Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing of a Proposed Rule Change To List and Trade Shares of the iShares Short Maturity Municipal Bond ETF of the iShares U.S. ETF Trust Under Rule 14.11(i) of BATS Exchange, Inc., 78125-78132 [2014-30276]

Download as PDF Federal Register / Vol. 79, No. 248 / Monday, December 29, 2014 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.21 Brent J. Fields, Secretary. 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: [FR Doc. 2014–30274 Filed 12–24–14; 8:45 am] 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– EDGX–2014–34 on the subject line. tkelley on DSK3SPTVN1PROD with NOTICES it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.. Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing of a Proposed Rule Change To List and Trade Shares of the iShares Short Maturity Municipal Bond ETF of the iShares U.S. ETF Trust Under Rule 14.11(i) of BATS Exchange, Inc. 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–EDGX–2014–34. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the 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–EDGX– 2014–34, and should be submitted on or before January 20, 2015. December 19, 2014. BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73895; File No. SR–BATS– 2014–054] Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 12, 2014, BATS Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BATS’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. 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 filed a proposal to list and trade shares of the iShares Short Maturity Municipal Bond ETF (the ‘‘Fund’’) of the iShares U.S. ETF Trust (the ‘‘Trust’’) under BATS Rule 14.11(i) (‘‘Managed Fund Shares’’). The shares of the Fund are referred to herein as the ‘‘Shares.’’ The text of the proposed rule change is available at the Exchange’s Web site at https://www.batstrading.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 Exchange 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 1 15 21 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 19:09 Dec 24, 2014 2 17 Jkt 235001 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00101 Fmt 4703 78125 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 the Shares under BATS Rule 14.11(i), which governs the listing and trading of Managed Fund Shares on the Exchange.3 The Fund will be an actively managed fund. The Shares will be offered by the Trust, which was established as a Delaware statutory trust on June 21, 2011. The Trust is registered with the Commission as an open-end investment company and has filed a registration statement on behalf of the Fund on Form N–1A (‘‘Registration Statement’’) with the Commission.4 Description of the Shares and the Fund BlackRock Fund Advisors is the investment adviser (‘‘BFA’’ or ‘‘Adviser’’) to the Fund.5 State Street Bank and Trust Company is the administrator, custodian, and transfer agent (‘‘Administrator,’’ ‘‘Custodian,’’ and ‘‘Transfer Agent,’’ respectively) for the Trust. BlackRock Investments, LLC serves as the distributor (‘‘Distributor’’) for the Trust. BATS Rule 14.11(i)(7) provides that, if the investment adviser to the investment company issuing Managed Fund Shares is affiliated with a brokerdealer, 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.6 In addition, Rule 3 The Commission approved BATS Rule 14.11(i) in Securities Exchange Act Release No. 65225 (August 30, 2011), 76 FR 55148 (September 6, 2011) (SR–BATS–2011–018). 4 See Registration Statement on Form N–1A for the Trust, dated September 3, 2014 (File Nos. 333– 179904 and 811–22649). The descriptions of the Fund and the Shares contained herein are based, in part, on information in the Registration Statement. The Commission has issued an order granting certain exemptive relief to the Trust under the Investment Company Act of 1940 (15 U.S.C. 80a– 1) (‘‘1940 Act’’) (the ‘‘Exemptive Order’’). See Investment Company Act Release No. 29571 (January 24, 2011) (File No. 812–13601). 5 BFA is an indirect wholly owned subsidiary of BlackRock, Inc. 6 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 Continued Sfmt 4703 E:\FR\FM\29DEN1.SGM 29DEN1 78126 Federal Register / Vol. 79, No. 248 / Monday, December 29, 2014 / Notices tkelley on DSK3SPTVN1PROD with NOTICES 14.11(i)(7) further requires that personnel who make decisions on the investment company’s portfolio composition must be subject to procedures designed to prevent the use and dissemination of material nonpublic information regarding the applicable investment company portfolio. Rule 14.11(i)(7) is similar to BATS Rule 14.11(b)(5)(A)(i), however, Rule 14.11(i)(7) 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 a registered broker-dealer, but is affiliated with multiple broker-dealers and has implemented ‘‘fire walls’’ with respect to such broker-dealers regarding access to information concerning the composition and/or changes to the Fund’s portfolio. In addition, Adviser personnel who make decisions regarding the Fund’s portfolio are subject to procedures designed to prevent the use and dissemination of material nonpublic information regarding the Fund’s portfolio. In the event that (a) the Adviser becomes registered as a broker-dealer or newly affiliated with another 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 such broker-dealer affiliate, as applicable, regarding access to information concerning the composition and/or changes to the portfolio, and will be subject to procedures designed to prevent the use and dissemination of material nonpublic information regarding such portfolio. 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. VerDate Sep<11>2014 19:09 Dec 24, 2014 Jkt 235001 iShares Short Maturity Municipal Bond ETF According to the Registration Statement, the Fund will seek to maximize tax-free current income. To achieve its objective, the Fund will invest, under normal circumstances,7 at least 80% of its net assets in Municipal Securities, as defined below, such that the interest on each bond is exempt from U.S. federal income taxes and the federal alternative minimum tax (the ‘‘AMT’’), along with Short-Term Instruments and Repurchase Agreements, as both terms are defined below. The Fund is not a money market fund and does not seek to maintain a stable net asset value of $1.00 per share. The Fund will be classified as a ‘‘diversified’’ investment company under the 1940 Act.8 The 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 the Fund’s investments in that industry would equal or exceed 25% of the current value of the Fund’s total assets, provided that this restriction does not limit the 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 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.9 The Fund intends to qualify each year as a regulated investment company (a ‘‘RIC’’) under subchapter M of the Internal Revenue Code of 1986, as amended. The Fund will invest its assets, and otherwise conduct its operations, in a manner that is intended to satisfy the qualifying income, diversification and distribution requirements necessary to establish and 7 The term ‘‘under normal circumstances’’ includes, but is not limited to, the absence of adverse market, economic, political, or other conditions, including extreme volatility or trading halts in the financial markets; 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. 8 The diversification standard is set forth in section 5(b)(1) of the 1940 Act. 9 See Form N–1A, Item 9. The Commission has taken the position that a fund is concentrated if it invests in 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). PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 maintain RIC qualification under subchapter M. Principal Holdings—Municipal Securities To achieve its objective, the Fund will invest, under normal circumstances, in U.S.-dollar denominated investmentgrade short-term fixed- and floating-rate municipal bonds, municipal notes and variable rate demand obligations, as well as money market instruments and registered investment companies. Investment-grade securities are rated a minimum of BBB- or higher by Standard & Poor’s Ratings Services and/or Fitch, or Baa3 or higher by Moody’s, or if unrated, determined by the Adviser to be of equivalent quality.10 Generally, the Fund’s effective duration will be 1.2 years or less, as calculated by the management team, and it is not expected to exceed 1.5 years.11 Municipal securities (‘‘Municipal Securities’’) are fixed and floating rate securities issued in the U.S. by U.S. states and territories, municipalities and other political subdivisions, agencies, authorities, and instrumentalities of states and multi-state agencies and authorities and will include only the following instruments: General obligation bonds,12 limited obligation bonds (or revenue bonds),13 private 10 According to the Adviser, BFA may determine that unrated securities are of ‘‘equivalent quality’’ based on such credit quality factors that it deems appropriate, which may include among other things, performing an analysis similar, to the extent possible, to that performed by a nationally recognized statistical ratings organization when rating similar securities and issuers. In making such a determination, BFA may consider internal analyses and risk ratings, third party research and analysis, and other sources of information, as deemed appropriate by the Adviser. 11 Effective duration is a measure of the Fund’s price sensitivity to changes in yields or interest rates. 12 General obligation bonds are obligations involving the credit of an issuer possessing taxing power and are payable from such issuer’s general revenues and not from any particular source. 13 Limited obligation bonds are payable only from the revenues derived from a particular facility or class of facilities or, in some cases, from the proceeds of a special excise or other specific revenue source, and also include industrial development bonds issued pursuant to former U.S. federal tax law. Industrial development bonds generally are also revenue bonds and thus are not payable from the issuer’s general revenues. The credit and quality of industrial development bonds are usually related to the credit of the corporate user of the facilities. Payment of interest on and repayment of principal of such bonds is the responsibility of the corporate user (and/or any guarantor). E:\FR\FM\29DEN1.SGM 29DEN1 Federal Register / Vol. 79, No. 248 / Monday, December 29, 2014 / Notices tkelley on DSK3SPTVN1PROD with NOTICES activity bonds,14 municipal notes,15 municipal commercial paper,16 tender option bonds,17 variable rate demand obligations (‘‘VRDOs’’),18 municipal lease obligations,19 stripped securities,20 structured securities,21 when issued securities,22 zero coupon securities,23 and exchange traded and non-exchange traded investment companies (including investment companies advised by BFA or its affiliates) that invest in such Municipal Securities.24 14 Private activity bonds are bonds issued by or on behalf of public authorities to obtain funds to provide privately operated housing facilities, airport, mass transit or port facilities, sewage disposal, solid waste disposal or hazardous waste treatment or disposal facilities, and certain local facilities for water supply, gas, or electricity. Other types of private activity bonds, the proceeds of which are used for the construction, equipment, repair or improvement of privately operated industrial or commercial facilities, may constitute municipal securities, although the current U.S. federal tax laws place substantial limitations on the size of such issues. 15 Municipal notes are shorter-term municipal debt obligations that may provide interim financing in anticipation of tax collection, receipt of grants, bond sales, or revenue receipts. 16 Municipal commercial paper is generally unsecured debt that is issued to meet short-term financing needs. 17 Tender option bonds are synthetic floating-rate or variable-rate securities issued when long-term bonds are purchased in the primary or secondary market and then deposited into a trust. Custodial receipts are then issued to investors, such as the Fund, evidencing ownership interests in the trust. 18 VRDOs are tax-exempt obligations that contain a floating or variable interest rate adjustment formula and a right of demand on the part of the holder thereof to receive payment of the unpaid principal balance plus accrued interest upon a short notice period not to exceed seven days. 19 Municipal lease obligations include certificates of participation issued by government authorities or entities to finance the acquisition or construction of equipment, land, and/or facilities. 20 Stripped securities are created when an issuer separates the interest and principal components of an instrument and sells them as separate securities. In general, one security is entitled to receive the interest payments on the underlying assets and the other to receive the principal payments. 21 Structured securities are privately negotiated debt obligations where the principal and/or interest is determined by reference to the performance of an underlying investment, index, or reference obligation, and may be issued by governmental agencies. While structured securities are part of the principal holdings of the Fund, the Issuer represents that such securities, when combined with those instruments held as part of the other portfolio holdings described below, will not exceed 20% of the Fund’s net assets. 22 The Fund may purchase or sell securities that it is entitled to receive on a when issued or delayed delivery basis as well as through a forward commitment. 23 Zero coupon securities are securities that are sold at a discount to par value and do not pay interest during the life of the security. The discount approximates the total amount of interest the security will accrue and compound over the period until maturity at a rate of interest reflecting the market rate of the security at the time of issuance. Upon maturity, the holder of a zero coupon security is entitled to receive the par value of the security. 24 The Fund currently anticipates investing in only registered open-end investment companies, VerDate Sep<11>2014 19:09 Dec 24, 2014 Jkt 235001 The Fund may also enter into repurchase and reverse repurchase agreements for Municipal Securities (collectively, ‘‘Repurchase Agreements’’). 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 as part of the Fund’s principal holdings.25 As discussed above, the Fund may also invest in short-term instruments (‘‘Short-Term Instruments’’) 26 as part of its principal holdings, which includes exchange traded and non-exchange traded investment companies (including investment companies advised by BFA or its affiliates) that invest in money market instruments.27 In the absence of normal circumstances, the Fund may including mutual funds and the open-end investment company funds described in BATS Rule 14.11. The Fund may invest in the securities of other investment companies to the extent permitted by law. 25 The Fund’s exposure to reverse repurchase agreements will be covered by liquid assets having a value equal to or greater than such commitments. The use of reverse repurchase agreements is a form of leverage because the proceeds derived from reverse repurchase agreements may be invested in additional securities. As further stated below, the Fund’s investments will be consistent with its investment objective and will not be used to achieve leveraged returns. 26 The Fund may invest in Short-Term Instruments, including money market instruments, on an ongoing basis to provide liquidity or for other reasons. Money market instruments are generally short-term investments that include only the following: (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, including assetbacked commercial paper; (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 the Fund. All money market securities acquired by the Fund will be rated investment grade. The Fund does not intend to invest in any unrated money market securities. However, it may do so, to a limited extent, such as where a rated money market security becomes unrated, if such money market security is determined by the Adviser to be of comparable quality. BFA may determine that unrated securities are of comparable quality based on such credit quality factors that it deems appropriate, which may include, among other things, performing an analysis similar, to the extent possible, to that performed by a nationally recognized statistical rating organization rating similar securities and issuers. 27 See supra note 24. PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 78127 temporarily depart from its normal investment process, provided that such departure is, in the opinion of the Adviser, consistent with the Fund’s investment objective and in the best interest of the Fund. For example, the Fund may hold a higher than normal proportion of its assets in cash in response to adverse market, economic or political conditions. The Fund intends to qualify each year as a regulated investment company (a ‘‘RIC’’) under subchapter M of the Internal Revenue Code of 1986, as amended.28 The Fund will invest its assets, and otherwise conduct its operations, in a manner that is intended to satisfy the qualifying income, diversification and distribution requirements necessary to establish and maintain RIC qualification under subchapter M. Other Portfolio Holdings The Fund may also, to a limited extent (under normal circumstances, less than 20% of the Fund’s net assets), engage in transactions in interest rate futures contracts for hedging purposes.29 The Fund’s investments will be consistent with its investment objective and will not be used to achieve leveraged returns (i.e. two times or three times the Fund’s benchmark, as described in the Registration Statement). The Fund may also invest up to 20% of its net assets in Municipal Securities that pay interest that is subject to the AMT. Investment Restrictions The Fund may hold up to an aggregate amount of 15% of its net assets in illiquid assets (calculated at the time of investment), as deemed illiquid by the Adviser 30 under the 1940 Act.31 The 28 26 U.S.C. 851. will be exchange traded and collateralized. 30 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 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). 31 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 29 Futures E:\FR\FM\29DEN1.SGM Continued 29DEN1 78128 Federal Register / Vol. 79, No. 248 / Monday, December 29, 2014 / Notices 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 the Fund’s net assets are held in illiquid assets. Illiquid assets include securities subject to contractual or other restrictions on resale and other instruments that lack readily available markets as determined in accordance with Commission staff guidance. Net Asset Value tkelley on DSK3SPTVN1PROD with NOTICES According to the Registration Statement, the net asset value (‘‘NAV’’) of the Fund will be calculated each business day as of the close of regular trading on the New York Stock Exchange (‘‘NYSE’’), generally 4:00 p.m. Eastern Time (the ‘‘NAV Calculation Time’’), on each day that the NYSE is open for trading, based on prices at the NAV Calculation Time. NAV per Share is calculated by dividing the Fund’s net assets by the number of Shares outstanding. According to the Registration Statement, unless otherwise described below, the Fund values Municipal 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. Exchange traded investment companies will be valued at market closing price or, if no closing price is available, at the last traded price on the primary exchange on which they are traded. Price information for such securities will be taken from the exchange where the security is primarily traded. Investment companies not listed on an exchange are valued at their net asset value. 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). VerDate Sep<11>2014 19:09 Dec 24, 2014 Jkt 235001 Futures contracts will be valued at their last sale price or settle price as of the close of the applicable exchange. Repurchase Agreements will generally be valued at par. In certain circumstances, Short-Term Instruments may be valued on the basis of amortized cost. According to the Registration Statement, generally, trading in money market instruments, and certain Municipal Securities is substantially completed each day at various times prior to the close of business on the Exchange. Additionally, trading in certain derivatives is substantially completed each day at various times prior to the close of business on the Exchange. The values of such securities and derivatives used in computing the NAV of the Fund are determined at such times. According to the Registration Statement, when market quotations are not readily available or are believed by BFA to be unreliable, the Fund’s investments are valued at fair value. Fair value determinations are made by BFA in accordance with policies and procedures approved by the Trust’s board of trustees and in accordance with the 1940 Act. BFA may conclude that a market quotation is not readily available or is unreliable if a security or other asset or liability is thinly traded, or where there is a significant event 32 subsequent to the most recent market quotation. According to the Registration Statement, fair value represents a good faith approximation of the value of an asset or liability. The fair value of an asset or liability held by the Fund is the amount the Fund might reasonably expect to receive from the current sale of that asset or the cost to extinguish that liability in an arm’s-length transaction. Valuing the Fund’s investments using fair value pricing will result in prices that may differ from current valuations and that may not be the prices at which those investments could have been sold during the period in which the particular fair values were used. The Shares The Fund will issue and redeem Shares on a continuous basis at the NAV per Share only in large blocks of a specified number of Shares or multiples thereof (‘‘Creation Units’’) in transactions with authorized participants who have entered into 32 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. PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 agreements with the Distributor. The Fund currently anticipates that a Creation Unit will consist of 50,000 Shares, though this number may change from time to time, including prior to listing of the Fund. The exact number of Shares that will constitute a Creation Unit will be disclosed in the Registration Statement of the Fund. Once created, Shares of the Fund trade on the secondary market in amounts less than a Creation Unit. The consideration for purchase of Creation Units of the 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’’), and the ‘‘Cash Component’’ computed as described below. Together, the Deposit Securities and the Cash Component constitute the ‘‘Fund Deposit,’’ which represents the minimum initial and subsequent investment amount for a Creation Unit of the Fund. The portfolio of securities required for purchase of a Creation Unit may not be identical to the portfolio of securities the Fund will deliver upon redemption of 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 the 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 will be 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. The Fund generally offers Creation Units partially for cash. 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 Fund. The identity and number or par value of the Deposit Securities may change pursuant to changes in the composition of the Fund’s portfolio 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 holdings of the Fund. E:\FR\FM\29DEN1.SGM 29DEN1 tkelley on DSK3SPTVN1PROD with NOTICES Federal Register / Vol. 79, No. 248 / Monday, December 29, 2014 / Notices The 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 the clearing process through the NSCC.33 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 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 the 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 2:00 p.m., Eastern Time on the Settlement Date. The ‘‘Settlement Date’’ is generally the third business day after the transmittal date. On days when the Exchange or the bond markets close earlier than normal, the Fund may require orders to create or to redeem Creation Units to be placed earlier in the day. Fund Deposits must be delivered through the Federal Reserve System (for cash and government securities), through DTC (for corporate and municipal securities), or through a central depository account, such as with Euroclear or DTC, maintained by State Street or a sub-custodian (a ‘‘Central Depository Account’’) by an authorized participant. Any portion of a Fund Deposit that may not be delivered through the Federal Reserve System or DTC must be delivered through a Central Depository Account. The Fund Deposit transfer must be ordered by the authorized participant in a timely fashion so as to ensure the delivery of the requisite number of Deposit Securities to the account of the Fund by no later than 3:00 p.m., Eastern Time, on the Settlement Date. 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 the 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 33 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 manner or in an equitable manner for all authorized participants. VerDate Sep<11>2014 19:09 Dec 24, 2014 Jkt 235001 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 the 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 Securities, less a redemption transaction fee. The Fund generally redeems Creation Units partially for cash. A standard redemption transaction fee will be imposed to offset transfer and other transaction costs that may be incurred by the Fund. Redemption requests for Creation Units of the 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 the Fund to the Distributor in accordance with procedures set forth in the authorized participant agreement. Additional information regarding the Shares and the Fund, including investment strategies, risks, creation and redemption procedures, fees and expenses, portfolio holdings disclosure policies, distributions, taxes and reports to be distributed to beneficial owners of the Shares can be found in the Registration Statement or on the Web site for the Fund (www.iShares.com), as applicable. Availability of Information The Fund’s Web site, which will be publicly available prior to the public offering of Shares, will include a form of the prospectus for the Fund that may be downloaded. The Web site will include additional quantitative information updated on a daily basis, including, for the Fund: (1) The prior business day’s NAV and the market closing price or mid-point of the bid/ask spread at the time of calculation of such NAV (the ‘‘Bid/Ask Price’’),34 and a 34 The Bid/Ask Price of the Fund will be determined using the highest bid and the lowest PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 78129 calculation of the premium or discount of the market closing price or 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. Daily trading volume information will be available in the financial section of newspapers, through subscription services such as Bloomberg, Thomson Reuters, and International Data Corporation, which can be accessed by authorized participants and other investors, as well as through other electronic services, including major public Web sites. On each business day, before commencement of trading in Shares during Regular Trading Hours on the Exchange, the Fund will disclose on its Web site the identities and quantities of the portfolio of securities and other assets (the ‘‘Disclosed Portfolio’’) held by the Fund that will form the basis for the Fund’s calculation of NAV at the end of the business day.35 The Disclosed Portfolio will include, as applicable, the names, quantity, percentage weighting and market value of securities and other assets held by the Fund and the characteristics of such assets. The Web site and information will be publicly available at no charge. In addition, for the Fund, an estimated value, defined in BATS Rule 14.11(i)(3)(C) as the ‘‘Intraday Indicative Value,’’ that reflects an estimated intraday value of the Fund’s portfolio, will be disseminated. Moreover, the Intraday Indicative Value will be based upon the current value for the components of the Disclosed Portfolio and will be updated and widely disseminated by one or more major market data vendors at least every 15 seconds during the Exchange’s Regular Trading Hours.36 The dissemination of the Intraday Indicative Value, together with the Disclosed Portfolio, will allow investors to determine the value of the underlying portfolio of the Fund on a daily basis offer on the Exchange as of the time of calculation of the Fund’s NAV. The records relating to Bid/Ask Prices will be retained by the Fund or its service providers. 35 Under accounting procedures to be followed by the Fund, trades made on the prior business day (‘‘T’’) will be booked and reflected in NAV on the current business day (‘‘T+1’’). Accordingly, the Fund 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. 36 Currently, it is the Exchange’s understanding that several major market data vendors display and/ or make widely available Intraday Indicative Values published via the Consolidated Tape Association (‘‘CTA’’) or other data feeds. E:\FR\FM\29DEN1.SGM 29DEN1 78130 Federal Register / Vol. 79, No. 248 / Monday, December 29, 2014 / Notices and provide a close estimate of that value throughout the trading day. Intraday, executable price quotations on assets held by the Fund are available from major broker-dealer firms and for exchange-traded assets, including investment companies, such intraday information is available directly from the applicable listing exchange. All such intraday price information is available through subscription services, such as Bloomberg, Thomson Reuters and International Data Corporation, which can be accessed by authorized participants and other investors. Pricing information for Repurchase Agreements and securities not listed on an exchange or national securities market will be available from major broker-dealer firms and/or subscription services, such as Bloomberg, Thomson Reuters and International Data Corporation. Information regarding market price and volume of the Shares will be continually available on a real-time basis throughout the day on brokers’ computer screens and other electronic services. 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 will be available on the facilities of the CTA. Price information relating to all other securities held by the Fund will be available from major market data vendors. Quotations and last sale information for the underlying exchange traded investment companies will be available through CTA. tkelley on DSK3SPTVN1PROD with NOTICES Initial and Continued Listing The Shares will be subject to BATS Rule 14.11(i), which sets forth the initial and continued listing criteria applicable to Managed Fund Shares. The Exchange represents that, for initial and/or continued listing, the Fund must be in compliance with Rule 10A–3 under the Act.37 A minimum of 100,000 Shares 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 NAV per Share will be calculated daily and that the NAV and the Disclosed Portfolio will be made available to all market participants at the same time. 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 Fund. The Exchange will halt trading in the Shares under the 37 See 17 CFR 240.10A–3. VerDate Sep<11>2014 19:09 Dec 24, 2014 Jkt 235001 conditions specified in BATS Rule 11.18. Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. These may include: (1) The extent to which trading is not occurring in the securities and/or the financial instruments composing the Disclosed Portfolio of the 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 also will be subject to Rule 14.11(i)(4)(B)(iv), which sets forth circumstances under which Shares of the 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. BATS will allow trading in the Shares from 8:00 a.m. until 5:00 p.m. Eastern Time. The Exchange has appropriate rules to facilitate transactions in the Shares during all trading sessions. As provided in BATS Rule 11.11(a), the minimum price variation for quoting and entry of orders in Managed Fund Shares traded on the Exchange is $0.01, with the exception of securities that are priced less than $1.00, for which the minimum price variation for order entry is $0.0001. Surveillance The Exchange believes that its surveillance procedures are adequate to properly monitor the trading of the Shares on the Exchange during all trading sessions and to deter and detect violations of Exchange rules and the applicable federal securities laws. Trading of the Shares through the Exchange will be subject to the Exchange’s surveillance procedures for derivative products, including Managed Fund Shares. The Exchange may obtain information regarding trading in the Shares and the underlying shares in exchange traded equity securities via the ISG, from other exchanges that are members or affiliates of the ISG, or with which the Exchange has entered into a comprehensive surveillance sharing agreement.38 In addition, the Exchange is able to access, as needed, trade information for certain fixed income instruments reported to FINRA’s Trade 38 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 the Fund may trade on markets that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 Reporting and Compliance Engine (‘‘TRACE’’). As it relates to exchange traded investment companies, the Fund will only invest in investment companies that trade on markets that are a member of the ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. To the extent that the Fund invests in futures contracts, the Fund will only invest 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. The Exchange prohibits the distribution of material non-public information by its employees. Information Circular Prior to the commencement of trading, the Exchange will inform its members in an Information Circular of the special characteristics and risks associated with trading the Shares. Specifically, the Information Circular will discuss the following: (1) The procedures for purchases and redemptions of Shares in Creation Units (and that Shares are not individually redeemable); (2) BATS Rule 3.7, which imposes suitability obligations on Exchange members with respect to recommending transactions in the Shares to customers; (3) how information regarding the Intraday Indicative Value is disseminated; (4) the risks involved in trading the Shares during the Pre-Opening 39 and After Hours Trading Sessions 40 when an updated Intraday Indicative Value will not be calculated or publicly disseminated; (5) the requirement that members 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 Information Circular will advise members, prior to the commencement of trading, of the prospectus delivery requirements applicable to the Fund. Members purchasing Shares from the Fund for resale to investors will deliver a prospectus to such investors. The Information Circular will also discuss any exemptive, no-action, and interpretive relief granted by the Commission from any rules under the Act. In addition, the Information Circular will reference that the Fund is subject 39 The Pre-Opening Session is from 8:00 a.m. to 9:30 a.m. Eastern Time. 40 The After Hours Trading Session is from 4:00 p.m. to 5:00 p.m. Eastern Time. E:\FR\FM\29DEN1.SGM 29DEN1 Federal Register / Vol. 79, No. 248 / Monday, December 29, 2014 / Notices tkelley on DSK3SPTVN1PROD with NOTICES to various fees and expenses described in the Registration Statement. The Information Circular will also disclose the trading hours of the Shares of the Fund and the applicable NAV Calculation Time for the Shares. The Information Circular will disclose that information about the Shares of the Fund will be publicly available on the Fund’s Web site. In addition, the Information Circular will reference that the Trust is subject to various fees and expenses described in the Fund’s Registration Statement. 2. Statutory Basis The Exchange believes that the proposal is consistent with section 6(b) of the Act 41 in general and section 6(b)(5) of the Act 42 in particular in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. The 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 BATS Rule 14.11(i). The Exchange believes that its surveillance procedures are adequate to properly monitor the trading of the Shares on the Exchange during all trading sessions and to deter and detect violations of Exchange rules and the applicable federal securities laws. BATS Rule 14.11(i)(7) 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. The Adviser is not a registered broker-dealer, but is affiliated with multiple brokerdealers and has implemented ‘‘fire walls’’ with respect to such brokerdealers regarding access to information concerning the composition and/or changes to the Fund’s portfolio. In addition, Adviser personnel who make decisions regarding the Fund’s portfolio are subject to procedures designed to prevent the use and dissemination of 41 15 42 15 U.S.C. 78f. U.S.C. 78f(b)(5). VerDate Sep<11>2014 19:09 Dec 24, 2014 Jkt 235001 material nonpublic information regarding the Fund’s portfolio. The Exchange may obtain information regarding trading in the Shares and the underlying shares in exchange traded equity securities via the ISG, from other exchanges that are members or affiliates of the ISG, or with which the Exchange has entered into a comprehensive surveillance sharing agreement. In addition, the Exchange is able to access, as needed, trade information for certain fixed income instruments reported to TRACE. According to the Registration Statement, the Fund will invest, under normal circumstances,43 at least 80% of its net assets in Municipal Securities, Short-Term Instruments, and Repurchase Agreements. Additionally, the Fund may hold up to an aggregate amount of 15% of its net assets in illiquid assets (calculated at the time of investment), as deemed illiquid by the Adviser 44 under the 1940 Act.45 The 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 the Fund’s net assets are held in illiquid assets. Illiquid assets include securities subject to contractual or other restrictions on resale and other instruments that lack readily available markets as determined in accordance with Commission staff guidance. 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 will be calculated daily and that the 43 See supra note 7. supra note 29. 45 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). 44 See PO 00000 Frm 00107 Fmt 4703 Sfmt 4703 78131 NAV and the Disclosed Portfolio will be made available to all market participants at the same time. In addition, a large amount of information is publicly available regarding the Fund and the Shares, thereby promoting market transparency. Moreover, the Intraday Indicative Value will be disseminated by one or more major market data vendors at least every 15 seconds during Regular Trading Hours. On each business day, before commencement of trading in Shares during Regular Trading Hours, the Fund will disclose on its Web site the Disclosed Portfolio that will form the basis for the Fund’s calculation of NAV at the end of the business day. Pricing information will include additional quantitative information updated on a daily basis, including, for the Fund: (1) The prior business day’s NAV and the market closing price or mid-point of the bid/ask spread at the time of calculation of such NAV (the ‘‘Bid/Ask Price’’),46 and a calculation of the premium or discount of the market closing price or 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. Additionally, information regarding market price and trading 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 for the Shares will be available on the facilities of the CTA. The Web site for the Fund will include a form of the prospectus for the Fund and additional data relating to NAV and other applicable quantitative information. Trading in Shares of the Fund will be halted under the conditions specified in BATS Rule 11.18. Trading may also be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. Finally, trading in the Shares will be subject to BATS Rule 14.11(i)(4)(B)(iv), which sets forth circumstances under which Shares may be halted. In addition, as noted above, investors will have ready access to information regarding the Fund’s holdings, the Intraday Indicative Value, the Disclosed Portfolio, and quotation and last sale information for the Shares. 46 The Bid/Ask Price of the Fund will be determined using the highest bid and the lowest offer on the Exchange as of the time of calculation of the Fund’s NAV. The records relating to Bid/Ask Prices will be retained by the Fund or its service providers. E:\FR\FM\29DEN1.SGM 29DEN1 78132 Federal Register / Vol. 79, No. 248 / Monday, December 29, 2014 / Notices Intraday, executable price quotations on assets held by the Fund are available from major broker-dealer firms and for exchange-traded assets, including investment companies, such intraday information is available directly from the applicable listing exchange. All such intraday price information is available through subscription services, such as Bloomberg, Thomson Reuters and International Data Corporation, which can be accessed by authorized participants and other investors. 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, the Exchange has in place surveillance procedures relating to trading in the Shares and may obtain information via ISG, from other exchanges that are members of ISG, or with which the Exchange has entered into a comprehensive surveillance sharing agreement. In addition, the Exchange is able to access, as needed, trade information for certain fixed income instruments reported to TRACE. As noted above, investors will also have ready access to information regarding the Fund’s holdings, the Intraday Indicative Value, the Disclosed Portfolio, and quotation and last sale information for the Shares. For the above reasons, the Exchange believes that the proposed rule change is consistent with the requirements of section 6(b)(5) of the Act. B. Self-Regulatory Organization’s Statement on Burden on Competition tkelley on DSK3SPTVN1PROD with NOTICES 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 an additional actively-managed exchangetraded product that 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 The Exchange has neither solicited nor received written comments on the proposed rule change. VerDate Sep<11>2014 19:09 Dec 24, 2014 Jkt 235001 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 up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the Exchange consents, the Commission will: (a) by order approve or disapprove such proposed rule change, or (b) institute proceedings to determine whether the proposed rule change should be disapproved. BILLING CODE 8011–01–P 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– BATS–2014–054 on the subject line. Paper Comments • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–BATS–2014–054. 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 Frm 00108 Fmt 4703 Sfmt 9990 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.47 Brent J. Fields, Secretary. [FR Doc. 2014–30276 Filed 12–24–14; 8:45 am] IV. Solicitation of Comments PO 00000 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–BATS– 2014–054, and should be submitted on or before January 20, 2015. SECURITIES AND EXCHANGE COMMISSION [File No. 500–1] In the Matter of American Heritage International Inc.; Order of Suspension of Trading December 16, 2014. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of American Heritage International Inc. (‘‘American Heritage’’) because of concerns regarding potentially manipulative activity related to American Heritage common stock. American Heritage is a Nevada corporation with its principal place of business located in Las Vegas, Nevada. Its stock is quoted on OTC Link (previously ‘‘Pink Sheets’’) operated by OTC Markets Group Inc., and on OTC Bulletin Board under the ticker symbol: AHII. The Commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of the above-listed company. Therefore, it is ordered, pursuant to Section 12(k) of the Securities Exchange Act of 1934, that trading in the securities of the above-listed company is suspended for the period from 9:30 a.m. EST, on December 16, 2014 through 11:59 p.m. EST, on December 30, 2014. By the Commission. Jill M. Peterson, Assistant Secretary. [FR Doc. 2014–30348 Filed 12–23–14; 11:15 am] BILLING CODE 8011–01–P 47 17 E:\FR\FM\29DEN1.SGM CFR 200.30–3(a)(12). 29DEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 79, Number 248 (Monday, December 29, 2014)]
[Notices]
[Pages 78125-78132]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-30276]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73895; File No. SR-BATS-2014-054]

Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing of a Proposed Rule Change To List and Trade Shares of the
iShares Short Maturity Municipal Bond ETF of the iShares U.S. ETF Trust
Under Rule 14.11(i) of BATS Exchange, Inc.

December 19, 2014.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 12, 2014, BATS Exchange, Inc. (the ``Exchange'' or
``BATS'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

The Exchange filed a proposal to list and trade shares of the
iShares Short Maturity Municipal Bond ETF (the ``Fund'') of the iShares
U.S. ETF Trust (the ``Trust'') under BATS Rule 14.11(i) (``Managed Fund
Shares''). The shares of the Fund are referred to herein as the
``Shares.''
The text of the proposed rule change is available at the Exchange's
Web site at https://www.batstrading.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 Exchange 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. 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 the Shares under BATS Rule
14.11(i), which governs the listing and trading of Managed Fund Shares
on the Exchange.\3\ The Fund will be an actively managed fund. The
Shares will be offered by the Trust, which was established as a
Delaware statutory trust on June 21, 2011. The Trust is registered with
the Commission as an open-end investment company and has filed a
registration statement on behalf of the Fund on Form N-1A
(``Registration Statement'') with the Commission.\4\
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\3\ The Commission approved BATS Rule 14.11(i) in Securities
Exchange Act Release No. 65225 (August 30, 2011), 76 FR 55148
(September 6, 2011) (SR-BATS-2011-018).
\4\ See Registration Statement on Form N-1A for the Trust, dated
September 3, 2014 (File Nos. 333-179904 and 811-22649). The
descriptions of the Fund and the Shares contained herein are based,
in part, on information in the Registration Statement. The
Commission has issued an order granting certain exemptive relief to
the Trust under the Investment Company Act of 1940 (15 U.S.C. 80a-1)
(``1940 Act'') (the ``Exemptive Order''). See Investment Company Act
Release No. 29571 (January 24, 2011) (File No. 812-13601).
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Description of the Shares and the Fund
BlackRock Fund Advisors is the investment adviser (``BFA'' or
``Adviser'') to the Fund.\5\ State Street Bank and Trust Company is the
administrator, custodian, and transfer agent (``Administrator,''
``Custodian,'' and ``Transfer Agent,'' respectively) for the Trust.
BlackRock Investments, LLC serves as the distributor (``Distributor'')
for the Trust.
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\5\ BFA is an indirect wholly owned subsidiary of BlackRock,
Inc.
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BATS Rule 14.11(i)(7) 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.\6\ In addition, Rule

[[Page 78126]]

14.11(i)(7) further requires that personnel who make decisions on the
investment company's portfolio composition must be subject to
procedures designed to prevent the use and dissemination of material
nonpublic information regarding the applicable investment company
portfolio. Rule 14.11(i)(7) is similar to BATS Rule 14.11(b)(5)(A)(i),
however, Rule 14.11(i)(7) 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 a registered broker-dealer, but is affiliated with multiple broker-
dealers and has implemented ``fire walls'' with respect to such broker-
dealers regarding access to information concerning the composition and/
or changes to the Fund's portfolio. In addition, Adviser personnel who
make decisions regarding the Fund's portfolio are subject to procedures
designed to prevent the use and dissemination of material nonpublic
information regarding the Fund's portfolio. In the event that (a) the
Adviser becomes registered as a broker-dealer or newly affiliated with
another 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
such broker-dealer affiliate, as applicable, regarding access to
information concerning the composition and/or changes to the portfolio,
and will be subject to procedures designed to prevent the use and
dissemination of material non-public information regarding such
portfolio.
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\6\ 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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iShares Short Maturity Municipal Bond ETF
According to the Registration Statement, the Fund will seek to
maximize tax-free current income. To achieve its objective, the Fund
will invest, under normal circumstances,\7\ at least 80% of its net
assets in Municipal Securities, as defined below, such that the
interest on each bond is exempt from U.S. federal income taxes and the
federal alternative minimum tax (the ``AMT''), along with Short-Term
Instruments and Repurchase Agreements, as both terms are defined below.
The Fund is not a money market fund and does not seek to maintain a
stable net asset value of $1.00 per share. The Fund will be classified
as a ``diversified'' investment company under the 1940 Act.\8\
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\7\ The term ``under normal circumstances'' includes, but is not
limited to, the absence of adverse market, economic, political, or
other conditions, including extreme volatility or trading halts in
the financial markets; 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.
\8\ The diversification standard is set forth in section 5(b)(1)
of the 1940 Act.
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The 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 the Fund's
investments in that industry would equal or exceed 25% of the current
value of the Fund's total assets, provided that this restriction does
not limit the 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 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.\9\
---------------------------------------------------------------------------

\9\ See Form N-1A, Item 9. The Commission has taken the position
that a fund is concentrated if it invests in 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).
---------------------------------------------------------------------------

The Fund intends to qualify each year as a regulated investment
company (a ``RIC'') under subchapter M of the Internal Revenue Code of
1986, as amended. The Fund will invest its assets, and otherwise
conduct its operations, in a manner that is intended to satisfy the
qualifying income, diversification and distribution requirements
necessary to establish and maintain RIC qualification under subchapter
M.
Principal Holdings--Municipal Securities
To achieve its objective, the Fund will invest, under normal
circumstances, in U.S.-dollar denominated investment-grade short-term
fixed- and floating-rate municipal bonds, municipal notes and variable
rate demand obligations, as well as money market instruments and
registered investment companies. Investment-grade securities are rated
a minimum of BBB- or higher by Standard & Poor's Ratings Services and/
or Fitch, or Baa3 or higher by Moody's, or if unrated, determined by
the Adviser to be of equivalent quality.\10\ Generally, the Fund's
effective duration will be 1.2 years or less, as calculated by the
management team, and it is not expected to exceed 1.5 years.\11\
---------------------------------------------------------------------------

\10\ According to the Adviser, BFA may determine that unrated
securities are of ``equivalent quality'' based on such credit
quality factors that it deems appropriate, which may include among
other things, performing an analysis similar, to the extent
possible, to that performed by a nationally recognized statistical
ratings organization when rating similar securities and issuers. In
making such a determination, BFA may consider internal analyses and
risk ratings, third party research and analysis, and other sources
of information, as deemed appropriate by the Adviser.
\11\ Effective duration is a measure of the Fund's price
sensitivity to changes in yields or interest rates.
---------------------------------------------------------------------------

Municipal securities (``Municipal Securities'') are fixed and
floating rate securities issued in the U.S. by U.S. states and
territories, municipalities and other political subdivisions, agencies,
authorities, and instrumentalities of states and multi-state agencies
and authorities and will include only the following instruments:
General obligation bonds,\12\ limited obligation bonds (or revenue
bonds),\13\ private

[[Page 78127]]

activity bonds,\14\ municipal notes,\15\ municipal commercial
paper,\16\ tender option bonds,\17\ variable rate demand obligations
(``VRDOs''),\18\ municipal lease obligations,\19\ stripped
securities,\20\ structured securities,\21\ when issued securities,\22\
zero coupon securities,\23\ and exchange traded and non-exchange traded
investment companies (including investment companies advised by BFA or
its affiliates) that invest in such Municipal Securities.\24\
---------------------------------------------------------------------------

\12\ General obligation bonds are obligations involving the
credit of an issuer possessing taxing power and are payable from
such issuer's general revenues and not from any particular source.
\13\ Limited obligation bonds are payable only from the revenues
derived from a particular facility or class of facilities or, in
some cases, from the proceeds of a special excise or other specific
revenue source, and also include industrial development bonds issued
pursuant to former U.S. federal tax law. Industrial development
bonds generally are also revenue bonds and thus are not payable from
the issuer's general revenues. The credit and quality of industrial
development bonds are usually related to the credit of the corporate
user of the facilities. Payment of interest on and repayment of
principal of such bonds is the responsibility of the corporate user
(and/or any guarantor).
\14\ Private activity bonds are bonds issued by or on behalf of
public authorities to obtain funds to provide privately operated
housing facilities, airport, mass transit or port facilities, sewage
disposal, solid waste disposal or hazardous waste treatment or
disposal facilities, and certain local facilities for water supply,
gas, or electricity. Other types of private activity bonds, the
proceeds of which are used for the construction, equipment, repair
or improvement of privately operated industrial or commercial
facilities, may constitute municipal securities, although the
current U.S. federal tax laws place substantial limitations on the
size of such issues.
\15\ Municipal notes are shorter-term municipal debt obligations
that may provide interim financing in anticipation of tax
collection, receipt of grants, bond sales, or revenue receipts.
\16\ Municipal commercial paper is generally unsecured debt that
is issued to meet short-term financing needs.
\17\ Tender option bonds are synthetic floating-rate or
variable-rate securities issued when long-term bonds are purchased
in the primary or secondary market and then deposited into a trust.
Custodial receipts are then issued to investors, such as the Fund,
evidencing ownership interests in the trust.
\18\ VRDOs are tax-exempt obligations that contain a floating or
variable interest rate adjustment formula and a right of demand on
the part of the holder thereof to receive payment of the unpaid
principal balance plus accrued interest upon a short notice period
not to exceed seven days.
\19\ Municipal lease obligations include certificates of
participation issued by government authorities or entities to
finance the acquisition or construction of equipment, land, and/or
facilities.
\20\ Stripped securities are created when an issuer separates
the interest and principal components of an instrument and sells
them as separate securities. In general, one security is entitled to
receive the interest payments on the underlying assets and the other
to receive the principal payments.
\21\ Structured securities are privately negotiated debt
obligations where the principal and/or interest is determined by
reference to the performance of an underlying investment, index, or
reference obligation, and may be issued by governmental agencies.
While structured securities are part of the principal holdings of
the Fund, the Issuer represents that such securities, when combined
with those instruments held as part of the other portfolio holdings
described below, will not exceed 20% of the Fund's net assets.
\22\ The Fund may purchase or sell securities that it is
entitled to receive on a when issued or delayed delivery basis as
well as through a forward commitment.
\23\ Zero coupon securities are securities that are sold at a
discount to par value and do not pay interest during the life of the
security. The discount approximates the total amount of interest the
security will accrue and compound over the period until maturity at
a rate of interest reflecting the market rate of the security at the
time of issuance. Upon maturity, the holder of a zero coupon
security is entitled to receive the par value of the security.
\24\ The Fund currently anticipates investing in only registered
open-end investment companies, including mutual funds and the open-
end investment company funds described in BATS Rule 14.11. The Fund
may invest in the securities of other investment companies to the
extent permitted by law.
---------------------------------------------------------------------------

The Fund may also enter into repurchase and reverse repurchase
agreements for Municipal Securities (collectively, ``Repurchase
Agreements''). 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 as
part of the Fund's principal holdings.\25\ As discussed above, the Fund
may also invest in short-term instruments (``Short-Term Instruments'')
\26\ as part of its principal holdings, which includes exchange traded
and non-exchange traded investment companies (including investment
companies advised by BFA or its affiliates) that invest in money market
instruments.\27\
---------------------------------------------------------------------------

\25\ The Fund's exposure to reverse repurchase agreements will
be covered by liquid assets having a value equal to or greater than
such commitments. The use of reverse repurchase agreements is a form
of leverage because the proceeds derived from reverse repurchase
agreements may be invested in additional securities. As further
stated below, the Fund's investments will be consistent with its
investment objective and will not be used to achieve leveraged
returns.
\26\ The Fund may invest in Short-Term Instruments, including
money market instruments, on an ongoing basis to provide liquidity
or for other reasons. Money market instruments are generally short-
term investments that include only the following: (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, including
asset-backed commercial paper; (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 the Fund. All money market securities acquired by the
Fund will be rated investment grade. The Fund does not intend to
invest in any unrated money market securities. However, it may do
so, to a limited extent, such as where a rated money market security
becomes unrated, if such money market security is determined by the
Adviser to be of comparable quality. BFA may determine that unrated
securities are of comparable quality based on such credit quality
factors that it deems appropriate, which may include, among other
things, performing an analysis similar, to the extent possible, to
that performed by a nationally recognized statistical rating
organization rating similar securities and issuers.
\27\ See supra note 24.
---------------------------------------------------------------------------

In the absence of normal circumstances, the Fund may temporarily
depart from its normal investment process, provided that such departure
is, in the opinion of the Adviser, consistent with the Fund's
investment objective and in the best interest of the Fund. For example,
the Fund may hold a higher than normal proportion of its assets in cash
in response to adverse market, economic or political conditions.
The Fund intends to qualify each year as a regulated investment
company (a ``RIC'') under subchapter M of the Internal Revenue Code of
1986, as amended.\28\ The Fund will invest its assets, and otherwise
conduct its operations, in a manner that is intended to satisfy the
qualifying income, diversification and distribution requirements
necessary to establish and maintain RIC qualification under subchapter
M.
---------------------------------------------------------------------------

\28\ 26 U.S.C. 851.
---------------------------------------------------------------------------

Other Portfolio Holdings
The Fund may also, to a limited extent (under normal circumstances,
less than 20% of the Fund's net assets), engage in transactions in
interest rate futures contracts for hedging purposes.\29\ The Fund's
investments will be consistent with its investment objective and will
not be used to achieve leveraged returns (i.e. two times or three times
the Fund's benchmark, as described in the Registration Statement).
---------------------------------------------------------------------------

\29\ Futures will be exchange traded and collateralized.
---------------------------------------------------------------------------

The Fund may also invest up to 20% of its net assets in Municipal
Securities that pay interest that is subject to the AMT.
Investment Restrictions
The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets (calculated at the time of investment), as
deemed illiquid by the Adviser \30\ under the 1940 Act.\31\ The

[[Page 78128]]

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 the Fund's
net assets are held in illiquid assets. Illiquid assets include
securities subject to contractual or other restrictions on resale and
other instruments that lack readily available markets as determined in
accordance with Commission staff guidance.
---------------------------------------------------------------------------

\30\ 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 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).
\31\ 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).
---------------------------------------------------------------------------

Net Asset Value
According to the Registration Statement, the net asset value
(``NAV'') of the Fund will be calculated each business day as of the
close of regular trading on the New York Stock Exchange (``NYSE''),
generally 4:00 p.m. Eastern Time (the ``NAV Calculation Time''), on
each day that the NYSE is open for trading, based on prices at the NAV
Calculation Time. NAV per Share is calculated by dividing the Fund's
net assets by the number of Shares outstanding.
According to the Registration Statement, unless otherwise described
below, the Fund values Municipal 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.
Exchange traded investment companies will be valued at market
closing price or, if no closing price is available, at the last traded
price on the primary exchange on which they are traded. Price
information for such securities will be taken from the exchange where
the security is primarily traded. Investment companies not listed on an
exchange are valued at their net asset value.
Futures contracts will be valued at their last sale price or settle
price as of the close of the applicable exchange.
Repurchase Agreements will generally be valued at par. In certain
circumstances, Short-Term Instruments may be valued on the basis of
amortized cost.
According to the Registration Statement, generally, trading in
money market instruments, and certain Municipal Securities is
substantially completed each day at various times prior to the close of
business on the Exchange. Additionally, trading in certain derivatives
is substantially completed each day at various times prior to the close
of business on the Exchange. The values of such securities and
derivatives used in computing the NAV of the Fund are determined at
such times.
According to the Registration Statement, when market quotations are
not readily available or are believed by BFA to be unreliable, the
Fund's investments are valued at fair value. Fair value determinations
are made by BFA in accordance with policies and procedures approved by
the Trust's board of trustees and in accordance with the 1940 Act. BFA
may conclude that a market quotation is not readily available or is
unreliable if a security or other asset or liability is thinly traded,
or where there is a significant event \32\ subsequent to the most
recent market quotation.
---------------------------------------------------------------------------

\32\ 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.
---------------------------------------------------------------------------

According to the Registration Statement, fair value represents a
good faith approximation of the value of an asset or liability. The
fair value of an asset or liability held by the Fund is the amount the
Fund might reasonably expect to receive from the current sale of that
asset or the cost to extinguish that liability in an arm's-length
transaction. Valuing the Fund's investments using fair value pricing
will result in prices that may differ from current valuations and that
may not be the prices at which those investments could have been sold
during the period in which the particular fair values were used.
The Shares
The Fund will issue and redeem Shares on a continuous basis at the
NAV per Share only in large blocks of a specified number of Shares or
multiples thereof (``Creation Units'') in transactions with authorized
participants who have entered into agreements with the Distributor. The
Fund currently anticipates that a Creation Unit will consist of 50,000
Shares, though this number may change from time to time, including
prior to listing of the Fund. The exact number of Shares that will
constitute a Creation Unit will be disclosed in the Registration
Statement of the Fund. Once created, Shares of the Fund trade on the
secondary market in amounts less than a Creation Unit.
The consideration for purchase of Creation Units of the 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''), and the ``Cash
Component'' computed as described below. Together, the Deposit
Securities and the Cash Component constitute the ``Fund Deposit,''
which represents the minimum initial and subsequent investment amount
for a Creation Unit of the Fund.
The portfolio of securities required for purchase of a Creation
Unit may not be identical to the portfolio of securities the Fund will
deliver upon redemption of 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 the 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 will be 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. The Fund generally
offers Creation Units partially for cash. 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 Fund.
The identity and number or par value of the Deposit Securities may
change pursuant to changes in the composition of the Fund's portfolio
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 holdings
of the Fund.

[[Page 78129]]

The 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 the clearing process through
the NSCC.\33\
---------------------------------------------------------------------------

\33\ 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 manner or in an equitable manner for
all authorized participants.
---------------------------------------------------------------------------

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 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 the 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 2:00 p.m., Eastern Time on the Settlement
Date. The ``Settlement Date'' is generally the third business day after
the transmittal date. On days when the Exchange or the bond markets
close earlier than normal, the Fund may require orders to create or to
redeem Creation Units to be placed earlier in the day.
Fund Deposits must be delivered through the Federal Reserve System
(for cash and government securities), through DTC (for corporate and
municipal securities), or through a central depository account, such as
with Euroclear or DTC, maintained by State Street or a sub-custodian (a
``Central Depository Account'') by an authorized participant. Any
portion of a Fund Deposit that may not be delivered through the Federal
Reserve System or DTC must be delivered through a Central Depository
Account. The Fund Deposit transfer must be ordered by the authorized
participant in a timely fashion so as to ensure the delivery of the
requisite number of Deposit Securities to the account of the Fund by no
later than 3:00 p.m., Eastern Time, on the Settlement Date.
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 the 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 the 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
Securities, less a redemption transaction fee. The Fund generally
redeems Creation Units partially for cash.
A standard redemption transaction fee will be imposed to offset
transfer and other transaction costs that may be incurred by the Fund.
Redemption requests for Creation Units of the 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 the Fund to the
Distributor in accordance with procedures set forth in the authorized
participant agreement.
Additional information regarding the Shares and the Fund, including
investment strategies, risks, creation and redemption procedures, fees
and expenses, portfolio holdings disclosure policies, distributions,
taxes and reports to be distributed to beneficial owners of the Shares
can be found in the Registration Statement or on the Web site for the
Fund (www.iShares.com), as applicable.
Availability of Information
The Fund's Web site, which will be publicly available prior to the
public offering of Shares, will include a form of the prospectus for
the Fund that may be downloaded. The Web site will include additional
quantitative information updated on a daily basis, including, for the
Fund: (1) The prior business day's NAV and the market closing price or
mid-point of the bid/ask spread at the time of calculation of such NAV
(the ``Bid/Ask Price''),\34\ and a calculation of the premium or
discount of the market closing price or 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. Daily trading volume information will be available in the
financial section of newspapers, through subscription services such as
Bloomberg, Thomson Reuters, and International Data Corporation, which
can be accessed by authorized participants and other investors, as well
as through other electronic services, including major public Web sites.
On each business day, before commencement of trading in Shares during
Regular Trading Hours on the Exchange, the Fund will disclose on its
Web site the identities and quantities of the portfolio of securities
and other assets (the ``Disclosed Portfolio'') held by the Fund that
will form the basis for the Fund's calculation of NAV at the end of the
business day.\35\ The Disclosed Portfolio will include, as applicable,
the names, quantity, percentage weighting and market value of
securities and other assets held by the Fund and the characteristics of
such assets. The Web site and information will be publicly available at
no charge.
---------------------------------------------------------------------------

\34\ The Bid/Ask Price of the Fund will be determined using the
highest bid and the lowest offer on the Exchange as of the time of
calculation of the Fund's NAV. The records relating to Bid/Ask
Prices will be retained by the Fund or its service providers.
\35\ Under accounting procedures to be followed by the Fund,
trades made on the prior business day (``T'') will be booked and
reflected in NAV on the current business day (``T+1''). Accordingly,
the Fund 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.
---------------------------------------------------------------------------

In addition, for the Fund, an estimated value, defined in BATS Rule
14.11(i)(3)(C) as the ``Intraday Indicative Value,'' that reflects an
estimated intraday value of the Fund's portfolio, will be disseminated.
Moreover, the Intraday Indicative Value will be based upon the current
value for the components of the Disclosed Portfolio and will be updated
and widely disseminated by one or more major market data vendors at
least every 15 seconds during the Exchange's Regular Trading Hours.\36\
---------------------------------------------------------------------------

\36\ Currently, it is the Exchange's understanding that several
major market data vendors display and/or make widely available
Intraday Indicative Values published via the Consolidated Tape
Association (``CTA'') or other data feeds.
---------------------------------------------------------------------------

The dissemination of the Intraday Indicative Value, together with
the Disclosed Portfolio, will allow investors to determine the value of
the underlying portfolio of the Fund on a daily basis

[[Page 78130]]

and provide a close estimate of that value throughout the trading day.
Intraday, executable price quotations on assets held by the Fund
are available from major broker-dealer firms and for exchange-traded
assets, including investment companies, such intraday information is
available directly from the applicable listing exchange. All such
intraday price information is available through subscription services,
such as Bloomberg, Thomson Reuters and International Data Corporation,
which can be accessed by authorized participants and other investors.
Pricing information for Repurchase Agreements and securities not listed
on an exchange or national securities market will be available from
major broker-dealer firms and/or subscription services, such as
Bloomberg, Thomson Reuters and International Data Corporation.
Information regarding market price and volume of the Shares will be
continually available on a real-time basis throughout the day on
brokers' computer screens and other electronic services. 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 will be available on the
facilities of the CTA. Price information relating to all other
securities held by the Fund will be available from major market data
vendors. Quotations and last sale information for the underlying
exchange traded investment companies will be available through CTA.
Initial and Continued Listing
The Shares will be subject to BATS Rule 14.11(i), which sets forth
the initial and continued listing criteria applicable to Managed Fund
Shares. The Exchange represents that, for initial and/or continued
listing, the Fund must be in compliance with Rule 10A-3 under the
Act.\37\ A minimum of 100,000 Shares 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 NAV per Share
will be calculated daily and that the NAV and the Disclosed Portfolio
will be made available to all market participants at the same time.
---------------------------------------------------------------------------

\37\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

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 Fund. The Exchange will halt trading in
the Shares under the conditions specified in BATS Rule 11.18. Trading
may be halted because of market conditions or for reasons that, in the
view of the Exchange, make trading in the Shares inadvisable. These may
include: (1) The extent to which trading is not occurring in the
securities and/or the financial instruments composing the Disclosed
Portfolio of the 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 also will be subject to Rule
14.11(i)(4)(B)(iv), which sets forth circumstances under which Shares
of the 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. BATS will allow
trading in the Shares from 8:00 a.m. until 5:00 p.m. Eastern Time. The
Exchange has appropriate rules to facilitate transactions in the Shares
during all trading sessions. As provided in BATS Rule 11.11(a), the
minimum price variation for quoting and entry of orders in Managed Fund
Shares traded on the Exchange is $0.01, with the exception of
securities that are priced less than $1.00, for which the minimum price
variation for order entry is $0.0001.
Surveillance
The Exchange believes that its surveillance procedures are adequate
to properly monitor the trading of the Shares on the Exchange during
all trading sessions and to deter and detect violations of Exchange
rules and the applicable federal securities laws. Trading of the Shares
through the Exchange will be subject to the Exchange's surveillance
procedures for derivative products, including Managed Fund Shares. The
Exchange may obtain information regarding trading in the Shares and the
underlying shares in exchange traded equity securities via the ISG,
from other exchanges that are members or affiliates of the ISG, or with
which the Exchange has entered into a comprehensive surveillance
sharing agreement.\38\ In addition, 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'').
---------------------------------------------------------------------------

\38\ 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 the Fund may trade on markets that are
members of ISG or with which the Exchange has in place a
comprehensive surveillance sharing agreement.
---------------------------------------------------------------------------

As it relates to exchange traded investment companies, the Fund
will only invest in investment companies that trade on markets that are
a member of the ISG or with which the Exchange has in place a
comprehensive surveillance sharing agreement. To the extent that the
Fund invests in futures contracts, the Fund will only invest 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.
The Exchange prohibits the distribution of material non-public
information by its employees.
Information Circular
Prior to the commencement of trading, the Exchange will inform its
members in an Information Circular of the special characteristics and
risks associated with trading the Shares. Specifically, the Information
Circular will discuss the following: (1) The procedures for purchases
and redemptions of Shares in Creation Units (and that Shares are not
individually redeemable); (2) BATS Rule 3.7, which imposes suitability
obligations on Exchange members with respect to recommending
transactions in the Shares to customers; (3) how information regarding
the Intraday Indicative Value is disseminated; (4) the risks involved
in trading the Shares during the Pre-Opening \39\ and After Hours
Trading Sessions \40\ when an updated Intraday Indicative Value will
not be calculated or publicly disseminated; (5) the requirement that
members deliver a prospectus to investors purchasing newly issued
Shares prior to or concurrently with the confirmation of a transaction;
and (6) trading information.
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\39\ The Pre-Opening Session is from 8:00 a.m. to 9:30 a.m.
Eastern Time.
\40\ The After Hours Trading Session is from 4:00 p.m. to 5:00
p.m. Eastern Time.
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In addition, the Information Circular will advise members, prior to
the commencement of trading, of the prospectus delivery requirements
applicable to the Fund. Members purchasing Shares from the Fund for
resale to investors will deliver a prospectus to such investors. The
Information Circular will also discuss any exemptive, no-action, and
interpretive relief granted by the Commission from any rules under the
Act.
In addition, the Information Circular will reference that the Fund
is subject

[[Page 78131]]

to various fees and expenses described in the Registration Statement.
The Information Circular will also disclose the trading hours of the
Shares of the Fund and the applicable NAV Calculation Time for the
Shares. The Information Circular will disclose that information about
the Shares of the Fund will be publicly available on the Fund's Web
site. In addition, the Information Circular will reference that the
Trust is subject to various fees and expenses described in the Fund's
Registration Statement.
2. Statutory Basis
The Exchange believes that the proposal is consistent with section
6(b) of the Act \41\ in general and section 6(b)(5) of the Act \42\ in
particular in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system and, in general, to protect investors and the
public interest.
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\41\ 15 U.S.C. 78f.
\42\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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 BATS Rule 14.11(i). The
Exchange believes that its surveillance procedures are adequate to
properly monitor the trading of the Shares on the Exchange during all
trading sessions and to deter and detect violations of Exchange rules
and the applicable federal securities laws. BATS Rule 14.11(i)(7)
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. The Adviser is not a registered broker-dealer, but is
affiliated with multiple broker-dealers and has implemented ``fire
walls'' with respect to such broker-dealers regarding access to
information concerning the composition and/or changes to the Fund's
portfolio. In addition, Adviser personnel who make decisions regarding
the Fund's portfolio are subject to procedures designed to prevent the
use and dissemination of material nonpublic information regarding the
Fund's portfolio. The Exchange may obtain information regarding trading
in the Shares and the underlying shares in exchange traded equity
securities via the ISG, from other exchanges that are members or
affiliates of the ISG, or with which the Exchange has entered into a
comprehensive surveillance sharing agreement. In addition, the Exchange
is able to access, as needed, trade information for certain fixed
income instruments reported to TRACE.
According to the Registration Statement, the Fund will invest,
under normal circumstances,\43\ at least 80% of its net assets in
Municipal Securities, Short-Term Instruments, and Repurchase
Agreements. Additionally, the Fund may hold up to an aggregate amount
of 15% of its net assets in illiquid assets (calculated at the time of
investment), as deemed illiquid by the Adviser \44\ under the 1940
Act.\45\ The 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 the Fund's net assets are held in illiquid assets. Illiquid
assets include securities subject to contractual or other restrictions
on resale and other instruments that lack readily available markets as
determined in accordance with Commission staff guidance.
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\43\ See supra note 7.
\44\ See supra note 29.
\45\ 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).
---------------------------------------------------------------------------

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 will be calculated daily and that the NAV
and the Disclosed Portfolio will be made available to all market
participants at the same time. In addition, a large amount of
information is publicly available regarding the Fund and the Shares,
thereby promoting market transparency. Moreover, the Intraday
Indicative Value will be disseminated by one or more major market data
vendors at least every 15 seconds during Regular Trading Hours. On each
business day, before commencement of trading in Shares during Regular
Trading Hours, the Fund will disclose on its Web site the Disclosed
Portfolio that will form the basis for the Fund's calculation of NAV at
the end of the business day. Pricing information will include
additional quantitative information updated on a daily basis,
including, for the Fund: (1) The prior business day's NAV and the
market closing price or mid-point of the bid/ask spread at the time of
calculation of such NAV (the ``Bid/Ask Price''),\46\ and a calculation
of the premium or discount of the market closing price or 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. Additionally, information regarding market
price and trading 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 for
the Shares will be available on the facilities of the CTA. The Web site
for the Fund will include a form of the prospectus for the Fund and
additional data relating to NAV and other applicable quantitative
information. Trading in Shares of the Fund will be halted under the
conditions specified in BATS Rule 11.18. Trading may also be halted
because of market conditions or for reasons that, in the view of the
Exchange, make trading in the Shares inadvisable. Finally, trading in
the Shares will be subject to BATS Rule 14.11(i)(4)(B)(iv), which sets
forth circumstances under which Shares may be halted. In addition, as
noted above, investors will have ready access to information regarding
the Fund's holdings, the Intraday Indicative Value, the Disclosed
Portfolio, and quotation and last sale information for the Shares.
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\46\ The Bid/Ask Price of the Fund will be determined using the
highest bid and the lowest offer on the Exchange as of the time of
calculation of the Fund's NAV. The records relating to Bid/Ask
Prices will be retained by the Fund or its service providers.

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[[Page 78132]]

Intraday, executable price quotations on assets held by the Fund
are available from major broker-dealer firms and for exchange-traded
assets, including investment companies, such intraday information is
available directly from the applicable listing exchange. All such
intraday price information is available through subscription services,
such as Bloomberg, Thomson Reuters and International Data Corporation,
which can be accessed by authorized participants and other investors.
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, the Exchange has in
place surveillance procedures relating to trading in the Shares and may
obtain information via ISG, from other exchanges that are members of
ISG, or with which the Exchange has entered into a comprehensive
surveillance sharing agreement. In addition, the Exchange is able to
access, as needed, trade information for certain fixed income
instruments reported to TRACE. As noted above, investors will also have
ready access to information regarding the Fund's holdings, the Intraday
Indicative Value, the Disclosed Portfolio, and quotation and last sale
information for the Shares.
For the above reasons, the Exchange believes that the proposed rule
change is consistent with the requirements of section 6(b)(5) of the
Act.

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 an
additional actively-managed exchange-traded product that 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

The Exchange has neither solicited nor received written comments on
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 up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will: (a) by order approve
or disapprove such 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-BATS-2014-054 on the subject line.

Paper Comments

Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BATS-2014-054. 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-BATS-2014-054, and should be
submitted on or before January 20, 2015.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\47\
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\47\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2014-30276 Filed 12-24-14; 8:45 am]
BILLING CODE 8011-01-P

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