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Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices
jbell on DSKJLSW7X2PROD with NOTICES2

designed to foster cooperation and coordination with persons engaged in facilitating transactions in securities, 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. Further, the differences in the proposals compared to the analogous NYSE American provisions appropriately reflect the differences between the two exchanges. The Exchange believes that ensuring that its systems are appropriately described in the BSTX Rules facilitates market participants review of such Rules, which serves to remove impediments to and perfect the mechanism of a free and open market and a national market system by ensuring that market participants can easily navigate, understand and comply with the Exchanges rulebook. Therefore, the Exchange believes its proposals are consistent with Section 6b5 of the Exchange Act.305
Trading and Listing Rules for ExchangeTrade Products Rule 28000 Series The Exchange proposes as the Rule 28000 Series rules related to trading and listing ETPs. These proposed Rules allow for an array of different types of ETPs to be traded and listed on the Exchange and would provide individuals and institutions with diverse range of products in which to invest. The proposed Rules would set forth requirements and initial as well as continued listing standards for a variety of ETPs noted in the bulleted list below.
The proposed Rules have been adapted from, and are substantially similar to, rules found in the NYSE Arca Inc.
NYSE Arca rulebook. Below is a list of the proposed Rules in the 28000
Series and the NYSE Arca rules on which it is based:
Proposed Rule 28000 Investment Company Units is based on NYSE Arca Rule 5.2Ej3
Proposed Rule 28001 Equity IndexLinked Securities, Commodity-Linked Securities, Currency-Linked Securities, Fixed Income Index-Linked Securities, Futures-Linked Securities and Multifactor Index-Linked Securities is based on NYSE Arca Rule 5.2Ej6
Proposed Rule 28002 ExchangeTraded Fund Shares is based on NYSE
Arca Rule 5.2Ej8
Proposed Rule 28003 Trust Issued Receipts is based on NYSE Arca Rule 8.200E
Proposed Rule 28004 CommodityBased Trust Shares is based on NYSE
Arca Rule 8.201E
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Proposed Rule 28005 Managed Fund Shares is based on NYSE Arca Rule 8.600E
Proposed Rule 28006 Active Proxy Portfolio Shares is based on NYSE Arca Rule 8.601E
Proposed Rule 28007 Managed Portfolio Shares is based on NYSE Arca Rule 8.900E
For each Rule in the 28000 Series, the Exchange proposes provisions that are substantially similar to provisions in the NYSE Arca rulebook, with adjustments made to ensure appropriate reference to concepts in other parts of the BSTX
Rulebook. For example, in cases where the precedent NYSE Arca rule referred to a specific provision regarding delisting procedures, the Exchange has modified the proposed Rules to reference to the proposed Rule 27000
Series, which set forth the Exchanges proposed Rules governing suspension and delisting.306 As another example, the proposed definition of ETP
Holder, which closely parallels the same definition in the NYSE Arca Rulebook, but is located in a different place in the proposed BSTX Rulebook as compared to the NYSE Arca rulebook.307 In addition, certain products or concepts that are supported by NYSE Arca but are not supported by the Exchange have not been included in the proposal. For example, the Exchange notes that the NYSE Arca rulebook provides for trading of a Nasdaq100
Index product, Currency Trust Shares, and Commodity Index Trust Shares,308
whereas the Exchange will not support trading in these specific ETPs and therefore has not included provisions relating to the listing and trading of such products in its proposal. The discussion below describes other notable variations from the NYSE Arca rules set forth in the proposed Rule Series 28000.
The Exchange believes that the proposals in the Rule 28000 Series help remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general promote the protecting of investors and the public interest because they will facilitate an additional exchange on which ETPs can be listed 306 As another example, the concept of Core Trading Hours in the NYSE Arca Rulebook as defined therein has no analog in the BSTX
Rulebook. The BSTX Rulebook only allows for Regular Trading Hours and thus the proposal references the concept of Regular Trading Hours.
307 See proposed IM280001g. In the NYSE Arca rule book, the comparable definition is set forth in NYSE Arca Rulebook Rule 1.
308 Specifically, Section 2 of Rule 8E in the NYSE Arca rulebook allows for trading of a Nasdaq100 Index product, Currency Trust Shares, and Commodity Index Trust Shares.

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and traded. This adds competition to the marketplace for the listing of ETPs, providing greater choice for issuers of ETPs and an additional trading venue on which market participants can trade such products. As noted, the proposed Rule 28000 Series is substantially similar to the rules of NYSE Arca relating to ETPs, with only nonsubstantive differences, which differences appropriately reflect the differences between the two exchanges e.g., internal cross-references within each rule book or excluding provisions related to products that the Exchange will not support.
Fees Rule 29000 Series The Exchange proposes to set forth as its Rule 29000 Series Fees the Exchanges authority to prescribe reasonable dues, fees, assessments or other charges as it may deem appropriate. As provided in proposed Rule 29000 Authority to Prescribe Dues, Fees, Assessments and Other Charges, these fees may include membership dues, transaction fees, communication and technology fees, regulatory fees, and other fees, which will be equitably allocated among BSTX
Participants, issuers, and other persons using the Exchanges facilities.309
Proposed Rule 29010 Regulatory Revenues generally provides that any revenues received by the Exchange from fees derived from its regulatory function or regulatory fines will not be used for non-regulatory purposes or distributed to the stockholder, but rather, shall be applied to fund the legal and regulatory operations of the Exchange including surveillance and enforcement activities.
The Exchange believes that the proposed Rule 29000 Series Fees is consistent with Sections 6b5 of the Exchange Act because these proposed rules are designed to protect investors and the public interest by setting forth the Exchanges authority to assess fees on BSTX Participants, which would be used to operate the BSTX System and surveil BSTX for compliance with applicable laws and rules. The Exchange believes that the proposed Rule 29000 Series Fees is also consistent with Sections 6b3 of the Exchange Act 310 because the proposed Rules specify that all fees assessed by the Exchange shall be equitably allocated among BSTX Participants, issuers and other persons using the 309 Proposed Rule 29000 further provides authority for the Exchange to charge BSTX
Participants a regulatory transaction fee pursuant to Section 31 of the Exchange Act 15 U.S.C. 78ee and that the Exchange will set forth fees pursuant to publicly available schedule of fees.
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