Document ID: SEC-2017-0112-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2017-01-25T05:00Z

[Federal Register Volume 82, Number 15 (Wednesday, January 25, 2017)]
[Notices]
[Pages 8444-8445]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-01612]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79834; File No. SR-NYSEArca-2017-01]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change Amending the NYSE Arca Equities Rule 5 and Rule 
8 Series

January 18, 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 January 6, 2017, NYSE Arca, Inc. (the ``Exchange'' or 
``NYSE Arca'') 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 self-
regulatory organization. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the NYSE Arca Equities Rule 5 and 
Rule 8 series to add additional continued listing standards as well as 
clarify the procedures it will undertake when an ETP is noncompliant 
with applicable rules. The proposed rule change is available on the 
Exchange's Web site at www.nyse.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the listing rules for ETPs in the 
Rule 5 and Rule 8 series of the NYSE Arca Equities rule book to add 
additional continued listing standards as well as clarify the 
procedures it will undertake when an ETP is noncompliant with 
applicable rules. The proposed rule changes are being made in concert 
with discussions with the SEC. Staff (``Staff'') of the SEC's Division 
of Trading and Markets (``T&M'') requested that the Exchange adopt 
certain additional continued listing standards for ETPs.
    As a result, the proposed amended rules reflect the guidance 
provided by T&M Staff to clarify that most initial listing standards, 
as well as certain representations included in Exchange rule filings 
under SEC Rule 19b-4 to list an ETP (``Exchange Rule Filings''), are 
also considered continued listing standards. The Exchange Rule Filing 
representations that will also be required to be maintained on a 
continuous basis include (a) the description of the fund and (b) the 
fund's investment restrictions.
    The proposed rule changes require that ETPs listed by the Exchange 
without an Exchange Rule Filing must maintain the initial index or 
reference asset criteria on a continued basis. For example, in the case 
of a domestic equity index, these criteria generally include: (a) 
Stocks with 90% of the weight of the index must have a minimum market 
value of at least $75 million; (b) stocks with 70% of the weight of the 
index must have a minimum monthly trading volume of at least 250,000 
shares; (c) the most heavily weighted component cannot exceed 30% of 
the weight of the index, and the five most heavily weighted stocks 
cannot exceed 65%; (d) there must be at least 13 stocks in the index; 
and (e) all securities in the index must be listed in the U.S. There 
are similar criteria for international indexes, fixed-income indexes 
and indexes with a combination of components.
    If an Exchange Rule Filing is made to list a specific ETP, the 
proposed rule change requires that the issuer of the security comply on 
a continuing basis with any statements or representations contained in 
the applicable rule proposal, including (a) the description of the 
portfolio and (b) limitations on portfolio holdings or reference 
assets. The NYSE Arca listing rules will also be modified to require 
that issuers of securities listed under the Rule 5 and Rule 8 series 
must notify the Exchange regarding instances of non-compliance. In 
addition, while listed ETPs are currently subject to the delisting 
process in Rule 5.5(m), the rules will be clarified to make this 
explicit.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\4\ in general, and furthers the 
objectives of Sections 6(b)(5) \5\ of the Act, in particular, in that 
it is designed to promote just and equitable principles of trade, to 
foster cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest. 
The Exchange also believes that the proposed rule change is consistent 
with Section 6(b)(5) \6\ of the Act in that it is

[[Page 8445]]

not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
    \6\ 15 U.S.C. 78f(b)(5).
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    The proposed rule changes accomplish these objectives by enhancing 
Exchange rules by clarifying that most initial listing standards, as 
well as certain representations included in Exchange Rule Filings to 
list an ETP, are considered continued listing standards. Additionally, 
the NYSE Arca listing rules will be modified to require that issuers of 
securities listed under the Rule 5 and Rule 8 series must notify the 
Exchange regarding instances of non-compliance and to clarify that 
deficiencies will be subject to the delisting process in Rule 5.5(m). 
The Exchange believes that these amendments will enhance the NYSE Arca 
listing rules, thereby serving to improve the national market system 
and 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 amended. The Exchange 
believes that the proposed rule change to amend the listing rules for 
ETPs in the NYSE Arca Rule 5 and Rule 8 series and the related 
notification requirement will have no impact on competition. 
Furthermore, since T&M Staff has provided the same guidance regarding 
ETP continued listing requirements to all exchanges, the Exchange 
believes that there will be no effect on competition.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please 
include File Number SR-NYSEArca-2017-01 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2017-01. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEArca-2017-01 and should 
be submitted on or before February 15, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-01612 Filed 1-24-17; 8:45 am]
 BILLING CODE 8011-01-P