Federal Register / Vol. 82, No. 191 / Wednesday, October 4, 2017 / Notices 46325 

10 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4Units 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 American Rule 5.2E(j)(3). 

The following securities currently are included in 

Section 2 of NYSE American Rule 8E: Portfolio 

Depositary Receipts (Rule 8.100E); Trust Issued 

Receipts (Rule 8.200E); Commodity-Based Trust 

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

8.202E); Commodity Index Trust Shares (Rule 

8.203E); Commodity Futures Trust Shares (Rule 

8.204E); Partnership Units (Rule 8.300E); Paired 

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

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

Managed Trust Securities (Rule 8.700E). 

5 Index-Linked Securities are securities that 

qualify for Exchange listing and trading under 

NYSE American Rule 5.2E(j)(6). The securities 

described in Rule 5.2E(j)(3), Rule 5.2E(j)(6) and 

Section 2 of Rule 8E, as referenced above, would 

include securities listed on another national 

securities exchange pursuant to substantially 

equivalent listing rules. 

6The Commission has approved amendments to 

NYSE Arca Rule 5.2E(j)(6) that are substantially 

identical to those proposed herein. See Securities 

Exchange Act Release No. 81442 (August 18, 2017), 

82 FR 40178 (August 24, 2017) (SR–NYSEArca– 

2017–54) (order approving a proposed rule change 

to amend the generic listing criteria applicable to 

Equity Index-Linked Securities). 

7 15 U.S.C. 80–1. 

8See Rule 5.2E(j)(6)(B)(I)(1). 

9See Rule 5.2E(j)(6)(B)(I)(1)(a). 

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– 

BatsBYX–2017–23 and should be 

submitted on or before October 25, 

2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–21277 Filed 10–3–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81755; File No. SR– 

NYSEAMER–2017–19] 

Self-Regulatory Organizations; NYSE 

American LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend NYSE 

American Rule 5.2E (j)(6) 

September 28, 2017. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on 

September 18, 2017, NYSE American 

LLC (the ‘‘Exchange’’ or ‘‘NYSE 

American’’) filed with the Securities 

and Exchange Commission (the 

‘‘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 

NYSE American Rule 5.2E(j)(6) to 

exclude Investment Company Units, 

securities defined in Section 2 of NYSE 

American Rule 8E and Index-Linked 

Securities when applying the 

quantitative generic listing criteria 

applicable to Equity Index-Linked 

Securities. 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

NYSE American Rule 5.2E(j)(6) to 

exclude Investment Company Units 

(‘‘Units’’) and securities defined in 

Section 2 of NYSE American Rule 8E 

(collectively, together with Units, 

‘‘Derivative Securities Products’’),4 as 

well as Index-Linked Securities,5 when 

applying the quantitative generic listing 

criteria applicable to Equity IndexLinked Securities.6

Equity 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 7

and/or Units.8 In addition to certain 

other generic listing criteria, Equity 

Index-Linked Securities must satisfy the 

generic quantitative initial and 

continued listing criteria under NYSE 

American Rule 5.2E(j)(6)(B)(I) in order 

to become, and continue to be, listed 

and traded on the Exchange. Certain of 

the applicable quantitative criteria 

specify minimum or maximum 

thresholds that must be satisfied with 

respect to, for example, market value, 

trading volume, and dollar weight of the 

index represented by a single 

component or groups of components. 

The applicable initial quantitative 

listing criteria include (i) that each 

underlying index is required to have at 

least ten component securities; 9 (ii) that 

each component security has a 

minimum market value of at least $75 

million, except that 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, the 

market value can be at least $50 million; 

(iii) that component stocks that in the 

aggregate account for at least 90% of the 

weight of the index each 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; (iv) that no 

underlying component security 

represents more than 25% of the dollar 

weight of the index, and the five highest 

dollar weighted component securities in 

the index do not in the aggregate 

account for more than 50% of the dollar 

weight of the index (60% for an index 

consisting of fewer than 25 component 

securities); and (v) that 90% of the 

index’s numerical value and at least 

80% of the total number of component 

securities meet the then current criteria 

for standardized option trading set forth 

in Rule 915; except that an index will 

not be subject to this last requirement if 

(a) no underlying component security 

represents more than 10% of the dollar 

weight of the index and (b) the index 


sradovich on DSK3GMQ082PROD with NOTICES
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10See Rule 5.2E(j)(6)(B)(I)(1)(b)(i)–(iv). 

11See Rule 5.2E(j)(6)(B)(I)(2)(a)(ii). 

12This provision is similar to that in Commentary 

.01(a) to NYSE American Rule 8.600E relating to 

generic listing criteria applicable to issues of 

Managed Fund Shares. 

13NYSE American Rules 5.2E(j)(6)(B)(I)(2)(a)(i) 

and (ii) provide that the Exchange will maintain 

surveillance procedures for securities listed under 

Rule 5.2E(j)(6) and may halt trading in such 

securities and will initiate delisting proceedings 

pursuant to Rule 5.5E(m) (unless the Commission 

has approved the continued trading of the subject 

Index-Linked Security), if any of the standards set 

forth in Rules 5.2E(j)(6)(B)(I)(1)(a) and 

5.2E(j)(6)(B)(I)(1)(b)(2) are not continuously 

maintained, except that: (i) The criteria that no 

single component represent more than 25% of the 

dollar weight of the index and the five highest 

dollar weighted components in the index cannot 

represent more than 50% (or 60% for indexes with 

less than 25 components) of the dollar weight of the 

index, need only be satisfied at the time the index 

is rebalanced (Rule 5.2E(j)(6)(B)(I)(2)(a)(i)), and (ii) 

component stocks that in the aggregate account for 

at least 90% of the weight of the index each will 

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 (Rule 5.2E(j)(6)(B)(I)(2)(a)(ii)). 

14The phrase ‘‘to the extent applicable’’ also is 

included in Commentary .01(a)(A)(3) to NYSE 

American Rule 5.2E(j)(3) for Investment Company 

Units and Commentary .01(a)(1)(C) to NYSE 

American Rule 8.600E for Managed Fund Shares. 

15 15 U.S.C. 78s(b)(2); 15 U.S.C. 78s(b)(3)(A). 

16 17 CFR 240.19b–4(e). 

17See Commentary .01 to NYSE American Rule 

5.2E(j)(3). See also, Securities Exchange Act Release 

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

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

amendments to the eligibility criteria for 

components of an index underlying Investment 

Company Units). 

18See Commentary .01 to NYSE American Rule 

8.600E. See also, Securities Exchange Act Release 

No. 78397 (July 22, 2016), 81 FR 49320 (July 27, 

2016) (SR–NYSEArca–2015–110) (order approving 

amendments to NYSE Arca Equities Rule 8.600 to 

adopt generic listing standards for Managed Fund 

Shares). 

19 15 U.S.C. 78f(b). 

20 15 U.S.C. 78f(b)(5). 

has a minimum of 20 components.10

The applicable continued quantitative 

listing criteria require that component 

stocks that in the aggregate account for 

at least 90% of the weight of the index 

each 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.11

The Exchange proposes to amend 

NYSE American Rule 

5.2E(j)(6)(B)(I)(1)(a), which provides that 

each underlying index is required to 

have at least ten component securities, 

to provide that there will be no 

minimum number of component 

securities if one or more issues of 

Derivative Securities Products or IndexLinked Securities constitute, at least in 

part, component securities underlying 

an issue of Equity Index-Linked 

Securities. The proposed amendment to 

NYSE American Rule 

5.2E(j)(6)(B)(I)(1)(a) also would provide 

that the securities described in Rule 

5.2E(j)(3)) and Section 2 of Rule 8E (that 

is, Derivative Securities Products), and 

Rule 5.2E(j)(6) (that is, Index-Linked 

Securities), as referenced in proposed 

amended Rule 5.2E(j)(6)(B)(I)(1)(b)(2) 

and Rule 5.2E(j)(6)(B)(I)(2)(a) would 

include securities listed on another 

national securities exchange pursuant to 

substantially equivalent listing rules.12

The Exchange also proposes to 

exclude Derivative Securities Products 

and Index-Linked Securities from 

consideration when determining 

whether the applicable quantitative 

generic thresholds have been satisfied 

under the initial listing standards 

specified in NYSE American Rule 

5.2E(j)(6)(B)(I)(1)(b)(i)–(iv) and the 

continued listing standards specified in 

NYSE American Rules 

5.2E(j)(6)(B)(I)(2)(a)(i) and (ii).13 Thus, 

for example, when determining 

compliance with NYSE American Rule 

5.2E(j)(6)(B)(I)(1)(b)(ii), component 

stocks, excluding Derivative Securities 

Products or Index-Linked Securities, 

that in the aggregate account for at least 

90% of the remaining index weight 

would be required to have a minimum 

global monthly trading volume of 1 

million shares, or minimum global 

notional volume traded per month of 25 

million, averaged over the last six 

months. 

The Exchange proposes further to 

provide that the weighting limitation for 

the five highest weighted component 

securities in an index in NYSE 

American Rules 5.2E(j)(6)(B)(I)(1)(b)(iii) 

and 5.2E(j)(6)(B)(I)(2)(a)(i) would apply 

‘‘to the extent applicable.’’ 14 When 

considered in conjunction with the 

proposed amendment to NYSE 

American Rule 5.2E(j)(6)(B)(I)(1)(a) 

referenced above, this language would 

make clear that an index that includes 

Derivative Securities Products or IndexLinked Securities may include fewer 

than five component securities. 

The Exchange believes that it is 

appropriate to exclude Derivative 

Securities Products and Index-Linked 

Securities from the generic listing and 

continued listing criteria specified 

above for Equity Index-Linked 

Securities because Derivative Securities 

Products and Index-Linked Securities 

that may be included in an index or 

portfolio underlying a series of Equity 

Index-Linked Securities are themselves 

subject to specific initial and continued 

listing requirements of the exchange on 

which they are listed. For example, 

Units listed and traded on the Exchange 

are subject to the listing standards 

specified under NYSE American Rule 

5.2E(j)(3). Also, Derivative Securities 

Products and Index-Linked Securities 

would have been listed and traded on 

an exchange pursuant to a filing 

submitted under Sections 19(b)(2) or 

19(b)(3)(A) of the Act,15 or would have 

been listed by an exchange pursuant to 

the requirements of Rule 19b–4(e) under 

the Act.16 Derivative Securities Products 

and Index-Linked Securities are 

derivatively priced, and, therefore, the 

Exchange does not believe that it is 

necessary to apply the generic 

quantitative criteria (e.g., market 

capitalization, trading volume, or 

component weighting) applicable to 

securities that are not Derivative 

Securities Products or Index-Linked 

Securities (e.g., common stocks) to such 

products. Finally, by way of 

comparison, Derivative Securities 

Products are excluded from 

consideration when determining 

whether the components of Units satisfy 

the applicable listing criteria in Rule 

5.2E(j)(3),17 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 Rule 8.600E.18

The Exchange also proposes (1) to 

replace ‘‘investment company units’’ 

with ‘‘Investment Company Units’’ in 

two places in NYSE American Rule 

5.2E(j)(6)(B)(I)(1) in order to conform to 

other usages of this term in Exchange 

rules; and (2) to replace the word 

‘‘Index’’ with ‘‘index’’ in two places in 

Rule 5.2E(j)(6)(B)(I)(2)(a)(i) to conform 

to other usages of this word in Rule 

5.2E(j)(6)(B)(I)(2). 

The Exchange notes that the proposed 

change is not otherwise intended to 

address any other issues and that the 

Exchange is not aware of any problems 

that ETP Holders or issuers would have 

in complying with the proposed change. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,19 in general, and 

furthers the objectives of Section 6(b)(5) 

of the Act,20 in particular, because it is 

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, in general, to protect 

investors and the public interest. 

The Exchange believes that the 

proposed change would facilitate the 

listing and trading of additional types of 

Equity Index-Linked Securities, which 

would enhance competition among 

market participants, to the benefit of 


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21See supra, note 17. 

22See supra, note 18. 

23 15 U.S.C. 78s(b)(2); 15 U.S.C. 78s(b)(3)(A). 

24 17 CFR 240.19b–4(e). 

25See, e.g., Securities Exchange Act Release No. 

54739 (November 9, 2006), 71 FR 66693 (SR– 

Amex–2006–78) (order approving generic listing 

standards for Portfolio Depositary Receipts and 

Index Fund Shares based on international or global 

indexes), in which the Commission stated that 

‘‘these standards are reasonably designed to ensure 

that stocks with substantial market capitalization 

and trading volume account for a substantial 

portion of any underlying index or portfolio, and 

that when applied in conjunction with the other 

applicable listing requirements, will permit the 

listing only of ETFs that are sufficiently broadbased in scope to minimize potential 

manipulation.’’ 

26See Commentary .01 to NYSE American Rule 

5.2E(j)(3). See also Securities Exchange Act Release 

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

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

amendments to eligibility criteria for components of 

an index underlying Investment Company Units), in 

which the Commission noted that ‘‘based on the 

trading characteristics of Derivative Securities 

Products, it may be difficult for component 

Derivative Securities Products to satisfy certain 

quantitative index criteria, such as the minimum 

market value and trading volume limitations. 

However, because Derivative Securities Products 

are themselves subject to specific initial and 

continued listing requirements, the Commission 

believes that it would be reasonable to exclude 

Derivative Securities Products, as components, from 

certain index component eligibility criteria for 

[Investment Company] Units.’’ 

27See, e.g., Securities Exchange Act Release No. 

76719 (December 21, 2015), 80 FR 80859 (December 

28, 2015) (order approving Exchange listing and 

trading of shares of the Guggenheim Total Return 

Bond ETF (‘‘Fund’’) under NYSE Arca Equities Rule 

8.600), which filing stated: ‘‘Not more than 10% of 

the net assets of the Fund in the aggregate invested 

in equity securities (other than non exchange-traded 

investment company securities) will consist of 

equity securities whose principal market is not a 

member of the ISG or is a market with which the 

Exchange does not have a comprehensive 

surveillance sharing agreement. In addition, not 

Continued 

investors and the marketplace. The 

proposed change would also result in 

greater efficiencies in the listing process 

with respect to Equity Index-Linked 

Securities by eliminating an 

unnecessary consideration regarding 

underlying components, which would 

therefore remove impediments to, and 

perfect the mechanism of, a free and 

open market. In addition, the proposed 

amendment to the Equity Index-Linked 

Securities listing criteria is intended to 

protect investors and the public interest 

in that it is consistent with the manner 

in which Derivative Securities Products 

are also excluded from consideration 

when determining whether the 

components of an index or portfolio 

underlying an issue of Units satisfy the 

applicable listing criteria,21 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 Rule 

8.600E.22 Additionally, Equity IndexLinked Securities would remain subject 

to all existing listing standards, thereby 

maintaining existing levels of investor 

protection. The Exchange believes that 

the proposed rule change is designed to 

prevent fraudulent and manipulative 

acts and practices because the Equity 

Index-Linked Securities would continue 

to be listed and traded on the Exchange 

pursuant to the initial and continued 

listing criteria in Rule 5.2E(j)(6). 

Further, the proposed change would not 

impact the existing listing process for 

Derivative Securities Products and 

Index-Linked Securities, whereby the 

exchanges on which such securities are 

listed must, for example, submit 

proposed rule changes with the 

Commission prior to listing and trading. 

The Exchange believes that it is 

appropriate to exclude Derivative 

Securities Products and Index-Linked 

Securities from the generic criteria 

specified above for Equity Index-Linked 

Securities because Derivative Securities 

Products and Index-Linked Securities 

that may be included in an index or 

portfolio underlying a series of Equity 

Index-Linked Securities are themselves 

subject to specific initial and continued 

listing requirements of the exchange on 

which they are listed. For example, 

Units listed and traded on the Exchange 

are subject to the listing standards 

specified under NYSE American Rule 

5.2E(j)(3). Also, such Derivative 

Securities Products and Index-Linked 

Securities would have been listed and 

traded on an exchange pursuant to a 

filing submitted under Sections 19(b)(2) 

or 19(b)(3)(A) of the Act,23 or would 

have been listed by an exchange 

pursuant to the requirements of Rule 

19b–4(e) under the Act.24 The Exchange 

believes that quantitative factors—such 

as market value, global monthly trading 

volume, or weighting—when applied to 

index components (such as common 

stocks) underlying a series of Equity 

Index-Linked Securities, are relevant 

criteria in establishing that such series 

is sufficiently broad-based to minimize 

potential manipulation.25 Derivative 

Securities Products and Index-Linked 

Securities, however, are derivatively 

priced, and, therefore, the Exchange 

does not believe that it is necessary to 

apply the generic quantitative criteria 

applicable to securities that are not 

Derivative Securities Products and 

Index-Linked Securities (e.g., common 

stocks) to such products. As noted 

above, Derivative Securities Products 

are excluded from consideration on 

NYSE American when determining 

whether the components of Units satisfy 

the applicable listing criteria,26 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 Rule 

8.600E. Moreover, for shares of 

Derivative Securities Products that are 

not listed on an exchange pursuant to an 

exchange’s generic listing rules, the 

Commission must first approve an 

exchange’s proposed rule change under 

Section 19(b) of the Act regarding a 

particular Derivative Securities Product 

or Index-Linked Securities, which is 

subject to the representations and 

restrictions included in such proposed 

rule change. 

The Exchange also believes it is 

appropriate to exclude Derivative 

Securities Products and Index-Linked 

Securities from the requirement under 

NYSE American Rule 

5.2E(j)(6)(B)(I)(1)(b)(iv) that 90% of the 

applicable index’s numerical value and 

at least 80% of the total number of 

component securities will meet the 

criteria for standardized option trading 

set forth in Rule 915. Rule 915 includes 

criteria for securities underlying option 

contracts approved for listing and 

trading on the Exchange. Among such 

criteria are those applicable to 

‘‘Exchange-Traded Fund Shares’’ (as 

referenced in Rule 915, Commentary 

.06(a)), Trust Issued Receipts (as 

referenced in Rule 915, Commentary 

.07(a)), and Index-Linked Securities (as 

referenced in Rule 915, Commentary 

.11) that underlie Exchange-traded 

option contracts. The Exchange does not 

believe that criteria in Rule 915 should 

be applied to Derivative Securities 

Products and Index-Linked Securities 

because such securities are subject to 

separate numerical and other criteria 

included in the applicable exchange 

listing rules, including both generic 

listing rules permitting listing pursuant 

to Rule 19b–4(e) and non-generic listing 

rules. Derivative Securities Products 

and Index-Linked Securities that are the 

subject of a Commission approval order 

under Section 19(b) of the Act also are 

subject to specific representations made 

in the applicable Rule 19b–4 filing. 

These include representations regarding 

the existence of comprehensive 

surveillance agreements between the 

applicable exchange and the principal 

markets for certain financial 

instruments underlying Derivative 

Securities Products, or percentage 

limitations on assets (e.g., non-U.S. 

stocks, futures and options) whose 

principal market is not a member of the 

Intermarket Surveillance Group 

(‘‘ISG’’).27


sradovich on DSK3GMQ082PROD with NOTICES
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more than 10% of the net assets of the Fund in the 

aggregate invested in futures contracts or exchangetraded options contracts will consist of futures 

contracts or exchange-traded options contracts 

whose principal market is not a member of ISG or 

is a market with which the Exchange does not have 

a comprehensive surveillance sharing agreement.’’ 

28 15 U.S.C. 78f(b)(8). 

29 15 U.S.C. 78s(b)(3)(A)(iii). 

30 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change, along with a brief 

description and 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. The Exchange 

has satisfied this requirement. 

31 17 CFR 240.19b–4(f)(6). 

32 17 CFR 240.19b–4(f)(6)(iii). 

33For 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). 

The Exchange believes it is 

appropriate to provide that the 

weighting limitation for the five highest 

weighted component securities in an 

index in NYSE American Rules 

5.2E(j)(6)(B)(I)(1)(b)(iii) and 

5.2E(j)(6)(B)(I)(2)(a)(i) would apply ‘‘to 

the extent applicable.’’ When 

considered in conjunction with the 

proposed amendment to NYSE 

American Rule 5.2E(j)(6)(B)(I)(1)(a) 

referenced above, this language would 

make clear that an index that includes 

Derivative Securities Products or IndexLinked Securities may include fewer 

than five component securities. In 

addition, the phrase ‘‘to the extent 

applicable’’ is included in Commentary 

.01(a)(A)(3) to NYSE American Rule 

5.2E(j)(3) for Investment Company Units 

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

American Rule 8.600E for Managed 

Fund Shares. 

The proposed replacement of 

‘‘investment company units’’ with 

‘‘Investment Company Units’’ in two 

places in NYSE American Rule 

5.2E(j)(6)(B)(I)(1) is appropriate as such 

changes conform to other usages of this 

term in Exchange rules. The proposed 

replacement of the word ‘‘Index’’ with 

‘‘index’’ in two places in Rule 

5.2E(j)(6)(B)(I)(2)(a)(i) is appropriate as 

such changes would conform to other 

usages of this word in Rule 

5.2E(j)(6)(B)(I)(2). 

The Exchange 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. All 

Index-Linked Securities listed and 

traded pursuant to NYSE American Rule 

5.2E(j)(6) are included within the 

definition of ‘‘security’’ or ‘‘securities’’ 

as such terms are used in the Exchange 

rules and, as such, are subject to 

Exchange rules and procedures that 

currently govern the trading of 

securities on the Exchange. Trading in 

the securities will be halted under the 

conditions specified in NYSE American 

Rule 5.2E(j)(6)(E). 

For these reasons, the Exchange 

believes that the proposal is consistent 

with the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act,28 the Exchange does not believe 

that the proposed rule change will 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

Instead, the Exchange believes that the 

proposed change will encourage 

competition by enabling additional 

types of Equity Index-Linked Securities 

to be traded on the Exchange and, by 

eliminating an unnecessary 

consideration regarding underlying 

components, create a more efficient 

process surrounding the trading of 

Equity Index-Linked Securities. 

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. 

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)(iii) of the Act 29 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.30

A proposed rule change filed 

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

Act 31 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6)(iii) 32

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 proposal may 

become operative immediately upon 

filing. According to the Exchange, the 

proposed rule change is substantively 

identical to rule changes previously 

approved for the NYSE Arca exchange 

and that trading on the Exchange 

pursuant to unlisted trading privileges 

of issues of Index-Linked Securities that 

conform to the requirements of 

amended NYSE American Rule 

5.2E(j)(6) would further competition 

among exchange markets. The 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest because permitting the 

Exchange without delay to trade issues 

of Index-Linked Securities that conform 

to the proposed requirements of NYSE 

American Rule 5.2E(j)(6)—which are 

substantively identical to previously 

approved rules of another exchange— 

would further competition among 

exchanges trading these securities. 

Therefore, the Commission hereby 

waives the operative delay and 

designates the proposal operative upon 

filing.33

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: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission will 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– 

NYSEAMER–2017–19 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–NYSEAMER–2017–19. This 

file number should be included on the 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 82, No. 191 / Wednesday, October 4, 2017 / Notices 46329 

34 17 CFR 200.30–3(a)(12). 

1See Securities Exchange Act Release No. 34– 

78961 (Sep. 28, 2016), 81 FR 70786, 70788 (Oct. 13, 

2016). 

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– 

NYSEAMER–2017–19, and should be 

submitted on or before October 25, 

2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.34

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–21280 Filed 10–3–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

32839; File No. 812–14818] 

National Securities Clearing 

Corporation 

September 28, 2017. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice. Notice of application for 

an order under section 3(b)(2) of the 

Investment Company Act of 1940 

(‘‘Act’’). 

APPLICANT: National Securities Clearing 

Corporation (‘‘NSCC’’). 

SUMMARY OF APPLICATION: Applicant 

seeks an order under Section 3(b)(2) of 

the Act declaring it to be primarily 

engaged in a business other than that of 

investing, reinvesting, owning, holding 

or trading in securities. Applicant is 

primarily in the business of providing 

clearing, settlement, risk management, 

central counterparty (‘‘CCP’’) and 

ancillary services to the registered 

broker-dealers, banks and other market 

participants that are its ‘‘Members’’, as 

such term is defined in the rules and 

procedures of Applicant (‘‘NSCC 

Rules’’). 

FILING DATE: The application was filed 

on September 8, 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 

applicant with a copy of the request, 

personally or by mail. Hearing requests 

should be received by the Commission 

by 5:30 p.m. on October 23, 2017, and 

should be accompanied by proof of 

service on applicant, in the form of an 

affidavit or, for lawyers, a certificate of 

service. Hearing requests should state 

the nature of the writer’s interest, 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: Secretary, Securities and 

Exchange Commission, 100 F Street NE., 

Washington, DC 20549–1090. 

Applicant, c/o David F. Freeman, Jr., 

Arnold & Porter LLP, 601 Massachusetts 

Avenue NW., Washington, DC 20001. 

FOR FURTHER INFORMATION CONTACT: 

Jennifer O. Palmer, Senior Counsel, at 

(202) 551–5786, or Nadya B. Roytblat, 

Assistant Chief Counsel, at (202) 551– 

6825 (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 applicant using the 

Company name box, at http://

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

calling (202) 551–8090. 

Applicant’s Representations 

1. Formed in 1976, Applicant is 

organized under the Business 

Corporation Law of the State of New 

York and is registered as a clearing 

agency under the Securities and 

Exchange Act of 1934, as amended 

(‘‘Exchange Act’’), and the rules and 

regulations thereunder (‘‘Exchange Act 

Rules’’). Applicant is also designated as 

a systemically important financial 

market utility (‘‘SIFMU’’) by the 

Financial Stability Oversight Council 

(‘‘FSOC’’) under Title VIII of The DoddFrank Wall Street Reform and Consumer 

Protection Act (‘‘Dodd-Frank Act’’). As 

a registered clearing agency, Applicant 

is regulated by the Commission. As a 

SIFMU, Applicant is subject to 

enhanced supervision by the 

Commission in consultation with the 

Board of Governors of the Federal 

Reserve System (‘‘FRB’’).1

2. Applicant is a wholly-owned 

subsidiary of The Depository Trust & 

Clearing Corporation (‘‘DTCC’’). 

Applicant has one authorized class of 

stock, which is common stock. All 

issued and outstanding shares of 

Applicant’s common stock are held by 

DTCC and there are no plans to alter 

this wholly-owned subsidiary structure. 

There is no trading market in 

Applicant’s shares. 

3. Applicant provides clearing, 

settlement, risk management and CCP 

services to its Members for broker-tobroker trades in the United States 

involving equities, corporate and 

municipal debt, American depositary 

receipts, exchange traded funds and 

unit investment trusts. In addition to 

these core services, Applicant also offers 

ancillary, non-guaranteed services, 

including wealth management services 

(‘‘WMS’’) and insurance and retirement 

services (‘‘I&RS’’), which automate 

manual processes in the mutual funds, 

insurance and alternative investment 

products areas. Applicant’s operations 

are national. 

4. Applicant operates a continuous 

net settlement (‘‘CNS’’) system, through 

which the trades in CNS-eligible 

securities are processed. Applicant acts 

as a CCP in respect of such CNS trades, 

becoming the buyer to every seller and 

the seller to every buyer, thereby 

guaranteeing the completion of such 

trades and eliminating counterparty risk 

among its Members. As a result, 

Applicant has obligations to and claims 

against its Members on opposite sides of 

guaranteed netted transactions. 

Applicant also provides a trade 

guarantee with respect to balance order 

transactions. 

5. Due to the nature of Applicant’s 

operations and the large volume and 

dollar value of trades that it guarantees, 

Applicant maintains a large clearing 

fund (‘‘Clearing Fund’’) and a large 

amount of other cash on hand. The 

Clearing Fund consists of deposits (i.e., 

margin and other contributions) posted 

by Members in the form of cash and 


sradovich on DSK3GMQ082PROD with NOTICES