

2017–13). 

the proposed transaction is consistent 

with the general purposes of the Act. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–18777 Filed 9–5–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81501; File No. SR–Phlx– 

2017–71] 

Self-Regulatory Organizations; 

NASDAQ PHLX LLC; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change to Rules 431, 

432, and 835 To Conform Them to 

Securities Exchange Act Rule 15c6– 

1(a), Which Shortens the Settlement 

Cycle to Two Dates After the Trade 

Date, and To Interpret the Amended 

Rules To Exclude September 5, 2017 

as the First Ex-Dividend Date 

Thereunder 

August 30, 2017. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on August 

22, 2017, NASDAQ PHLX LLC (‘‘Phlx’’ 

or ‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I and II, 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

PHLX Rules 431, 432, and 825 to 

conform them to SEA Rule 15c6–1(a) to 

shorten the standard settlement cycle 

for most broker-dealer transactions from 

three business days after the trade date 

(‘‘T+3’’) to two business days after the 

trade date (‘‘T+2’’) and the industry-led 

initiative to shorten the settlement cycle 

from T+3 to T+2. The proposal also 

addresses the application of these Rules 

as they relate to establishing exdividend dates in connection with the 

implementation of the T+2 settlement 

cycle on September 5, 2017. 

The Exchange requests that the 

Commission waive the five-day prefiling requirement and the 30-day 

operative delay period contained in 

Exchange Act Rule 19b–4(f)(6)(iii).3

While these amendments are effective 

upon filing, the Exchange has 

designated the proposed amendments to 

be operative on September 5, 2017. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://nasdaqphlx.cchwallstreet.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 aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Background 

On March 22, 2017, the SEC adopted 

amendments to SEA Rule 15c6–1(a) to 

shorten the standard settlement cycle 

for U.S. secondary market transactions 

in equities, corporate and municipal 

bonds, unit investment trusts and 

financial instruments composed of these 

products, from T+3 to T+2.4 The 

industry-wide initiative is designed to 

reduce a number of risks, including 

credit risk, market risk, and liquidity 

risk and, as a result, reduce systemic 

risk for U.S. market participants.5 The 

compliance date for the rule 

amendments is September 5, 2017. 

The Exchange [sic] proposing changes 

to its Rules pertaining to securities 

settlement to conform them to SEA Rule 

15c6–1(a), as amended, and to conform 

them to similar changes that other 

exchanges have made.6

Specifically, the Exchange proposes to 

amend Rule 431 (Ex-dividend, Exrights), which presently provides that 

transactions in stocks (except for those 

made for cash) shall be ex-dividend or 

ex-rights on the second business day 

preceding the record date fixed by the 

corporation or the date of the closing of 

transfer books thereof. It also provides 

that if the record date or closing of 

transfer books occurs on a day other 

than a business day, the transaction will 

be ex-dividend or ex-rights on the third 

preceding business day. The Exchange 

proposes to amend this Rule to provide 

that: (1) The transactions shall be exdividend or ex-rights on the first 

business day preceding the record date 

fixed by the corporation or the date of 

the closing of transfer books thereof; and 

(2) the transaction will be ex-dividend 

or ex-rights on the second preceding 

business day if the record date or 

closing of transfer books occurs on a day 

other than a business day. 

Similarly, the Exchange proposes to 

amend Rule 432 (Ex-warrants), which 

presently provides that transactions in 

securities which have subscription 

warrants attached (except those made 

for cash) shall be ex-warrants on the 

second business day preceding the date 

of expiration of the warrants, except that 

when the date of expiration occurs on 

a day other than a business day, the 

transactions will be ex-warrants on the 

third business day preceding the date of 

expiration. The proposal will amend 

this Rule to provide that transactions in 

securities which have subscription 

warrants attached (except those made 

for cash) shall be ex-warrants on the 

first business day preceding the date of 

expiration of the warrants, except that 

when the date of expiration occurs on 

a day other than a business day, the 

transactions will be ex-warrants on the 

second business day preceding the date 

of expiration. 

Third, the Exchange proposes to 

amend Rule 825 (Ex-dividend 

Procedure), which sets forth the exdividend rules for transactions in 

securities subject to unlisted trading 

privileges. The Rule presently provides 

that transactions in stocks (except those 

made for cash) are ex-dividend on the 

second business day preceding the 

record date and that, if the record date 

selected is not a business day, then the 

stock will be quoted ex-dividend on the 


asabaliauskas on DSKBBXCHB2PROD with NOTICES