Document ID: SEC-2016-0151-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2016-01-27T05:00Z

[Federal Register Volume 81, Number 17 (Wednesday, January 27, 2016)]
[Notices]
[Pages 4726-4728]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-01668]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76969; File No. SR-NYSEArca-2016-13]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending the 
Exchange's Schedule of Fees and Charges To Define the Term ``Exchange 
Traded Products'' and To Provide for the Proration of Annual Fees 
Applicable to Exchange Traded Products That Have Liquidated

January 22, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on January 14, 2016, 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, II, 
and III below, which Items have been prepared by the Exchange.\3\ 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\ 17 CFR 240.19b-4.
    \3\ The Exchange originally filed this proposed rule change on 
December 23, 2015 under File No. SR-NYSEArca-2015-126, and the 
Exchange subsequently withdrew that filing on January 5, 2016. The 
Exchange refiled this proposed rule change on January 5, 2016 under 
File No. SR-NYSEArca-2016-07. The Exchange subsequently withdrew 
that filing on January 14, 2016 and filed this filing.
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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 Exchange's Schedule of Fees and 
Charges to define the term ``Exchange Traded Products'' and to provide 
for the proration of Annual Fees applicable to Exchange Traded Products 
that have liquidated. 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 its Schedule of Fees and Charges for 
NYSE Arca Equities listing fees (``Schedule'') to define the term 
``Exchange Traded Products,'' to revise the Annual Fees paid by issuers 
of Exchange Traded Products, and to make technical, non-substantive 
changes to the Schedule.
    The term ``Derivative Securities Products'' is currently defined in 
Footnote 3 of the Schedule to mean the securities described in NYSE 
Arca Equities Rules 5.2(j)(3) (Investment Company Units); 8.100 
(Portfolio Depositary Receipts); 8.200 (Trust Issued Receipts); 8.201 
(Commodity-Based Trust Shares); 8.202 (Currency Trust Shares); 8.203 
(Commodity Index Trust Shares); 8.204 (Commodity Futures Trust Shares); 
8.300 (Partnership Units); 8.500 (Trust Units); 8.600 (Managed Fund 
Shares), and 8.700 (Managed Trust Securities). The Exchange proposes to 
replace the term ``Derivative Securities Products'' with the term 
``Exchange Traded Products'' as a term that is more commonly used by 
investors and the public with respect to the equity securities that 
list and trade on the Exchange and distinguishes them from derivatives, 
such as futures or swaps. To effect this change, the Exchange proposes 
to amend footnote 3 of the Schedule and to replace the term 
``Derivative Securities Products'' with the term ``Exchange Traded 
Products'' throughout the Schedule.
    The Schedule includes ``Annual Fees'' payable by issuers of 
Exchange Traded Products listed on the Exchange. Pursuant to Footnote 8 
of the Schedule, issuers are subject to Annual Fees in the year of 
listing, pro-rated based on days listed that calendar year. The Annual 
Fees for Exchange Traded Products are billed in January for the 
forthcoming

[[Page 4727]]

year. Currently, when an Exchange Traded Product liquidates, and as a 
result, is delisted from the Exchange, the issuer is responsible for 
the full year's Annual Fee as billed in January. The issuer receives no 
refund for amounts paid or reduction of amounts payable even though the 
Exchange Traded Product has liquidated.
    The Exchange proposes to amend Footnote 8 of the Schedule to 
provide that the Annual Fees applicable to Exchange Traded Products 
that have liquidated and as a result are delisted from the Exchange 
will be prorated for the portion of the calendar year that such issue 
was listed on the Exchange, based on days listed that calendar year. 
Thus, for example, if the issuer of an Exchange Traded Product has paid 
an Annual Fee of $20,000 as billed in January and such issue is 
liquidated and then delisted from the Exchange on June 30, the issuer 
would receive a refund of $10,000, which represents a pro rata credit 
of Annual Fees owed for the year.
    Notwithstanding the proposed proration of the Annual Fees for 
Exchange Traded Products, the Exchange will continue to be able to fund 
its regulatory obligations.
    The Exchange also proposes non-substantive amendments to the 
Schedule. First, the Exchange proposes to add the operative date to the 
Schedule, which, for this filing, would be January 14, 2016. Second, 
the Exchange proposes to delete the last two sentences of Commentary .4 
to the Schedule, which refer to the transfer of securities from NYSE 
Alternext US to NYSE Arca, which occurred in 2008, and therefore is 
outdated text.
2. Statutory Basis
    NYSE Arca believes that the proposal is consistent with Section 
6(b) \4\ of the Act, in general, and Section 6(b)(4) \5\ of the Act in 
particular, in that it provides for the equitable allocation of 
reasonable dues, fees and other charges among its issuers and other 
persons using its facilities. In addition, the Exchange believes the 
proposal is consistent with the requirement under Section 6(b)(5) \6\ 
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.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4).
    \6\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that adding the operative date will clarify 
the Schedule by specifying the date as of which the most recent changes 
to the Schedule apply. Replacing the term ``Derivative Securities 
Products'' with the term ``Exchange Traded Products'' will remove 
impediments to and perfect the mechanism of a free and open market by 
using a term commonly used by the public and investors to refer to the 
products that are listed on the Exchange. The Exchange further believes 
that using the term ``Exchange Traded Products'' will promote 
transparency in Exchange rules by distinguishing the equity securities 
that list and trade on the Exchange from derivatives, such as futures 
or swaps. In addition, the deletion of the last two sentences of 
Commentary .4 to the Schedule will eliminate outdated text.
    The Exchange further believes that the proposed pro rata reduction 
of the Annual Fees as a result of liquidation and termination of an 
issue of Exchange Traded Products is equitable and does not unfairly 
discriminate between issuers because it would apply uniformly to all 
Exchange Traded Products and issuers of such products. The Exchange 
believes such reduction is reasonable in that it constitutes a 
potential reduction in Annual Fees for issues that are liquidated, and 
therefore are no longer collecting a management fee to pay for such 
expenses. Notwithstanding the proposed proration of the Annual Fees for 
Exchange Traded Products, the Exchange will continue to be able to fund 
its regulatory obligations.

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 would promote competition because it will permit 
the Exchange to better compete with other exchanges with respect to 
fees charged in connection with listing Exchange Traded Products.

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

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \7\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \8\ thereunder, because it establishes a due, fee, or other charge 
imposed by the Exchange.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(2).
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    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) \9\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \9\ 15 U.S.C. 78s(b)(2)(B).
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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-2016-13 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-2016-13. 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

[[Page 4728]]

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-2016-13, and should 
be submitted on or before February 17, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-01668 Filed 1-26-16; 8:45 am]
 BILLING CODE 8011-01-P