Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change to List and Trade Shares of the iShares Interest Rate Hedged Corporate Bond ETF and iShares Interest Rate Hedged High Yield Bond ETF Under NYSE Arca Equities Rule 8.600, 17585-17592 [2014-06966]
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Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Notices
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
EDGA–2014–05 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
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All submissions should refer to File
Number SR–EDGA–2014–05. 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 such
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–EDGA–
2014–05, and should be submitted on or
before April 18, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–06896 Filed 3–27–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–71778; File No. SR–
NYSEArca–2014–23)
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of Proposed
Rule Change to List and Trade Shares
of the iShares Interest Rate Hedged
Corporate Bond ETF and iShares
Interest Rate Hedged High Yield Bond
ETF Under NYSE Arca Equities Rule
8.600
March 24, 2014.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on March
19, 2014, NYSE Arca, Inc. (the
‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange proposes to list and
trade the following under NYSE Arca
Equities Rule 8.600 (‘‘Managed Fund
Shares’’): iShares Interest Rate Hedged
Corporate Bond ETF and iShares
Interest Rate Hedged High Yield Bond
ETF. The text of the proposed rule
change is available on the Exchange’s
Web site at www.nyse.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
1 15
U.S.C.78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
19 17
CFR 200.30–3(a)(12).
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to list and
trade shares (‘‘Shares’’) of the following
under NYSE Arca Equities Rule 8.600,
which governs the listing and trading of
Managed Fund Shares 4: iShares Interest
Rate Hedged Corporate Bond ETF and
iShares Interest Rate Hedged High Yield
Bond ETF (each, a ‘‘Fund’’ and
collectively, the ‘‘Funds’’). The Shares
of the Funds will be offered by iShares
U.S. ETF Trust (the ‘‘Trust’’).5. The
Trust is registered with the Commission
as an open-end management investment
company.6 BlackRock Fund Advisors
(‘‘BFA’’) will serve as the investment
adviser to the Funds (the ‘‘Adviser’’).
BFA is an indirect wholly-owned
subsidiary of BlackRock, Inc. BlackRock
Investments, LLC (the ‘‘Distributor’’)
will be the principal underwriter and
distributor of the Funds’ Shares. State
Street Bank and Trust Company (the
4 A Managed Fund Share is a security that
represents an interest in an investment company
registered under the Investment Company Act of
1940 (15 U.S.C. 80a–1) (‘‘1940 Act’’) organized as
an open-end investment company or similar entity
that invests in a portfolio of securities selected by
its investment adviser consistent with its
investment objectives and policies. In contrast, an
open-end investment company that issues
Investment Company Units, listed and traded on
the Exchange under NYSE Arca Equities Rule
5.2(j)(3), seeks to provide investment results that
correspond generally to the price and yield
performance of a specific foreign or domestic stock
index, fixed income securities index or combination
thereof.
5 The Commission has previously approved
listing and trading on the Exchange of a number of
actively managed funds under Rule 8.600. See, e.g.,
Securities Exchange Act Release Nos. 57801 (May
8, 2008), 73 FR 27878 (May 14, 2008) (SR–
NYSEArca-2008–31) (order approving Exchange
listing and trading of twelve actively-managed
funds of the WisdomTree Trust); 60460 (August 7,
2009), 74 FR 41468 (August 17, 2009) (SR–
NYSEArca–2009–55) (order approving listing and
trading of Dent Tactical ETF); 63076 (October 12,
2010), 75 FR 63874 (October 18, 2010) (SR–
NYSEArca–2010–79) (order approving listing and
trading of Cambria Global Tactical ETF).
6 The Trust is registered under the 1940 Act. On
August 22, 2013, the Trust filed with the
Commission post-effective amendments on Form
N–1A under the Securities Act of 1933 (15 U.S.C.
77a) and under the 1940 Act relating to the iShares
Interest Rate Hedged Corporate Bond ETF (the
‘‘Corporate Bond Registration Statement’’) and the
iShares Interest Rate Hedged High Yield Bond ETF
(the ‘‘High Yield Registration Statement’’ and
together with the Corporate Bond Registration
Statement, the ‘‘Registration Statements’’) (File Nos.
333–179904 and 811–22649). The description of the
operation of the Trust and the Funds herein is
based, in part, on the Registration Statements. In
addition, the Commission has issued an order
granting certain exemptive relief to the Trust under
the 1940 Act. See Investment Company Act Release
No. 29571 (File No. 812–13601) (‘‘Exemptive
Order’’).
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‘‘Administrator’’, ‘‘Custodian’’ or
‘‘Transfer Agent’’) will serve as
administrator, custodian and transfer
agent for the Funds.
Commentary .06 to Rule 8.600
provides that, if the investment adviser
to the investment company issuing
Managed Fund Shares is affiliated with
a broker-dealer, such investment adviser
shall erect a ‘‘fire wall’’ between the
investment adviser and the brokerdealer with respect to access to
information concerning the composition
and/or changes to such investment
company portfolio. Commentary .06
further requires that personnel who
make decisions on the open-end fund’s
portfolio composition must be subject to
procedures designed to prevent the use
and dissemination of material
nonpublic information regarding the
open-end fund’s portfolio.7 Commentary
.06 to Rule 8.600 is similar to
Commentary .03(a)(i) and (iii) to NYSE
Arca Equities Rule 5.2(j)(3); however,
Commentary .06 in connection with the
establishment of a ‘‘fire wall’’ between
the investment adviser and the brokerdealer reflects the applicable open-end
fund’s portfolio, not an underlying
benchmark index, as is the case with
index-based funds. The Adviser is not
registered as a broker-dealer but is
affiliated with multiple broker-dealers
and has implemented a ‘‘fire wall’’ with
respect to such broker-dealers regarding
access to information concerning the
composition and/or changes to a Fund’s
portfolio. In the event (a) the Adviser or
any sub-adviser registers as a brokerdealer or becomes newly affiliated with
a broker-dealer, or (b) any new adviser
or sub-adviser is a registered brokerdealer, or becomes affiliated with a
7 An investment adviser to an open-end fund is
required to be registered under the Investment
Advisers Act of 1940 (the ‘‘Advisers Act’’). As a
result, the Adviser and its related personnel are
subject to the provisions of Rule 204A–1 under the
Advisers Act relating to codes of ethics. This Rule
requires investment advisers to adopt a code of
ethics that reflects the fiduciary nature of the
relationship to clients as well as compliance with
other applicable securities laws. Accordingly,
procedures designed to prevent the communication
and misuse of non-public information by an
investment adviser must be consistent with Rule
204A–1 under the Advisers Act. In addition, Rule
206(4)–7 under the Advisers Act makes it unlawful
for an investment adviser to provide investment
advice to clients unless such investment adviser has
(i) adopted and implemented written policies and
procedures reasonably designed to prevent
violation, by the investment adviser and its
supervised persons, of the Advisers Act and the
Commission rules adopted thereunder; (ii)
implemented, at a minimum, an annual review
regarding the adequacy of the policies and
procedures established pursuant to subparagraph (i)
above and the effectiveness of their
implementation; and (iii) designated an individual
(who is a supervised person) responsible for
administering the policies and procedures adopted
under subparagraph (i) above
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broker-dealer, it will implement a fire
wall with respect to its relevant
personnel or its broker-dealer affiliate
regarding access to information
concerning the composition and/or
changes to a portfolio, and will be
subject to procedures designed to
prevent the use and dissemination of
material non-public information
regarding such portfolio.
iShares Interest Rate Hedged Corporate
Bond ETF
According to the Corporate Bond
Registration Statement, the Fund will
seek to mitigate the interest rate risk of
a portfolio composed of U.S. dollardenominated, investment grade
corporate bonds. The Fund will seek to
achieve its investment objective by
investing, under normal circumstances,8
at least 80% of its net assets in U.S.
dollar-denominated investment-grade
bonds, in one or more investment
companies (exchange-traded and nonexchange-traded funds) that principally
invest in investment-grade bonds, in
U.S. Treasury securities (or cash
equivalents), and by taking short
positions in U.S. Treasury futures and
other interest rate futures contracts.
According to the Corporate Bond
Registration Statement, the Fund
initially intends to invest a substantial
portion of its assets in the iShares iBoxx
$ Investment Grade Corporate Bond ETF
(the ‘‘Underlying Corporate Bond
Fund’’). The Fund will attempt to
mitigate interest rate risk primarily
through the use of U.S. Treasury futures
contracts. The Fund may also take short
positions in other interest rate futures
contracts, including but not limited to,
Eurodollar and Federal Funds futures.
The Fund will invest only in futures
contracts that are traded on an exchange
that is a member of the Intermarket
Surveillance Group (‘‘ISG’’) or with
which the Exchange has in place a
comprehensive surveillance sharing
agreement.
BFA will utilize a model-based
proprietary investment process to
assemble an investment portfolio
comprised of (i) long positions in the
Underlying Corporate Bond Fund, (ii)
long positions in U.S. dollardenominated investment-grade
corporate bonds, (iii) long positions in
U.S. Treasury securities and (iv) short
8 The term ‘‘under normal circumstances’’
includes, but is not limited to, the absence of
extreme volatility or trading halts in the equity
markets or the financial markets generally;
operational issues causing dissemination of
inaccurate market information; or force majeure
type events such as systems failure, natural or manmade disaster, act of God, armed conflict, act of
terrorism, riot or labor disruption or any similar
intervening circumstance.
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positions in U.S. Treasury futures and
other interest rate futures contracts. The
short positions are expected to have, in
the aggregate, approximately equivalent
duration to the underlying securities in
the Underlying Corporate Bond Fund
and to the investment-grade corporate
bonds. By taking these short positions,
BFA will seek to mitigate the potential
impact of rising Treasury interest rates
on the performance of the Underlying
Corporate Bond Fund and the
investment-grade corporate bonds
(conversely also limiting the potential
positive impact of falling interest rates).
The short positions will not be intended
to mitigate other factors influencing the
price of investment-grade bonds, such
as credit risk, which may have a greater
impact than rising or falling interest
rates. Relative to a long-only investment
in the same investment-grade bonds, the
Fund’s investment strategy will be
designed to outperform in a rising
interest rate environment and
underperform in a falling interest rate
environment.
iShares Interest Rate Hedged High Yield
Bond ETF
According to the High Yield
Registration Statement, the Fund will
seek to mitigate the interest rate risk of
a portfolio composed of U.S. dollardenominated, high yield corporate
bonds. The Fund will seek to achieve its
investment objective by investing, under
normal circumstances, at least 80% of
its net assets in U.S. dollar-denominated
high yield corporate bonds, in one or
more investment companies (exchangetraded and non-exchange-traded funds)
that principally invest in high yield
bonds, in U.S. Treasury securities (or
cash equivalents), and by taking short
positions in U.S. Treasury futures and
other interest rate futures contracts.
According to the High Yield
Registration Statement, the Fund
initially intends to invest a substantial
portion of its assets in the iShares iBoxx
$ High Yield Corporate Bond ETF (the
‘‘Underlying High Yield Bond Fund’’
and together with the Underlying
Corporate Bond Fund, the ‘‘Underlying
Funds’’). The Fund will attempt to
mitigate interest rate risk primarily
through the use of U.S. Treasury futures
contracts. The Fund may also take short
positions in other interest rate futures
contracts, including but not limited to,
Eurodollar and Federal Funds futures.
The Fund will invest only in futures
contracts that are traded on an exchange
that is a member of the ISG or with
which the Exchange has in place a
comprehensive surveillance sharing
agreement.
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BFA will utilize a model-based
proprietary investment process to
assemble an investment portfolio
comprised of (i) long positions in the
Underlying High Yield Bond Fund, (ii)
long positions in U.S. dollardenominated high yield corporate
bonds, (iii) long positions in U.S.
Treasury securities and (iv) short
positions in U.S. Treasury futures and
other interest rate futures contracts. The
short positions are expected to have, in
the aggregate, approximately equivalent
duration to the underlying securities in
the Underlying High Yield Bond Fund
and to the high yield corporate bonds.
By taking these short positions, BFA
will seek to mitigate the potential
impact of rising Treasury interest rates
on the performance of the Underlying
High Yield Bond Fund and the high
yield corporate bonds (conversely also
limiting the potential positive impact of
falling interest rates). The short
positions will not be intended to
mitigate other factors influencing the
price of high yield bonds, such as credit
risk, which may have a greater impact
than rising or falling interest rates.
Relative to a long-only investment in the
same high yield bonds, the Fund’s
investment strategy will be designed to
outperform in a rising interest rate
environment and underperform in a
falling interest rate environment.
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Other Investments
While each Fund, under normal
circumstances, will invest at least 80%
of its net assets in its investments as
described above, a Fund may directly
invest in certain other investments, as
described below. The Funds may
temporarily depart from its normal
investment process,9, provided that the
alternative, in the opinion of BFA, is
consistent with a Fund’s investment
objective and is in the best interest of a
Fund. However, BFA will not seek to
actively time market movements.
A Fund may hold up to an aggregate
amount of 15% of its net assets in
illiquid assets (calculated at the time of
investment), including Rule 144A
securities deemed illiquid by the
Adviser, consistent with Commission
guidance.10 Each Fund will monitor its
9 Circumstances under which a Fund may
temporarily depart from their normal investment
process include, but are not limited to, extreme
volatility or trading halts in the equity markets or
the financial markets generally; operational issues
causing dissemination of inaccurate market
information; or force majeure type events such as
systems failure, natural or man-made disaster, act
of God, armed conflict, act of terrorism, riot or labor
disruption or any similar intervening circumstance.
10 In reaching liquidity decisions, the Adviser
may consider factors including: The frequency of
trades and quotes for the security; the number of
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portfolio liquidity on an ongoing basis
to determine whether, in light of current
circumstances, an adequate level of
liquidity is being maintained, and will
consider taking appropriate steps in
order to maintain adequate liquidity if,
through a change in values, net assets,
or other circumstances, more than 15%
of a Fund’s net assets are held in
illiquid assets. Illiquid assets include
assets subject to contractual or other
restrictions on resale and other
instruments that lack readily available
markets as determined in accordance
with Commission staff guidance.11
Each Fund may invest in repurchase
and reverse repurchase agreements. A
repurchase agreement is an instrument
under which the purchaser (i.e., a Fund
or an Underlying Fund) acquires the
security and the seller agrees, at the
time of the sale, to repurchase the
security at a mutually agreed upon time
and price, thereby determining the yield
during the purchaser’s holding period.
Reverse repurchase agreements involve
the sale of securities with an agreement
to repurchase the securities at an
agreed-upon price, date and interest
payment and have the characteristics of
borrowing.
Each Fund may invest in money
market instruments on an ongoing basis
to provide liquidity or for other reasons.
Money market instruments are generally
short-term investments that may include
but are not limited to: (i) Shares of
money market funds (including those
dealers wishing to purchase or sell the security and
the number of other potential purchasers; dealer
undertakings to make a market in the security; the
nature of the security and the nature of the
marketplace in which it trades (e.g., the time
needed to dispose of the security, the method of
soliciting offers and the mechanics of transfer); any
legal or contractual restrictions on the ability to
transfer the security or asset; significant
developments involving the issuer or counterparty
specifically (e.g., default, bankruptcy, etc.) or the
securities markets generally; and settlement
practices, registration procedures, limitations on
currency conversion or repatriation, and transfer
limitations (for foreign securities or other assets).
11 The Commission has stated that long-standing
Commission guidelines have required open-end
funds to hold no more than 15% of their net assets
in illiquid securities and other illiquid assets. See
Investment Company Act Release No. 28193 (March
11, 2008), 73 FR 14618 (March 18, 2008), footnote
34. See also, Investment Company Act Release No.
5847 (October 21, 1969), 35 FR 19989 (December
31, 1970) (Statement Regarding ‘‘Restricted
Securities’’); Investment Company Act Release No.
18612 (March 12, 1992), 57 FR 9828 (March 20,
1992) (Revisions of Guidelines to Form N–1A). A
fund’s portfolio security is illiquid if it cannot be
disposed of in the ordinary course of business
within seven days at approximately the value
ascribed to it by the fund. See Investment Company
Act Release No. 14983 (March 12, 1986), 51 FR
9773 (March 21, 1986) (adopting amendments to
Rule 2a-7 under the 1940 Act); Investment
Company Act Release No. 17452 (April 23, 1990),
55 FR 17933 (April 30, 1990) (adopting Rule 144A
under the Securities Act of 1933).
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17587
advised by BFA or otherwise affiliated
with BFA); (ii) obligations issued or
guaranteed by the U.S. government, its
agencies or instrumentalities (including
government-sponsored enterprises); (iii)
negotiable certificates of deposit
(‘‘CDs’’), bankers’ acceptances, fixedtime deposits and other obligations of
U.S. and non-U.S. banks (including nonU.S. branches) and similar institutions;
(iv) commercial paper rated, at the date
of purchase, ‘‘Prime-1’’ by Moody’s®
Investors Service, Inc., ‘‘F–1’’ by Fitch
Inc., or ‘‘A–1’’ by Standard & Poor’s®
(‘‘S&P®’’), or if unrated, of comparable
quality as determined by BFA; (v) nonconvertible corporate debt securities
(e.g., bonds and debentures) with
remaining maturities at the date of
purchase of not more than 397 days and
that satisfy the rating requirements set
forth in Rule 2a–7 under the 1940 Act;
and (vi) short-term U.S. dollardenominated obligations of non-U.S.
banks (including U.S. branches) that, in
the opinion of BFA, are of comparable
quality to obligations of U.S. banks
which may be purchased by a Fund.
Any of these instruments may be
purchased on a current or forwardsettled basis. Time deposits are nonnegotiable deposits maintained in
banking institutions for specified
periods of time at stated interest rates.
A Fund may invest in options that are
traded on a U.S. or non-U.S. exchange
and that reference U.S. Treasury
securities. To the extent that a Fund
invests in options, not more than 10%
of such investment would be in options
whose principal trading market is not a
member of ISG or is a market with
which the Exchange does not have a
comprehensive surveillance sharing
agreement.
A Fund or the Underlying Funds may
invest in debt securities of non-U.S.
issuers and may invest in privatelyissued debt securities.
Each Fund will be classified as a
‘‘diversified’’ investment company
under the 1940 Act.12
Each Fund will not purchase the
securities of issuers conducting their
principal business activity in the same
industry if, immediately after the
purchase and as a result thereof, the
value of a Fund’s investments in that
industry would equal or exceed 25% of
the current value of a Fund’s total
assets, provided that this restriction
does not limit a Fund’s: (i) Investments
in securities of other investment
companies, (ii) investments in securities
issued or guaranteed by the U.S.
government, its agencies or
12 The diversification standard is set forth in
Section 5(b)(1) of the 1940 Act.
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instrumentalities, (iii) investments in
securities of state, territory, possession
or municipal governments and their
authorities, agencies, instrumentalities
or political subdivisions; or (iv)
investments in repurchase agreements
collateralized by any such obligations.13
Each Fund intends to qualify for and
to elect treatment as a separate regulated
investment company (‘‘RIC’’) under
Subchapter M of the Internal Revenue
Code.14
Each Fund’s investments will be
consistent with its investment objective.
The Shares
The Shares will conform to the initial
and continued listing criteria under
NYSE Arca Equities Rule 8.600. The
Exchange represents that, for initial
and/or continued listing, the Funds will
be in compliance with Rule 10A–3 15
under theAct, as provided by NYSE
Arca Equities Rule 5.3. A minimum of
100,000 Shares for each Fund will be
outstanding at the commencement of
trading on the Exchange. The Exchange
will obtain a representation from the
issuer of the Shares that the net asset
value (‘‘NAV’’) per Share of each Fund
will be calculated daily and that the
NAV and the Disclosed Portfolio as
defined in NYSE Arca Equities Rule
8.600(c)(2) will be made available to all
market participants at the same time.
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Creation and Redemption of Shares
According to the Registration
Statements, each Fund will issue and
redeem Shares on a continuous basis at
NAV only in large specified numbers of
Shares called a ‘‘Creation Unit’’.
The consideration for purchase of
Creation Units of each Fund generally
will consist of the in-kind deposit of a
designated portfolio of securities
(including any portion of such securities
for which cash may be substituted) (i.e.,
the Deposit Securities (as defined
below)) and the Cash Component (as
defined below) computed as described
below. Together, the Deposit Securities
and the Cash Component constitute the
‘‘Fund Deposit,’’ which will be
applicable (subject to possible
amendment or correction) to creation
requests received in proper form. The
Fund Deposit represents the minimum
initial and subsequent investment
amount for a Creation Unit of a Fund.
13 See Form N–1A, Item 9. The Commission has
taken the position that a fund is concentrated if it
invests more than 25% of the value of its total
assets in any one industry. See, e.g., Investment
Company Act Release No. 9011 (October 30, 1975),
40 FR 54241 (November 21, 1975).
14 26 U.S.C. 851 et seq.
15 17 CFR 240.10A–3.
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The Cash Component will be an
amount equal to the difference between
the NAV of the Shares (per Creation
Unit) and the ‘‘Deposit Amount,’’ which
is an amount equal to the market value
of the Deposit Securities, and serve to
compensate for any differences between
the NAV per Creation Unit and the
Deposit Amount.
BFA will make available through the
National Securities Clearing Corporation
(‘‘NSCC’’) on each business day, prior to
the opening of business on the
Exchange, the list of names and the
required number or par value of each
Deposit Security and the amount of the
Cash Component to be included in the
current Fund Deposit (based on
information as of the end of the
previous business day) for the
applicable Fund. Such Fund Deposit is
applicable, subject to any adjustments
as described below, in order to effect
purchases of Creation Units of Shares of
a Fund until such time as the nextannounced Fund Deposit is made
available.
The identity and number or par value
of the Deposit Securities may change
pursuant to changes in the composition
of a Fund’s portfolio and as rebalancing
adjustments and corporate action events
occur from time to time. The
composition of the Deposit Securities
may also change in response to
adjustments to the weighting or
composition of the component
securities constituting a Fund’s
portfolio.
The portfolio of securities required for
purchase of a Creation Unit may not be
identical to the portfolio of securities a
Fund will deliver upon redemption of
Fund Shares. The Deposit Securities
and Fund Securities (as defined below),
as the case may be, in connection with
a purchase or redemption of a Creation
Unit, generally will correspond pro rata
to the securities held by such Fund.
Each Fund reserves the right to permit
or require the substitution of a ‘‘cash in
lieu’’ amount to be added to the Cash
Component to replace any Deposit
Security that may not be available in
sufficient quantity for delivery or that
may not be eligible for transfer through
the Depository Trust Company (‘‘DTC’’)
or through the continuous net
settlement system of the NSCC. Each
Fund also reserves the right to permit or
require a ‘‘cash in lieu’’ amount in
certain other circumstances, including
circumstances in which (i) the delivery
of the Deposit Security by the
authorized participant would be
restricted under applicable securities
laws or (ii) the delivery of the Deposit
Security to the authorized participant
would result in the disposition of the
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Deposit Security by the authorized
participant becoming restricted under
applicable securities laws, or in certain
other situations. The Adviser represents
that, to the extent the Trust permits or
requires a ‘‘cash in lieu’’ amount, such
transactions will be effected in the same
or equitable manner for all authorized
participants.
Creation Units may be purchased only
by or through a DTC participant that has
entered into an authorized participant
agreement (as described in the
Registration Statements) with the
Distributor. Except as noted below, all
creation orders must be placed for one
or more Creation Units and must be
received by the Distributor in proper
form no later than the closing time of
the regular trading session of the
Exchange (normally 4:00 p.m., Eastern
time) in each case on the date such
order is placed in order for creation of
Creation Units to be effected based on
the NAV of Shares of a Fund as next
determined on such date after receipt of
the order in proper form. Orders
requesting substitution of a ‘‘cash in
lieu’’ amount generally must be received
by the Distributor no later than 4:00
p.m., Eastern time. On days when the
Exchange or other markets close earlier
than normal, a Fund may require orders
to create Creation Units to be placed
earlier in the day. A standard creation
transaction fee will be imposed to offset
the transfer and other transaction costs
associated with the issuance of Creation
Units.
Shares of a Fund may be redeemed
only in Creation Units at their NAV next
determined after receipt of a redemption
request in proper form by the
Distributor and only on a business day.
BFA will make available through the
NSCC, prior to the opening of business
on the Exchange on each business day,
the designated portfolio of securities
(including any portion of such securities
for which cash may be substituted) that
will be applicable (subject to possible
amendment or correction) to
redemption requests received in proper
form on that day (‘‘Fund Securities’’).
Fund Securities received on redemption
may not be identical to Deposit
Securities that are applicable to
creations of Creation Units.
Unless cash redemptions are available
or specified for a Fund, the redemption
proceeds for a Creation Unit generally
will consist of a specified amount of
cash, Fund Securities, plus additional
cash in an amount equal to the
difference between the NAV of the
Shares being redeemed, as next
determined after the receipt of a request
in proper form, and the value of the
specified amount of cash and Fund
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Securities, less a redemption transaction
fee. Each Fund currently will redeem
Shares for Fund Securities, but each
Fund reserves the right to utilize a
‘‘cash’’ option for redemption of Shares.
A standard redemption transaction fee
will be imposed to offset transfer and
other transaction costs that may be
incurred by a Fund.
Redemption requests for Creation
Units of a Fund must be submitted to
the Distributor by or through an
authorized participant no later than 4:00
p.m. Eastern time on any business day,
in order to receive that day’s NAV. The
authorized participant must transmit the
request for redemption in the form
required by a Fund to the Distributor in
accordance with procedures set forth in
the authorized participant agreement.
Determination of Net Asset Value
According to the Registration
Statements, the NAV of each Fund
normally will be determined once each
business day, generally as of the
regularly scheduled close of business of
the New York Stock Exchange (‘‘NYSE’’)
(normally 4:00 p.m., Eastern time) on
each day that the NYSE is open for
trading, based on prices at the time of
closing provided that (a) any Fund
assets or liabilities denominated in
currencies other than the U.S. dollar are
translated into U.S. dollars at the
prevailing market rates on the date of
valuation as quoted by one or more data
service providers, and (b) U.S. fixedincome assets may be valued as of the
announced closing time for trading in
fixed-income instruments in a particular
market or exchange. The NAV per Share
of each Fund will be calculated by
dividing the value of the net assets of
each Fund (i.e., the value of its total
assets less total liabilities) by the total
number of outstanding Shares of a
Fund, generally rounded to the nearest
cent.
The value of the securities and other
assets and liabilities held by each Fund
will be determined pursuant to
valuation policies and procedures
approved by the Trust’s Board of
Directors (‘‘Board’’).
Except as described below, each Fund
will value fixed-income portfolio
securities, including money market
instruments and U.S. government
securities, using prices provided
directly from one or more brokerdealers, market makers, or independent
third-party pricing services which may
use matrix pricing and valuation
models, as well as recent market
transactions for the same or similar
assets, to derive values. Certain money
market instruments with maturities of
60 days or less will generally be valued
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on the basis of amortized cost.
Repurchase agreements and reverse
repurchase agreements are generally
valued at par.
Exchange-traded options are generally
valued at the mean of the last bid and
ask prices as quoted on the exchange or
the board of trade on which such
options are traded. Futures contracts,
including U.S. Treasury futures
contracts, will be valued at their last
sale price or settle price as of the close
of such exchange.
Investments in other investment
companies will be valued using market
valuations. Investment companies that
are exchange traded will generally be
valued using the last reported official
closing price or last trading price on the
exchange or other market on which the
fund is primarily traded at the time of
valuation. Investment companies that
are not exchange traded will be valued
at their net asset value.
Generally, trading in U.S. Treasury
futures, non-U.S. securities, U.S.
government securities, money market
instruments and certain fixed-income
securities is substantially completed
each day at various times prior to the
close of business on the NYSE. The
values of such securities used in
computing the NAV of each Fund are
determined as of such times.
When market quotations are not
readily available or are believed by BFA
to be unreliable, each Fund’s
investments will be valued at fair value.
Fair value determinations will be made
by BFA in accordance with policies and
procedures approved by the Trust’s
Board. BFA may conclude that a market
quotation is not readily available or is
unreliable if a security or other asset or
liability does not have a price source
due to its lack of liquidity, if a market
quotation differs significantly from
recent price quotations or otherwise no
longer appears to reflect fair value,
where the security or other asset or
liability is thinly traded, or where there
is a significant event subsequent to the
most recent market quotation. A
‘‘significant event’’ is an event that, in
the judgment of BFA, is likely to cause
a material change to the closing market
price of the asset or liability held by the
Fund.
business day’s reported closing price,
NAV and mid-point of the bid/ask
spread at the time of calculation of such
NAV (the ‘‘Bid/Ask Price’’),16 and a
calculation of the premium and
discount of the Bid/Ask Price against
the NAV, and (2) data in chart format
displaying the frequency distribution of
discounts and premiums of the daily
Bid/Ask Price against the NAV, within
appropriate ranges, for each of the four
previous calendar quarters. On each
business day, before commencement of
trading in Shares in the Core Trading
Session on the Exchange, each Fund
will disclose on its Web site the
Disclosed Portfolio that will form the
basis for such Fund’s calculation of
NAV at the end of the business day.17
On a daily basis, the Fund will
disclose for each portfolio security or
other financial instrument of each Fund
the following information on the Funds’
Web site: ticker symbol (if applicable),
name of security or financial
instrument, number of shares (if
applicable) and dollar value of
securities and financial instruments
held in the portfolio, and percentage
weighting of the security and financial
instrument in the portfolio. The Web
site information will be publicly
available at no charge.
In addition, a basket composition file,
which includes the security names and
share quantities required to be delivered
in exchange for each Fund’s Shares,
together with estimates and actual cash
components, will be publicly
disseminated daily prior to the opening
of the NYSE via NSCC. The basket
represents one Creation Unit of a Fund.
Investors can also obtain the Trust’s
Statement of Additional Information
(‘‘SAI’’), each Fund’s Shareholder
Reports, and the Trust’s Form N–CSR
and Form N–SAR, filed twice a year.
The Trust’s SAI and Shareholder
Reports are available free upon request
from the Trust, and those documents
and the Form N–CSR and Form N–SAR
may be viewed on-screen or
downloaded from the Commission’s
Web site at www.sec.gov. Information
regarding market price and trading
volume of the Shares will be continually
available on a real-time basis throughout
Availability of Information
The Funds’ Web site
(www.ishares.com), which will be
publicly available prior to the public
offering of Shares, will include a form
of the prospectus for a Fund that may
be downloaded. The Funds’ Web site
will include additional quantitative
information updated on a daily basis,
including, for the Funds, (1) the prior
16 The Bid/Ask Price of each Fund will be
determined using the mid-point of the highest bid
and the lowest offer on the Exchange as of the time
of calculation of a Fund’s NAV. The records relating
to Bid/Ask Prices will be retained by the Funds and
their service providers.
17 Under accounting procedures followed by the
Funds, trades made on the prior business day (‘‘T’’)
will be booked and reflected in NAV on the current
business day (‘‘T+1’’). Accordingly, the Funds will
be able to disclose at the beginning of the business
day the portfolio that will form the basis for the
NAV calculation at the end of the business day.
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the day on brokers’ computer screens
and other electronic services.
Information regarding the previous
day’s closing price and trading volume
information for the Shares will be
published daily in the financial section
of newspapers. Quotation and last sale
information for the Shares of each Fund
and the shares of the Underlying Funds
and any ETFs held by each Fund will
be available via the Consolidated Tape
Association (‘‘CTA’’) high-speed line.
Quotation and last sale information for
exchange-listed options contracts will
be available via the Options Price
Reporting Authority. In addition, the
Indicative Optimized Portfolio Value
(‘‘IOPV’’),18 which is the Portfolio
Indicative Value as defined in NYSE
Arca Equities Rule 8.600 (c)(3), will be
widely disseminated at least every 15
seconds during the Core Trading
Session by one or more major market
data vendors.19 The dissemination of
the IOPV, together with the Disclosed
Portfolio, will allow investors to
determine the value of the underlying
portfolio of each Fund on a daily basis
and to provide a close estimate of that
value throughout the trading day. The
intra-day, closing and settlement prices
of exchange-traded portfolio assets,
including investment companies,
money market instruments, futures and
options will be readily available from
the securities exchanges and futures
exchanges trading such securities and
futures, as the case may be, automated
quotation systems, published or other
public sources, or on-line information
services such as Bloomberg or Reuters.
Such price information on fixed income
portfolio securities, including money
market instruments, and other Fund
assets traded in over-the-counter
markets including bonds and money
market instruments is available from
major broker-dealer firms or market data
vendors, as well as from automated
quotation systems, published or other
18 According to the Registration Statements, the
IOPV calculations will be estimates of the value of
each Fund’s NAV per Share using market data
converted into U.S. dollars at the current currency
rates. The IOPV price will be based on quotes and
closing prices from the securities’ local market and
may not reflect events that occur subsequent to the
local market’s close. Premiums and discounts
between the IOPV and the market price may occur.
This should not be viewed as a ‘‘real-time’’ update
of the NAV per Share of the Funds, which will be
calculated only once a day. The quotations of
certain Fund holdings may not be updated during
U.S. trading hours if such holdings do not trade in
the United States.
19 Currently, it is the Exchange’s understanding
that several major market data vendors display and/
or make widely available IOPVs taken from CTA or
other data feeds.
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18:57 Mar 27, 2014
Jkt 232001
public sources, or online information
services.
Additional information regarding the
Trust and the Shares, including
investment strategies, risks, creation and
redemption procedures, fees, portfolio
holdings disclosure policies,
distributions and taxes is included in
the Registration Statements. All terms
relating to the Funds that are referred to,
but not defined in, this proposed rule
change are defined in the Registration
Statements.
Trading Halts
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.20 Trading in Shares of a
Fund will be halted if the circuit breaker
parameters in NYSE Arca Equities Rule
7.12 have been reached. Trading also
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 comprising
the Disclosed Portfolio of a Fund; or (2)
whether other unusual conditions or
circumstances detrimental to the
maintenance of a fair and orderly
market are present. Trading in the
Shares will be subject to NYSE Arca
Equities Rule 8.600(d)(2)(D), which sets
forth circumstances under which Shares
of a Fund may be halted.
Trading Rules
The Exchange deems the Shares to be
equity securities, thus rendering trading
in the Shares subject to the Exchange’s
existing rules governing the trading of
equity securities. Shares will trade on
the NYSE Arca Marketplace from 4:00
a.m. to 8:00 p.m. Eastern time in
accordance with NYSE Arca Equities
Rule 7.34 (Opening, Core, and Late
Trading Sessions). The Exchange has
appropriate rules to facilitate
transactions in the Shares during all
trading sessions. As provided in NYSE
Arca Equities Rule 7.6, Commentary .03,
the minimum price variation (‘‘MPV’’)
for quoting and entry of orders in equity
securities traded on the NYSE Arca
Marketplace is $0.01, with the exception
of securities that are priced less than
$1.00 for which the MPV for order entry
is $0.0001.
Surveillance
The Exchange represents that trading
in the Shares will be subject to the
existing surveillance procedures
20 See
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Frm 00097
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administered by the Financial Industry
Regulatory Authority (‘‘FINRA’’) on
behalf of the Exchange, which are
designed to detect violations of
Exchange rules and applicable federal
securities laws.21 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
applicable federal securities laws.
The Exchange’s current trading
surveillance focuses on detecting
securities trading outside their normal
patterns. When such situations are
detected, surveillance analysis follows
and investigations are opened, where
appropriate, to review the behavior of
all relevant parties for all relevant
trading violations.
FINRA, on behalf of the Exchange,
will communicate as needed regarding
trading in the Shares of the Funds, as
well as underlying equity securities,
futures and options contracts with other
markets and other entities that are
members of the ISG, and FINRA, on
behalf of the Exchange, may obtain
trading information regarding trading in
the Shares of the Funds as well as
underlying equity securities and futures
from such markets and other entities. In
addition, the Exchange may obtain
information regarding trading in the
Shares of the Funds from markets and
other entities that are members of ISG or
with which the Exchange has in place
a comprehensive surveillance sharing
agreement.22 The Exchange may obtain
information regarding trading in the
Shares of the Funds as well as
underlying equity securities, futures and
exchange-traded options contracts from
ISG member markets or markets with
which the Exchange has in place a
comprehensive surveillance sharing
agreement. In addition, FINRA, on
behalf of the Exchange, is able to access,
as needed, trade information for certain
fixed income instruments reported to
FINRA’s Trade Reporting and
Compliance Engine (‘‘TRACE’’).
In addition, the Exchange also has a
general policy prohibiting the
distribution of material, non-public
information by its employees.
21 FINRA surveils trading on the Exchange
pursuant to a regulatory services agreement. The
Exchange is responsible for FINRA’s performance
under this regulatory services agreement.
22 For a list of the current members of ISG, see
www.isgportal.org. The Exchange notes that not all
components of the Disclosed 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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Information Bulletin
Prior to the commencement of
trading, the Exchange will inform its
Equity Trading Permit (‘‘ETP’’) Holders
in an Information Bulletin (‘‘Bulletin’’)
of the special characteristics and risks
associated with trading the Shares.
Specifically, the Bulletin will discuss
the following: (1) The procedures for
purchases and redemptions of Shares in
Creation Unit aggregations (and that
Shares are not individually redeemable);
(2) NYSE Arca Equities Rule 9.2(a),
which imposes a duty of due diligence
on its ETP Holders to learn the essential
facts relating to every customer prior to
trading the Shares; (3) the risks involved
in trading the Shares during the
Opening and Late Trading Sessions
when an updated IOPV will not be
calculated or publicly disseminated; (4)
how information regarding the IOPV is
disseminated; (5) the requirement that
ETP Holders deliver a prospectus to
investors purchasing newly issued
Shares prior to or concurrently with the
confirmation of a transaction; and (6)
trading information.
In addition, the Bulletin will
reference that each Fund is subject to
various fees and expenses described in
the Registration Statements. The
Bulletin will discuss any exemptive, noaction, and interpretive relief granted by
the Commission from any rules under
the Act. The Bulletin will also disclose
that the NAV for the Shares will be
calculated after 4:00 p.m. Eastern time
each trading day.
mstockstill on DSK4VPTVN1PROD with NOTICES
2. Statutory Basis
The basis under the Act for this
proposed rule change is the requirement
under Section 6(b)(5) 23 that an
exchange have rules that are designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to remove
impediments to, and perfect the
mechanism of a free and open market
and, in general, to protect investors and
the public interest.
The Exchange believes that the
proposed rule change is designed to
prevent fraudulent and manipulative
acts and practices in that the Shares will
be listed and traded on the Exchange
pursuant to the initial and continued
listing criteria in NYSE Arca Equities
Rule 8.600. The Exchange has in place
surveillance procedures that are
adequate to properly monitor trading in
the Shares in all trading sessions and to
deter and detect violations of Exchange
rules and applicable federal securities
laws. The Adviser has implemented a
23 15
U.S.C. 78f(b)(5).
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18:57 Mar 27, 2014
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‘‘fire wall’’ with respect to its affiliated
broker-dealers regarding access to
information concerning the composition
and/or changes to a Fund’s portfolios.
FINRA, on behalf of the Exchange, will
communicate as needed regarding
trading in the Shares of the Funds, as
well as underlying equity securities,
futures and options contracts with other
markets and other entities that are
members of the ISG, and FINRA, on
behalf of the Exchange, may obtain
trading information regarding trading in
the Shares of the Funds as well as
underlying equity securities and futures
from such markets and other entities. In
addition, the Exchange may obtain
information regarding trading in the
Shares of the Funds from markets and
other entities that are members of ISG or
with which the Exchange has in place
a comprehensive surveillance sharing
agreement. The Exchange may obtain
information regarding trading in the
Shares of the Funds as well as
underlying equity securities, futures and
options contracts from ISG member
markets or markets with which the
Exchange has in place a comprehensive
surveillance sharing agreement. A Fund
may hold up to an aggregate amount of
15% of its net assets in illiquid assets
(calculated at the time of investment),
including Rule 144A securities deemed
illiquid by the Adviser. With respect to
its exchange-listed equity securities
investments, a Fund will invest only in
equity securities that trade in markets
that are members of the ISG or are
parties to a comprehensive surveillance
sharing agreement with the Exchange.
To the extent that a Fund invests in
options, not more than 10% of such
investment would be in options whose
principal trading market is not a
member of ISG or is a market with
which the Exchange does not have a
comprehensive surveillance sharing
agreement.
The proposed rule change is designed
to promote just and equitable principles
of trade and to protect investors and the
public interest in that the Exchange will
obtain a representation from the issuer
of the Shares that the NAV per Share of
each Fund will be calculated daily and
that the NAV and the Disclosed
Portfolio for each Fund will be made
available to all market participants at
the same time. In addition, a large
amount of information is publicly
available regarding the Funds and the
Shares, thereby promoting market
transparency. Moreover, the IOPV will
be widely disseminated by one or more
major market data vendors at least every
15 seconds during the Exchange’s Core
Trading Session. On each business day,
PO 00000
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17591
before commencement of trading in
Shares in the Core Trading Session on
the Exchange, the Funds will disclose
on their Web site the Disclosed Portfolio
that will form the basis for a Fund’s
calculation of NAV at the end of the
business day. Information regarding
market price and trading volume of the
Shares will be continually available on
a real-time basis throughout the day on
brokers’ computer screens and other
electronic services, and quotation and
last sale information will be available
via the CTA high-speed line. The Web
site for the Funds will include a form of
the prospectus for the Funds and
additional data relating to NAV and
other applicable quantitative
information. Moreover, prior to the
commencement of trading, the Exchange
will inform its ETP Holders in an
Information Bulletin of the special
characteristics and risks associated with
trading the Shares. Trading in Shares of
a Fund will be halted if the circuit
breaker parameters in NYSE Arca
Equities Rule 7.12 have been reached or
because of market conditions or for
reasons that, in the view of the
Exchange, make trading in the Shares
inadvisable, and trading in the Shares
will be subject to NYSE Arca Equities
Rule 8.600(d)(2)(D), which sets forth
circumstances under which Shares of a
Fund may be halted. In addition, as
noted above, investors will have ready
access to information regarding a Fund’s
holdings, the IOPV, the Disclosed
Portfolio, and quotation and last sale
information for the Shares.
The proposed rule change is designed
to perfect the mechanism of a free and
open market and, in general, to protect
investors and the public interest in that
it will facilitate the listing and trading
of an additional type of activelymanaged exchange-traded product that
will enhance competition among market
participants, to the benefit of investors
and the marketplace. As noted above,
FINRA, on behalf of the Exchange, will
communicate as needed regarding
trading in the Shares with other markets
and other entities that are members of
the ISG and FINRA, on behalf of the
Exchange, may obtain trading
information regarding trading in the
Shares from such markets and other
entities. In addition, the Exchange may
obtain information regarding trading in
the Shares from markets and other
entities that are members of ISG or with
which the Exchange has in place a
comprehensive surveillance sharing
agreement. In addition, as noted above,
investors will have ready access to
information regarding a Fund’s
holdings, the IOPV, the Disclosed
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Portfolio, and quotation and last sale
information for the Shares. The
proposed rule change would benefit
investors by providing them with
additional choice of transparent and
tradable products.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purpose of the Act. The Exchange
notes that the proposed rule change will
facilitate the listing and trading of other
actively-managed exchange-traded
products that hold equity securities and
will enhance competition among market
participants, to the benefit of investors
and the marketplace.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the self-regulatory
organization consents, the Commission
will:
(A) By order approve or disapprove
the proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
mstockstill on DSK4VPTVN1PROD with NOTICES
Electronic comments:
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSEArca-2014–23 on the subject line.
Paper Comments:
• Send paper comments in triplicate
to Secretary, Securities and Exchange
18:57 Mar 27, 2014
Jkt 232001
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 10,
2014, Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II,
and III below, which Items have been
prepared by FINRA. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
Kevin M. O’Neill,
Deputy Secretary.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
[FR Doc. 2014–06966 Filed 3–27–14; 8:45 am]
BILLING CODE 8011–01–P
IV. Solicitation of Comments
VerDate Mar<15>2010
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSEArca-2014–23. 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 such
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NYSEArca-2014–23, and should be
submitted on or before April 18, 2014.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–71786; File No. SR–FINRA–
2014–010]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing of
Proposed Rule Change To Adopt
FINRA Rule 2243 (Disclosure and
Reporting Obligations Related to
Recruitment Practices)
March 24, 2014.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
FINRA is proposing to adopt FINRA
Rule 2243, which would establish
disclosure and reporting obligations
related to member recruitment practices.
The text of the proposed rule change
is available on FINRA’s Web site at
https://www.finra.org, at the principal
office of FINRA and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
FINRA included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. FINRA has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
1. Purpose
Background
FINRA members dedicate substantial
resources each year to recruit registered
persons (‘‘representatives’’) to their
firms. Implicit in these recruitment
efforts is an expectation that many of
the representative’s former customers
will transfer assets to the member
recruiting the representative (‘‘recruiting
firm’’) based on the relationship that the
representative has developed with those
customers. To induce representatives to
leave their current firm, recruiting firms
often offer inducements to the
representatives in the form of
recruitment compensation packages.
Recruitment compensation packages
provide a significant layer of
1 15
24 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00099
Fmt 4703
Sfmt 4703
2 17
E:\FR\FM\28MRN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
28MRN1
]]>Agencies
[Federal Register Volume 79, Number 60 (Friday, March 28, 2014)]
[Notices]
[Pages 17585-17592]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-06966]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71778; File No. SR-NYSEArca-2014-23)
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change to List and Trade Shares of the iShares
Interest Rate Hedged Corporate Bond ETF and iShares Interest Rate
Hedged High Yield Bond ETF Under NYSE Arca Equities Rule 8.600
March 24, 2014.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on March 19, 2014, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C.78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The Exchange proposes to list and trade the following under NYSE
Arca Equities Rule 8.600 (``Managed Fund Shares''): iShares Interest
Rate Hedged Corporate Bond ETF and iShares Interest Rate Hedged High
Yield Bond ETF. The text of the proposed rule change is available on
the Exchange's Web site at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to list and trade shares (``Shares'') of the
following under NYSE Arca Equities Rule 8.600, which governs the
listing and trading of Managed Fund Shares \4\: iShares Interest Rate
Hedged Corporate Bond ETF and iShares Interest Rate Hedged High Yield
Bond ETF (each, a ``Fund'' and collectively, the ``Funds''). The Shares
of the Funds will be offered by iShares U.S. ETF Trust (the
``Trust'').\5\. The Trust is registered with the Commission as an open-
end management investment company.\6\ BlackRock Fund Advisors (``BFA'')
will serve as the investment adviser to the Funds (the ``Adviser'').
BFA is an indirect wholly-owned subsidiary of BlackRock, Inc. BlackRock
Investments, LLC (the ``Distributor'') will be the principal
underwriter and distributor of the Funds' Shares. State Street Bank and
Trust Company (the
[[Page 17586]]
``Administrator'', ``Custodian'' or ``Transfer Agent'') will serve as
administrator, custodian and transfer agent for the Funds.
---------------------------------------------------------------------------
\4\ A Managed Fund Share is a security that represents an
interest in an investment company registered under the Investment
Company Act of 1940 (15 U.S.C. 80a-1) (``1940 Act'') organized as an
open-end investment company or similar entity that invests in a
portfolio of securities selected by its investment adviser
consistent with its investment objectives and policies. In contrast,
an open-end investment company that issues Investment Company Units,
listed and traded on the Exchange under NYSE Arca Equities Rule
5.2(j)(3), seeks to provide investment results that correspond
generally to the price and yield performance of a specific foreign
or domestic stock index, fixed income securities index or
combination thereof.
\5\ The Commission has previously approved listing and trading
on the Exchange of a number of actively managed funds under Rule
8.600. See, e.g., Securities Exchange Act Release Nos. 57801 (May 8,
2008), 73 FR 27878 (May 14, 2008) (SR-NYSEArca-2008-31) (order
approving Exchange listing and trading of twelve actively-managed
funds of the WisdomTree Trust); 60460 (August 7, 2009), 74 FR 41468
(August 17, 2009) (SR-NYSEArca-2009-55) (order approving listing and
trading of Dent Tactical ETF); 63076 (October 12, 2010), 75 FR 63874
(October 18, 2010) (SR-NYSEArca-2010-79) (order approving listing
and trading of Cambria Global Tactical ETF).
\6\ The Trust is registered under the 1940 Act. On August 22,
2013, the Trust filed with the Commission post-effective amendments
on Form N-1A under the Securities Act of 1933 (15 U.S.C. 77a) and
under the 1940 Act relating to the iShares Interest Rate Hedged
Corporate Bond ETF (the ``Corporate Bond Registration Statement'')
and the iShares Interest Rate Hedged High Yield Bond ETF (the ``High
Yield Registration Statement'' and together with the Corporate Bond
Registration Statement, the ``Registration Statements'') (File Nos.
333-179904 and 811-22649). The description of the operation of the
Trust and the Funds herein is based, in part, on the Registration
Statements. In addition, the Commission has issued an order granting
certain exemptive relief to the Trust under the 1940 Act. See
Investment Company Act Release No. 29571 (File No. 812-13601)
(``Exemptive Order'').
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Commentary .06 to Rule 8.600 provides that, if the investment
adviser to the investment company issuing Managed Fund Shares is
affiliated with a broker-dealer, such investment adviser shall erect a
``fire wall'' between the investment adviser and the broker-dealer with
respect to access to information concerning the composition and/or
changes to such investment company portfolio. Commentary .06 further
requires that personnel who make decisions on the open-end fund's
portfolio composition must be subject to procedures designed to prevent
the use and dissemination of material nonpublic information regarding
the open-end fund's portfolio.\7\ Commentary .06 to Rule 8.600 is
similar to Commentary .03(a)(i) and (iii) to NYSE Arca Equities Rule
5.2(j)(3); however, Commentary .06 in connection with the establishment
of a ``fire wall'' between the investment adviser and the broker-dealer
reflects the applicable open-end fund's portfolio, not an underlying
benchmark index, as is the case with index-based funds. The Adviser is
not registered as a broker-dealer but is affiliated with multiple
broker-dealers and has implemented a ``fire wall'' with respect to such
broker-dealers regarding access to information concerning the
composition and/or changes to a Fund's portfolio. In the event (a) the
Adviser or any sub-adviser registers as a broker-dealer or becomes
newly affiliated with a broker-dealer, or (b) any new adviser or sub-
adviser is a registered broker-dealer, or becomes affiliated with a
broker-dealer, it will implement a fire wall with respect to its
relevant personnel or its broker-dealer affiliate regarding access to
information concerning the composition and/or changes to a portfolio,
and will be subject to procedures designed to prevent the use and
dissemination of material non-public information regarding such
portfolio.
---------------------------------------------------------------------------
\7\ An investment adviser to an open-end fund is required to be
registered under the Investment Advisers Act of 1940 (the ``Advisers
Act''). As a result, the Adviser and its related personnel are
subject to the provisions of Rule 204A-1 under the Advisers Act
relating to codes of ethics. This Rule requires investment advisers
to adopt a code of ethics that reflects the fiduciary nature of the
relationship to clients as well as compliance with other applicable
securities laws. Accordingly, procedures designed to prevent the
communication and misuse of non-public information by an investment
adviser must be consistent with Rule 204A-1 under the Advisers Act.
In addition, Rule 206(4)-7 under the Advisers Act makes it unlawful
for an investment adviser to provide investment advice to clients
unless such investment adviser has (i) adopted and implemented
written policies and procedures reasonably designed to prevent
violation, by the investment adviser and its supervised persons, of
the Advisers Act and the Commission rules adopted thereunder; (ii)
implemented, at a minimum, an annual review regarding the adequacy
of the policies and procedures established pursuant to subparagraph
(i) above and the effectiveness of their implementation; and (iii)
designated an individual (who is a supervised person) responsible
for administering the policies and procedures adopted under
subparagraph (i) above
---------------------------------------------------------------------------
iShares Interest Rate Hedged Corporate Bond ETF
According to the Corporate Bond Registration Statement, the Fund
will seek to mitigate the interest rate risk of a portfolio composed of
U.S. dollar-denominated, investment grade corporate bonds. The Fund
will seek to achieve its investment objective by investing, under
normal circumstances,\8\ at least 80% of its net assets in U.S. dollar-
denominated investment-grade bonds, in one or more investment companies
(exchange-traded and non-exchange-traded funds) that principally invest
in investment-grade bonds, in U.S. Treasury securities (or cash
equivalents), and by taking short positions in U.S. Treasury futures
and other interest rate futures contracts.
---------------------------------------------------------------------------
\8\ The term ``under normal circumstances'' includes, but is not
limited to, the absence of extreme volatility or trading halts in
the equity markets or the financial markets generally; operational
issues causing dissemination of inaccurate market information; or
force majeure type events such as systems failure, natural or man-
made disaster, act of God, armed conflict, act of terrorism, riot or
labor disruption or any similar intervening circumstance.
---------------------------------------------------------------------------
According to the Corporate Bond Registration Statement, the Fund
initially intends to invest a substantial portion of its assets in the
iShares iBoxx $ Investment Grade Corporate Bond ETF (the ``Underlying
Corporate Bond Fund''). The Fund will attempt to mitigate interest rate
risk primarily through the use of U.S. Treasury futures contracts. The
Fund may also take short positions in other interest rate futures
contracts, including but not limited to, Eurodollar and Federal Funds
futures. The Fund will invest only in futures contracts that are traded
on an exchange that is a member of the Intermarket Surveillance Group
(``ISG'') or with which the Exchange has in place a comprehensive
surveillance sharing agreement.
BFA will utilize a model-based proprietary investment process to
assemble an investment portfolio comprised of (i) long positions in the
Underlying Corporate Bond Fund, (ii) long positions in U.S. dollar-
denominated investment-grade corporate bonds, (iii) long positions in
U.S. Treasury securities and (iv) short positions in U.S. Treasury
futures and other interest rate futures contracts. The short positions
are expected to have, in the aggregate, approximately equivalent
duration to the underlying securities in the Underlying Corporate Bond
Fund and to the investment-grade corporate bonds. By taking these short
positions, BFA will seek to mitigate the potential impact of rising
Treasury interest rates on the performance of the Underlying Corporate
Bond Fund and the investment-grade corporate bonds (conversely also
limiting the potential positive impact of falling interest rates). The
short positions will not be intended to mitigate other factors
influencing the price of investment-grade bonds, such as credit risk,
which may have a greater impact than rising or falling interest rates.
Relative to a long-only investment in the same investment-grade bonds,
the Fund's investment strategy will be designed to outperform in a
rising interest rate environment and underperform in a falling interest
rate environment.
iShares Interest Rate Hedged High Yield Bond ETF
According to the High Yield Registration Statement, the Fund will
seek to mitigate the interest rate risk of a portfolio composed of U.S.
dollar-denominated, high yield corporate bonds. The Fund will seek to
achieve its investment objective by investing, under normal
circumstances, at least 80% of its net assets in U.S. dollar-
denominated high yield corporate bonds, in one or more investment
companies (exchange-traded and non-exchange-traded funds) that
principally invest in high yield bonds, in U.S. Treasury securities (or
cash equivalents), and by taking short positions in U.S. Treasury
futures and other interest rate futures contracts.
According to the High Yield Registration Statement, the Fund
initially intends to invest a substantial portion of its assets in the
iShares iBoxx $ High Yield Corporate Bond ETF (the ``Underlying High
Yield Bond Fund'' and together with the Underlying Corporate Bond Fund,
the ``Underlying Funds''). The Fund will attempt to mitigate interest
rate risk primarily through the use of U.S. Treasury futures contracts.
The Fund may also take short positions in other interest rate futures
contracts, including but not limited to, Eurodollar and Federal Funds
futures. The Fund will invest only in futures contracts that are traded
on an exchange that is a member of the ISG or with which the Exchange
has in place a comprehensive surveillance sharing agreement.
[[Page 17587]]
BFA will utilize a model-based proprietary investment process to
assemble an investment portfolio comprised of (i) long positions in the
Underlying High Yield Bond Fund, (ii) long positions in U.S. dollar-
denominated high yield corporate bonds, (iii) long positions in U.S.
Treasury securities and (iv) short positions in U.S. Treasury futures
and other interest rate futures contracts. The short positions are
expected to have, in the aggregate, approximately equivalent duration
to the underlying securities in the Underlying High Yield Bond Fund and
to the high yield corporate bonds. By taking these short positions, BFA
will seek to mitigate the potential impact of rising Treasury interest
rates on the performance of the Underlying High Yield Bond Fund and the
high yield corporate bonds (conversely also limiting the potential
positive impact of falling interest rates). The short positions will
not be intended to mitigate other factors influencing the price of high
yield bonds, such as credit risk, which may have a greater impact than
rising or falling interest rates. Relative to a long-only investment in
the same high yield bonds, the Fund's investment strategy will be
designed to outperform in a rising interest rate environment and
underperform in a falling interest rate environment.
Other Investments
While each Fund, under normal circumstances, will invest at least
80% of its net assets in its investments as described above, a Fund may
directly invest in certain other investments, as described below. The
Funds may temporarily depart from its normal investment process,\9\,
provided that the alternative, in the opinion of BFA, is consistent
with a Fund's investment objective and is in the best interest of a
Fund. However, BFA will not seek to actively time market movements.
---------------------------------------------------------------------------
\9\ Circumstances under which a Fund may temporarily depart from
their normal investment process include, but are not limited to,
extreme volatility or trading halts in the equity markets or the
financial markets generally; operational issues causing
dissemination of inaccurate market information; or force majeure
type events such as systems failure, natural or man-made disaster,
act of God, armed conflict, act of terrorism, riot or labor
disruption or any similar intervening circumstance.
---------------------------------------------------------------------------
A Fund may hold up to an aggregate amount of 15% of its net assets
in illiquid assets (calculated at the time of investment), including
Rule 144A securities deemed illiquid by the Adviser, consistent with
Commission guidance.\10\ Each Fund will monitor its portfolio liquidity
on an ongoing basis to determine whether, in light of current
circumstances, an adequate level of liquidity is being maintained, and
will consider taking appropriate steps in order to maintain adequate
liquidity if, through a change in values, net assets, or other
circumstances, more than 15% of a Fund's net assets are held in
illiquid assets. Illiquid assets include assets subject to contractual
or other restrictions on resale and other instruments that lack readily
available markets as determined in accordance with Commission staff
guidance.\11\
---------------------------------------------------------------------------
\10\ In reaching liquidity decisions, the Adviser may consider
factors including: The frequency of trades and quotes for the
security; the number of dealers wishing to purchase or sell the
security and the number of other potential purchasers; dealer
undertakings to make a market in the security; the nature of the
security and the nature of the marketplace in which it trades (e.g.,
the time needed to dispose of the security, the method of soliciting
offers and the mechanics of transfer); any legal or contractual
restrictions on the ability to transfer the security or asset;
significant developments involving the issuer or counterparty
specifically (e.g., default, bankruptcy, etc.) or the securities
markets generally; and settlement practices, registration
procedures, limitations on currency conversion or repatriation, and
transfer limitations (for foreign securities or other assets).
\11\ The Commission has stated that long-standing Commission
guidelines have required open-end funds to hold no more than 15% of
their net assets in illiquid securities and other illiquid assets.
See Investment Company Act Release No. 28193 (March 11, 2008), 73 FR
14618 (March 18, 2008), footnote 34. See also, Investment Company
Act Release No. 5847 (October 21, 1969), 35 FR 19989 (December 31,
1970) (Statement Regarding ``Restricted Securities''); Investment
Company Act Release No. 18612 (March 12, 1992), 57 FR 9828 (March
20, 1992) (Revisions of Guidelines to Form N-1A). A fund's portfolio
security is illiquid if it cannot be disposed of in the ordinary
course of business within seven days at approximately the value
ascribed to it by the fund. See Investment Company Act Release No.
14983 (March 12, 1986), 51 FR 9773 (March 21, 1986) (adopting
amendments to Rule 2a-7 under the 1940 Act); Investment Company Act
Release No. 17452 (April 23, 1990), 55 FR 17933 (April 30, 1990)
(adopting Rule 144A under the Securities Act of 1933).
---------------------------------------------------------------------------
Each Fund may invest in repurchase and reverse repurchase
agreements. A repurchase agreement is an instrument under which the
purchaser (i.e., a Fund or an Underlying Fund) acquires the security
and the seller agrees, at the time of the sale, to repurchase the
security at a mutually agreed upon time and price, thereby determining
the yield during the purchaser's holding period. Reverse repurchase
agreements involve the sale of securities with an agreement to
repurchase the securities at an agreed-upon price, date and interest
payment and have the characteristics of borrowing.
Each Fund may invest in money market instruments on an ongoing
basis to provide liquidity or for other reasons. Money market
instruments are generally short-term investments that may include but
are not limited to: (i) Shares of money market funds (including those
advised by BFA or otherwise affiliated with BFA); (ii) obligations
issued or guaranteed by the U.S. government, its agencies or
instrumentalities (including government-sponsored enterprises); (iii)
negotiable certificates of deposit (``CDs''), bankers' acceptances,
fixed-time deposits and other obligations of U.S. and non-U.S. banks
(including non-U.S. branches) and similar institutions; (iv) commercial
paper rated, at the date of purchase, ``Prime-1'' by Moody's[supreg]
Investors Service, Inc., ``F-1'' by Fitch Inc., or ``A-1'' by Standard
& Poor's[supreg] (``S&P[supreg]''), or if unrated, of comparable
quality as determined by BFA; (v) non-convertible corporate debt
securities (e.g., bonds and debentures) with remaining maturities at
the date of purchase of not more than 397 days and that satisfy the
rating requirements set forth in Rule 2a-7 under the 1940 Act; and (vi)
short-term U.S. dollar-denominated obligations of non-U.S. banks
(including U.S. branches) that, in the opinion of BFA, are of
comparable quality to obligations of U.S. banks which may be purchased
by a Fund. Any of these instruments may be purchased on a current or
forward-settled basis. Time deposits are non-negotiable deposits
maintained in banking institutions for specified periods of time at
stated interest rates.
A Fund may invest in options that are traded on a U.S. or non-U.S.
exchange and that reference U.S. Treasury securities. To the extent
that a Fund invests in options, not more than 10% of such investment
would be in options whose principal trading market is not a member of
ISG or is a market with which the Exchange does not have a
comprehensive surveillance sharing agreement.
A Fund or the Underlying Funds may invest in debt securities of
non-U.S. issuers and may invest in privately-issued debt securities.
Each Fund will be classified as a ``diversified'' investment
company under the 1940 Act.\12\
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\12\ The diversification standard is set forth in Section
5(b)(1) of the 1940 Act.
---------------------------------------------------------------------------
Each Fund will not purchase the securities of issuers conducting
their principal business activity in the same industry if, immediately
after the purchase and as a result thereof, the value of a Fund's
investments in that industry would equal or exceed 25% of the current
value of a Fund's total assets, provided that this restriction does not
limit a Fund's: (i) Investments in securities of other investment
companies, (ii) investments in securities issued or guaranteed by the
U.S. government, its agencies or
[[Page 17588]]
instrumentalities, (iii) investments in securities of state, territory,
possession or municipal governments and their authorities, agencies,
instrumentalities or political subdivisions; or (iv) investments in
repurchase agreements collateralized by any such obligations.\13\
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\13\ See Form N-1A, Item 9. The Commission has taken the
position that a fund is concentrated if it invests more than 25% of
the value of its total assets in any one industry. See, e.g.,
Investment Company Act Release No. 9011 (October 30, 1975), 40 FR
54241 (November 21, 1975).
---------------------------------------------------------------------------
Each Fund intends to qualify for and to elect treatment as a
separate regulated investment company (``RIC'') under Subchapter M of
the Internal Revenue Code.\14\
---------------------------------------------------------------------------
\14\ 26 U.S.C. 851 et seq.
---------------------------------------------------------------------------
Each Fund's investments will be consistent with its investment
objective.
The Shares
The Shares will conform to the initial and continued listing
criteria under NYSE Arca Equities Rule 8.600. The Exchange represents
that, for initial and/or continued listing, the Funds will be in
compliance with Rule 10A-3 \15\ under theAct, as provided by NYSE Arca
Equities Rule 5.3. A minimum of 100,000 Shares for each Fund will be
outstanding at the commencement of trading on the Exchange. The
Exchange will obtain a representation from the issuer of the Shares
that the net asset value (``NAV'') per Share of each Fund will be
calculated daily and that the NAV and the Disclosed Portfolio as
defined in NYSE Arca Equities Rule 8.600(c)(2) will be made available
to all market participants at the same time.
---------------------------------------------------------------------------
\15\ 17 CFR 240.10A-3.
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Creation and Redemption of Shares
According to the Registration Statements, each Fund will issue and
redeem Shares on a continuous basis at NAV only in large specified
numbers of Shares called a ``Creation Unit''.
The consideration for purchase of Creation Units of each Fund
generally will consist of the in-kind deposit of a designated portfolio
of securities (including any portion of such securities for which cash
may be substituted) (i.e., the Deposit Securities (as defined below))
and the Cash Component (as defined below) computed as described below.
Together, the Deposit Securities and the Cash Component constitute the
``Fund Deposit,'' which will be applicable (subject to possible
amendment or correction) to creation requests received in proper form.
The Fund Deposit represents the minimum initial and subsequent
investment amount for a Creation Unit of a Fund.
The Cash Component will be an amount equal to the difference
between the NAV of the Shares (per Creation Unit) and the ``Deposit
Amount,'' which is an amount equal to the market value of the Deposit
Securities, and serve to compensate for any differences between the NAV
per Creation Unit and the Deposit Amount.
BFA will make available through the National Securities Clearing
Corporation (``NSCC'') on each business day, prior to the opening of
business on the Exchange, the list of names and the required number or
par value of each Deposit Security and the amount of the Cash Component
to be included in the current Fund Deposit (based on information as of
the end of the previous business day) for the applicable Fund. Such
Fund Deposit is applicable, subject to any adjustments as described
below, in order to effect purchases of Creation Units of Shares of a
Fund until such time as the next-announced Fund Deposit is made
available.
The identity and number or par value of the Deposit Securities may
change pursuant to changes in the composition of a Fund's portfolio and
as rebalancing adjustments and corporate action events occur from time
to time. The composition of the Deposit Securities may also change in
response to adjustments to the weighting or composition of the
component securities constituting a Fund's portfolio.
The portfolio of securities required for purchase of a Creation
Unit may not be identical to the portfolio of securities a Fund will
deliver upon redemption of Fund Shares. The Deposit Securities and Fund
Securities (as defined below), as the case may be, in connection with a
purchase or redemption of a Creation Unit, generally will correspond
pro rata to the securities held by such Fund.
Each Fund reserves the right to permit or require the substitution
of a ``cash in lieu'' amount to be added to the Cash Component to
replace any Deposit Security that may not be available in sufficient
quantity for delivery or that may not be eligible for transfer through
the Depository Trust Company (``DTC'') or through the continuous net
settlement system of the NSCC. Each Fund also reserves the right to
permit or require a ``cash in lieu'' amount in certain other
circumstances, including circumstances in which (i) the delivery of the
Deposit Security by the authorized participant would be restricted
under applicable securities laws or (ii) the delivery of the Deposit
Security to the authorized participant would result in the disposition
of the Deposit Security by the authorized participant becoming
restricted under applicable securities laws, or in certain other
situations. The Adviser represents that, to the extent the Trust
permits or requires a ``cash in lieu'' amount, such transactions will
be effected in the same or equitable manner for all authorized
participants.
Creation Units may be purchased only by or through a DTC
participant that has entered into an authorized participant agreement
(as described in the Registration Statements) with the Distributor.
Except as noted below, all creation orders must be placed for one or
more Creation Units and must be received by the Distributor in proper
form no later than the closing time of the regular trading session of
the Exchange (normally 4:00 p.m., Eastern time) in each case on the
date such order is placed in order for creation of Creation Units to be
effected based on the NAV of Shares of a Fund as next determined on
such date after receipt of the order in proper form. Orders requesting
substitution of a ``cash in lieu'' amount generally must be received by
the Distributor no later than 4:00 p.m., Eastern time. On days when the
Exchange or other markets close earlier than normal, a Fund may require
orders to create Creation Units to be placed earlier in the day. A
standard creation transaction fee will be imposed to offset the
transfer and other transaction costs associated with the issuance of
Creation Units.
Shares of a Fund may be redeemed only in Creation Units at their
NAV next determined after receipt of a redemption request in proper
form by the Distributor and only on a business day. BFA will make
available through the NSCC, prior to the opening of business on the
Exchange on each business day, the designated portfolio of securities
(including any portion of such securities for which cash may be
substituted) that will be applicable (subject to possible amendment or
correction) to redemption requests received in proper form on that day
(``Fund Securities''). Fund Securities received on redemption may not
be identical to Deposit Securities that are applicable to creations of
Creation Units.
Unless cash redemptions are available or specified for a Fund, the
redemption proceeds for a Creation Unit generally will consist of a
specified amount of cash, Fund Securities, plus additional cash in an
amount equal to the difference between the NAV of the Shares being
redeemed, as next determined after the receipt of a request in proper
form, and the value of the specified amount of cash and Fund
[[Page 17589]]
Securities, less a redemption transaction fee. Each Fund currently will
redeem Shares for Fund Securities, but each Fund reserves the right to
utilize a ``cash'' option for redemption of Shares.
A standard redemption transaction fee will be imposed to offset
transfer and other transaction costs that may be incurred by a Fund.
Redemption requests for Creation Units of a Fund must be submitted
to the Distributor by or through an authorized participant no later
than 4:00 p.m. Eastern time on any business day, in order to receive
that day's NAV. The authorized participant must transmit the request
for redemption in the form required by a Fund to the Distributor in
accordance with procedures set forth in the authorized participant
agreement.
Determination of Net Asset Value
According to the Registration Statements, the NAV of each Fund
normally will be determined once each business day, generally as of the
regularly scheduled close of business of the New York Stock Exchange
(``NYSE'') (normally 4:00 p.m., Eastern time) on each day that the NYSE
is open for trading, based on prices at the time of closing provided
that (a) any Fund assets or liabilities denominated in currencies other
than the U.S. dollar are translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more data
service providers, and (b) U.S. fixed-income assets may be valued as of
the announced closing time for trading in fixed-income instruments in a
particular market or exchange. The NAV per Share of each Fund will be
calculated by dividing the value of the net assets of each Fund (i.e.,
the value of its total assets less total liabilities) by the total
number of outstanding Shares of a Fund, generally rounded to the
nearest cent.
The value of the securities and other assets and liabilities held
by each Fund will be determined pursuant to valuation policies and
procedures approved by the Trust's Board of Directors (``Board'').
Except as described below, each Fund will value fixed-income
portfolio securities, including money market instruments and U.S.
government securities, using prices provided directly from one or more
broker-dealers, market makers, or independent third-party pricing
services which may use matrix pricing and valuation models, as well as
recent market transactions for the same or similar assets, to derive
values. Certain money market instruments with maturities of 60 days or
less will generally be valued on the basis of amortized cost.
Repurchase agreements and reverse repurchase agreements are generally
valued at par.
Exchange-traded options are generally valued at the mean of the
last bid and ask prices as quoted on the exchange or the board of trade
on which such options are traded. Futures contracts, including U.S.
Treasury futures contracts, will be valued at their last sale price or
settle price as of the close of such exchange.
Investments in other investment companies will be valued using
market valuations. Investment companies that are exchange traded will
generally be valued using the last reported official closing price or
last trading price on the exchange or other market on which the fund is
primarily traded at the time of valuation. Investment companies that
are not exchange traded will be valued at their net asset value.
Generally, trading in U.S. Treasury futures, non-U.S. securities,
U.S. government securities, money market instruments and certain fixed-
income securities is substantially completed each day at various times
prior to the close of business on the NYSE. The values of such
securities used in computing the NAV of each Fund are determined as of
such times.
When market quotations are not readily available or are believed by
BFA to be unreliable, each Fund's investments will be valued at fair
value. Fair value determinations will be made by BFA in accordance with
policies and procedures approved by the Trust's Board. BFA may conclude
that a market quotation is not readily available or is unreliable if a
security or other asset or liability does not have a price source due
to its lack of liquidity, if a market quotation differs significantly
from recent price quotations or otherwise no longer appears to reflect
fair value, where the security or other asset or liability is thinly
traded, or where there is a significant event subsequent to the most
recent market quotation. A ``significant event'' is an event that, in
the judgment of BFA, is likely to cause a material change to the
closing market price of the asset or liability held by the Fund.
Availability of Information
The Funds' Web site (www.ishares.com), which will be publicly
available prior to the public offering of Shares, will include a form
of the prospectus for a Fund that may be downloaded. The Funds' Web
site will include additional quantitative information updated on a
daily basis, including, for the Funds, (1) the prior business day's
reported closing price, NAV and mid-point of the bid/ask spread at the
time of calculation of such NAV (the ``Bid/Ask Price''),\16\ and a
calculation of the premium and discount of the Bid/Ask Price against
the NAV, and (2) data in chart format displaying the frequency
distribution of discounts and premiums of the daily Bid/Ask Price
against the NAV, within appropriate ranges, for each of the four
previous calendar quarters. On each business day, before commencement
of trading in Shares in the Core Trading Session on the Exchange, each
Fund will disclose on its Web site the Disclosed Portfolio that will
form the basis for such Fund's calculation of NAV at the end of the
business day.\17\
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\16\ The Bid/Ask Price of each Fund will be determined using the
mid-point of the highest bid and the lowest offer on the Exchange as
of the time of calculation of a Fund's NAV. The records relating to
Bid/Ask Prices will be retained by the Funds and their service
providers.
\17\ Under accounting procedures followed by the Funds, trades
made on the prior business day (``T'') will be booked and reflected
in NAV on the current business day (``T+1''). Accordingly, the Funds
will be able to disclose at the beginning of the business day the
portfolio that will form the basis for the NAV calculation at the
end of the business day.
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On a daily basis, the Fund will disclose for each portfolio
security or other financial instrument of each Fund the following
information on the Funds' Web site: ticker symbol (if applicable), name
of security or financial instrument, number of shares (if applicable)
and dollar value of securities and financial instruments held in the
portfolio, and percentage weighting of the security and financial
instrument in the portfolio. The Web site information will be publicly
available at no charge.
In addition, a basket composition file, which includes the security
names and share quantities required to be delivered in exchange for
each Fund's Shares, together with estimates and actual cash components,
will be publicly disseminated daily prior to the opening of the NYSE
via NSCC. The basket represents one Creation Unit of a Fund.
Investors can also obtain the Trust's Statement of Additional
Information (``SAI''), each Fund's Shareholder Reports, and the Trust's
Form N-CSR and Form N-SAR, filed twice a year. The Trust's SAI and
Shareholder Reports are available free upon request from the Trust, and
those documents and the Form N-CSR and Form N-SAR may be viewed on-
screen or downloaded from the Commission's Web site at www.sec.gov.
Information regarding market price and trading volume of the Shares
will be continually available on a real-time basis throughout
[[Page 17590]]
the day on brokers' computer screens and other electronic services.
Information regarding the previous day's closing price and trading
volume information for the Shares will be published daily in the
financial section of newspapers. Quotation and last sale information
for the Shares of each Fund and the shares of the Underlying Funds and
any ETFs held by each Fund will be available via the Consolidated Tape
Association (``CTA'') high-speed line. Quotation and last sale
information for exchange-listed options contracts will be available via
the Options Price Reporting Authority. In addition, the Indicative
Optimized Portfolio Value (``IOPV''),\18\ which is the Portfolio
Indicative Value as defined in NYSE Arca Equities Rule 8.600 (c)(3),
will be widely disseminated at least every 15 seconds during the Core
Trading Session by one or more major market data vendors.\19\ The
dissemination of the IOPV, together with the Disclosed Portfolio, will
allow investors to determine the value of the underlying portfolio of
each Fund on a daily basis and to provide a close estimate of that
value throughout the trading day. The intra-day, closing and settlement
prices of exchange-traded portfolio assets, including investment
companies, money market instruments, futures and options will be
readily available from the securities exchanges and futures exchanges
trading such securities and futures, as the case may be, automated
quotation systems, published or other public sources, or on-line
information services such as Bloomberg or Reuters. Such price
information on fixed income portfolio securities, including money
market instruments, and other Fund assets traded in over-the-counter
markets including bonds and money market instruments is available from
major broker-dealer firms or market data vendors, as well as from
automated quotation systems, published or other public sources, or
online information services.
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\18\ According to the Registration Statements, the IOPV
calculations will be estimates of the value of each Fund's NAV per
Share using market data converted into U.S. dollars at the current
currency rates. The IOPV price will be based on quotes and closing
prices from the securities' local market and may not reflect events
that occur subsequent to the local market's close. Premiums and
discounts between the IOPV and the market price may occur. This
should not be viewed as a ``real-time'' update of the NAV per Share
of the Funds, which will be calculated only once a day. The
quotations of certain Fund holdings may not be updated during U.S.
trading hours if such holdings do not trade in the United States.
\19\ Currently, it is the Exchange's understanding that several
major market data vendors display and/or make widely available IOPVs
taken from CTA or other data feeds.
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Additional information regarding the Trust and the Shares,
including investment strategies, risks, creation and redemption
procedures, fees, portfolio holdings disclosure policies, distributions
and taxes is included in the Registration Statements. All terms
relating to the Funds that are referred to, but not defined in, this
proposed rule change are defined in the Registration Statements.
Trading Halts
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.\20\ Trading in Shares of a Fund
will be halted if the circuit breaker parameters in NYSE Arca Equities
Rule 7.12 have been reached. Trading also 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 comprising the Disclosed Portfolio of a Fund; or
(2) whether other unusual conditions or circumstances detrimental to
the maintenance of a fair and orderly market are present. Trading in
the Shares will be subject to NYSE Arca Equities Rule 8.600(d)(2)(D),
which sets forth circumstances under which Shares of a Fund may be
halted.
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\20\ See NYSE Arca Equities Rule 7.12.
---------------------------------------------------------------------------
Trading Rules
The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. Shares will trade on
the NYSE Arca Marketplace from 4:00 a.m. to 8:00 p.m. Eastern time in
accordance with NYSE Arca Equities Rule 7.34 (Opening, Core, and Late
Trading Sessions). The Exchange has appropriate rules to facilitate
transactions in the Shares during all trading sessions. As provided in
NYSE Arca Equities Rule 7.6, Commentary .03, the minimum price
variation (``MPV'') for quoting and entry of orders in equity
securities traded on the NYSE Arca Marketplace is $0.01, with the
exception of securities that are priced less than $1.00 for which the
MPV for order entry is $0.0001.
Surveillance
The Exchange represents that trading in the Shares will be subject
to the existing surveillance procedures administered by the Financial
Industry Regulatory Authority (``FINRA'') on behalf of the Exchange,
which are designed to detect violations of Exchange rules and
applicable federal securities laws.\21\ 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 applicable federal securities laws.
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\21\ FINRA surveils trading on the Exchange pursuant to a
regulatory services agreement. The Exchange is responsible for
FINRA's performance under this regulatory services agreement.
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The Exchange's current trading surveillance focuses on detecting
securities trading outside their normal patterns. When such situations
are detected, surveillance analysis follows and investigations are
opened, where appropriate, to review the behavior of all relevant
parties for all relevant trading violations.
FINRA, on behalf of the Exchange, will communicate as needed
regarding trading in the Shares of the Funds, as well as underlying
equity securities, futures and options contracts with other markets and
other entities that are members of the ISG, and FINRA, on behalf of the
Exchange, may obtain trading information regarding trading in the
Shares of the Funds as well as underlying equity securities and futures
from such markets and other entities. In addition, the Exchange may
obtain information regarding trading in the Shares of the Funds from
markets and other entities that are members of ISG or with which the
Exchange has in place a comprehensive surveillance sharing
agreement.\22\ The Exchange may obtain information regarding trading in
the Shares of the Funds as well as underlying equity securities,
futures and exchange-traded options contracts from ISG member markets
or markets with which the Exchange has in place a comprehensive
surveillance sharing agreement. In addition, FINRA, on behalf of the
Exchange, is able to access, as needed, trade information for certain
fixed income instruments reported to FINRA's Trade Reporting and
Compliance Engine (``TRACE'').
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\22\ For a list of the current members of ISG, see
www.isgportal.org. The Exchange notes that not all components of the
Disclosed 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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In addition, the Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.
[[Page 17591]]
Information Bulletin
Prior to the commencement of trading, the Exchange will inform its
Equity Trading Permit (``ETP'') Holders in an Information Bulletin
(``Bulletin'') of the special characteristics and risks associated with
trading the Shares. Specifically, the Bulletin will discuss the
following: (1) The procedures for purchases and redemptions of Shares
in Creation Unit aggregations (and that Shares are not individually
redeemable); (2) NYSE Arca Equities Rule 9.2(a), which imposes a duty
of due diligence on its ETP Holders to learn the essential facts
relating to every customer prior to trading the Shares; (3) the risks
involved in trading the Shares during the Opening and Late Trading
Sessions when an updated IOPV will not be calculated or publicly
disseminated; (4) how information regarding the IOPV is disseminated;
(5) the requirement that ETP Holders deliver a prospectus to investors
purchasing newly issued Shares prior to or concurrently with the
confirmation of a transaction; and (6) trading information.
In addition, the Bulletin will reference that each Fund is subject
to various fees and expenses described in the Registration Statements.
The Bulletin will discuss any exemptive, no-action, and interpretive
relief granted by the Commission from any rules under the Act. The
Bulletin will also disclose that the NAV for the Shares will be
calculated after 4:00 p.m. Eastern time each trading day.
2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \23\ that an exchange have rules that
are designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to remove
impediments to, and perfect the mechanism of a free and open market
and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------
\23\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices in that the
Shares will be listed and traded on the Exchange pursuant to the
initial and continued listing criteria in NYSE Arca Equities Rule
8.600. The Exchange has in place surveillance procedures that are
adequate to properly monitor trading in the Shares in all trading
sessions and to deter and detect violations of Exchange rules and
applicable federal securities laws. The Adviser has implemented a
``fire wall'' with respect to its affiliated broker-dealers regarding
access to information concerning the composition and/or changes to a
Fund's portfolios. FINRA, on behalf of the Exchange, will communicate
as needed regarding trading in the Shares of the Funds, as well as
underlying equity securities, futures and options contracts with other
markets and other entities that are members of the ISG, and FINRA, on
behalf of the Exchange, may obtain trading information regarding
trading in the Shares of the Funds as well as underlying equity
securities and futures from such markets and other entities. In
addition, the Exchange may obtain information regarding trading in the
Shares of the Funds from markets and other entities that are members of
ISG or with which the Exchange has in place a comprehensive
surveillance sharing agreement. The Exchange may obtain information
regarding trading in the Shares of the Funds as well as underlying
equity securities, futures and options contracts from ISG member
markets or markets with which the Exchange has in place a comprehensive
surveillance sharing agreement. A Fund may hold up to an aggregate
amount of 15% of its net assets in illiquid assets (calculated at the
time of investment), including Rule 144A securities deemed illiquid by
the Adviser. With respect to its exchange-listed equity securities
investments, a Fund will invest only in equity securities that trade in
markets that are members of the ISG or are parties to a comprehensive
surveillance sharing agreement with the Exchange. To the extent that a
Fund invests in options, not more than 10% of such investment would be
in options whose principal trading market is not a member of ISG or is
a market with which the Exchange does not have a comprehensive
surveillance sharing agreement.
The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that the Exchange will obtain a representation from the issuer of the
Shares that the NAV per Share of each Fund will be calculated daily and
that the NAV and the Disclosed Portfolio for each Fund will be made
available to all market participants at the same time. In addition, a
large amount of information is publicly available regarding the Funds
and the Shares, thereby promoting market transparency. Moreover, the
IOPV will be widely disseminated by one or more major market data
vendors at least every 15 seconds during the Exchange's Core Trading
Session. On each business day, before commencement of trading in Shares
in the Core Trading Session on the Exchange, the Funds will disclose on
their Web site the Disclosed Portfolio that will form the basis for a
Fund's calculation of NAV at the end of the business day. Information
regarding market price and trading volume of the Shares will be
continually available on a real-time basis throughout the day on
brokers' computer screens and other electronic services, and quotation
and last sale information will be available via the CTA high-speed
line. The Web site for the Funds will include a form of the prospectus
for the Funds and additional data relating to NAV and other applicable
quantitative information. Moreover, prior to the commencement of
trading, the Exchange will inform its ETP Holders in an Information
Bulletin of the special characteristics and risks associated with
trading the Shares. Trading in Shares of a Fund will be halted if the
circuit breaker parameters in NYSE Arca Equities Rule 7.12 have been
reached or because of market conditions or for reasons that, in the
view of the Exchange, make trading in the Shares inadvisable, and
trading in the Shares will be subject to NYSE Arca Equities Rule
8.600(d)(2)(D), which sets forth circumstances under which Shares of a
Fund may be halted. In addition, as noted above, investors will have
ready access to information regarding a Fund's holdings, the IOPV, the
Disclosed Portfolio, and quotation and last sale information for the
Shares.
The proposed rule change is designed to perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest in that it will facilitate the listing and trading of
an additional type of actively-managed exchange-traded product that
will enhance competition among market participants, to the benefit of
investors and the marketplace. As noted above, FINRA, on behalf of the
Exchange, will communicate as needed regarding trading in the Shares
with other markets and other entities that are members of the ISG and
FINRA, on behalf of the Exchange, may obtain trading information
regarding trading in the Shares from such markets and other entities.
In addition, the Exchange may obtain information regarding trading in
the Shares from markets and other entities that are members of ISG or
with which the Exchange has in place a comprehensive surveillance
sharing agreement. In addition, as noted above, investors will have
ready access to information regarding a Fund's holdings, the IOPV, the
Disclosed
[[Page 17592]]
Portfolio, and quotation and last sale information for the Shares. The
proposed rule change would benefit investors by providing them with
additional choice of transparent and tradable products.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purpose of the Act. The Exchange notes that the
proposed rule change will facilitate the listing and trading of other
actively-managed exchange-traded products that hold equity securities
and will enhance competition among market participants, to the benefit
of investors and the marketplace.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic comments:
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSEArca-2014-23 on the subject line.
Paper Comments:
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2014-23. 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 such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEArca-2014-23, and should
be submitted on or before April 18, 2014.
For the Commission, by the Division of Trading and Markets, pursuant
to delegated authority.\24\
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\24\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-06966 Filed 3-27-14; 8:45 am]
BILLING CODE 8011-01-P
