Document ID: SEC-2016-1428-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2016-08-15T04:00Z

[Federal Register Volume 81, Number 157 (Monday, August 15, 2016)]
[Notices]
[Pages 54142-54144]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-19323]

[[Page 54142]]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78521; File No. SR-NYSEArca-2016-108]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Reflect a Change 
in the Permitted Size of a Basket Applicable to Shares of ETFS Physical 
Silver Shares Issued by the ETFS Silver Trust

August 9, 2016.
    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 July 27, 2016, NYSE Arca, Inc. (the ``Exchange'' or 
``NYSE Arca'') 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 self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to reflect a change in the permitted size of 
a ``Basket'' applicable to shares of ETFS Physical Silver Shares 
(``Fund'') issued by the ETFS Silver Trust. The Fund is currently 
listed and traded on the Exchange under NYSE Arca Equities Rule 8.201. 
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 Commission has approved a proposed rule change relating to 
listing and trading on the Exchange of shares (``Shares'') of the Fund 
under NYSE Arca Equities Rule 8.201, which governs the listing and 
trading of Commodity-Based Trust Shares.\4\ The Shares are offered by 
ETFS Silver Trust (the ``Trust'').\5\ The Shares represent units of 
fractional undivided beneficial interest in and ownership of the Trust. 
The investment objective of the Trust is for the Shares to reflect the 
performance of the price of silver bullion, less the Trust's 
expenses.\6\ ETF Securities USA LLC is the sponsor of the Trust 
(``Sponsor''), The Bank of New York Mellon is the trustee of the Trust 
and HSBC Bank plc. is the custodian of the Trust. The Fund's Shares are 
currently listed and traded on the Exchange under NYSE Arca Equities 
Rule 8.201.
---------------------------------------------------------------------------

    \4\ Commodity-Based Trust Shares are securities issued by a 
trust that represent investors' discrete identifiable and undivided 
beneficial ownership interest in the commodities deposited into the 
Trust.
    \5\ The Trust is registered under the Securities Act of 1933 
(``1933 Act''). See Post-Effective Amendment No. 1 on Form S-3 under 
the 1933 Act for the ETFS Silver Trust, filed with the Commission on 
August 8, 2014 (No. 333-195514) (``Registration Statement'').
    \6\ The Commission approved listing and trading of Shares of the 
Fund on NYSE Arca in Securities Exchange Act Release No. 59781 
(April 14, 2009), 74 FR 18771 (April 24, 2009) (SR-NYSEArca-2009-28) 
(Notice of Filing and Order Granting Accelerated Approval of 
Proposed Rule Change Relating to Listing and Trading of Shares of 
the ETFS Silver Trust) (``Prior Order''); See also Securities 
Exchange Act Release Nos. 72847 (August 14, 2014), 79 FR 49350 
(August 20, 2014) (SR-NYSEArca-2014-88) (Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change (1) to Reflect a 
Change to the Value Used by the iShares Silver Trust, ETFS Silver 
Trust, ETFS White Metals Basket Trust and ETFS Precious Metals 
Basket Trust with Respect to Calculation of the Net Asset Value of 
Shares of each Trust; and (2) to Reflect a Change to the Underlying 
Benchmark for ProShares Ultra Silver and ProShares UltraShort 
Silver) (``First Prior Notice''); 77830 (May 13, 2016), 81 FR 31671 
(May 19, 2016) (SR-NYSEArca-2016-72) (Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change Relating to Changes to 
Procedures Regarding Establishing the LBMA Silver Price) (``Second 
Prior Notice'').
---------------------------------------------------------------------------

    As described in the Prior Order, issuances of Shares will be made 
only in ``Baskets'' of 100,000 Shares or multiples thereof. The 
Exchange proposes to eliminate the representation in the Prior Order 
regarding the size of a Basket. Going forward, the size of a Basket 
will be no greater than 100,000 Shares and the size of a Basket will be 
subject to change, but always equal to or less than 100,000 Shares.\7\ 
The Fund currently plans to change the size of a Basket to 50,000 
Shares.\8\ The Exchange believes that the change to the size of a 
Basket will not adversely impact investors or Exchange trading. In 
addition, a reduction in the size of a Basket may provide potential 
benefits to investors by facilitating additional creation and 
redemption activity in the Shares, thereby potentially resulting in 
increased secondary market trading activity, tighter bid/ask spreads 
and narrower premiums or discounts to NAV.\9\
---------------------------------------------------------------------------

    \7\ The Exchange notes that the Commission has approved the 
listing and trading of other issues of exchange-traded products for 
which the size of a ``Creation Unit'' is subject to change. See 
e.g., Securities Exchange Act Release Nos. 77522 (April 5, 2016), 81 
FR 21420 (April 11, 2016) (SR-NYSEArca-2015-125) (order approving 
Exchange listing and trading of Shares of the of RiverFront Dynamic 
Unconstrained Income ETF and RiverFront Dynamic Core Income ETF 
under NYSE Arca Equities Rule 8.600); 76719 (December 21, 2015), 80 
FR 80859 (December 28, 2015) (SR-NYSEArca-2015-73) (order approving 
listing and trading of shares of the Guggenheim Total Return Bond 
ETF under NYSE Arca Equities Rule 8.600).
    \8\ The change to size of a Basket will be effective upon filing 
with the Commission of an amendment to the Trust's Registration 
Statement filed pursuant to Rule 424(b)(3) under the 1933 Act, and 
shareholders will be notified of such change by means of such 
amendment.
    \9\ The Exchange notes that the Commission has approved the 
listing and trading of other issues of exchange-traded products that 
have applied a minimum ``Creation Unit'' size of 50,000 shares. See, 
e.g., Securities Exchange Act Release Nos. 65458 (September 30, 
2011), 76 FR 62112 (October 6, 2011) (SR-NYSEArca-2011-54) (order 
approving listing and trading of WisdomTree Dreyfus Australia and 
New Zealand Debt Fund); 66112 (January 5, 2012), 77 FR 1761 (January 
11, 2012) (SR-NYSEArca-2011-80) (order approving listing and trading 
of Rockledge SectorSAM ETF).
---------------------------------------------------------------------------

    The Sponsor represents that the proposed change to provide that the 
size of a Basket will be no greater than 100,000 Shares and subject to 
change, but always equal to or less than 100,000 Shares, as well as to 
reduce the Basket size to 50,000 Shares, as described above, is 
consistent with the Fund's investment objective, and will further 
assist the Sponsor to achieve such investment objective. Except for the 
change noted above, all other representations made in the Prior Order, 
the First Prior Notice and the Second Prior Notice remain 
unchanged.\10\ The Fund and the Shares will continue to comply with all 
initial and continued listing requirements under NYSE Arca Equities 
Rule 8.201.
---------------------------------------------------------------------------

    \10\ See note 6, supra. All terms referenced but not defined 
herein are defined in the First Prior Notice.
---------------------------------------------------------------------------

    The Sponsor represents that the investment objective of the Fund is 
not changing.
    The Sponsor has represented to the Exchange that it will advise the

[[Page 54143]]

Exchange of any failure by the Fund to comply with the continued 
listing requirements, and, pursuant to its obligations under Section 
19(g)(1) of the Act, the Exchange will monitor for compliance with the 
continued listing requirements. If the Fund is not in compliance with 
the applicable listing requirements, the Exchange will commence 
delisting procedures under NYSE Arca Equities Rule 5.5(m).
    Except for the changes noted herein, all other facts presented and 
representations made in the Rule 19b-4 filing underlying the Prior 
Order, the First Prior Notice and the Second Prior Notice remain 
unchanged.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \11\ that an exchange have rules that 
are 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.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The proposed rule change is designed to perfect the mechanism of a 
free and open market and, in general, to protect investors and the 
public interest. The Exchange believes that providing for a Basket size 
of no greater than 100,000 Shares (with the size of a Basket subject to 
change, but always equal to or less than 100,000 Shares), and changing 
the Basket size to 50,000 Shares, will not adversely impact investors 
or Exchange trading. In addition, a reduction in the size of a Basket 
may provide potential benefits to investors by facilitating additional 
creation and redemption activity in the Shares, thereby potentially 
resulting in increased secondary market trading activity, tighter bid/
ask spreads and narrower premiums or discounts to NAV.

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 that is not necessary or appropriate 
in furtherance of the purpose of the Act. The Exchange believes the 
proposed rule change, by providing that the size of a Basket is subject 
to change, but always equal to or less than 100,000 Shares, will 
provide the Fund with additional flexibility in administering the 
creation and redemption of Shares, which will enhance competition among 
issues of Commodity-Based Trust Shares.

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 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, the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-4(f)(6) 
thereunder.\13\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 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.
---------------------------------------------------------------------------

    The Exchange has asked the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. The Commission believes that waiver of the 30-day operative 
delay is consistent with the protection of investors and the public 
interest because a reduction in the size of a Basket may provide 
potential benefits to investors by facilitating additional creation and 
redemption activity in the Shares, thereby potentially resulting in 
increased secondary market trading activity, tighter bid/ask spreads 
and narrower premiums or discounts to NAV. Therefore, the Commission 
designates the proposed rule change to be operative upon filing.\14\
---------------------------------------------------------------------------

    \14\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such 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 under 
Section 19(b)(2)(B) \15\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

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

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-2016-108 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-NYSEArca-2016-108. 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-2016-108 and should 
be submitted on or before September 6, 2016.

[[Page 54144]]

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-19323 Filed 8-12-16; 8:45 am]
 BILLING CODE 8011-01-P