43618 Federal Register / Vol. 82, No. 179 / Monday, September 18, 2017 / Notices 

36 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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– 

NASDAQ–2017–091 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–NASDAQ–2017–091. 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– 

NASDAQ–2017–091 and should be 

submitted on or before October 10, 

2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.36

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–19802 Filed 9–15–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold a closed meeting 

on Wednesday, September 20, 2017 at 2 

p.m. 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the closed meeting. Certain 

staff members who have an interest in 

the matters also may be present. 

The General Counsel of the 

Commission, or his designee, has 

certified that, in his opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) 

and 17 CFR 200.402(a)(3), (a)(5), (a)(7), 

(a)(9)(ii) and (a)(10), permit 

consideration of the scheduled matters 

at the closed meeting. 

Commissioner Piwowar, as duty 

officer, voted to consider the items 

listed for the closed meeting in closed 

session. 

The subject matters of the closed 

meeting will be: 

Institution and settlement of 

injunctive actions; 

Institution and settlement of 

administrative proceedings; 

Resolution of litigation claims; and 

Other matters relating to enforcement 

proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

For further information and to 

ascertain what, if any, matters have been 

added, deleted or postponed; please 

contact Brent J. Fields from the Office of 

the Secretary at (202) 551–5400. 

Dated: September 13, 2017. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2017–19918 Filed 9–14–17; 4:15 pm] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81598; File No. SR–ISE– 

2017–83] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Make NonSubstantive, Clarifying Changes to 

ISE’s Rulebook and Schedule of Fees 

September 13, 2017. 

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 

September 1, 2017, Nasdaq ISE, LLC 

(‘‘ISE’’ 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 make nonsubstantive, clarifying changes to ISE’s 

Rulebook and Schedule of Fees. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at www.ise.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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to make non-substantive, 

clarifying changes to the ISE Rulebook 

and Schedule of Fees to avoid confusion 


sradovich on DSKBBY8HB2PROD with NOTICES
Federal Register / Vol. 82, No. 179 / Monday, September 18, 2017 / Notices 43619 

3See Securities Exchange Act Release No. 80718 

(May 18, 2017), 82 FR 23932 (May 24, 2017) (SR– 

ISE–2017–44). 

4See Options Trader Alert #2017–48. 

5The Exchange notes that Chapter 19 of the ISE 

Rulebook, including Rule 1901, is incorporated by 

referenced into the rulebooks of Nasdaq GEMX, LLC 

(‘‘GEMX’’) and Nasdaq MRX, LLC (‘‘MRX’’). As 

such, the amendments to ISE Rule 1901 will also 

impact GEMX and MRX rules. 

6See Securities Exchange Act Release No. 80009 

(February 10, 2017), 82 FR 10927 (February 16, 

2017) (SR–ISE–2016–31). 

7See Options Trader Alerts #2017–19 (GEMX 

symbol migration schedule), #2017–61 (ISE symbol 

migration schedule) and #2017–66 (MRX symbol 

migration schedule). 

8This rule text was added to the Schedule of Fees 

in connection with a pricing change. See Securities 

Exchange Act Release No. 81106 (July 10, 2017), 82 

FR 32597 (July 14, 2017) (SR–ISE–2017–63). 

9This rule text was added to the Schedule of Fees 

in connection with a pricing change. See Securities 

Exchange Act Release No. 81128 (July 12, 2017), 82 

FR 32893 (July 18, 2017) (SR–ISE–2017–66). 

10This footnote (and references thereto) was 

added to the Schedule of Fees in connection with 

a pricing change. See Securities Exchange Act 

Release No. 81144 (July 14, 2017), 82 FR 33527 

(July 20, 2017) (SR–ISE–2017–69). 

11This rule text was added to the Schedule of 

Fees in connection with a pricing change. See 

Securities Exchange Act Release No. 80999 (June 

22, 2017), 82 FR 29354 (June 28, 2017) (SR–ISE– 

2017–59). 

12See Securities Exchange Release No. 71914 

(April 9, 2014), 79 FR 21321 (April 15, 2014) (SR– 

ISE–2014–20). 

13Footnote 12 currently states that the Exchange 

will charge a stock handling fee of $0.0010 per 

share (capped at $50 per trade) for the stock leg of 

stock-option orders executed against other stockoption orders in the complex order book. 

14See Securities Exchange Release No. 74117 

(January 22, 2015), 80 FR 4600 (January 28, 2015) 

(SR–ISE–2015–03) (hereinafter, ‘‘Stock Handling 

Fee Notice’’). 

15A stock-option order is an order to buy or sell 

a stated number of units of an underlying stock or 

a security convertible into the underlying stock 

(‘‘convertible security’’) coupled with the purchase 

or sale of options contract(s) on the opposite side 

of the market representing either (A) the same 

number of units of the underlying stock or 

convertible security, or (B) the number of units of 

the underlying stock necessary to create a delta 

neutral position, but in no case in a ratio greater 

than eight-to-one (8.00), where the ratio represents 

the total number of units of the underlying stock 

Continued 

in the Exchange’s rules. Each change is 

discussed below. 

1. ISE Rulebook 

The Exchange proposes to remove text 

from ISE Rule 721, entitled ‘‘Crossing 

Orders.’’ Specifically, the Exchange 

proposes to remove the following rule 

text, ‘‘ISE will migrate symbols to the 

INET platform pursuant to a symbol 

migration commencing in the second 

quarter of 2017. For symbols that have 

migrated to the INET platform, the 

functionality provided under ISE Rule 

721(c) and the Supplementary Material 

thereto, permitting QCC with Stock 

Orders, will be temporarily suspended. 

The Exchange will specify the symbol 

migration schedule in an Options 

Trader Alert to be issued by the 

Exchange. The Exchange will 

recommence offering QCC with Stock 

Orders by announcing a date of 

implementation in a separate Options 

Trader Alert which will be issued prior 

to August 1, 2017. For symbols that 

have migrated to INET, QCC with Stock 

Orders will be rejected until the 

Exchange has recommenced this 

offering.’’ This rule text was added at 

the time the Exchange proposed to delay 

this functionality.3 The Exchange 

recommenced the QCC with Stock 

Orders functionality on June 27, 2017.4

The text is no longer applicable. 

The Exchange also proposes to 

remove text from ISE Rule 1901, entitled 

‘‘Order Protection.’’ 5 Specifically, the 

Exchange proposes to remove the 

following rule text, ‘‘The amended rule 

text will be implemented on a symbol 

by symbol basis for Nasdaq GEMX, LLC 

in Q1 2017, for Nasdaq ISE in Q2 2017 

and for Nasdaq MRX, LLC in Q3 2017, 

the specific dates will be announced in 

a separate notice.’’ This rule text was 

added at the time the Exchange 

proposed to delay implementation of 

the changes to Rule 1901 in connection 

with a system migration to Nasdaq INET 

technology.6 Each of ISE, GEMX and 

MRX completed its symbol migration to 

INET.7 Accordingly, the Exchange seeks 

to remove the outdated rule text in Rule 

1901 as described above in order to 

alleviate potential confusion regarding 

the operation of the rule. 

2. Schedule of Fees 

The Exchange further proposes to 

remove the following outdated 

sentences or footnotes, including any 

references thereto, in the Preface and in 

Sections I and III of the Schedule of 

Fees: 

• There will be no fees or rebates for 

trades in symbol KANG executed on the 

INET trading system from June 27–30, 

2017. Volume executed in KANG during 

this period will not be counted towards 

a member’s tier for June activity.8

• There will be no fees or rebates for 

trades executed on the INET trading 

system on June 30, 2017 in the 

following symbols: ACN, ACOR, AEO, 

AFSI, AMJ, AOBC, BKD, BTE, BV, CBI, 

CCL, CLR, CME, CNQ, ADM, ADSK, 

AGNC, ASHR, BBT, BK, BSX, CIEN, and 

IBM. Volume executed in these symbols 

on this date will not be counted towards 

a member’s tier for June activity. In 

addition, June 30, 2017 will not be 

counted for purposes of determining 

Market Maker Plus tiers for the 

following symbols: ADM, ADSK, AGNC, 

ASHR, BBT, BK, BSX, CIEN, and IBM.9

• Select Symbols which will migrate 

to INET from July 3rd through July 30th 

2017 as noticed by Nasdaq ISE in 

Options Trader Alert #2017–51 

(‘‘Migrated Symbols’’) will not be 

subject to Market Maker Plus Tiers 1–3 

for the month of July 2017. These 

Migrated Symbols will be subject to 

Market Maker Plus Tiers 1–3 as of 

August 1, 2017 and thereafter. 

Additionally, Select Symbols which 

will migrate to INET on July 31, 2017 as 

noticed by Nasdaq ISE at Options 

Trader Alert #2017–51 (‘‘July 31 

Migrated Symbols’’) will only use 

activity from July 3rd through July 30th 

2017 for purposes of qualifying for 

Market Maker Plus Tiers 1–3 for the 

month of July 2017.10

• There will be no fees or rebates for 

trades in FX Options executed on the 

INET trading system from June 12–30, 

2017. Volume executed in FX Options 

during this period will not be counted 

towards a member’s tier for June 

activity.11

The operative dates for the pricing 

noted above have expired. The 

Exchange therefore desires to remove 

the outdated text from its Schedule of 

Fees to avoid confusion. 

Finally, the Exchange proposes to 

make certain clarifying changes in 

Section II of the Schedule of Fees 

entitled, ‘‘Complex Order Fees and 

Rebates’’ (hereinafter, ‘‘Complex Fee 

Schedule’’). In particular, the Exchange 

proposes to add references to footnotes 

11 and 12 in the Complex Fee Schedule, 

both of which presently do not refer to 

any particular complex order fee or 

activity. Footnote 11 currently states 

that fees apply to the originating and 

contra order, but the footnote itself does 

not refer to any particular fees under the 

Complex Fee Schedule. The Exchange 

notes that when it adopted footnote 11 

in the Complex Fee Schedule, it had 

appended references to the footnote to 

the fees for Crossing Orders and for 

orders executed in the Price 

Improvement Mechanism (‘‘PIM’’),12 but 

inadvertently did not reflect the changes 

appending these references to the two 

fees in the Schedule of Fees itself. The 

Exchange therefore proposes to append 

footnote 11 to the fees for Crossing 

Orders and PIM orders to clarify that 

these fees apply to both the originating 

and contra order for complex orders. 

In addition, the Exchange proposes to 

clarify the application of footnote 12,13

which also does not refer to anything 

under the Complex Fee Schedule today. 

The Exchange adopted footnote 12 

when it introduced the stock handling 

fee 14 for stock-option orders,15 and now 


sradovich on DSKBBY8HB2PROD with NOTICES
43620 Federal Register / Vol. 82, No. 179 / Monday, September 18, 2017 / Notices 

or convertible security in the option leg to the total 

number of units of the underlying stock or 

convertible security in the stock leg. See ISE Rule 

722(a)(2). 

16The Exchange will continue to bill passthrough fees for the stock leg of stock-option orders 

that trade against liquidity on the stock venue, 

instead of being matched in the complex order 

book. See Stock Handling Fee Notice at 4601. 

17 15 U.S.C. 78f(b). 

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

19 15 U.S.C. 78s(b)(3)(A). 

20 17 CFR 240.19b–4(f)(6). As required under Rule 

19b–4(f)(6)(iii), the Exchange provided the 

Commission with written notice of its intent to file 

the proposed rule change, along with a brief 

description and the text of the proposed rule 

change, at least five business days prior to the date 

of filing of the proposed rule change, or such 

shorter time as designated by the Commission. 

21 17 CFR 240.19b–4(f)(6). 

22 17 CFR 240.19b–4(f)(6)(iii). 

23For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

proposes to insert a reference to this 

footnote at the top of the Complex Fee 

Schedule (i.e., at Section II) to clarify 

that this fee applies to all orders that 

have a stock component as described in 

footnote 12.16

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,17 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,18

in particular, in that it is designed 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. 

As discussed above, the Exchange 

seeks to make non-substantive, 

clarifying amendments to its Rulebook 

and Schedule of Fees by removing 

outdated text and by appending 

references to footnotes 11 and 12 at 

particular places in the Complex Fee 

Schedule. The Exchange believes that 

the proposed changes herein will add 

further clarification to the Rulebook and 

Schedule of Fees, and will also alleviate 

potential confusion as to the 

applicability of the Exchange’s rules, all 

of which will protect investors and the 

public interest. 

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. As discussed 

above, the proposed changes are nonsubstantive, clarifying amendments to 

the Exchange’s Rulebook and Schedule 

of Fees, and are merely intended to add 

further clarification to the Exchange’s 

rules and alleviate potential confusion. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the 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 19 and Rule 19b– 

4(f)(6) thereunder.20

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act 21 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6)(iii) 22

permits the Commission to designate a 

shorter time if such action is consistent 

with the protection of investors and the 

public interest. The Exchange has asked 

the Commission to waive the 30-day 

operative delay so that the Exchange 

may immediately make the proposed 

changes to its Rulebook and Schedule of 

Fees. The Exchange believes that 

removing the outdated or duplicative 

language and clarifying the application 

of footnotes 11 and 12 will provide its 

rules with greater clarity and will avoid 

confusion as to their applicability. The 

Commission believes the waiver of the 

operative delay is consistent with the 

protection of investors and the public 

interest. Accordingly, the Commission 

hereby waives the operative delay and 

designates the proposed rule change 

operative upon filing.23

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. 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– 

ISE–2017–83 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–ISE–2017–83. 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–ISE– 

2017–83, and should be submitted on or 

before October 10, 2017. 


sradovich on DSKBBY8HB2PROD with NOTICES
Federal Register / Vol. 82, No. 179 / Monday, September 18, 2017 / Notices 43621 

24 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. 80911 

(June 13, 2017), 82 FR 27925 (‘‘Notice’’). 

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

5See Securities Exchange Act Release No. 81247, 

82 FR 36031 (August 2, 2017). The Commission 

designated September 17, 2017, as the date by 

which the Commission shall approve or disapprove, 

or institute proceedings to determine whether to 

disapprove, the proposed rule change. 

6See Letter from Gary L. Gastineau, President, 

ETF Consultants.com, Inc., to Brent J. Fields, 

Secretary, Commission, dated July 7, 2017 

(‘‘Gastineau Letter’’); Letter from Todd J. Broms, 

Chief Executive Officer, Broms & Company LLC, to 

Brent J. Fields, Secretary, Commission, dated July 

10, 2017 (‘‘Broms Letter’’); Letter from James J. 

Angel, Associate Professor of Finance, Georgetown 

University, McDonough School of Business, to the 

Commission, dated July 10, 2017 (‘‘Angel Letter’’); 

and Letter from Terence W. Norman, Founder, Blue 

Tractor Group, LLC, to Brent J. Fields, Secretary, 

Commission, dated August 1, 2017 (‘‘Norman 

Letter’’). The comment letters are available on the 

Commission’s Web site at: https://www.sec.gov/ 

comments/sr-batsbzx-2017-30/batsbzx201730.htm. 

7 15 U.S.C. 78s(b)(2)(B). 

8For a complete description of the Exchange’s 

proposal, including a description of the Precidian 

ETF Trust II (‘‘Trust’’), see the Notice, supra note 

3. 

9Proposed Rule 14.11(k)(3)(A) defines the term 

‘‘Managed Portfolio Share’’ as a security that (a) is 

issued by a registered investment company 

(‘‘Investment Company’’) organized as an open-end 

management investment company or similar entity, 

that invests in a portfolio of securities selected by 

the Investment Company’s investment adviser 

consistent with the Investment Company’s 

investment objectives and policies; and (b) when 

aggregated in a number of shares equal to a 

Redemption Unit (as defined in proposed Rule 

14.11(k)(3)(C)) or multiples thereof, may be 

redeemed at the request of an authorized 

participant (as defined in the Investment 

Company’s Form N–1A filed with the Commission), 

which authorized participant will be paid through 

a confidential account (‘‘Confidential Account’’) 

established for its benefit, a portfolio of securities 

and/or cash with a value equal to the next 

determined net asset value (‘‘NAV’’). 

10The Exchange represents that, for purposes of 

describing the holdings of the Funds, ETFs include 

Portfolio Depository Receipts (as described in Rule 

14.11(b)); Index Fund Shares (as described in Rule 

14.11(c)); and Managed Fund Shares (as described 

in Rule 14.11(i)). The ETFs in which a Fund will 

invest all will be listed and traded on national 

securities exchanges. While the Funds may invest 

in inverse ETFs, the Funds will not invest in 

leveraged (e.g., 2X, -2X, 3X or -3X) ETFs. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–19807 Filed 9–15–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81599; File No. SR– 

BatsBZX–2017–30] 

Self-Regulatory Organizations; Bats 

BZX Exchange, Inc.; Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove a Proposed 

Rule Change To Permit the Listing and 

Trading of Managed Portfolio Shares; 

and To List and Trade Shares of the 

Following Under Proposed Rule 

14.11(k): ClearBridge Appreciation 

ETF; ClearBridge Large Cap ETF; 

ClearBridge MidCap Growth ETF; 

ClearBridge Select ETF; and 

ClearBridge All Cap Value ETF 

September 13, 2017. 

On June 1, 2017, Bats BZX Exchange, 

Inc. (‘‘Exchange’’ or ‘‘BZX’’) 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: (1) Adopt Rule 14.11(k) 

(Managed Portfolio Shares); and (2) list 

and trade shares (‘‘Shares’’) of the 

ClearBridge Appreciation ETF; 

ClearBridge Large Cap ETF; ClearBridge 

MidCap Growth ETF; ClearBridge Select 

ETF; and ClearBridge All Cap Value 

ETF under proposed Rule 14.11(k). The 

proposed rule change was published for 

comment in the Federal Register on 

June 19, 2017.3 On July 28, 2017, 

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 four 

comments on the proposed rule 

change.6 This order institutes 

proceedings under Section 19(b)(2)(B) of 

the Act 7 to determine whether to 

approve or disapprove the proposed 

rule change. 

I. Summary of the Exchange’s 

Description of the Proposed Rule 

Change 8

The Exchange proposes to adopt new 

Rule 14.11(k), which would govern the 

listing and trading of ‘‘Managed 

Portfolio Shares.’’ 9 The Exchange also 

proposes to list and trade Shares of the 

ClearBridge Appreciation ETF; 

ClearBridge Large Cap ETF; ClearBridge 

MidCap Growth ETF; ClearBridge Select 

ETF; and ClearBridge All Cap Value 

ETF under proposed Rule 14.11(k) (each 

a ‘‘Fund,’’ and collectively the 

‘‘Funds’’). 

A. Description of the Funds 

The portfolio for each Fund will 

consist primarily of long and/or short 

positions in U.S.-exchange-listed 

securities and shares issued by other 

U.S. exchange-listed exchange-traded 

funds (‘‘ETFs’’).10 All exchange-listed 

equity securities in which the Funds 

will invest will be listed and traded on 

U.S. national securities exchanges. 

1. ClearBridge Appreciation ETF 

The ClearBridge Appreciation ETF 

will seek to provide long-term 

appreciation of shareholders’ capital. 

The Fund will seek to achieve its 

investment objective by investing 

primarily in U.S. exchange-listed equity 

securities. The Fund will typically 

invest in medium and large 

capitalization companies, but may also 

invest in small capitalization 

companies. 

2. ClearBridge Large Cap ETF 

The ClearBridge Large Cap ETF will 

seek long-term capital appreciation. The 

Fund will seek to achieve its investment 

objective by taking long and possibly 

short positions in equity securities or 

groups of equities that the portfolio 

managers believe will provide long term 

capital appreciation. The Fund will 

normally invest at least 80% of its net 

assets (plus borrowings for investment 

purposes) in stocks included in the 

Russell 1000 Index and ETFs that 

primarily invest in stocks in the Russell 

1000 Index. The Fund purchases 

securities that the Fund’s sub-adviser, 

ClearBridge Investments, LLC (‘‘SubAdviser’’), believes are undervalued, 

and sells short securities that it believes 

are overvalued. 

3. ClearBridge Mid Cap Growth ETF 

The ClearBridge Mid Cap Growth ETF 

will seek long-term growth of capital. 

The Fund will seek to achieve its 

investment objective by investing 

primarily in U.S. exchange-listed, 

publicly traded equity and equityrelated securities of U.S. companies or 

other instruments with similar 

economic characteristics. The Fund may 

invest in securities of issuers of any 

market capitalization. 

4. ClearBridge Select ETF 

The ClearBridge Select ETF will seek 

to provide long-term growth of capital. 

The Fund will seek to achieve its 

investment objective by investing 

primarily in U.S. exchange-listed, 

publicly traded equity and equityrelated securities of U.S. companies or 

other instruments with similar 

economic characteristics. The Fund may 

invest in securities of issuers of any 

market capitalization. 


sradovich on DSKBBY8HB2PROD with NOTICES