
[Federal Register Volume 79, Number 161 (Wednesday, August 20, 2014)]
[Notices]
[Pages 49350-49355]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-19703]


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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.
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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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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.
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    \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.''
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    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.
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    \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/.
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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.
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    \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).
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    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.
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    \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'').
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    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.
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    \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).
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The New London Silver Price Mechanism \13\
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    \13\ The description herein of the London Silver Price mechanism 
is based, in part, on the ETFS Silver Registration Statement.
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    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.
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    \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.
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    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.
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    \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.
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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\
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    \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.
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    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\
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    \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.
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    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.
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    \18\ See supra, notes 6-10.
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    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\
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    \19\ See supra, notes 6-10.
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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.
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    \20\ 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, 
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.
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    \21\ See supra, note 5.
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    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\
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    \22\ See supra, notes 6-10.
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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\
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    \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.
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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 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\
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    \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).
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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) \26\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \26\ 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-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\
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    \27\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-19703 Filed 8-19-14; 8:45 am]
BILLING CODE 8011-01-P


