Justia Agencies And Commissions Securities And Exchange Commission Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Order Granting Approval of Proposed Rule Change, as Modified by Amendment No. 8 Thereto, to List and Trade Under BZX Rule 14.11(c)(4) Shares of the Following Series of VanEck Vectors ETF Trust: VanEck Vectors AMT-Free 6-8 Year Municipal Index ETF; VanEck Vectors AMT-Free 8-12 Year Municipal Index ETF; and VanEck Vectors AMT-Free 12-17 Year Municipal Index ETF, 47217-47222 [2016-17089]

Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Order Granting Approval of Proposed Rule Change, as Modified by Amendment No. 8 Thereto, to List and Trade Under BZX Rule 14.11(c)(4) Shares of the Following Series of VanEck Vectors ETF Trust: VanEck Vectors AMT-Free 6-8 Year Municipal Index ETF; VanEck Vectors AMT-Free 8-12 Year Municipal Index ETF; and VanEck Vectors AMT-Free 12-17 Year Municipal Index ETF, 47217-47222 [2016-17089]

Download as PDF Federal Register / Vol. 81, No. 139 / Wednesday, July 20, 2016 / Notices • Send an email to rule-comments@ sec.gov. Please include File Number SR– MSRB–2016–09 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549. All submissions should refer to File Number SR–MSRB–2016–09. 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 (https://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 MSRB. 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–MSRB– 2016–09 and should be submitted on or before August 10, 2016. For the Commission, pursuant to delegated authority.15 Jill M. Peterson, Assistant Secretary. [FR Doc. 2016–17094 Filed 7–19–16; 8:45 am] mstockstill on DSK3G9T082PROD with NOTICES BILLING CODE 8011–01–P 15 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 18:24 Jul 19, 2016 Jkt 238001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–78329; File No. SR– BatsBZX–2016–01] Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Order Granting Approval of Proposed Rule Change, as Modified by Amendment No. 8 Thereto, to List and Trade Under BZX Rule 14.11(c)(4) Shares of the Following Series of VanEck Vectors ETF Trust: VanEck Vectors AMT-Free 6–8 Year Municipal Index ETF; VanEck Vectors AMT-Free 8–12 Year Municipal Index ETF; and VanEck Vectors AMT-Free 12–17 Year Municipal Index ETF July 14, 2016. I. Introduction On March 29, 2016, Bats BZX Exchange, Inc. (‘‘Exchange’’ or ‘‘BZX’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to list and trade under BZX Rule 14.11(c)(4) the shares (‘‘Shares’’) of the following series of VanEck Vectors ETF Trust (‘‘Trust’’): VanEck Vectors AMTFree 6–8 Year Municipal Index ETF; VanEck Vectors AMT-Free 8–12 Year Municipal Index ETF; and VanEck Vectors AMT-Free 12–17 Year Municipal Index ETF (individually, ‘‘Fund’’ and, collectively, ‘‘Funds’’). The proposed rule change was published for comment in the Federal Register on April 18, 2016.3 On June 1, the Exchange filed Amendment No. 1 to the proposed rule change.4 On June 14, U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 77596 (April 18, 2016), 81 FR 22681 (‘‘Notice’’). 4 In Amendment No. 1, the Exchange: (a) Clarified the names of the exchange-traded funds (‘‘ETFs’’) by replacing references to ‘‘Market Vectors’’ with ‘‘VanEck Vectors’’; (b) added representations relating to continued listing compliance and Exchange delisting procedures in the event of noncompliance with respect to the proposal; (c) clarified certain holdings of the Funds by (i) replacing references to ‘‘to-be-announced’’ or ‘‘TBA’’ transactions with ‘‘when-issued’’ or ‘‘WI’’ transactions, (ii) deleting references to over-thecounter options on futures contracts, (iii) deleting statements relating to certain swaps, and (iv) deleting information relating to municipal bonds that are not included in the applicable underlying indices; (d) made conforming and clarifying changes in describing the calculation of net asset value of the Funds; (e) changed the creation unit size of the Funds from 100,000 Shares to 50,000 Shares; and (f) clarified that information with respect to the mid-point of the bid/ask spread would not be publicly available; and (g) added availability of information relating to the underlying indices. Because the changes in Amendment No. 1 to the proposed rule change clarify certain statements in the proposal and do not PO 00000 1 15 2 17 Frm 00063 Fmt 4703 Sfmt 4703 47217 2016, the Exchange filed Amendment No. 2 to the proposed rule change.5 On June 23, 2016, the Exchange filed Amendment No. 3 to the proposed rule change.6 On July 8, 2016, the Exchange filed: (1) Amendment No. 4 to the proposed rule change; 7 (2) Amendment No. 5 to the proposed rule change; 8 and (3) Amendment No. 6 to the proposed rule change.9 On July 12, 2016, the materially alter the substance of the proposed rule change or raise any novel regulatory issues, it is not subject to notice and comment. Amendment No. 1, which amended and replaced the Notice in its entirety, is available on the Commission’s Web site at: https://www.sec.gov/comments/sr-batsbzx-201601/batsbzx201601-2.pdf. 5 In Amendment No. 2, the Exchange: (a) Clarified the other portfolio holdings of the Funds with respect to other municipal bonds; (b) added statements with respect to certain swaps; (c) corrected a typographical error; and (d) clarified that each Fund will disclose on its Web site the identities and quantities of the portfolio of securities and other assets in the daily disclosed portfolio held by the Funds that formed the basis for each Fund’s calculation of net asset value at the end of the previous business day. Because the changes in Amendment No. 2 to the proposed rule change are technical in nature and do not materially alter the substance of the proposed rule change or raise any novel regulatory issues, it is not subject to notice and comment. Amendment No. 2, which amended and replaced the proposed rule change, as modified by Amendment No. 1 thereto, in its entirety, is available on the Commission’s Web site at: https://www.sec.gov/comments/sr-batsbzx-201601/batsbzx201601-3.pdf. 6 In Amendment No. 3, the Exchange: (a) Deleted extraneous language previously corrected by Amendment No. 2 to the proposed rule change relating to certain swaps; and (b) corrected a technical redundancy with respect to a defined term. Because the changes in Amendment No. 3 to the proposed rule change are technical in nature and do not materially alter the substance of the proposed rule change or raise any novel regulatory issues, it is not subject to notice and comment. Amendment No. 3, which amended and replaced the proposed rule change, as modified by Amendment No. 2 thereto, in its entirety, is available on the Commission’s Web site at: https:// www.sec.gov/comments/sr-batsbzx-2016-01/ batsbzx201601-4.pdf. 7 In Amendment No. 4, the Exchange corrected errors made with respect to the names of the Funds by adding ‘‘AMT-Free’’ to certain references made in the proposal. Because the changes in Amendment No. 4 to the proposed rule change are technical in nature and do not materially alter the substance of the proposed rule change or raise any novel regulatory issues, it is not subject to notice and comment. Amendment No. 4, which amended and replaced the proposed rule change, as modified by Amendment No. 3 thereto, in its entirety, is available on the Commission’s Web site at: https:// www.sec.gov/comments/sr-batsbzx-2016-01/ batsbzx201601-5.pdf. 8 On July 8, 2016, the Exchange withdrew Amendment No. 5 to the proposed rule change. 9 In Amendment No. 6, the Exchange further corrected the names of the Funds by removing references to ‘‘AMT-Free.’’ Because the changes in Amendment No. 6 to the proposed rule change are technical in nature and do not materially alter the substance of the proposed rule change or raise any novel regulatory issues, it is not subject to notice and comment. Amendment No. 6, which amended and replaced the proposed rule change, as modified by Amendment No. 4 thereto, in its entirety, is E:\FR\FM\20JYN1.SGM Continued 20JYN1 47218 Federal Register / Vol. 81, No. 139 / Wednesday, July 20, 2016 / Notices Exchange filed Amendment No. 7 to the proposed rule change.10 On July 13, 2016, the Exchange filed Amendment No. 8 to the proposed rule change.11 The Commission received one comment on the proposed rule change.12 This order grants approval of the proposed rule change, as modified by Amendment No. 8 thereto. II. Exchange’s Description of the Proposal mstockstill on DSK3G9T082PROD with NOTICES The Exchange proposes to list and trade Shares of the following series of the Trust under BZX Rule 14.11(c)(4): VanEck Vectors AMT-Free 6–8 Year Municipal Index ETF; VanEck Vectors AMT-Free 8–12 Year Municipal Index ETF; and VanEck Vectors AMT-Free 12– 17 Year Municipal Index ETF. The Shares will be offered by the Trust, which was established as a Delaware statutory trust on March 15, 2001. The Trust is registered with the Commission as an open-end investment company and has filed a registration statement on behalf of the Funds on Form N–1A available on the Commission’s Web site at: https:// www.sec.gov/comments/sr-batsbzx-2016-01/ batsbzx201601-6.pdf. 10 In Amendment No. 7, the Exchange (a) further corrected errors in the names of the Funds; and (b) clarified that (i) all statements and representations regarding each Fund’s 80% Investment Policy (as defined herein) constitute continued listing requirements for listing the Shares on the Exchange, (ii) the issuer has represented to the Exchange that it will advise the Exchange of any failure by a Fund to comply with the continued listing requirements (or any changes made with respect to a Fund’s 80% Investment Policy), and, pursuant to its obligations under Section 19(g)(1) of the Act, the Exchange will surveil for compliance with the continued listing requirements, and (iii) if the Fund is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under Exchange Rule 14.12. See infra note 16 and accompanying text. Because the changes in Amendment No. 7 to the proposed rule change do not materially alter the substance of the proposed rule change or raise any novel regulatory issues, it is not subject to notice and comment. Amendment No. 7, which amended and replaced the proposed rule change, as modified by Amendment No. 6 thereto, in its entirety, is available on the Commission’s Web site at: https:// www.sec.gov/comments/sr-batsbzx-2016-01/ batsbzx201601-7.pdf. 11 In Amendment No. 8, the Exchange corrected an error identifying the Amendment number. Because the changes in Amendment No. 8 to the proposed rule change do not materially alter the substance of the proposed rule change or raise any novel regulatory issues, it is not subject to notice and comment. Amendment No. 8, which amended and replaced the proposed rule change, as modified by Amendment No. 7 thereto, in its entirety, is available on the Commission’s Web site at: https:// www.sec.gov/comments/sr-batsbzx-2016-01/ batsbzx201601-8.pdf. 12 See Letter from Anonymous dated May 3, 2016, available at: https://www.sec.gov/comments/srbatsbzx-2016-01/batsbzx201601-1.htm (commenting that the proposed rule change was ‘‘good’’). VerDate Sep<11>2014 18:24 Jul 19, 2016 Jkt 238001 (‘‘Registration Statement’’) with the Commission.13 Van Eck Associates Corporation will be the investment adviser (‘‘Adviser’’) to the Funds. The Adviser will serve as the administrator for the Fund. The Bank of New York Mellon will serve as the custodian and transfer agent for the Funds. Van Eck Securities Corporation will be the distributor of the Shares. Barclays Inc. will be the index provider. The Exchange has made the following representations and statements in describing the Funds and their respective investment strategies, including the Funds’ portfolio holdings and investment restrictions.14 A. Exchange’s Description of the Funds’ Principal Investments According to the Exchange, the Funds and the Shares will seek to track the performance of a benchmark index that measures the investment-grade segment of the U.S. municipal bond market, as described below. Specifically, with respect to each of the VanEck Vectors AMT-Free 6–8 Year Municipal Index ETF, VanEck Vectors AMT-Free 8–12 Year Municipal Index ETF, and VanEck Vectors AMT-Free 12–17 Year Municipal Index ETF, the Shares will replicate as closely as possible, before fees and expense, the price and yield performance of the Barclays AMT-Free6–8 Year Intermediate Continuous Municipal Index (‘‘6–8 Year Index’’); the Barclays AMT-Free-8–12 Year Intermediate Continuous Municipal Index (‘‘8–12 Year Index’’); and the Barclays AMT-Free-12–17 Year Intermediate Continuous Municipal Index (‘‘12–17 Year Index,’’ and together with the 6–8 Year Index and the 8–12 Year Index, collectively, ‘‘Indices’’), respectively. To be included in each of the Funds, the Exchange states that a bond must be rated Baa3/BBB- or higher by at least two of the following ratings agencies if all three agencies rate the security: Moody’s, S&P and Fitch. If only two of 13 See Registration Statement on Form N–1A (File Nos. 333–123257 and 811–10325) dated October 29, 2015. According to the Exchange, the Trust has obtained certain exemptive relief from the Commission under the Investment Company Act of 1940 (‘‘1940 Act’’). See Investment Company Act Release No. 28021 (October 24, 2007) (File No. 812– 13426). 14 The Commission notes that additional information regarding the Funds, the Trust, and the Shares, including investment strategies, risks, creation and redemption procedures, fees, portfolio holdings disclosure policies, calculation of net asset value (‘‘NAV’’), distributions, and taxes, among other things, can be found in the Notice, as modified by Amendment No. 8 thereto, and the Registration Statement, as applicable. See Notice and Registration Statement, supra notes 3 and 13, respectively. See also Amendment No. 8 to the proposed rule change, supra note 11. PO 00000 Frm 00064 Fmt 4703 Sfmt 4703 the three agencies rate the security, the lower rating is used to determine index eligibility. If only one of the three agencies rates a security, the rating must be at least Baa3/BBB-. Potential constituents must have an outstanding par value of at least $7 million and be issued as part of a transaction of at least $75 million. The bonds must be fixed rate, have a dated date within the last five years, and have an effective maturity that tracks each respective Fund. The following types of bonds are excluded from each of the Funds: Bonds subject to the alternative minimum tax, taxable municipal bonds, floating rate bonds, and derivatives. The Funds are calculated using a market value weighting methodology. The composition of each of the Funds is rebalanced monthly. Interest and principal payments earned by the component securities are held in the Fund without a reinvestment return until month end when they are removed. Qualifying securities issued, but not necessarily settled, on or before the month end rebalancing date qualify for inclusion in each of the Funds in the following month. The Exchange notes that when-issued transactions (‘‘WIs’’) 15 representing securities in the 6–8 Year, 8–12 Year, and 12–17 Year Indices may be used by the Fund in seeking performance that corresponds to the 6– 8 Year, 8–12 Year, and 12–17 Year Indices, respectively, and, in such cases, would count towards the respective Fund’s 80% policy. Each of the Funds normally will invest at least 80% of its total assets in securities that comprise the Fund’s corresponding benchmark index. The Funds will be comprised of publicly traded municipal bonds that cover the U.S. dollar-denominated intermediate term tax-exempt bond market with final maturities corresponding to the Index timeframe. Each Fund’s 80% investment policy is non-fundamental and may be changed without shareholder approval upon 60 days’ prior written notice to shareholders.16 15 According to the Exchange, when-issued is a transaction that is made conditionally because a security has been authorized but not yet issued. Treasury securities, stock splits, and new issues of stocks and bonds are all traded on a when-issued basis. 16 While each Fund’s policy to invest 80% of its total assets in securities that comprise the Fund’s benchmark index (‘‘80% Investment Policy’’) is non-fundamental and may be changed without shareholder approval upon 60 days’ prior written notice to shareholders, the Exchange represents that, notwithstanding the foregoing, all statements and representations made in this filing regarding (a) the description of the portfolios, (b) limitations on portfolio holdings or reference assets (including, for example, each Fund’s 80% Investment Policy), or (c) the applicability of Exchange rules and E:\FR\FM\20JYN1.SGM 20JYN1 Federal Register / Vol. 81, No. 139 / Wednesday, July 20, 2016 / Notices mstockstill on DSK3G9T082PROD with NOTICES B. Exchange’s Description of the Funds’ Other Investments While each of the Funds normally will invest at least 80% of its total assets in securities that compose the 6–8 Year, 8–12 Year, and 12–17 Year Indices, as described above, the Funds may invest their remaining assets in other financial instruments, as described below. The Funds may invest remaining assets in securities not included in the respective Indices, including only the following instruments: Municipal bonds (not described above); money market instruments, including repurchase agreements or other funds which invest exclusively in money market instruments; convertible securities; structured notes (notes on which the amount of principal repayment and interest payments are based on the movement of one or more specified factors, such as the movement of a particular stock or stock index); 17 certain derivative instruments described below; and, to the extent permitted by the 1940 Act, affiliated and unaffiliated funds, such as open-end or closed-end management investment companies, including other ETFs.18 In addition to the use described above, WIs not included in each of the Indices may also be used by each of the Funds in managing cash flows. The Funds may invest in repurchase agreements with commercial banks, brokers or dealers to generate income from its excess cash balances and to invest securities lending cash collateral. surveillance procedures shall constitute continued listing requirements for listing the Shares on the Exchange. As noted herein, the issuer also has represented to the Exchange that it will advise the Exchange of any failure by a Fund to comply with the continued listing requirements (or any changes made with respect to a Fund’s 80% Investment Policy), and, pursuant to its obligations under Section 19(g)(1) of the Act, the Exchange will surveil for compliance with the continued listing requirements. If the Fund is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under Exchange Rule 14.12. 17 Structured notes are derivative securities for which the amount of principal repayment and/or interest payments is based on the movement of one or more factors, including, but not limited to, currency exchange rates, interest rates (such as the prime lending rate or LIBOR), referenced bonds, and stock indices. 18 For purposes of this proposal, ETFs include: Index Fund Shares (as described in BZX Rule 14.11(c)); Portfolio Depositary Receipts (as described in BZX Rule 14.11(b)); and Managed Fund Shares (as described in BZX Rule 14.11(i)). The ETFs all will be listed and traded in the U.S. on registered exchanges. The Funds may invest in the securities of ETFs registered under the 1940 Act consistent with the requirements of Section 12(d)(1) of the 1940 Act, or any rule, regulation or order of the Commission or interpretation thereof. While the Funds may invest in inverse ETFs, the Funds will not invest in leveraged (e.g., 2X, -2X, 3X, or -3X) ETFs. VerDate Sep<11>2014 18:24 Jul 19, 2016 Jkt 238001 The Funds may use exchange-traded futures contracts and exchange-traded options thereon, together with positions in cash and money market instruments, to simulate full investment. The Funds may use cleared or noncleared index, interest rate or credit default swap agreements. According to the Exchange, interest rate swaps and credit default swaps on indexes currently may be cleared; however, credit default swaps on a specific security are currently uncleared. The Funds may invest in exchangetraded warrants, which are equity securities in the form of options issued by a corporation which give the holder the right to purchase stock, usually at a price that is higher than the market price at the time the warrant is issued. The Funds may invest in participation notes, which are issued by banks or broker-dealers and are designed to offer a return linked to the performance of a particular underlying equity security or market. The Funds will only enter into transactions in derivative instruments with counterparties that the Adviser reasonably believes are capable of performing under the contract and will post collateral as required by the counterparty.19 C. Exchange’s Description of the Indices and Bats BZX Rule 14.11(c)(4) The Exchange is submitting this proposed rule change because the Indices underlying the corresponding Funds do not meet all of the ‘‘generic’’ listing requirements of BZX Rule 14.11(c)(4) applicable to the listing of Index Fund Shares based on fixed income securities indexes. 1. 6–8 Year Index. According to the Exchange, the 6–8 Year Index meets all of the requirements of BZX Rule 14.11(c)(4) except for those set forth in BZX Rule 14.11(c)(4)(B)(i)(b).20 Specifically, as of December 31, 2015, only 9.8% of the weight of the 6–8 Year Index components have a minimum 19 The Funds will seek, where possible, to use counterparties, as applicable, whose financial status is such that the risk of default is reduced; however, the risk of losses resulting from default is still possible. The Adviser will evaluate the creditworthiness of counterparties on a regular basis. In addition to information provided by credit agencies, the Adviser will review approved counterparties using various factors, which may include the counterparty’s reputation, the Adviser’s past experience with the counterparty and the price/market actions of debt of the counterparty. 20 BZX Rule 14.11(c)(4)(B)(i)(b) provides that components that in the aggregate account for at least 75% of the weight of the index or portfolio each shall have a minimum original principal amount outstanding of $100 million or more. PO 00000 Frm 00065 Fmt 4703 Sfmt 4703 47219 original principal amount outstanding of $100 million or more. According to the Exchange, as of December 31, 2015, 95.1% of the weight of the 6–8 Year Index components was comprised of individual maturities that were part of an entire municipal bond offering with a minimum original principal amount outstanding $100 million or more for all maturities of the offering. In addition, the total dollar amount outstanding of issues in the 6– 8 Year Index was approximately $57.4 billion, and the average dollar amount outstanding of issues in the 6–8 Year Index was approximately $19.8 million. Further, the most heavily weighted component represented 1.07% of the weight of the 6–8 Year Index, and the five most heavily weighted components represented 3.0% of the weight of the 6– 8 Year Index.21 In addition, the Exchange notes that the 6–8 Year Index is comprised of approximately 2,894 issues, and that 63.8% of the 6–8 Year Index weight consisted of issues with a rating of AA/Aa2 or higher. The 6–8 Year Index value, calculated and disseminated at least once daily, as well as the components of the 6–8 Year Index and their percentage weighting, will be available from major market data vendors. In addition, the portfolio of securities held by the Fund will be disclosed on the Fund’s Web site. 2. 8–12 Year Index. According to the Exchange, the 8–12 Year Index for the Fund meets all of the requirements of BZX Rule 14.11(c)(4), except for those set forth in BZX Rule 14.11(c)(4)(B)(i)(b).22 Specifically, as of December 31, 2015, only 5.7% of the weight of the 8–12 Year Index components have a minimum original principal amount outstanding of $100 million or more. According to the Exchange, as of December 31, 2015, 95.1% of the weight of the 8–12 Year Index components was comprised of individual maturities that were part of an entire municipal bond offering with a minimum original principal amount outstanding of $100 million or more for all maturities of the offering. In addition, the total dollar amount outstanding of issues in the 8– 12 Year Index was approximately $108.6 billion, and the average dollar amount outstanding of issues in the 8– 12 Year Index was approximately $19.2 21 BZX Rule 14.11(c)(4)(B)(i)(d) provides that no component fixed-income security (excluding Treasury Securities, as defined therein) shall represent more than 30% of the weight of the index or portfolio, and the five most heavily weighted component fixed-income securities in the index or portfolio shall not in the aggregate account for more than 65% of the weight of the index or portfolio. 22 See supra note 20. E:\FR\FM\20JYN1.SGM 20JYN1 mstockstill on DSK3G9T082PROD with NOTICES 47220 Federal Register / Vol. 81, No. 139 / Wednesday, July 20, 2016 / Notices million. Further, the most heavily weighted component represented 0.26% of the weight of the 8–12 Year Index, and the five most heavily weighted components represented 1.04% of the weight of the 8–12 Year Index.23 In addition, the Exchange represents that the 8–12 Year Index is comprised of approximately 5,662 issues, and that 64.7% of the 8–12 Year Index weight consisted of issues with a rating of AA/ Aa2 or higher. The 8–12 Year Index value, calculated and disseminated at least once daily, as well as the components of the 8–12 Year Index and their percentage weighting, will be available from major market data vendors. In addition, the portfolio of securities held by the Fund will be disclosed on the Fund’s Web site. 3. 12–17 Year Index. According to the Exchange, the 12–17 Year Index meets all of the requirements of BZX Rule 14.11(c)(4), except for those set forth in BZX Rule 14.11(c)(4)(B)(i)(b).24 Specifically, as of December 31, 2015, only 8.3% of the weight of the 12–17 Year Index components have a minimum original principal amount outstanding of $100 million or more. According to the Exchange, as of December 31, 2015, 95.3% of the weight of the 12–17 Year Index components was comprised of individual maturities that were part of an entire municipal bond offering with a minimum original principal amount outstanding $100 million or more for all maturities of the offering. In addition, the total dollar amount outstanding of issues in the 12– 17 Year Index was approximately $123.5 billion, and the average dollar amount outstanding of issues in the 12– 17 Year Index was approximately $20 million. Further, the most heavily weighted component represented 0.29% of the weight of the 12–17 Year Index, and the five most heavily weighted components represented 1.11% of the weight of the 12–17 Year Index.25 The Exchange further represents that the 12– 17 Year Index is comprised of approximately 6,171 issues, and that 61.2% of the 12–17 Year Index weight consisted of issues with a rating of AA/ Aa2 or higher. The 12–17 Year Index value, calculated and disseminated at least once daily, as well as the components of the 12–17 Year Index and their percentage weighting, will be available from major market data vendors. In addition, the portfolio of securities held by the Fund will be disclosed on the Fund’s Web site. 23 See supra note 21. supra note 20. 25 See supra note 21. 24 See VerDate Sep<11>2014 18:24 Jul 19, 2016 Jkt 238001 D. Additional Exchange Representations The Exchange represents that: (1) Except for BZX Rule 14.11(c)(4)(B)(i)(b), the 6–8 Year Index, the 8–12 Year Index, and the 12–17 Year Index currently and will continue to satisfy all of the generic listing standards under BZX Rule 14.11(c)(4); (2) the continued listing standards under BZX Rule 14.11(c) applicable to Index Fund Shares will apply to the Shares of each Fund; and (3) the Trust is required to comply with Rule 10A–3 under the Act 26 for the initial and continued listing of the Shares of each Fund. In addition, the Exchange represents that the Shares of the Funds will comply with all other requirements applicable to Index Fund Shares including, but not limited to, requirements relating to the dissemination of key information such as the value of the Indices and the Intraday Indicative Value (‘‘IIV’’), rules governing the trading of equity securities, trading hours, trading halts, surveillance, and the information circular, as set forth in Exchange rules applicable to Index Fund Shares and the orders approving such rules. III. Discussion and Commission’s Findings After careful review, the Commission finds that the proposed rule change is consistent with the requirements of Section 6 of the Act 27 and the rules and regulations thereunder applicable to a national securities exchange.28 In particular, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act,29 which requires, among other things, that the Exchange’s rules be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to 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. The Commission also finds that the proposal to list and trade the Shares on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the Act,30 which sets forth Congress’ finding that it is in the CFR 240.10A–3. U.S.C. 78f. 28 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 29 17 U.S.C. 78f(b)(5). 30 15 U.S.C. 78k–1(a)(1)(C)(iii). PO 00000 26 17 27 15 Frm 00066 Fmt 4703 Sfmt 4703 public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure the availability to brokers, dealers, and investors of information with respect to quotations for, and transactions in, securities. Quotation and last-sale information for the Shares will be available via the Consolidated Tape Association (‘‘CTA’’). The current value of the Indices will be widely disseminated by one or more major market data vendors 31 at least once per day. In addition, during Regular Trading Hours 32 an IIV for the Shares of the Funds will be disseminated by one or more major market data vendors and updated at least every 15 seconds.33 On each business day, before commencement of trading in Shares during Regular Trading Hours on the Exchange, each Fund will disclose on its Web site the identities and quantities of the portfolio of securities and other assets in the daily disclosed portfolio held by the Funds that formed the basis for each Fund’s calculation of NAV at the end of the previous business day.34 31 The Exchange further states that the components of the Indices and their percentage weighting will be available from major market data vendors. 32 Regular Trading Hours are 9:30 a.m. to 4:00 p.m. Eastern Time. 33 According to the Exchange, several major market data vendors display and/or make widely available IIVs taken from the CTA or other data feeds. See Notice, as modified by Amendment No. 8 thereto, supra note 11, at n.29. 34 The NAV of each Fund will be determined each business day as of the close of trading (ordinarily 4:00 p.m. Eastern Time) on the Exchange. Any assets or liabilities denominated in currencies other than the U.S. dollar are converted into U.S. dollars at the current market rates on the date of valuation as quoted by one or more sources. The values of each Fund’s portfolio securities are based on the securities’ closing prices, when available. In the absence of a last reported sales price, or if no sales were reported, and for other assets for which market quotes are not readily available, values may be based on quotes obtained from a quotation reporting system, established market makers or by an outside independent pricing service. Fixed income securities, repurchase agreements, and money market instruments with maturities of more than 60 days are normally valued on the basis of quotes from brokers or dealers, established market makers, or an outside independent pricing service. Prices obtained by an outside independent pricing service may use information provided by market makers or estimates of market values obtained from yield data related to investments or securities with similar characteristics and may use a computerized grid matrix of securities and its evaluations in determining what it believes is the fair value of the portfolio securities. Short-term investments and money market instruments having a maturity of 60 days or less are valued at amortized cost. Futures contracts will be valued at the settlement price established each day by the board or exchange on which they are traded. Exchange-traded options will be valued at the closing price in the market where such contracts are principally traded. Swaps, structured notes, participation notes, convertible securities, and WIs will be valued based on valuations provided by independent, third-party E:\FR\FM\20JYN1.SGM 20JYN1 Federal Register / Vol. 81, No. 139 / Wednesday, July 20, 2016 / Notices mstockstill on DSK3G9T082PROD with NOTICES The daily disclosed portfolio will include, as applicable: the ticker symbol; CUSIP number or other identifier, if any; a description of the holding (including the type of holding, such as the type of swap); the identity of the security, index or other asset or instrument underlying the holding, if any; for options, the option strike price; quantity held (as measured by, for example, par value, notional value or number of shares, contracts, or units); maturity date, if any; coupon rate, if any; effective date, if any; market value of the holding; and the percentage weighting of the holding in each Fund’s portfolio. Quotation information for investment company securities (excluding ETFs) may be obtained through nationally recognized pricing services through subscription agreements or from brokers and dealers who make markets in such securities. Price information regarding municipal bonds, convertible securities, and nonexchange traded assets, including investment companies, derivatives, money market instruments, repurchase agreements, structured notes, participation notes, and WIs is available from third party pricing services and major market data vendors. For exchange-traded assets, including investment companies, futures, warrants, and options, such intraday information is available directly from the applicable listing exchange. Rules governing the Indices are available on Barclays’ Web site and in each respective Fund’s prospectus. The Web site for the Funds also will include the prospectus for the Funds and additional data relating to the NAV and other applicable quantitative information. The Commission believes that the proposal to list and trade the Shares is reasonably designed to promote fair disclosure of information that may be necessary to price the Shares appropriately and to prevent trading when a reasonable degree of transparency cannot be assured. Prior to the commencement of trading, the Exchange will inform its members in an Information Circular of the special characteristics and risks associated with pricing agents. Securities of non-exchange-traded investment companies will be valued at NAV. Exchange-traded instruments, including investment companies and warrants, will be valued at the last reported sale price on the primary exchange or market on which they are traded. If a market quotation for a security is not readily available or the Adviser believes it does not otherwise accurately reflect the market value of the security at the time the Fund calculates its NAV, the security will be fair valued by the Adviser in accordance with the Trust’s valuation policies and procedures approved by the Board of Trustees and in accordance with the 1940 Act. VerDate Sep<11>2014 18:24 Jul 19, 2016 Jkt 238001 trading the Shares. With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares of the Funds. The Exchange will halt trading in the Shares under the conditions specified in BZX Rule 11.18. Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. These may include: (1) the extent to which trading is not occurring in the securities and/or the financial instruments composing the daily disclosed portfolio of the Funds; or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. Trading in the Shares also will be subject to BZX Rule 14.11(c)(1)(B)(iv), which sets forth circumstances under which Shares of a Fund may be halted. Based on the Exchange’s representations, the Commission believes that the Indices are sufficiently broad-based to deter potential manipulation. The Exchange represents that, as of December 31, 2015, the 6–8 Year Index had the following characteristics: there were 2,894 issues; 9.8% of the weight of components had a minimum original principal amount outstanding of $100 million or more; 95.1% of the weight of components was comprised of individual maturities that were part of an entire municipal bond offering with a minimum original principal amount outstanding of $100 million or more for all maturities of the offering; the total dollar amount outstanding of all issues was approximately $57.4 billion, and the average dollar amount outstanding per issue was approximately $19.8 million; and the most heavily weighted component represented 1.07% of the 6– 8 Year Index, and the five most heavily weighted components represented 3.0% of the 6–8 Year Index. The Exchange also represents that, as of December 31, 2015, the 8–12 Year Index had the following characteristics: there were 5,662 issues; 5.7% of the weight of components had a minimum original principal amount outstanding of $100 million or more; 95.1% of the weight of components was comprised of individual maturities that were part of an entire municipal bond offering with a minimum original principal amount outstanding of $100 million or more for all maturities of the offering; the total dollar amount outstanding of all issues was approximately $108.6 billion, and the average dollar amount outstanding per issue was approximately $19.2 PO 00000 Frm 00067 Fmt 4703 Sfmt 4703 47221 million; and the most heavily weighted component represented 0.26% of the 8– 12 Year Index, and the five most heavily weighted components represented 1.04% of the 8–12 Year Index. Likewise, the Exchange represents that, as of December 31, 2015, the 12–17 Year Index had the following characteristics: there were 6,171 issues; 8.3% of the weight of components had a minimum original principal amount outstanding of $100 million or more; 95.3% of the weight of components was comprised of individual maturities that were part of an entire municipal bond offering with a minimum original principal amount outstanding of $100 million or more for all maturities of the offering; the total dollar amount outstanding of all issues was approximately $123.5 billion, and the average dollar amount outstanding per issue was approximately $20 million; and the most heavily weighted component represented 0.29% of the 12–17 Year Index, and the five most heavily weighted components represented 1.11% of the 12–17 Year Index. In support of this proposal, the Exchange has also made representations, including: (1) The Shares of each Fund will conform to the initial and continued listing criteria under BZX Rule 14.11(c)(4), except for those set forth in 14.11(c)(4)(B)(i)(b). (2) Except for BZX Rule 14.11(c)(4)(B)(i)(b), the 6–8 Year Index, the 8–12 Year Index, and the 12–17 Year Index currently and will continue to satisfy all of the generic listing standards under BZX Rule 14.11(c)(4) (3) The continued listing standards under BZX Rule 14.11(c) applicable to Index Fund Shares will apply to the Shares of each Fund. (4) The Shares of the Funds will comply with all other requirements applicable to Index Fund Shares including, but not limited to, requirements relating to the dissemination of key information such as the value of the Indices and the Intraday Indicative Value, rules governing the trading of equity securities, trading hours, trading halts, surveillance, and the information circular, as set forth in Exchange rules applicable to Index Fund Shares and the orders approving such rules. (5) The Exchange represents that trading in the Shares will be subject to the existing Exchange trading surveillances procedures. The Exchange represents that these procedures are adequate to properly monitor Exchange trading of the Shares in all trading sessions and to deter and detect violations of Exchange rules and federal E:\FR\FM\20JYN1.SGM 20JYN1 mstockstill on DSK3G9T082PROD with NOTICES 47222 Federal Register / Vol. 81, No. 139 / Wednesday, July 20, 2016 / Notices securities laws applicable to trading on the Exchange. (6) The Exchange may obtain information regarding trading in the Shares and the underlying shares in exchange traded equity securities via the Intermarket Surveillance Group (‘‘ISG’’), from other exchanges that are members or affiliates of the ISG, or with which the Exchange has entered into a comprehensive surveillance sharing agreement.35 In addition, the Exchange is able to access, as needed, trade information for certain fixed income instruments reported to the Financial Industry Regulatory Authority’s Trade Reporting and Compliance Engine. The Exchange also can access data obtained from the Municipal Securities Rulemaking Board relating to municipal bond trading activity for surveillance purposes in connection with trading in the Shares. In addition, the Exchange may obtain information regarding trading in the Shares and the underlying shares in exchange-traded investment companies, futures, options, and warrants from markets or other entities that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. The Exchange prohibits the distribution of material, non-public information by its employees. (7) For initial and continued listing of the Shares, the Trust is required to comply with Rule 10A–3 under the Act.36 (8) The Funds generally will invest at least 80% of their respective assets in the securities of the corresponding Indices. The Funds may invest up to 20% of their respective assets in other securities and financial instruments as described above and in the Notice, as modified by Amendment No. 3 thereto. (9) If the Exchange becomes aware that the NAV is not being disseminated to all market participants at the same time, it will halt trading in the Shares until such time as the NAV is available to all market participants. The Exchange represents that all statements and representations made in this filing regarding (a) the description of the portfolio, (b) limitations on portfolio holdings or reference assets (including, for example, each Fund’s 80% Investment Policy), or (c) the applicability of Exchange rules and surveillance procedures shall constitute continued listing requirements for 35 For a list of the current members of ISG, see www.isgportal.org. The Exchange notes that not all components of the portfolio for a Fund may trade on markets that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. 36 See 17 CFR 240.10A–3. VerDate Sep<11>2014 18:24 Jul 19, 2016 Jkt 238001 listing the Shares on the Exchange. In addition, the issuer has represented to the Exchange that it will advise the Exchange of any failure by the Fund to comply with the continued listing requirements (or any changes made with respect to a Fund’s 80% Investment Policy), and, pursuant to its obligations under Section 19(g)(1) of the Act, the Exchange will surveil for compliance with the continued listing requirements. If the Fund is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under Exchange Rule 14.12. This approval order is based on all of the Exchange’s representations, including those set forth above and in the Notice, as modified by Amendment No. 3 thereto, and the Exchange’s description of the Funds. For the foregoing reasons, the Commission finds that the proposed rule change, as modified by Amendment No. 8 thereto, is consistent with Section 6(b)(5) of the Act 37 and the rules and regulations thereunder applicable to a national securities exchange. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,38 that the proposed rule change (SR–BatsBZX– 2016–01), as modified by Amendment No. 8 thereto, be, and it hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.39 Jill M. Peterson, Assistant Secretary. [FR Doc. 2016–17089 Filed 7–19–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–78328; File No. SR– NYSEArca–2016–63] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Designation of a Longer Period for Commission Action on a Proposed Rule Change Relating to the Listing and Trading of Shares of BlackRock Government Collateral Pledge Unit Under NYSE Arca Equities Rule 8.600 Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to list and trade shares of the BlackRock Government Collateral Pledge Unit. The proposed rule change was published for comment in the Federal Register on June 2, 2016.3 The Commission received no comment letters on the proposed rule change. Section 19(b)(2) of the Act 4 provides that, within 45 days of the publication of notice of the filing of a proposed rule change, or within such longer period up to 90 days as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or as to which the self-regulatory organization consents, the Commission shall either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether the proposed rule change should be disapproved. The 45th day after publication of the notice for this proposed rule change is July 17, 2016. The Commission is extending this 45day time period. The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,5 designates August 31, 2016, as the date by which the Commission should either approve or disapprove or institute proceedings to determine whether to disapprove the proposed rule change (File Number SR– NYSEArca–2016–63). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 Jill M. Peterson, Assistant Secretary. [FR Doc. 2016–17098 Filed 7–19–16; 8:45 am] BILLING CODE 8011–01–P July 14, 2016. On May 19, 2016, NYSE Arca, Inc. filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities PO 00000 37 15 U.S.C. 78f(b)(5). U.S.C. 78s(b)(2). 39 17 CFR 200.30–3(a)(12). 38 15 Frm 00068 Fmt 4703 Sfmt 9990 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 77941 (May 27, 2016), 81 FR 35425. 4 15 U.S.C. 78s(b)(2). 5 Id. 6 17 CFR 200.30–3(a)(31). 2 17 E:\FR\FM\20JYN1.SGM 20JYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 81, Number 139 (Wednesday, July 20, 2016)]
[Notices]
[Pages 47217-47222]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-17089]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78329; File No. SR-BatsBZX-2016-01]

Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Order
Granting Approval of Proposed Rule Change, as Modified by Amendment No.
8 Thereto, to List and Trade Under BZX Rule 14.11(c)(4) Shares of the
Following Series of VanEck Vectors ETF Trust: VanEck Vectors AMT-Free
6-8 Year Municipal Index ETF; VanEck Vectors AMT-Free 8-12 Year
Municipal Index ETF; and VanEck Vectors AMT-Free 12-17 Year Municipal
Index ETF

July 14, 2016.

I. Introduction

On March 29, 2016, Bats BZX Exchange, Inc. (``Exchange'' or
``BZX'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to list and trade under BZX Rule 14.11(c)(4) the
shares (``Shares'') of the following series of VanEck Vectors ETF Trust
(``Trust''): VanEck Vectors AMT-Free 6-8 Year Municipal Index ETF;
VanEck Vectors AMT-Free 8-12 Year Municipal Index ETF; and VanEck
Vectors AMT-Free 12-17 Year Municipal Index ETF (individually, ``Fund''
and, collectively, ``Funds''). The proposed rule change was published
for comment in the Federal Register on April 18, 2016.\3\ On June 1,
the Exchange filed Amendment No. 1 to the proposed rule change.\4\ On
June 14, 2016, the Exchange filed Amendment No. 2 to the proposed rule
change.\5\ On June 23, 2016, the Exchange filed Amendment No. 3 to the
proposed rule change.\6\ On July 8, 2016, the Exchange filed: (1)
Amendment No. 4 to the proposed rule change; \7\ (2) Amendment No. 5 to
the proposed rule change; \8\ and (3) Amendment No. 6 to the proposed
rule change.\9\ On July 12, 2016, the

[[Page 47218]]

Exchange filed Amendment No. 7 to the proposed rule change.\10\ On July
13, 2016, the Exchange filed Amendment No. 8 to the proposed rule
change.\11\ The Commission received one comment on the proposed rule
change.\12\ This order grants approval of the proposed rule change, as
modified by Amendment No. 8 thereto.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 77596 (April 18,
2016), 81 FR 22681 (``Notice'').
\4\ In Amendment No. 1, the Exchange: (a) Clarified the names of
the exchange-traded funds (``ETFs'') by replacing references to
``Market Vectors'' with ``VanEck Vectors''; (b) added
representations relating to continued listing compliance and
Exchange delisting procedures in the event of non-compliance with
respect to the proposal; (c) clarified certain holdings of the Funds
by (i) replacing references to ``to-be-announced'' or ``TBA''
transactions with ``when-issued'' or ``WI'' transactions, (ii)
deleting references to over-the-counter options on futures
contracts, (iii) deleting statements relating to certain swaps, and
(iv) deleting information relating to municipal bonds that are not
included in the applicable underlying indices; (d) made conforming
and clarifying changes in describing the calculation of net asset
value of the Funds; (e) changed the creation unit size of the Funds
from 100,000 Shares to 50,000 Shares; and (f) clarified that
information with respect to the mid-point of the bid/ask spread
would not be publicly available; and (g) added availability of
information relating to the underlying indices. Because the changes
in Amendment No. 1 to the proposed rule change clarify certain
statements in the proposal and do not materially alter the substance
of the proposed rule change or raise any novel regulatory issues, it
is not subject to notice and comment. Amendment No. 1, which amended
and replaced the Notice in its entirety, is available on the
Commission's Web site at: https://www.sec.gov/comments/sr-batsbzx-2016-01/batsbzx201601-2.pdf.
\5\ In Amendment No. 2, the Exchange: (a) Clarified the other
portfolio holdings of the Funds with respect to other municipal
bonds; (b) added statements with respect to certain swaps; (c)
corrected a typographical error; and (d) clarified that each Fund
will disclose on its Web site the identities and quantities of the
portfolio of securities and other assets in the daily disclosed
portfolio held by the Funds that formed the basis for each Fund's
calculation of net asset value at the end of the previous business
day. Because the changes in Amendment No. 2 to the proposed rule
change are technical in nature and do not materially alter the
substance of the proposed rule change or raise any novel regulatory
issues, it is not subject to notice and comment. Amendment No. 2,
which amended and replaced the proposed rule change, as modified by
Amendment No. 1 thereto, in its entirety, is available on the
Commission's Web site at: https://www.sec.gov/comments/sr-batsbzx-2016-01/batsbzx201601-3.pdf.
\6\ In Amendment No. 3, the Exchange: (a) Deleted extraneous
language previously corrected by Amendment No. 2 to the proposed
rule change relating to certain swaps; and (b) corrected a technical
redundancy with respect to a defined term. Because the changes in
Amendment No. 3 to the proposed rule change are technical in nature
and do not materially alter the substance of the proposed rule
change or raise any novel regulatory issues, it is not subject to
notice and comment. Amendment No. 3, which amended and replaced the
proposed rule change, as modified by Amendment No. 2 thereto, in its
entirety, is available on the Commission's Web site at: https://www.sec.gov/comments/sr-batsbzx-2016-01/batsbzx201601-4.pdf.
\7\ In Amendment No. 4, the Exchange corrected errors made with
respect to the names of the Funds by adding ``AMT-Free'' to certain
references made in the proposal. Because the changes in Amendment
No. 4 to the proposed rule change are technical in nature and do not
materially alter the substance of the proposed rule change or raise
any novel regulatory issues, it is not subject to notice and
comment. Amendment No. 4, which amended and replaced the proposed
rule change, as modified by Amendment No. 3 thereto, in its
entirety, is available on the Commission's Web site at: https://www.sec.gov/comments/sr-batsbzx-2016-01/batsbzx201601-5.pdf.
\8\ On July 8, 2016, the Exchange withdrew Amendment No. 5 to
the proposed rule change.
\9\ In Amendment No. 6, the Exchange further corrected the names
of the Funds by removing references to ``AMT-Free.'' Because the
changes in Amendment No. 6 to the proposed rule change are technical
in nature and do not materially alter the substance of the proposed
rule change or raise any novel regulatory issues, it is not subject
to notice and comment. Amendment No. 6, which amended and replaced
the proposed rule change, as modified by Amendment No. 4 thereto, in
its entirety, is available on the Commission's Web site at: https://www.sec.gov/comments/sr-batsbzx-2016-01/batsbzx201601-6.pdf.
\10\ In Amendment No. 7, the Exchange (a) further corrected
errors in the names of the Funds; and (b) clarified that (i) all
statements and representations regarding each Fund's 80% Investment
Policy (as defined herein) constitute continued listing requirements
for listing the Shares on the Exchange, (ii) the issuer has
represented to the Exchange that it will advise the Exchange of any
failure by a Fund to comply with the continued listing requirements
(or any changes made with respect to a Fund's 80% Investment
Policy), and, pursuant to its obligations under Section 19(g)(1) of
the Act, the Exchange will surveil for compliance with the continued
listing requirements, and (iii) if the Fund is not in compliance
with the applicable listing requirements, the Exchange will commence
delisting procedures under Exchange Rule 14.12. See infra note 16
and accompanying text. Because the changes in Amendment No. 7 to the
proposed rule change do not materially alter the substance of the
proposed rule change or raise any novel regulatory issues, it is not
subject to notice and comment. Amendment No. 7, which amended and
replaced the proposed rule change, as modified by Amendment No. 6
thereto, in its entirety, is available on the Commission's Web site
at: https://www.sec.gov/comments/sr-batsbzx-2016-01/batsbzx201601-7.pdf.
\11\ In Amendment No. 8, the Exchange corrected an error
identifying the Amendment number. Because the changes in Amendment
No. 8 to the proposed rule change do not materially alter the
substance of the proposed rule change or raise any novel regulatory
issues, it is not subject to notice and comment. Amendment No. 8,
which amended and replaced the proposed rule change, as modified by
Amendment No. 7 thereto, in its entirety, is available on the
Commission's Web site at: https://www.sec.gov/comments/sr-batsbzx-2016-01/batsbzx201601-8.pdf.
\12\ See Letter from Anonymous dated May 3, 2016, available at:
https://www.sec.gov/comments/sr-batsbzx-2016-01/batsbzx201601-1.htm
(commenting that the proposed rule change was ``good'').
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II. Exchange's Description of the Proposal

The Exchange proposes to list and trade Shares of the following
series of the Trust under BZX Rule 14.11(c)(4): VanEck Vectors AMT-Free
6-8 Year Municipal Index ETF; VanEck Vectors AMT-Free 8-12 Year
Municipal Index ETF; and VanEck Vectors AMT-Free 12-17 Year Municipal
Index ETF. The Shares will be offered by the Trust, which was
established as a Delaware statutory trust on March 15, 2001. The Trust
is registered with the Commission as an open-end investment company and
has filed a registration statement on behalf of the Funds on Form N-1A
(``Registration Statement'') with the Commission.\13\
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\13\ See Registration Statement on Form N-1A (File Nos. 333-
123257 and 811-10325) dated October 29, 2015. According to the
Exchange, the Trust has obtained certain exemptive relief from the
Commission under the Investment Company Act of 1940 (``1940 Act'').
See Investment Company Act Release No. 28021 (October 24, 2007)
(File No. 812-13426).
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Van Eck Associates Corporation will be the investment adviser
(``Adviser'') to the Funds. The Adviser will serve as the administrator
for the Fund. The Bank of New York Mellon will serve as the custodian
and transfer agent for the Funds. Van Eck Securities Corporation will
be the distributor of the Shares. Barclays Inc. will be the index
provider.
The Exchange has made the following representations and statements
in describing the Funds and their respective investment strategies,
including the Funds' portfolio holdings and investment
restrictions.\14\
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\14\ The Commission notes that additional information regarding
the Funds, the Trust, and the Shares, including investment
strategies, risks, creation and redemption procedures, fees,
portfolio holdings disclosure policies, calculation of net asset
value (``NAV''), distributions, and taxes, among other things, can
be found in the Notice, as modified by Amendment No. 8 thereto, and
the Registration Statement, as applicable. See Notice and
Registration Statement, supra notes 3 and 13, respectively. See also
Amendment No. 8 to the proposed rule change, supra note 11.
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A. Exchange's Description of the Funds' Principal Investments

According to the Exchange, the Funds and the Shares will seek to
track the performance of a benchmark index that measures the
investment-grade segment of the U.S. municipal bond market, as
described below. Specifically, with respect to each of the VanEck
Vectors AMT-Free 6-8 Year Municipal Index ETF, VanEck Vectors AMT-Free
8-12 Year Municipal Index ETF, and VanEck Vectors AMT-Free 12-17 Year
Municipal Index ETF, the Shares will replicate as closely as possible,
before fees and expense, the price and yield performance of the
Barclays AMT-Free-6-8 Year Intermediate Continuous Municipal Index
(``6-8 Year Index''); the Barclays AMT-Free-8-12 Year Intermediate
Continuous Municipal Index (``8-12 Year Index''); and the Barclays AMT-
Free-12-17 Year Intermediate Continuous Municipal Index (``12-17 Year
Index,'' and together with the 6-8 Year Index and the 8-12 Year Index,
collectively, ``Indices''), respectively.
To be included in each of the Funds, the Exchange states that a
bond must be rated Baa3/BBB- or higher by at least two of the following
ratings agencies if all three agencies rate the security: Moody's, S&P
and Fitch. If only two of the three agencies rate the security, the
lower rating is used to determine index eligibility. If only one of the
three agencies rates a security, the rating must be at least Baa3/BBB-.
Potential constituents must have an outstanding par value of at least
$7 million and be issued as part of a transaction of at least $75
million. The bonds must be fixed rate, have a dated date within the
last five years, and have an effective maturity that tracks each
respective Fund. The following types of bonds are excluded from each of
the Funds: Bonds subject to the alternative minimum tax, taxable
municipal bonds, floating rate bonds, and derivatives. The Funds are
calculated using a market value weighting methodology.
The composition of each of the Funds is rebalanced monthly.
Interest and principal payments earned by the component securities are
held in the Fund without a reinvestment return until month end when
they are removed. Qualifying securities issued, but not necessarily
settled, on or before the month end rebalancing date qualify for
inclusion in each of the Funds in the following month. The Exchange
notes that when-issued transactions (``WIs'') \15\ representing
securities in the 6-8 Year, 8-12 Year, and 12-17 Year Indices may be
used by the Fund in seeking performance that corresponds to the 6-8
Year, 8-12 Year, and 12-17 Year Indices, respectively, and, in such
cases, would count towards the respective Fund's 80% policy.
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\15\ According to the Exchange, when-issued is a transaction
that is made conditionally because a security has been authorized
but not yet issued. Treasury securities, stock splits, and new
issues of stocks and bonds are all traded on a when-issued basis.
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Each of the Funds normally will invest at least 80% of its total
assets in securities that comprise the Fund's corresponding benchmark
index. The Funds will be comprised of publicly traded municipal bonds
that cover the U.S. dollar-denominated intermediate term tax-exempt
bond market with final maturities corresponding to the Index timeframe.
Each Fund's 80% investment policy is non-fundamental and may be changed
without shareholder approval upon 60 days' prior written notice to
shareholders.\16\
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\16\ While each Fund's policy to invest 80% of its total assets
in securities that comprise the Fund's benchmark index (``80%
Investment Policy'') is non-fundamental and may be changed without
shareholder approval upon 60 days' prior written notice to
shareholders, the Exchange represents that, notwithstanding the
foregoing, all statements and representations made in this filing
regarding (a) the description of the portfolios, (b) limitations on
portfolio holdings or reference assets (including, for example, each
Fund's 80% Investment Policy), or (c) the applicability of Exchange
rules and surveillance procedures shall constitute continued listing
requirements for listing the Shares on the Exchange. As noted
herein, the issuer also has represented to the Exchange that it will
advise the Exchange of any failure by a Fund to comply with the
continued listing requirements (or any changes made with respect to
a Fund's 80% Investment Policy), and, pursuant to its obligations
under Section 19(g)(1) of the Act, the Exchange will surveil for
compliance with the continued listing requirements. If the Fund is
not in compliance with the applicable listing requirements, the
Exchange will commence delisting procedures under Exchange Rule
14.12.

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[[Page 47219]]

B. Exchange's Description of the Funds' Other Investments

While each of the Funds normally will invest at least 80% of its
total assets in securities that compose the 6-8 Year, 8-12 Year, and
12-17 Year Indices, as described above, the Funds may invest their
remaining assets in other financial instruments, as described below.
The Funds may invest remaining assets in securities not included in
the respective Indices, including only the following instruments:
Municipal bonds (not described above); money market instruments,
including repurchase agreements or other funds which invest exclusively
in money market instruments; convertible securities; structured notes
(notes on which the amount of principal repayment and interest payments
are based on the movement of one or more specified factors, such as the
movement of a particular stock or stock index); \17\ certain derivative
instruments described below; and, to the extent permitted by the 1940
Act, affiliated and unaffiliated funds, such as open-end or closed-end
management investment companies, including other ETFs.\18\ In addition
to the use described above, WIs not included in each of the Indices may
also be used by each of the Funds in managing cash flows.
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\17\ Structured notes are derivative securities for which the
amount of principal repayment and/or interest payments is based on
the movement of one or more factors, including, but not limited to,
currency exchange rates, interest rates (such as the prime lending
rate or LIBOR), referenced bonds, and stock indices.
\18\ For purposes of this proposal, ETFs include: Index Fund
Shares (as described in BZX Rule 14.11(c)); Portfolio Depositary
Receipts (as described in BZX Rule 14.11(b)); and Managed Fund
Shares (as described in BZX Rule 14.11(i)). The ETFs all will be
listed and traded in the U.S. on registered exchanges. The Funds may
invest in the securities of ETFs registered under the 1940 Act
consistent with the requirements of Section 12(d)(1) of the 1940
Act, or any rule, regulation or order of the Commission or
interpretation thereof. While the Funds may invest in inverse ETFs,
the Funds will not invest in leveraged (e.g., 2X, -2X, 3X, or -3X)
ETFs.
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The Funds may invest in repurchase agreements with commercial
banks, brokers or dealers to generate income from its excess cash
balances and to invest securities lending cash collateral.
The Funds may use exchange-traded futures contracts and exchange-
traded options thereon, together with positions in cash and money
market instruments, to simulate full investment.
The Funds may use cleared or non-cleared index, interest rate or
credit default swap agreements. According to the Exchange, interest
rate swaps and credit default swaps on indexes currently may be
cleared; however, credit default swaps on a specific security are
currently uncleared.
The Funds may invest in exchange-traded warrants, which are equity
securities in the form of options issued by a corporation which give
the holder the right to purchase stock, usually at a price that is
higher than the market price at the time the warrant is issued.
The Funds may invest in participation notes, which are issued by
banks or broker-dealers and are designed to offer a return linked to
the performance of a particular underlying equity security or market.
The Funds will only enter into transactions in derivative
instruments with counterparties that the Adviser reasonably believes
are capable of performing under the contract and will post collateral
as required by the counterparty.\19\
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\19\ The Funds will seek, where possible, to use counterparties,
as applicable, whose financial status is such that the risk of
default is reduced; however, the risk of losses resulting from
default is still possible. The Adviser will evaluate the
creditworthiness of counterparties on a regular basis. In addition
to information provided by credit agencies, the Adviser will review
approved counterparties using various factors, which may include the
counterparty's reputation, the Adviser's past experience with the
counterparty and the price/market actions of debt of the
counterparty.
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C. Exchange's Description of the Indices and Bats BZX Rule 14.11(c)(4)

The Exchange is submitting this proposed rule change because the
Indices underlying the corresponding Funds do not meet all of the
``generic'' listing requirements of BZX Rule 14.11(c)(4) applicable to
the listing of Index Fund Shares based on fixed income securities
indexes.
1. 6-8 Year Index. According to the Exchange, the 6-8 Year Index
meets all of the requirements of BZX Rule 14.11(c)(4) except for those
set forth in BZX Rule 14.11(c)(4)(B)(i)(b).\20\ Specifically, as of
December 31, 2015, only 9.8% of the weight of the 6-8 Year Index
components have a minimum original principal amount outstanding of $100
million or more.
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\20\ BZX Rule 14.11(c)(4)(B)(i)(b) provides that components that
in the aggregate account for at least 75% of the weight of the index
or portfolio each shall have a minimum original principal amount
outstanding of $100 million or more.
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According to the Exchange, as of December 31, 2015, 95.1% of the
weight of the 6-8 Year Index components was comprised of individual
maturities that were part of an entire municipal bond offering with a
minimum original principal amount outstanding $100 million or more for
all maturities of the offering. In addition, the total dollar amount
outstanding of issues in the 6-8 Year Index was approximately $57.4
billion, and the average dollar amount outstanding of issues in the 6-8
Year Index was approximately $19.8 million. Further, the most heavily
weighted component represented 1.07% of the weight of the 6-8 Year
Index, and the five most heavily weighted components represented 3.0%
of the weight of the 6-8 Year Index.\21\ In addition, the Exchange
notes that the 6-8 Year Index is comprised of approximately 2,894
issues, and that 63.8% of the 6-8 Year Index weight consisted of issues
with a rating of AA/Aa2 or higher.
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\21\ BZX Rule 14.11(c)(4)(B)(i)(d) provides that no component
fixed-income security (excluding Treasury Securities, as defined
therein) shall represent more than 30% of the weight of the index or
portfolio, and the five most heavily weighted component fixed-income
securities in the index or portfolio shall not in the aggregate
account for more than 65% of the weight of the index or portfolio.
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The 6-8 Year Index value, calculated and disseminated at least once
daily, as well as the components of the 6-8 Year Index and their
percentage weighting, will be available from major market data vendors.
In addition, the portfolio of securities held by the Fund will be
disclosed on the Fund's Web site.
2. 8-12 Year Index. According to the Exchange, the 8-12 Year Index
for the Fund meets all of the requirements of BZX Rule 14.11(c)(4),
except for those set forth in BZX Rule 14.11(c)(4)(B)(i)(b).\22\
Specifically, as of December 31, 2015, only 5.7% of the weight of the
8-12 Year Index components have a minimum original principal amount
outstanding of $100 million or more.
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\22\ See supra note 20.
---------------------------------------------------------------------------

According to the Exchange, as of December 31, 2015, 95.1% of the
weight of the 8-12 Year Index components was comprised of individual
maturities that were part of an entire municipal bond offering with a
minimum original principal amount outstanding of $100 million or more
for all maturities of the offering. In addition, the total dollar
amount outstanding of issues in the 8-12 Year Index was approximately
$108.6 billion, and the average dollar amount outstanding of issues in
the 8-12 Year Index was approximately $19.2

[[Page 47220]]

million. Further, the most heavily weighted component represented 0.26%
of the weight of the 8-12 Year Index, and the five most heavily
weighted components represented 1.04% of the weight of the 8-12 Year
Index.\23\ In addition, the Exchange represents that the 8-12 Year
Index is comprised of approximately 5,662 issues, and that 64.7% of the
8-12 Year Index weight consisted of issues with a rating of AA/Aa2 or
higher.
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\23\ See supra note 21.
---------------------------------------------------------------------------

The 8-12 Year Index value, calculated and disseminated at least
once daily, as well as the components of the 8-12 Year Index and their
percentage weighting, will be available from major market data vendors.
In addition, the portfolio of securities held by the Fund will be
disclosed on the Fund's Web site.
3. 12-17 Year Index. According to the Exchange, the 12-17 Year
Index meets all of the requirements of BZX Rule 14.11(c)(4), except for
those set forth in BZX Rule 14.11(c)(4)(B)(i)(b).\24\ Specifically, as
of December 31, 2015, only 8.3% of the weight of the 12-17 Year Index
components have a minimum original principal amount outstanding of $100
million or more.
---------------------------------------------------------------------------

\24\ See supra note 20.
---------------------------------------------------------------------------

According to the Exchange, as of December 31, 2015, 95.3% of the
weight of the 12-17 Year Index components was comprised of individual
maturities that were part of an entire municipal bond offering with a
minimum original principal amount outstanding $100 million or more for
all maturities of the offering. In addition, the total dollar amount
outstanding of issues in the 12-17 Year Index was approximately $123.5
billion, and the average dollar amount outstanding of issues in the 12-
17 Year Index was approximately $20 million. Further, the most heavily
weighted component represented 0.29% of the weight of the 12-17 Year
Index, and the five most heavily weighted components represented 1.11%
of the weight of the 12-17 Year Index.\25\ The Exchange further
represents that the 12-17 Year Index is comprised of approximately
6,171 issues, and that 61.2% of the 12-17 Year Index weight consisted
of issues with a rating of AA/Aa2 or higher.
---------------------------------------------------------------------------

\25\ See supra note 21.
---------------------------------------------------------------------------

The 12-17 Year Index value, calculated and disseminated at least
once daily, as well as the components of the 12-17 Year Index and their
percentage weighting, will be available from major market data vendors.
In addition, the portfolio of securities held by the Fund will be
disclosed on the Fund's Web site.

D. Additional Exchange Representations

The Exchange represents that: (1) Except for BZX Rule
14.11(c)(4)(B)(i)(b), the 6-8 Year Index, the 8-12 Year Index, and the
12-17 Year Index currently and will continue to satisfy all of the
generic listing standards under BZX Rule 14.11(c)(4); (2) the continued
listing standards under BZX Rule 14.11(c) applicable to Index Fund
Shares will apply to the Shares of each Fund; and (3) the Trust is
required to comply with Rule 10A-3 under the Act \26\ for the initial
and continued listing of the Shares of each Fund. In addition, the
Exchange represents that the Shares of the Funds will comply with all
other requirements applicable to Index Fund Shares including, but not
limited to, requirements relating to the dissemination of key
information such as the value of the Indices and the Intraday
Indicative Value (``IIV''), rules governing the trading of equity
securities, trading hours, trading halts, surveillance, and the
information circular, as set forth in Exchange rules applicable to
Index Fund Shares and the orders approving such rules.
---------------------------------------------------------------------------

\26\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------

III. Discussion and Commission's Findings

After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of Section 6 of the Act \27\
and the rules and regulations thereunder applicable to a national
securities exchange.\28\ In particular, the Commission finds that the
proposal is consistent with Section 6(b)(5) of the Act,\29\ which
requires, among other things, that the Exchange's rules be designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, to 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.
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\27\ 15 U.S.C. 78f.
\28\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\29\ 17 U.S.C. 78f(b)(5).
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The Commission also finds that the proposal to list and trade the
Shares on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of
the Act,\30\ which sets forth Congress' finding that it is in the
public interest and appropriate for the protection of investors and the
maintenance of fair and orderly markets to assure the availability to
brokers, dealers, and investors of information with respect to
quotations for, and transactions in, securities. Quotation and last-
sale information for the Shares will be available via the Consolidated
Tape Association (``CTA''). The current value of the Indices will be
widely disseminated by one or more major market data vendors \31\ at
least once per day. In addition, during Regular Trading Hours \32\ an
IIV for the Shares of the Funds will be disseminated by one or more
major market data vendors and updated at least every 15 seconds.\33\ On
each business day, before commencement of trading in Shares during
Regular Trading Hours on the Exchange, each Fund will disclose on its
Web site the identities and quantities of the portfolio of securities
and other assets in the daily disclosed portfolio held by the Funds
that formed the basis for each Fund's calculation of NAV at the end of
the previous business day.\34\

[[Page 47221]]

The daily disclosed portfolio will include, as applicable: the ticker
symbol; CUSIP number or other identifier, if any; a description of the
holding (including the type of holding, such as the type of swap); the
identity of the security, index or other asset or instrument underlying
the holding, if any; for options, the option strike price; quantity
held (as measured by, for example, par value, notional value or number
of shares, contracts, or units); maturity date, if any; coupon rate, if
any; effective date, if any; market value of the holding; and the
percentage weighting of the holding in each Fund's portfolio. Quotation
information for investment company securities (excluding ETFs) may be
obtained through nationally recognized pricing services through
subscription agreements or from brokers and dealers who make markets in
such securities. Price information regarding municipal bonds,
convertible securities, and non-exchange traded assets, including
investment companies, derivatives, money market instruments, repurchase
agreements, structured notes, participation notes, and WIs is available
from third party pricing services and major market data vendors. For
exchange-traded assets, including investment companies, futures,
warrants, and options, such intraday information is available directly
from the applicable listing exchange. Rules governing the Indices are
available on Barclays' Web site and in each respective Fund's
prospectus. The Web site for the Funds also will include the prospectus
for the Funds and additional data relating to the NAV and other
applicable quantitative information.
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\30\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
\31\ The Exchange further states that the components of the
Indices and their percentage weighting will be available from major
market data vendors.
\32\ Regular Trading Hours are 9:30 a.m. to 4:00 p.m. Eastern
Time.
\33\ According to the Exchange, several major market data
vendors display and/or make widely available IIVs taken from the CTA
or other data feeds. See Notice, as modified by Amendment No. 8
thereto, supra note 11, at n.29.
\34\ The NAV of each Fund will be determined each business day
as of the close of trading (ordinarily 4:00 p.m. Eastern Time) on
the Exchange. Any assets or liabilities denominated in currencies
other than the U.S. dollar are converted into U.S. dollars at the
current market rates on the date of valuation as quoted by one or
more sources. The values of each Fund's portfolio securities are
based on the securities' closing prices, when available. In the
absence of a last reported sales price, or if no sales were
reported, and for other assets for which market quotes are not
readily available, values may be based on quotes obtained from a
quotation reporting system, established market makers or by an
outside independent pricing service. Fixed income securities,
repurchase agreements, and money market instruments with maturities
of more than 60 days are normally valued on the basis of quotes from
brokers or dealers, established market makers, or an outside
independent pricing service. Prices obtained by an outside
independent pricing service may use information provided by market
makers or estimates of market values obtained from yield data
related to investments or securities with similar characteristics
and may use a computerized grid matrix of securities and its
evaluations in determining what it believes is the fair value of the
portfolio securities. Short-term investments and money market
instruments having a maturity of 60 days or less are valued at
amortized cost. Futures contracts will be valued at the settlement
price established each day by the board or exchange on which they
are traded. Exchange-traded options will be valued at the closing
price in the market where such contracts are principally traded.
Swaps, structured notes, participation notes, convertible
securities, and WIs will be valued based on valuations provided by
independent, third-party pricing agents. Securities of non-exchange-
traded investment companies will be valued at NAV. Exchange-traded
instruments, including investment companies and warrants, will be
valued at the last reported sale price on the primary exchange or
market on which they are traded. If a market quotation for a
security is not readily available or the Adviser believes it does
not otherwise accurately reflect the market value of the security at
the time the Fund calculates its NAV, the security will be fair
valued by the Adviser in accordance with the Trust's valuation
policies and procedures approved by the Board of Trustees and in
accordance with the 1940 Act.
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The Commission believes that the proposal to list and trade the
Shares is reasonably designed to promote fair disclosure of information
that may be necessary to price the Shares appropriately and to prevent
trading when a reasonable degree of transparency cannot be assured.
Prior to the commencement of trading, the Exchange will inform its
members in an Information Circular of the special characteristics and
risks associated with trading the Shares. With respect to trading
halts, the Exchange may consider all relevant factors in exercising its
discretion to halt or suspend trading in the Shares of the Funds. The
Exchange will halt trading in the Shares under the conditions specified
in BZX Rule 11.18. Trading may be halted because of market conditions
or for reasons that, in the view of the Exchange, make trading in the
Shares inadvisable. These may include: (1) the extent to which trading
is not occurring in the securities and/or the financial instruments
composing the daily disclosed portfolio of the Funds; or (2) whether
other unusual conditions or circumstances detrimental to the
maintenance of a fair and orderly market are present. Trading in the
Shares also will be subject to BZX Rule 14.11(c)(1)(B)(iv), which sets
forth circumstances under which Shares of a Fund may be halted.
Based on the Exchange's representations, the Commission believes
that the Indices are sufficiently broad-based to deter potential
manipulation. The Exchange represents that, as of December 31, 2015,
the 6-8 Year Index had the following characteristics: there were 2,894
issues; 9.8% of the weight of components had a minimum original
principal amount outstanding of $100 million or more; 95.1% of the
weight of components was comprised of individual maturities that were
part of an entire municipal bond offering with a minimum original
principal amount outstanding of $100 million or more for all maturities
of the offering; the total dollar amount outstanding of all issues was
approximately $57.4 billion, and the average dollar amount outstanding
per issue was approximately $19.8 million; and the most heavily
weighted component represented 1.07% of the 6-8 Year Index, and the
five most heavily weighted components represented 3.0% of the 6-8 Year
Index. The Exchange also represents that, as of December 31, 2015, the
8-12 Year Index had the following characteristics: there were 5,662
issues; 5.7% of the weight of components had a minimum original
principal amount outstanding of $100 million or more; 95.1% of the
weight of components was comprised of individual maturities that were
part of an entire municipal bond offering with a minimum original
principal amount outstanding of $100 million or more for all maturities
of the offering; the total dollar amount outstanding of all issues was
approximately $108.6 billion, and the average dollar amount outstanding
per issue was approximately $19.2 million; and the most heavily
weighted component represented 0.26% of the 8-12 Year Index, and the
five most heavily weighted components represented 1.04% of the 8-12
Year Index. Likewise, the Exchange represents that, as of December 31,
2015, the 12-17 Year Index had the following characteristics: there
were 6,171 issues; 8.3% of the weight of components had a minimum
original principal amount outstanding of $100 million or more; 95.3% of
the weight of components was comprised of individual maturities that
were part of an entire municipal bond offering with a minimum original
principal amount outstanding of $100 million or more for all maturities
of the offering; the total dollar amount outstanding of all issues was
approximately $123.5 billion, and the average dollar amount outstanding
per issue was approximately $20 million; and the most heavily weighted
component represented 0.29% of the 12-17 Year Index, and the five most
heavily weighted components represented 1.11% of the 12-17 Year Index.
In support of this proposal, the Exchange has also made
representations, including:
(1) The Shares of each Fund will conform to the initial and
continued listing criteria under BZX Rule 14.11(c)(4), except for those
set forth in 14.11(c)(4)(B)(i)(b).
(2) Except for BZX Rule 14.11(c)(4)(B)(i)(b), the 6-8 Year Index,
the 8-12 Year Index, and the 12-17 Year Index currently and will
continue to satisfy all of the generic listing standards under BZX Rule
14.11(c)(4)
(3) The continued listing standards under BZX Rule 14.11(c)
applicable to Index Fund Shares will apply to the Shares of each Fund.
(4) The Shares of the Funds will comply with all other requirements
applicable to Index Fund Shares including, but not limited to,
requirements relating to the dissemination of key information such as
the value of the Indices and the Intraday Indicative Value, rules
governing the trading of equity securities, trading hours, trading
halts, surveillance, and the information circular, as set forth in
Exchange rules applicable to Index Fund Shares and the orders approving
such rules.
(5) The Exchange represents that trading in the Shares will be
subject to the existing Exchange trading surveillances procedures. The
Exchange represents that these procedures are adequate to properly
monitor Exchange trading of the Shares in all trading sessions and to
deter and detect violations of Exchange rules and federal

[[Page 47222]]

securities laws applicable to trading on the Exchange.
(6) The Exchange may obtain information regarding trading in the
Shares and the underlying shares in exchange traded equity securities
via the Intermarket Surveillance Group (``ISG''), from other exchanges
that are members or affiliates of the ISG, or with which the Exchange
has entered into a comprehensive surveillance sharing agreement.\35\ In
addition, the Exchange is able to access, as needed, trade information
for certain fixed income instruments reported to the Financial Industry
Regulatory Authority's Trade Reporting and Compliance Engine. The
Exchange also can access data obtained from the Municipal Securities
Rulemaking Board relating to municipal bond trading activity for
surveillance purposes in connection with trading in the Shares. In
addition, the Exchange may obtain information regarding trading in the
Shares and the underlying shares in exchange-traded investment
companies, futures, options, and warrants from markets or other
entities that are members of ISG or with which the Exchange has in
place a comprehensive surveillance sharing agreement. The Exchange
prohibits the distribution of material, non-public information by its
employees.
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\35\ For a list of the current members of ISG, see
www.isgportal.org. The Exchange notes that not all components of the
portfolio for a Fund may trade on markets that are members of ISG or
with which the Exchange has in place a comprehensive surveillance
sharing agreement.
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(7) For initial and continued listing of the Shares, the Trust is
required to comply with Rule 10A-3 under the Act.\36\
---------------------------------------------------------------------------

\36\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

(8) The Funds generally will invest at least 80% of their
respective assets in the securities of the corresponding Indices. The
Funds may invest up to 20% of their respective assets in other
securities and financial instruments as described above and in the
Notice, as modified by Amendment No. 3 thereto.
(9) If the Exchange becomes aware that the NAV is not being
disseminated to all market participants at the same time, it will halt
trading in the Shares until such time as the NAV is available to all
market participants.
The Exchange represents that all statements and representations
made in this filing regarding (a) the description of the portfolio, (b)
limitations on portfolio holdings or reference assets (including, for
example, each Fund's 80% Investment Policy), or (c) the applicability
of Exchange rules and surveillance procedures shall constitute
continued listing requirements for listing the Shares on the Exchange.
In addition, the issuer has represented to the Exchange that it will
advise the Exchange of any failure by the Fund to comply with the
continued listing requirements (or any changes made with respect to a
Fund's 80% Investment Policy), and, pursuant to its obligations under
Section 19(g)(1) of the Act, the Exchange will surveil for compliance
with the continued listing requirements. If the Fund is not in
compliance with the applicable listing requirements, the Exchange will
commence delisting procedures under Exchange Rule 14.12. This approval
order is based on all of the Exchange's representations, including
those set forth above and in the Notice, as modified by Amendment No. 3
thereto, and the Exchange's description of the Funds.
For the foregoing reasons, the Commission finds that the proposed
rule change, as modified by Amendment No. 8 thereto, is consistent with
Section 6(b)(5) of the Act \37\ and the rules and regulations
thereunder applicable to a national securities exchange.
---------------------------------------------------------------------------

\37\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

IV. Conclusion

It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\38\ that the proposed rule change (SR-BatsBZX-2016-01), as
modified by Amendment No. 8 thereto, be, and it hereby is, approved.
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\38\ 15 U.S.C. 78s(b)(2).

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\39\
Jill M. Peterson,
Assistant Secretary.
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\39\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2016-17089 Filed 7-19-16; 8:45 am]
BILLING CODE 8011-01-P

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