[Federal Register Volume 79, Number 161 (Wednesday, August 20, 2014)]
[Notices]
[Pages 49350-49355]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-19703]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72847; File No. SR-NYSEArca-2014-88]
Self-Regulatory Organizations; NYSE Arca, Inc.; 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
August 14, 2014.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on August 13, 2014, NYSE Arca, Inc. (``Exchange'' or ``NYSE
Arca'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II
[[Page 49351]]
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 to the value used by the
iShares Silver Trust, ETFS Silver Trust, ETFS White Metals Basket Trust
and ETFS Precious Metals Basket Trust, each of which is currently
listed on the Exchange under NYSE Arca Equities Rule 8.201, 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, each of which is
currently listed on the Exchange under NYSE Arca Equities Rule 8.200.
The text of 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 the Exchange listing rules
applicable to six exchange-traded products, all of which reference the
``London Silver Fix'', as described further below. The exchange-traded
products are listed and traded pursuant to NYSE Arca Equities Rules
8.201, for Commodity-Based Trust Shares, and NYSE Arca Equities Rule
8.200, for Trust Issued Receipts. The proposed change would replace
references to the ``London Silver Fix,'' a silver-price mechanism that
will be discontinued on the close of business August 14, 2014.
The ``London Silver Fix'' is a mechanism for pricing silver that
has been in place since 1898.\4\ The London Silver Market Fixing
Limited administers the London Silver Fix and announced, on May 14,
2014, that it will stop administering the London Silver Fix at the end
of the day on August 14, 2014. This announcement followed Deutsche Bank
AG's announcement that it planned to cease participation in the
committee that establishes the London Silver Fix, which would leave
only two members of the committee.
---------------------------------------------------------------------------
\4\ As described in the registration statement under the
Securities Act of 1933 (15 U.S.C. 77a) (``1933 Act'') for the
iShares Silver Trust (see infra, note 11), the London Bullion Market
Association (``LBMA'') fixings (which include the ``London Silver
Fix'') are an open process at which market participants can transact
business on the basis of a single quoted price. Three market making
members of the LBMA conduct the silver fixing meeting under the
chairmanship of The Bank of Nova Scotia-ScotiaMocatta by telephone
at 12:00 noon (London time) each working day. The other members of
the silver fixing are Deutsche Bank AG and HSBC Bank USA N.A.
(London branch). Orders executed at the fixing are conducted as
principal-to-principal transactions between the client and the
dealer through whom the order is placed. Clients place orders with
the dealing rooms of the fixing members, who net all the orders
before communicating their interest to their representative at the
fixing. The metal price is then adjusted to reflect whether there
are more buyers or sellers at a given price until such time as
supply and demand is seen to be balanced. Orders can be changed
throughout the proceedings as the price is moved higher and lower
until such time as buyers' and sellers' orders are satisfied and the
price is said to be ``fixed.''
---------------------------------------------------------------------------
As a consequence, the LBMA launched a consultation with market
participants, regulators and potential administrators on the London
silver daily price mechanism. On July 11, 2014, the LBMA announced in a
press release that CME Group, Inc. (``CME Group'') and Thomson Reuters
were selected to provide the solution for the ``London Silver Price''
mechanism, as described further below. According to the LBMA press
release, the price mechanism will be electronic, auction-based and
auditable, and will be tradeable with an increased number of direct
participants.\5\ In terms of the division of responsibilities, CME
Group will provide the price platform and methodology and Thomson
Reuters will provide the administration and governance. The LBMA will
develop a process of accreditation for ``silver participants,'' as
described further below.
---------------------------------------------------------------------------
\5\ See ``LBMA Silver Price Solution: CME Group & Thomson
Reuters,'' dated July 11, 2014, available at: http://www.lbma.org.uk/_blog/lbma_media_centre/post/silverpricesolution/.
---------------------------------------------------------------------------
Exchange-Listed Silver-Based Products
The Exchange lists and trades shares of exchange traded products
that reference the London Silver Fix benchmark for one or more
purposes. The Exchange lists and trades shares of the iShares Silver
Trust,\6\ ETFS Silver Trust,\7\ ETFS White Metals Basket Trust \8\ and
ETFS Precious Metals Basket Trust \9\ (together the ``Silver Trusts'')
under NYSE Arca Equities Rule 8.201. In addition, the Exchange lists
and trades shares of the ProShares Ultra Silver and ProShares
UltraShort Silver \10\ (together, the ``Silver Funds'') under NYSE Arca
Equities Rule 8.200.
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release Nos. 58956 (November 14,
2008), 73 FR 71074 (November 24, 2008) (SR-NYSEArca-2008-124)
(approving listing on the Exchange of the iShares Silver Trust);
53520 (March 20, 2006), 71 FR 14977 (March 24, 2006) (SR-PCX-2005-
117) (order approving listing and trading of shares of the iShares
Silver Trust pursuant to to unlisted trading privileges); 53521
(March 20, 2006), 71 FR 14967 (March 24, 2006) (SR-Amex-2005-72)
(order approving listing and trading on the American Stock Exchange
LLC of shares of the iShares Silver Trust).
\7\ See Securities Exchange Act Release No. 59781 (April 17,
2009), 78 FR 18771 (April 24, 2009) (SR-NYSEArca-2009-28) (notice of
filing and order granting accelerated approval relating to listing
and trading of shares of the ETFS Silver Trust).
\8\ See Securities Exchange Act Release No. 62620 (July 30,
2010), 75 FR 47655 (August 8, 2010) (SR-NYSEArca-2010-71) (notice of
filing of proposed rule change to list and trade shares of the ETFS
White Metals Basket Trust); 62875 (September 9, 2010), 75 FR 56156
(September 15, 2010) (SR-NYSEArca-2010-71) (order approving proposed
rule change to list and trade shares of the ETFS White Metals Basket
Trust).
\9\ See Securities Exchange Act Release No. 62402 (June 29,
2010), 75 FR 39292 (July 8, 2010) (SR-NYSEArca-2010-56) (notice of
filing of proposed rule change to list and trade shares of the ETFS
Precious Metals Basket Trust); 62692 (August 11, 2010), 75 FR 50789
(August 17, 2010) (order approving proposed rule change to list and
trade shares of the ETFS Precious Metals Basket Trust).
\10\ See Securities Exchange Act Release Nos. 58457 (September
3, 2008), (73 FR 52711 (September 10, 2008) (SR-NYSEArca-2008-91)
(notice of filing and order granting accelerated approval of
proposed rule change regarding listing and trading of shares of 14
funds of the Commodities and Currency Trust, now the ProShares Trust
II); 58162 (July 15, 2008), 73 FR 42391 (July 21, 2008) (SR-
NYSEArca-2008-73) (notice of filing and immediate effectiveness of
proposed rule change relating to trading of shares of 14 funds of
the Commodities and Currency Trust pursuant to unlisted trading
privileges). See also Securities Exchange Act Release Nos. 58161
(July 15, 2008), 73 FR 42380 (July 21, 2008) (SR-Amex-2008-39)
(order approving listing and trading on the American Stock Exchange
LLC of shares of 14 funds of the Commodities and Currency Trust);
57932 (June 5, 2008), 73 FR 33467 (June 12, 2008) (notice of
proposed rule change regarding listing and trading of shares of 14
funds of the Commodities and Currency Trust).
---------------------------------------------------------------------------
With respect to the Silver Trusts, the net asset value of shares of
the respective trusts is based on the London Silver Fix, as described
in the applicable rule filings relating to listing and trading of
shares of each of the Silver Trusts and in the registration statement
under the 1933 Act relating to
[[Page 49352]]
each such trust.\11\ After August 14, 2014, the London Silver Fix will
no longer exist and it is, therefore, necessary for the Silver Trusts
to change the benchmark price that each such trust uses for purposes of
calculating the net asset value of such trust's shares. The sponsors of
the Silver Trusts have represented that, on August 15, 2014, they
intend to use the CME Group/Thomson Reuters price mechanism (the
``London Silver Price'') for purposes of determining the net asset
value of shares of the Silver Trusts. Accordingly, the Exchange
proposes to change the benchmark price used by the Silver Trusts for
calculation of the net asset value of shares of each of such trust.
---------------------------------------------------------------------------
\11\ See supra, notes 6-9. See also Post-Effective Amendment No.
1 on Form S-3 under the 1933 Act for the iShares Silver Trust, dated
April 2, 2014 (No. 333-191498) and Form 8-K for the iShares Silver
Trust, filed on July 18, 2014; Post-Effective Amendment No. 1 on
Form S-1 under the 1933 Act for the ETFS White Metals Basket Trust,
filed with the Commission on August 13, 2014 (No. 333-195441); Post-
Effective Amendment No. 1 on Form S-3 under the 1933 Act for the
ETFS Precious Metals Basket Trust, filed with the Commission on
August 13, 2014 (No. 333-195675); 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) (``ETFS Silver
Registration Statement'').
---------------------------------------------------------------------------
With respect to the Silver Funds, the existing ``Underlying
Benchmark'' for each such fund is the U.S. dollar price of silver
bullion as measured by the London Silver Fix.\12\ The Silver Funds,
therefore, similarly need to change the Underlying Benchmark for each
such fund. The sponsor of the Silver Funds represents that it intends
to change the Underlying Benchmark for the Silver Funds to the London
Silver Price on August 15, 2014. Accordingly, the Exchange proposes to
reflect a change in the Underlying Benchmark applicable to the Silver
Funds.
---------------------------------------------------------------------------
\12\ The ProShares Ultra Silver seeks daily investment results,
before fees and expenses, that correspond to twice (200%) the daily
performance of the Underlying Benchmark. The ProShares UltraShort
Silver seeks daily investment results, before fees and expenses that
correspond to twice the inverse (-200%) of the daily performance of
the Underlying Benchmark. See Securities Exchange Act Release No.
58457 (September 3, 2008) (73 FR 52711) (September 10, 2008) (SR-
NYSEArca-2008-91) (notice of filing and order granting accelerated
approval of proposed rule change regarding listing and trading of
shares of 14 funds of ProShares Trust II). See also, registration
statement for the ProShares Trust II on Form S-1 under the 1933 Act,
filed with the Commission on July 31, 2014 (No. 333-196885).
---------------------------------------------------------------------------
The New London Silver Price Mechanism \13\
---------------------------------------------------------------------------
\13\ The description herein of the London Silver Price mechanism
is based, in part, on the ETFS Silver Registration Statement.
---------------------------------------------------------------------------
According to the ETFS Silver Registration Statement, as of August
15, 2014, CME Group will conduct an ``equilibrium auction'' once daily
during London trading hours among LBMA-authorized participating bullion
banks and market makers (``silver participants'') that establishes a
price which provides reference silver prices for that day's trading,
often referred to as the ``London Silver Price'' \14\ (Reuters
Instrument Code: ``LDNXAG''). The London Silver Price, determined
according to the methodologies of CME Group and disseminated by Thomson
Reuters, will be the silver valuation replacement for the London Silver
Fix previously determined by the London Silver Market Fixing Ltd. that
will be discontinued on August 14, 2014. The London Silver Price is
anticipated to be the most widely used benchmark for daily silver
prices and quoted by various financial information sources.
---------------------------------------------------------------------------
\14\ The term ``London Silver Price'' means the price for an
ounce of silver set by LBMA-authorized participating bullion banks
and market makers in the electronic, over-the-counter auction
operated by CME Group at approximately 12:00 noon London time, on
each working day and disseminated by Thomson Reuters.
---------------------------------------------------------------------------
CME Group has established an electronic, over-the-counter, auction
market for silver participants that discovers the London Silver Price
over multiple auction rounds that begin at 12:00 noon London time each
business day. The London Silver Price is the result of an ``equilibrium
auction'' because it establishes a price for a troy ounce of silver
London Good Delivery Bars \15\ that will clear the maximum amount of
bids and offers for silver entered by order-submitting silver
participants each day. CME Group has indicated that it is expected that
approximately six to seven silver participants having superior credit
ratings (so-called ``first tier participants'') will be initially
authorized to submit silver orders on the CME Group electronic system
and that an additional number of bullion banks or brokers having lesser
credit scores may also be silver participants. As the CME Group
electronic silver auction market develops, CME Group expects to admit
additional silver participants to the order submission process. Once
the London Silver Price, which is calculated in US dollars, is
established, Thomson Reuters will disseminate that day's London Silver
Price to the markets and other market data providers such as Bloomberg
via the Thomson Reuters Eikon and Elektron systems.
---------------------------------------------------------------------------
\15\ A London Good Delivery Bar is acceptable for delivery in
settlement of a transaction on the OTC market. A London Good
Delivery Bar must contain between 750 ounces and 1,100 ounces of
silver with a minimum fineness (or purity) of 999.0 parts per 1,000.
A London Good Delivery Bar must also bear the stamp of one of the
refiners who are on the LBMA-approved list.
---------------------------------------------------------------------------
CME Group Auction Process
The CME Group auction process will begin with a notice of an
auction round issued to silver participants before the commencement of
the auction round stating a silver price in US dollars at which the
auction round will be conducted. An auction round will last 30 seconds.
Silver participants will electronically place bid and offer orders at
the round's stated price and indicate whether the orders are for their
own account or for the account of clients. All auction round order
information other than the identity of those placing orders will be
displayed electronically in real time for all silver participants. The
CME Group system administrator will observe all auction round bid and
offer order information, including the identity of those submitting
orders. As long as the auction is open, silver participants may alter,
change or withdraw their orders.
At the end of the auction round, the CME Group system will evaluate
the equilibrium of the bid and offer orders submitted. If bid and offer
orders indicate an imbalance outside of acceptable tolerances
established for the CME Group system (e.g., too many purchase orders
submitted compared to sell orders or vice versa), a CME Group system
algorithm will calculate a new auction round price principally based on
the volume weighting of bid and offer orders submitted in the
immediately completed auction round. For instance, if the order
imbalance indicates that purchase orders (bids) outweigh sales orders
(offers), then the new auction round price will be increased over that
used in the prior auction round. Likewise, the new auction round price
will be decreased from the prior round's price if offers outweigh bids.
To clear the imbalance, the CME Group system then will issue another
notice of auction round to silver participants at the newly calculated
price. During this next 30 second auction round, silver participants
again will submit orders, and after it ends, the CME Group system will
evaluate for order imbalances. If order imbalances persist, a new
auction price will be calculated and a further auction round will
occur. This auction round process will continue until an equilibrium
within specified tolerances is determined to exist. Once the CME Group
system determines that orders are in equilibrium within system
tolerances, the auction process ends and the equilibrium auction round
price becomes the London Silver Price.
[[Page 49353]]
The London Silver Price and all bid and offer order information for
all auction rounds will become publicly available electronically via
Thomson Reuters instantly after the conclusion of the equilibrium
auction. The CME Group system also simultaneously matches bid and offer
orders from the equilibrium auction for bilateral settlement among the
silver participants. Orders reflecting any imbalance between bids and
offers that are within the CME Group system tolerances will then be
allocated to the first tier participants for settlement.
The London Silver Price is widely expected to be viewed as a full
and fair representation of all market interest at the conclusion of the
equilibrium auction. The CME Group's London Silver Price electronic
auction methodology is similar to the non-electronic process previously
used to establish the London Silver Fix where the London Silver Fix
process adjusted the silver price up or down until all the buy and sell
orders are matched, at which time the price was declared fixed.
Nevertheless, the London Silver Price has several advantages over the
previous London Silver Fix. The London Silver Price auction process
will be fully transparent in real time to the silver participants and,
at the close of each equilibrium auction, to the general public. The
London Silver Price auction process also will be fully auditable by
third parties since an audit trail exists from the time of each notice
of an auction round. Moreover, the London Silver Price's audit trail
and active, real time surveillance of the auction process by the CME
Group system administrator combined with silver participants' agreement
to abide by CME Group silver market rules and the Thomson Reuters code
of conduct will deter manipulative and abusive conduct in establishing
each day's London Silver Price.\16\
---------------------------------------------------------------------------
\16\ According to LBMA, the Prudential Regulation Authority
(PRA) at the Bank of England now has overall responsibility for the
prudential regulation of banks, building societies, credit unions,
insurers and major investment firms, many of whom are active in the
bullion market. The conduct of financial institutions is overseen by
the Financial Conduct Authority (FCA), which was formed from the
former Financial Services Authority and is separate from the Bank of
England.
---------------------------------------------------------------------------
The Exchange believes the new London Silver Price mechanism will
serve as an appropriate replacement to the London Silver Fix for
purposes of determining the net asset value of shares of the Silver
Trusts or as the Underlying Benchmark applicable to the Silver Funds
because of the transparency of the auction process, the participation
of an increased number of market participants compared to the London
Silver Fix, and the auditability of the silver pricing mechanism.
In connection with this proposed rule change, (1) the sponsors of
the Silver Trusts will each issue a press release informing the public
of the date a trust will first use the London Silver Price to value the
silver held by a trust; (2) the sponsor of the Silver Funds will issue
a press release informing the public of the date the Silver Funds will
first use the London Silver Price as the basis for their respective
Underlying Benchmark; (3) the sponsors will each file the applicable
press release with the Commission by means of Form 8-K, which will be
available on the applicable Silver Trust's or Silver Fund's Web site;
and (4) the sponsors will each file an amendment to the applicable
registration statement relating to the proposed change.\17\
---------------------------------------------------------------------------
\17\ The sponsors for the Silver Trusts and the Silver Funds
represent that they will manage the Silver Trusts and the Silver
Funds in the manner described in the applicable proposed rule change
(see supra, notes 6-10), and will not implement the changes
described herein until the instant proposed rule change is
operative.
---------------------------------------------------------------------------
The sponsors for the Silver Trusts and the Silver Funds represent
that there is no change to the investment objective of the applicable
Silver Trust or the Silver Funds from that described in the applicable
proposed rule change.\18\ The Silver Trusts and the Silver Funds will
comply with all initial and continued listing requirements under NYSE
Arca Equities Rule 8.201 or 8.200, respectively.
---------------------------------------------------------------------------
\18\ See supra, notes 6-10.
---------------------------------------------------------------------------
Except for the changes noted above, all other facts presented and
representations made in the proposed rule changes referenced above
remain unchanged.
All terms referenced but not defined herein are defined in the
applicable proposed rule change referenced above.\19\
---------------------------------------------------------------------------
\19\ See supra, notes 6-10.
---------------------------------------------------------------------------
2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \20\ 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.
---------------------------------------------------------------------------
\20\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices in that,
according to the LBMA press release,\21\ the new London Silver Price
mechanism will be electronic, auction-based and auditable, and will be
tradeable with an increased number of direct participants. The Exchange
believes the new London Silver Price mechanism will serve as an
appropriate replacement to the London Silver Fix for purposes of
determining the net asset value of shares of the Silver Trusts or as
the Underlying Benchmark applicable to the Silver Funds because of the
transparency of the auction process, the participation of an increased
number of market participants compared to the London Silver Fix, and
the auditability of the silver pricing mechanism. All auction round
order information other than the identity of those placing orders will
be displayed electronically in real time for all silver participants.
The CME Group system administrator will observe all auction round bid
and offer order information, including the identity of those submitting
orders. In addition, the London Silver Price and all bid and offer
order information for all auction rounds will become publicly available
electronically via Thomson Reuters instantly after the conclusion of
the equilibrium auction, as described above.
---------------------------------------------------------------------------
\21\ See supra, note 5.
---------------------------------------------------------------------------
The proposed change will permit the Silver Trusts and Silver Funds
to continue to function as silver-based exchange-traded products by
utilizing a new silver price mechanism to replace the London Silver
Fix, which is not expected to be available after August 14, 2014, and
that will provide a sound and reasonable basis for calculation of net
asset value or will provide a suitable Underlying Benchmark, as
applicable. Such price will be widely disseminated by one or more major
market data vendors and/or exchanges. Prior to or following the
effectiveness of this proposed rule change, (1) the sponsors of the
Silver Trusts will each issue a press release informing the public of
the date a trust will first use the London Silver Price to value the
silver held by a trust; (2) the sponsor of the Silver Funds will issue
a press release informing the public of the date the Silver Funds will
first use the London Silver Price as the basis for their respective
Underlying Benchmark; (3) the sponsors of the Silver Trusts and Silver
Funds will each file the applicable press release with the Commission
by means of Form 8-K, which will be available on the applicable Silver
Trust's or Silver Fund's Web site; and (4) the sponsors of the Silver
Trusts and Silver Funds will
[[Page 49354]]
each file an amendment to the applicable registration statement under
the 1933 Act relating to the proposed change. Such press releases and
registration statement amendments will protect investors and the public
interest by providing notification to investors of the new silver price
mechanism prior to the use of the London Silver Price by the Silver
Trusts and Silver Funds. The sponsors for the Silver Trusts and Silver
Funds represent that there is no change to the investment objective of
the applicable trust or the Silver Funds from that described in the
applicable proposed rule change. The Silver Trusts and Silver Funds
will comply with all initial and continued listing requirements under
NYSE Arca Equities Rule 8.201 or 8.200, respectively. Except for the
changes noted above, all other facts presented and representations made
in proposed rule changes referenced above remain unchanged.
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 in that the London Silver Price auction process will be
fully transparent in real time to the silver participants and, at the
close of each equilibrium auction, to the general public. The London
Silver Price auction process also will be fully auditable by third
parties since an audit trail exists from the time of each notice of an
auction round. Moreover, the London Silver Price's audit trail and
active, real time surveillance of the auction process by the CME Group
system administrator combined with silver participants' agreement to
abide by CME Group silver market rules and the Thomson Reuters code of
conduct will deter manipulative and abusive conduct in establishing
each day's London Silver Price. The Silver Trusts and Silver Funds will
continue to be listed and traded on the Exchange pursuant to the
initial and continued listing criteria in NYSE Arca Equities Rule 8.201
and 8.200, respectively. Except for the changes noted above, all other
facts presented and representations made in proposed rule changes
referenced above remain unchanged.\22\
---------------------------------------------------------------------------
\22\ See supra, notes 6-10.
---------------------------------------------------------------------------
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 purposes of the Act. The proposed change will
permit the Silver Trusts and Silver Funds to continue to function as
silver-based exchange-traded products by utilizing a new silver price
mechanism to replace the London Silver Fix, which is not expected to be
available after August 15, 2014, and that will provide a sound and
reasonable basis for calculation of net asset value or will provide a
suitable Underlying Benchmark, as applicable.
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 \23\ and Rule 19b-4(f)(6)
thereunder.\24\
---------------------------------------------------------------------------
\23\ 15 U.S.C. 78s(b)(3)(A).
\24\ 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 Exchange states that the proposed change will provide
additional transparency to silver pricing compared to the previous
London Silver Fix for several reasons. The Exchange represents that the
London Silver Price auction process is fully auditable by third
parties, and an audit trail will exist from the time of each notice of
an auction round. Moreover, the Exchange represents there will be
active, real time surveillance of the auction process by the CME Group
system administrator. The Exchange also represents that the initial
number of silver participants expected to participate in the auction
process (approximately six to seven) exceeds the number of market
participants determining the London Silver Fix prior to August 15,
2014, and will contribute to the integrity and reliability of the
pricing process. The Commission believes that waiver of the operative
delay is consistent with the protection of investors and the public
interest. Waiver of the operative delay will allow the Silver Trusts
and the Silver Funds, which are actively traded and widely held
exchange-traded products, to use the London Silver Price as the basis
for calculating net asset value or as an Underlying Benchmark, as
applicable, by August 15, 2014, thereby facilitating the transition to
the new price mechanism without disruption in trading. Therefore, the
Commission designates the proposed rule change to be operative upon
filing.\25\
---------------------------------------------------------------------------
\25\ 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) \26\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\26\ 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 [email protected]. Please include
File Number SR-NYSEArca-2014-88 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-2014-88. 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
[[Page 49355]]
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 Section, 100 F Street NE., Washington, DC
20549, on official business days between 10 a.m. and 3 p.m. Copies of
the filing will also be available for inspection and copying at the
NYSE's principal office and on its Internet Web site at www.nyse.com.
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-2014-
88 and should be submitted on or before September 10, 2014
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
---------------------------------------------------------------------------
\27\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-19703 Filed 8-19-14; 8:45 am]
BILLING CODE 8011-01-P