Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposal to Change Representation Regarding Investments by PowerShares DB Trust Issued Receipts Listed Under Commentary .02 to NYSE Arca Equities Rule 8.200
Federal Register, Volume 81 Issue 235 (Wednesday, December 7, 2016)
Federal Register Volume 81, Number 235 (Wednesday, December 7, 2016)
Notices
Pages 88302-88304
From the Federal Register Online via the Government Publishing Office www.gpo.gov
FR Doc No: 2016-29290
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SECURITIES AND EXCHANGE COMMISSION
Release No. 34-79445; File No. SR-NYSEArca-2016-152
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposal to Change Representation Regarding Investments by PowerShares DB Trust Issued Receipts Listed Under Commentary .02 to NYSE Arca Equities Rule 8.200
December 1, 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 November 18, 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.
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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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Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Exchange proposes to change a representation regarding investments by the following issues, which are currently listed on the Exchange under Commentary .02 to NYSE Arca Equities Rule 8.200 (Trust Issued Receipts): PowerShares DB Commodity Index Tracking Fund; PowerShares DB Energy Fund; PowerShares DB Oil Fund; PowerShares DB Precious Metals Fund; PowerShares DB Gold Fund; PowerShares DB Silver Fund; PowerShares DB Base Metals Fund; PowerShares DB Agriculture Fund; PowerShares DB G10 Currency Harvest Fund; PowerShares DB US Dollar Index Bullish Fund; and PowerShares DB US Dollar Index Bearish Fund. 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.
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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.
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Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change
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Purpose
The Exchange currently lists and trades shares of the following securities under Commentary .02 to NYSE Arca Equities Rule 8.200 (Trust Issued Receipts): PowerShares DB Commodity Index Tracking Fund; PowerShares DB Energy Fund; PowerShares DB Oil Fund; PowerShares DB Precious Metals Fund; PowerShares DB Gold Fund; PowerShares DB Silver Fund; PowerShares DB Base Metals Fund; PowerShares DB Agriculture Fund; PowerShares DB G10 Currency Harvest Fund; PowerShares DB US Dollar Index Bullish Fund; and PowerShares DB US Dollar Index Bearish Fund (each a ``Fund'' and, collectively, the ``Funds'').\4\
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\4\ The Shares of each Fund represent beneficial ownership interests in the Fund's net assets, as described in the registration statements for the Funds. See the following registration statements on Form S-3 or Form S-1 under the Securities Act of 1933: (1) Registration statement on Form S-3ASR, PowerShares DB Commodity Index Tracking Fund (No. 333-203054, dated March 27, 2015); (2) registration statement on Form S-3, PowerShares DB G10 Currency Harvest Fund (No. 333-192126, December 6, 2013); (3) registration statement on Form S-3ASR, PowerShares DB US Dollar Index Bullish Fund (No. 333-207089-01, September 23, 2015); (4) registration statement on Form S-1, PowerShares DB US Dollar Index Bearish Fund (No. 333-193224, March 14, 2014); (5) registration statement on Form S-3, PowerShares DB Energy Fund, PowerShares DB Oil Fund, PowerShares DB Precious Metals Fund, PowerShares DB Gold Fund, PowerShares DB Base Metals Fund, (No. 333-209437-01--333-209437-05, March 4, 2016); (6) registration statement on Form S-1, PowerShares DB Silver Fund (No. 333-193222, March 14, 2014); and (7) registration statement on Form S-3ASR, PowerShares DB Agriculture Fund (No. 333-208439-01, dated December 10, 2015) (collectively, ``Registration Statements'').
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Shares of the Funds were originally approved for listing on the American Stock Exchange LLC (``Amex'') (now known as NYSE MKT LLC),\5\ and were subsequently approved for listing on the Exchange.\6\ The Funds' Managing Owner is Invesco PowerShares Capital Management LLC.
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\5\ See Securities Exchange Act Release Nos. 53105 (January 11, 2006), 71 FR 3129 (January 19, 2006) (SR-Amex-2005-59) (approving listing of DB Commodity Index Tracking Fund (now known as PowerShares DB Commodity Index Tracking Fund)); 55292 (February 14, 2007), 72 FR 8406 (February 26, 2007) (SR-Amex-2006-86) (approving listing of the PowerShares DB US Dollar Index Bullish Fund and PowerShares DB US Dollar Index Bearish Fund); 54450 (September 14, 2006), 71 FR 55230 (September 21, 2006) (SR-Amex-2006-44) (approving listing of DB Currency Index Value Fund (now known as PowerShares DB G10 Currency Harvest Fund)); 55029 (December 29, 2006), 72 FR 806 (January 8, 2007) (SR-Amex-2006-76) (approving listing of PowerShares DB Energy Fund, PowerShares DB Oil Fund, PowerShares DB Precious Metals Fund, PowerShares DB Gold Fund, PowerShares DB Silver Fund, the PowerShares DB Base Metals Fund, and PowerShares DB Agriculture Fund) (collectively, ``Amex Filings'').
\6\ See Securities Exchange Act Release No. 58993 (November 21, 2008), 73 FR 72548 (November 28, 2008) (SR-NYSEArca-2008-128) (order approving listing on the Exchange of the Funds) (``NYSE Arca Order''). The Funds were previously traded on the Exchange pursuant to unlisted trading privileges (``UTP''). See Securities Exchange Act Release Nos. 53736 (April 27, 2006), 71 FR 26582 (May 5, 2006) (SR-PCX-2006-22) (order approving UTP trading of DB Commodity Index Tracking Fund); 55453 (March 13, 2007), 72 FR 13333 (March 21, 2007) (SR-NYSEArca-2006-62) (order approving UTP trading of PowerShares DB Agriculture Fund and other PowerShares commodity-based funds) (collectively, ``UTP Filings'').
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Each Fund seeks to track an index of commodity or currency futures. As described in the Amex Filings and UTP Filings, the cash proceeds of the issuance of each Fund's Shares are invested in cash and United States Treasury Securities (``Treasury Securities''), some of which are deposited with a futures commission merchant as margin for futures positions. The Exchange proposes to add to this representation that a Fund may gain exposure to Treasury Securities, for cash management and/
or margin purposes, through an investment in (1) government money market funds (as defined in Rule 2a-7 under the Investment Company Act of 1940 (``1940 Act'') \7\), and (2) exchange-traded funds that track indexes that measure the performance of U.S. Treasury obligations with a maximum remaining maturity of up to 12 months (``T-Bill ETFs'').\8\ The Funds may receive dividends or distributions of capital gains from such investment in government money market funds and T-Bill ETFs.
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\7\ 15 U.S.C. 80a-1. Rule 2a-7(a)(14) under the 1940 Act states that government money market fund means a money market fund that invests 99.5 percent or more of its total assets in cash, government securities, and/or repurchase agreements that are collateralized fully.
\8\ The T-Bill ETFs in which a Fund may invest may be affiliated with the Managing Owner and will be registered under the 1940 Act. For purposes of this filing, T-Bill ETFs include Investment Company Units (as described in NYSE Arca Equities Rule 5.2(j)(3)); and Managed Fund Shares (as described in NYSE Arca Equities Rule 8.600). Such T-Bill ETFs all will be listed and traded in the U.S. on registered exchanges. The Funds will not invest in inverse, leveraged or inverse leveraged (e.g., -1X, 2X, -2X, 3X or -3X) T-
Bill ETFs.
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The Funds' Managing Owner (Invesco PowerShares Capital Management LLC) represents that the proposed change to permit investment in T-Bill ETFs, as described above, is consistent with each Fund's investment objective, and will further assist the Funds' Managing Owner to achieve each Fund's investment objective. Specifically, by investing in government money market funds and T-Bill ETFs, in addition to U.S. Treasury Securities, each Fund will have additional flexibility to gain exposure to Treasury Securities. Except for the changes noted above, all other representations made in the Amex Filings and UTP Filings remain unchanged. The Funds will continue to comply with all initial and continued listing requirements under NYSE Arca Equities Rule 8.200.
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Statutory Basis
The basis under the Act for this proposed rule change is the requirement under Section 6(b)(5) \9\ 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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\9\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change is designed to prevent fraudulent and manipulative acts and practices in that trading in government money market funds and T-Bill ETFs occurs in transparent, liquid markets in the U.S. By investing in government money market funds and T-Bill ETFs, in addition to U.S. Treasury Securities, each Fund will have additional flexibility to gain exposure to Treasury Securities. The Adviser represents that the respective investment objectives of the Funds have not changed.
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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, which would permit each Fund to utilize government money market funds and T-Bill ETFs for cash management and/
or margin purposes, will enhance competition among issues of Trust Issued Receipts that invest in commodity and currency futures.
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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.
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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 \10\ and Rule 19b-4(f)(6) thereunder.\11\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 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.
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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 each Fund is already permitted to seek exposure to Treasury Securities, and the proposed rule change will merely provide each Fund with additional flexibility to gain such exposure through investments in government money market funds and T-Bill ETFs, which trade in transparent, liquid markets in the United States. Therefore, the Commission designates
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the proposed rule change to be operative upon filing.\12\
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\12\ 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).
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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)\13\ of the Act to determine whether the proposed rule change should be approved or disapproved.
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\13\ 15 U.S.C. 78s(b)(2)(B).
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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-2016-152 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-2016-152. 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-2016-152 and should be submitted on or December 28, 2016.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
FR Doc. 2016-29290 Filed 12-6-16; 8:45 am
BILLING CODE 8011-01-P
