Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To List and Trade the Shares of the Goldman Sachs Access Emerging Markets Local Currency Bond ETF Under Commentary .02 to NYSE Arca Rule 5.2-E(j)(3), 2695-2700 [2018-00721]

Download as PDF Federal Register / Vol. 83, No. 12 / Thursday, January 18, 2018 / Notices sradovich on DSK3GMQ082PROD with NOTICES of the Act 5 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 mechanisms of a free and open market and a national market system and, in general, to protect investors and the public interest. The Exchange believes the proposed changes promote just and equitable principles of trade and remove impediments to and perfect the mechanism of a free and open market and a national market system because the proposed rule change corrects minor typographical errors and corrects errors in the hierarchical heading scheme to provide uniformity in the Exchange’s rulebook. The Exchange notes that the proposed changes to Exchange Rule 700, Exercise of Option Contracts; Rule 1308, Supervision of Accounts; and Rule 1322, Options Communications, do not alter the application of each rule. As such, the proposed amendments would foster cooperation and coordination with persons engaged in facilitating transactions in securities and would remove impediments to and perfect the mechanism of a free and open market and a national exchange system. In particular, the Exchange believes that the proposed changes will provide greater clarity to Members 6 and the public regarding the Exchange’s Rules. It is in the public interest for rules to be accurate and concise so as to eliminate the potential for confusion. B. Self-Regulatory Organization’s Statement on Burden on Competition MIAX Options does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change will have no impact on competition as it is not designed to address any competitive issues but rather is designed to add additional clarity to existing rules and to remedy minor non-substantive issues in the text of various rules identified in this proposal. The Exchange does not believe that the proposed rule change will impose any burden on intermarket competition as the Rules apply equally to all Exchange Members. 5 15 U.S.C. 78f(b)(5). 6 The term ‘‘Member’’ means an individual or organization approved to exercise the trading rights associated with a Trading Permit. Members are deemed ‘‘members’’ under the Exchange Act. See Exchange Rule 100. VerDate Sep<11>2014 18:27 Jan 17, 2018 Jkt 244001 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate, it has become effective pursuant to 19(b)(3)(A) of the Act 7 and Rule 19b–4(f)(6) 8 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or 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– MIAX–2018–01 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–MIAX–2018–01. This file 7 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and the text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 8 17 PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 2695 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 website (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 website 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. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–MIAX–2018–01 and should be submitted on or before February 8, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–00722 Filed 1–17–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–82487; File No. SR– NYSEArca–2017–138] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To List and Trade the Shares of the Goldman Sachs Access Emerging Markets Local Currency Bond ETF Under Commentary .02 to NYSE Arca Rule 5.2–E(j)(3) January 11, 2018. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 9 17 1 15 E:\FR\FM\18JAN1.SGM CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 18JAN1 2696 Federal Register / Vol. 83, No. 12 / Thursday, January 18, 2018 / Notices (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that on December 28, 2017, NYSE Arca, Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to list and trade the shares of the Goldman Sachs Access Emerging Markets Local Currency Bond ETF (the ‘‘Fund’’), a series of Goldman Sachs ETF Trust (the ‘‘Trust’’), under Commentary .02 to NYSE Arca Rule 5.2–E(j)(3) (‘‘Investment Company Units’’). The proposed rule change is available on the Exchange’s website at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change sradovich on DSK3GMQ082PROD with NOTICES 1. Purpose The Exchange proposes to list and trade shares (‘‘Shares’’) of the Goldman Sachs Access Emerging Markets Local Currency Bond ETF (‘‘Fund’’) under Commentary .02 to NYSE Arca Rule 5.2–E(j)(3), which governs the listing and trading of Investment Company Units (‘‘ICUs’’) on the Exchange.4 The 2 15 U.S.C. 78a. CFR 240.19b–4. 4 NYSE Arca Rule 5.2–E(j)(3)(A) provides that an Investment Company Unit is a security that represents an interest in a registered investment company that holds securities comprising, or otherwise based on or representing an interest in, an index or portfolio of securities (or holds securities in another registered investment 3 17 VerDate Sep<11>2014 18:27 Jan 17, 2018 Jkt 244001 Fund will be an index-based exchange traded fund (‘‘ETF’’). The Shares will be offered by the Goldman Sachs ETF Trust (the ‘‘Trust’’), which is registered with the Commission as an investment company and has filed a registration statement on Form N–1A (the ‘‘Registration Statement’’) with the Commission on behalf of the Fund.5 The investment adviser to the Fund will be Goldman Sachs Asset Management, L.P. (‘‘Adviser’’), a wholly-owned subsidiary of The Goldman Sachs Group, Inc.6 ALPS Distributors, Inc. will serve as the distributor (the ‘‘Distributor’’) of Fund Shares on an agency basis. The Bank of New York Mellon (the ‘‘Administrator’’) will be the administrator, custodian and transfer agent for the Fund. Goldman Sachs Access Emerging Markets Local Currency Bond ETF Principal Investments According to the Registration Statement, the Fund will seek to provide investment results that closely correspond, before fees and expenses, to the performance of the Citi Goldman Sachs Emerging Markets Local Currency Government Bond Index (the ‘‘Index’’). Under normal market conditions,7 the Fund will seek to achieve its investment objective by investing at least 80% of its assets (exclusive of collateral held from securities lending) in securities included in the Index. Other Investments While, under normal market conditions, the Fund will seek to achieve its investment objective by investing at least 80% of its assets (exclusive of collateral held from securities lending) in securities included in the Index, the Fund may invest up to 20% of its net assets in the securities and financial instruments not company that holds securities comprising, or otherwise based on or representing an interest in, an index or portfolio of securities). 5 See the Trust’s post-effective amendment to the Trust’s registration statement on Form N–1A, dated November 9, 2017 (File Nos. 333–200933 and 811– 23013) (‘‘Registration Statement’’). The descriptions of the Fund and the Shares contained herein are based, in part, on information in the Registration Statement. In addition, the Commission has issued an order granting certain exemptive relief to the Trust under the Investment Company Act of 1940. See Investment Company Act Release No. 31465 (February 23, 2015) (File No. 812–14361). 6 The Adviser is not registered as a broker-dealer but is affiliated with a broker-dealer and has implemented and will maintain a ‘‘fire wall’’ with respect to such broker-dealer affiliate regarding access to information concerning the composition of and/or changes to the Fund’s portfolio. 7 The term ‘‘normal market conditions’’ for these purposes will have the same meaning as the term defined in NYSE Arca Rule 8.600–E(c)(5). PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 included in the Index, as described below. The Fund may invest in commercial paper and other short-term obligations issued or guaranteed by U.S. corporations, non-U.S. corporations or other entities. The Fund may hold foreign currencies. The Fund may invest in investment company securities, including exchange-traded funds (‘‘ETFs’’) 8 and money market funds. The Fund may invest in equity and fixed income securities of foreign issuers, including securities quoted or denominated in a currency other than U.S. dollars. The Fund may invest in Global Depositary Notes, credit linked notes and loan participation notes. The Fund may purchase and sell futures contracts and may also purchase and write call and put options on futures contracts. The Fund may purchase and sell futures contracts based on US and foreign securities indices, foreign currencies, interest rates and Eurodollars.9 The Fund may enter into interest rate, credit, total return, and currency swaps. The Fund also may enter into index swaps. The Fund may invest in foreign currency forward contracts. The Fund may enter into repurchase and reverse repurchase agreements. The Fund may invest in U.S. Government Securities. The Fund may invest in zero coupon, deferred interest, pay-in-kind and capital appreciation bonds. The Fund may invest in inflation protected securities of varying maturities issued by the U.S. Treasury and other U.S. and non-U.S. Government agencies and corporations. The Fund may invest in restricted securities (Rule 144A securities). Citi Goldman Sachs Emerging Markets Local Currency Government Bond Index The Index is a rules-based index that is designed to measure the performance of bonds issued by emerging market 8 For purposes of this filing, ETFs include Investment Company Units (as described in NYSE Arca Rule 5.2–E (j)(3)); Portfolio Depositary Receipts (as described in NYSE Arca Rule 8.100– E); and Managed Fund Shares (as described in NYSE Arca Rule 8.600–E). The ETFs all will be listed and traded in the U.S. on registered exchanges. The Fund will not invest in inverse or leveraged (e.g., +2x, –2X) index ETFs. 9 In the aggregate, at least 90% of the weight of the Fund’s holdings invested in futures shall consist of futures for which the Exchange may obtain information via the ISG from other members or affiliates of the ISG or for which the principal market is a market with which the Exchange has a comprehensive surveillance sharing agreement. E:\FR\FM\18JAN1.SGM 18JAN1 Federal Register / Vol. 83, No. 12 / Thursday, January 18, 2018 / Notices governments and denominated in the local currency of the issuer that meet certain liquidity and fundamental screening criteria. As of July 31, 2017, there were 189 issues in the Index. The Index is a custom index that is owned and calculated by FTSE Fixed Income LLC (‘‘FTSE’’ or the ‘‘Index Provider’’), and is based on the Citi Emerging Markets Government Bond Index (the ‘‘Reference Index’’) using concepts developed with Goldman Sachs Asset Management.10 The Index Provider constructs the Index in accordance with a rules-based methodology that involves two steps: sradovich on DSK3GMQ082PROD with NOTICES Step 1 In the first step, the Index Provider defines the universe of potential index components (‘‘Universe’’) by applying specified criteria to the constituent securities of the Reference Index. The Reference Index includes sovereign debt issued in local currency that has a minimum of one year to maturity and is rated at least C by S&P or Ca by Moody’s. Issuers need to have a minimum of local currency equivalent of $10 billion outstanding for three consecutive months to be eligible for inclusion in the Reference Index. Only constituents of the Reference Index that have a minimum local currency equivalent of approximately $1 billion outstanding are included in the Universe. Provided there are 10 or more countries represented in the Universe, the weight of each country within the Universe is capped at 10%. Step 2 In the second step, the Index Provider applies a fundamental screen to the Universe. Issuers are measured by two fundamental factors, money supply growth and current account to gross domestic product (‘‘GDP’’). The Index Provider ranks each issuer based on the two fundamental factors, equally weighted. The Index is constructed by including the highest ranking eligible securities, screening out lowest ranking eligible securities. The Index is rebalanced (i) monthly on the last business day of each month, to account for changes in maturities or ratings migration, and (ii) quarterly, to account for updates to the constituent securities on the basis of the fundamental factors (as described above). As of July 31, 2017, issuers from the following emerging market countries 10 The Index Provider is not a broker-dealer and is not affiliated with a broker dealer and has implemented procedures designed to prevent the use and dissemination of material, non-public information regarding the Index. VerDate Sep<11>2014 18:27 Jan 17, 2018 Jkt 244001 were included in the Index: Brazil, Chile, Colombia, Hungary, Indonesia, Malaysia, Mexico, Peru, Poland, Russia, South Africa, and Thailand. The countries included in the Index may change over time. The percentage of the portfolio exposed to any country or geographic region will vary from time to time as the weightings of the securities within the Index change, and the Fund may not be invested in each country or geographic region at all times. All such issuers are a government of a foreign country or a political subdivision of a foreign country. The Exchange is submitting this proposed rule change because the Index does not meet all of the ‘‘generic’’ listing requirements of Commentary .02 to NYSE Arca Rule 5.2–E(j)(3) applicable to the listing of Units. The Index meets all such requirements except for those set forth in Commentary .02(a)(5) to NYSE Arca Rule 5.2–E(j)(3) that an underlying index or portfolio (excluding one consisting entirely of exempted securities) must include a minimum of 13 non-affiliated issuers. Specifically, as of July 31, 2017, the Index included components from 12 non-affiliated issuers, each of which is a foreign government or political subdivision of a foreign country.11 The Exchange represents that (1) except for the requirement under Commentary .02(a)(5) to NYSE Arca Rule 5.2–E(j)(3) that an underlying index or portfolio (excluding one consisting entirely of exempted securities) must include a minimum of 13 non-affiliated issuers, the Shares of the Fund would satisfy all of the generic listing standards under NYSE Arca Rule 5.2–E(j)(3); (2) the continued listing standards under NYSE Arca Rules 5.2– E(j)(3) and 5.5–E(g)(2) applicable to ICUs shall apply to the Shares; and (3) the Trust is required to comply with Rule 10A–3 12 under the Act for the initial and continued listing of the Shares. The Exchange represents that the Fund will comply with the initial and continued listing requirements of NYSE Arca Rules 5.2–E(j)(3) and 5.5–E(g)(2) applicable to ICUs on a continued basis. In addition, the Exchange represents that the Shares will comply with all other requirements applicable to ICUs 11 The 12 non-affiliated issuers are the following; Republic of Colombia; Kingdom of Thailand; Government of Malaysia; Republic of Hungary; Indonesia Republic; Mexico (United Mexican States); Republic of Peru; Republic of Poland; Republic of South Africa; Brazil (Federative Republic and Secretaria Tesouro Nacional); Chile (Republic of Chile and Banco Central de Chile); and Russian Federation. 12 17 CFR 240.10A–3. PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 2697 including, but not limited to, requirements relating to the dissemination of key information such as the Index value and Intraday Indicative Value, rules governing the trading of equity securities, initial minimum number of shares required to be outstanding at commencement of trading, hours of trading in the Exchange’s Early, Core and Late Trading Sessions, trading halts, surveillance,13 and the Information Bulletin to ETP Holders, as set forth in prior Commission orders approving the generic listing rules applicable to the listing and trading of ICUs.14 The Exchange believes it is appropriate to permit the listing and trading of the Shares notwithstanding that the requirement of Commentary .02(a)(5) to NYSE Arca Rule 5.2–E(j)(3) is not met because the non-affiliated issuers represented by the Index components each is and will be a foreign sovereign government or government entity with a substantial amount of debt issuances outstanding, and, therefore, will make manipulation of the Index less feasible.15 In addition, 13 The Exchange or the Financial Industry Regulatory Authority (‘‘FINRA’’), on behalf of the Exchange, or both, will communicate as needed regarding trading in the Shares and certain futures with other markets and other entities that are members of the Intermarket Surveillance Group (‘‘ISG’’), and the Exchange or FINRA, on behalf of the Exchange, or both, may obtain trading information regarding trading in the Shares and certain futures from such markets and other entities. In addition, the Exchange may obtain information regarding trading in the Shares and certain futures from markets and other entities that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. For a list of current members of ISG, see www.isgportal.org. In addition, the Exchange is able to access from FINRA, as needed, trade information for certain fixed income securities held by the Fund reported to FINRA’s Trade Reporting and Compliance Engine (‘‘TRACE’’). 14 See Securities Exchange Act Release Nos. 55621 (April 12, 2007), 72 FR 19571 (April 18, 2007) (SR–NYSEArca–006–86) (order approving generic listing standards for ICUs based on international or global indexes); 44551 (July 12, 2001), 66 FR 37716 (July 19, 2001) (SR–PCX–2001– 14) (order approving generic listing standards for ICUs and Portfolio Depositary Receipts); 41983 (October 6, 1999), 64 FR 56008 (October 15, 1999) (SR–PCX–98–29) (order approving rules for listing and trading of ICUs); 55783 (May 17, 2007), 72 FR 29194 (May 24, 2007) (SR–NYSEArca–2007–36) (notice of filing of proposed rule change and Amendment No. 1 thereto to establish generic listing standards for exchange-traded funds based on fixed income indexes and order granting accelerated approval of proposed rule change as amended); 55437 (March 9, 2007), 72 FR 12233 (March 15, 2007) (SR–Amex–2006–118) (approving generic listing standards for series of ETFs based on Fixed Income and Combination Indexes). 15 The Exchange notes, for informational purposes, that, as of November 30, 2017, the largest bond in the Index had $32.5 billion outstanding and the smallest bond in the Index had $762 million outstanding. The average size of Index component E:\FR\FM\18JAN1.SGM Continued 18JAN1 2698 Federal Register / Vol. 83, No. 12 / Thursday, January 18, 2018 / Notices sradovich on DSK3GMQ082PROD with NOTICES the Index currently substantially exceeds the requirements of Commentary .02(a)(2) and Commentary .02(a)(4) 16 to NYSE Arca Rule 5.2– E(j)(3).17 The Index will at all times include a minimum of ten non-affiliated issuers that are foreign sovereign government or government entities, and a minimum of 75 components, in addition to meeting the other continued listing requirements of Commentary .02 to NYSE Arca Rule 5.2–E (j)(3). All statements and representations made in this filing regarding (a) the description of the index, portfolio or reference asset, (b) limitations on index or portfolio holdings or reference assets, or (c) the applicability of Exchange listing rules specified in this rule filing will constitute continued listing requirements for listing the Shares of the Fund on the Exchange. The issuer must notify the Exchange of any failure by the Fund to comply with the continued listing requirements, and, pursuant to its obligations under Section 19(g)(1) of the Act, the Exchange will monitor for compliance with the continued listing requirements. If the Fund is not in compliance with the bonds was $4.8 billion and the total value of bonds in the Index was $998.7 billion. As of July 31, 2017, the twelve sovereign entities which have debt issues included in the Index had approximately $3.1 trillion in debt outstanding in the aggregate, with each such sovereign entity having approximately the following debt amount outstanding: Brazil ($1.1 trillion), Chile ($83.7 billion), Colombia ($88.6 billion), Hungary ($91.7 billion), Indonesia ($237.6 billion), Malaysia $168.3 billion), Mexico ($444.9 billion), Peru ($39.3 billion), Poland ($237.4 billion), Russia ($185.6 billion), South Africa ($171.9 billion), and Thailand ($229.7 billion). 16 Commentary .02(a)(2) to NYSE Arca Rule 5.2– E(j)(3) provides that components that in aggregate account for at least 75% of the Fixed Income Securities portion of the weight of the index or portfolio each shall have a minimum original principal amount outstanding of $100 million or more. Commentary .02(a)(4) to NYSE Arca Rule 5.2–E(j)(3) provides that no component fixedincome security (excluding Treasury Securities and GSE Securities) shall represent more than 30% of the Fixed Income Securities portion of the weight of the index or portfolio and the top 5 fixed-income securities (excluding Treasury Securities and GSE Securities) shall not represent more than 65% of the Fixed Income Securities portion of the weight of the index or portfolio. 17 The Exchange notes, for informational purposes, that, as of July 31, 2017, the Index included 189 components; components that in aggregate accounted for 100% of the weight of the Index each had a minimum original principal amount outstanding of $100 million or more; no single component represented more than 3.23% of the weight of the Index; and the top 5 Index components represented 11.49% of the weight of the Index. The Index Provider has stated that the Index methodology is implemented in accordance with International Organization of Securities Commissions (‘‘IOSCO’’) ‘‘Principles for Financial Benchmarks’’. See https://www.yieldbook.com/m/ indices/announcements.shtml?view=rq. VerDate Sep<11>2014 18:27 Jan 17, 2018 Jkt 244001 applicable listing requirements, the Exchange will commence delisting procedures under NYSE Arca Rule 5.5– E(m). 2. Statutory Basis The Exchange believes that the proposal is consistent with Section 6(b) of the Act 18 in general and Section 6(b)(5) of the Act 19 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, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. 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 generic listing criteria in Commentary .02 to NYSE Arca Rule 5.2–E(j)(3), except that the Index does not meet the requirement in Commentary .02(a)(5) to NYSE Arca Rule 5.2–E(j)(3) that an underlying index or portfolio (excluding one consisting entirely of exempted securities) must include a minimum of 13 non-affiliated issuers. 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. 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 Index will at all times include a minimum of ten nonaffiliated issuers that are foreign sovereign government or government entities; as noted above, such sovereign issuers have a substantial amount of debt outstanding.20 The Index will at all times include at least 75 components. In addition, the Index will meet the other continued listing requirements of Commentary .02 to NYSE Arca Rule 5.2–E (j)(3).21 The Exchange believes the Index is and will continue to be welldiversified based on the minimum number of components (75) of at least ten sovereign issuers with substantial amounts of debt outstanding, and is 18 15 U.S.C. 78f. U.S.C. 78f(b)(5). 20 See note 15, supra. 21 See note 16, supra. 19 15 PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 therefore not susceptible to manipulation. In addition, the Exchange will obtain a representation from the issuer of the Shares that the net asset value (‘‘NAV’’) per Share will be calculated daily every day the New York Stock Exchange is open, and that the NAV will be made available to all market participants at the same time. In addition, a large amount of publicly available information will be publicly available regarding the Fund and the Shares, thereby promoting market transparency. Moreover, the Intraday Indicative Value (‘‘IIV’’) will be widely disseminated by one or more major market data vendors at least every 15 seconds during the Exchange’s Core Trading Session (normally, 9:30 a.m. to 4:00 p.m., Eastern Time). Information regarding market price and trading volume of the Shares will be continually available on a real-time basis throughout the day on brokers’ computer screens and other electronic services, and quotations and last sale information will be available via the Consolidated Tape Association (‘‘CTA’’) high-speed line. Quotation and last sale information for the Shares will be available via the CTA high-speed line. Price information for the Index components will be available from automated quotation systems, published or other public sources, or online information services such as Bloomberg or Reuters. The Fund’s website, 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. On each business day, before commencement of trading in Shares in the Core Trading Session on the Exchange, the Trust will disclose on its website the following information regarding each portfolio holding, as applicable to the type of holding: Ticker symbol, CUSIP number or other identifier, if any; a description of the holding (including the type of holding); the identity of the security, index or other asset or instrument underlying the holding, if any; maturity date, if any; coupon rate, if any; effective date, if any; for options, the strike price; market value of the holding; quantity of each security or other asset held; and the percentage weighting of the holding in the Fund’s portfolio. In addition, a portfolio composition file, which will include the security names and quantities of securities and other assets required to be delivered in exchange for the Fund’s Shares, together with estimates and actual cash components, will be publicly disseminated prior to the opening of the Exchange via the National Securities Clearing E:\FR\FM\18JAN1.SGM 18JAN1 Federal Register / Vol. 83, No. 12 / Thursday, January 18, 2018 / Notices Corporation. Moreover, prior to commencement of trading, the Exchange will inform its ETP Holders in an Information Bulletin of the special characteristics and risks associated with trading the Shares. Trading in Shares of the Fund will be halted if the circuit breaker parameters in NYSE Arca Rule 7.12–E have been reached or because of market conditions or for reasons that, in the view of the Exchange, make trading the Shares inadvisable. In addition, as noted above, investors will have ready access to information regarding the Fund’s portfolio, the IIV, the Index value, and quotation and last sale information for the Shares. The proposed rule change is designed to perfect the mechanism of a free and open market and, in general, to protect investors and the public interest in that it will facilitate the listing and trading of an additional type of exchange-traded product that will enhance competition among market participants, to the benefit of investors and the marketplace. As noted above, the Shares will be subject to the existing trading surveillances administered by the Exchange and FINRA on behalf of the Exchange. The Exchange or FINRA, on behalf of the Exchange, or both, will communicate as needed regarding trading in the Shares and certain futures with other markets and other entities that are members of ISG, and the Exchange, FINRA on behalf of the Exchange, or both, may obtain trading information in the Shares and certain futures from such markets and other entities. In addition, the Exchange may obtain information regarding trading in the Shares and certain futures from markets and other entities that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. In addition, as noted above, investors will have ready access to information regarding the Fund’s holdings, the IIV, and quotation and last sale information for the Shares. sradovich on DSK3GMQ082PROD with NOTICES B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes that the proposed rule change will facilitate the listing and trading of an additional type of exchange-traded fund that principally holds fixed income securities of foreign sovereign governments and government entities and that will enhance competition among market participants, VerDate Sep<11>2014 18:27 Jan 17, 2018 Jkt 244001 to the benefit of investors and the marketplace. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 22 and Rule 19b– 4(f)(6) thereunder.23 A proposed rule change filed pursuant to Rule 19b–4(f)(6) under the Act 24 normally does not become operative for 30 days after the date of its filing. However, Rule 19b–4(f)(6)(iii) 25 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. As discussed above, the Exchange proposes to list and trade the Shares. The Fund will seek to provide investment results that closely correspond, before fees and expenses, to the performance of the Index. The Exchange notes that the Index meets all of the generic listing requirements under Commentary .02 to NYSE Arca Rule 5.2–E(j)(3), except the requirement in Commentary .02(a)(5) that the underlying index or portfolio (excluding one consisting entirely of exempted securities) include a minimum of 13 non-affiliated issuers. Instead, the Index will at all times include a minimum of 10 non-affiliated issuers that are foreign sovereign government or government entities and a minimum of 75 components, in addition to meeting the other listing requirements of 22 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). As required under Rule 19b–4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. 24 17 CFR 240.19b–4(f)(6). 25 17 CFR 240.19b–4(f)(6)(iii). 23 17 PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 2699 Commentary .02 to NYSE Arca Rule 5.2–E(j)(3). Moreover, the Fund will comply with the listing requirements of NYSE Arca Rules 5.2–E(j)(3) and 5.5– E(g)(2) applicable to ICUs on a continued basis, and will comply with all other requirements applicable to ICUs. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. According to the Exchange, waiver of the operative delay would benefit the market and investors by permitting trading of the Shares prior to the 30-day delayed operative date, thereby enhancing market competition. The Commission hereby waives the 30-day operative delay and designates the proposal operative upon filing.26 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSEArca–2017–138 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEArca–2017–138. This file number should be included on the subject line if email is used. To help the Commission process and review your 26 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). E:\FR\FM\18JAN1.SGM 18JAN1 2700 Federal Register / Vol. 83, No. 12 / Thursday, January 18, 2018 / Notices comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (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 website 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. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NYSEArca–2017–138 and should be submitted on or before February 8, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.27 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–00721 Filed 1–17–18; 8:45 am] BILLING CODE 8011–01–P sradovich on DSK3GMQ082PROD with NOTICES ..................... ..................... ..................... ..................... ..................... ..................... Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Change To Modify the NYSE American Options Fee Schedule January 11, 2018. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on December 29, 2017, NYSE American LLC (‘‘Exchange’’ or ‘‘NYSE American’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the selfregulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to modify the NYSE American Options Fee Schedule. The proposed change is available on the Exchange’s website at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this filing is to modify portions of the Fee Schedule, as described below, effective January 1, 2018. Market Maker Sliding Scale-Electronic (‘‘Sliding Scale’’) Section I.C. of the Fee Schedule sets forth the Sliding Scale of transaction fees charged to NYSE American Options Marker [sic] Makers (referred to as Market Makers herein), which fees decrease upon the Market Maker achieving higher monthly volumes.4 Currently, Market Makers that have monthly volume on the Exchange of 0.15% or less of total Industry Customer Equity and ETF Option Volume are charged a base rate of $0.25 per contract and, these same market participants, upon reaching certain volume thresholds, or Tiers, receive the same per contract reduction for volume in each respective tier, as set forth in the table below. In addition, the Exchange charges a lower per contract base rate (of $0.23) to Market Makers that participate in a Prepayment Program, with lower marginal rates applied to volumes in successive tiers. Rate per contract 0.00% to 0.15% ............................................................................................... >0.15% to 0.60% ............................................................................................. >0.60% to 1.10% ............................................................................................. >1.10% to 1.45% ............................................................................................. >1.45% to 1.80% ............................................................................................. >1.80% ............................................................................................................ 27 17 CFR 200.30–3(a)(12). U.S.C.78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 4 See Fee Schedule, Section I.C., available here, https://www.nyse.com/publicdocs/nyse/markets/ 1 15 VerDate Sep<11>2014 [Release No. 34–82489; File No. SR– NYSEAMER–2017–42] Market Maker Electronic Monthly Volume as a % of Industry Customer Equity and Exchange Traded Fund (‘‘ETF’’) Option Volume Tier 1 2 3 4 5 6 SECURITIES AND EXCHANGE COMMISSION 18:27 Jan 17, 2018 Jkt 244001 american-options/NYSE_American_Options_Fee_ Schedule.pdf (excluding any volumes attributable to Mini Options, QCC trades, CUBE Auctions, and Strategy Execution Fee Caps, as these transactions are subject to separate pricing described in Fee Schedule Sections I.B., I.F., I.G., and I.J, respectively). The volume thresholds are based on PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 $0.25 0.22 0.14 0.10 0.07 0.05 Rate per contract if Monthly Volume from Posted Volume is more than .85% of Total Industry Customer Equity and ETF Option Volume or for any NYSE American Market Maker participating in a Prepayment Program pursuant to Section I.D. $0.23 0.18 0.08 0.05 0.04 0.02 a Market Makers’ volume transacted Electronically as a percentage of total industry Customer equity and Exchange Traded Fund (‘‘ETF’’) options volumes (‘‘ADV’’) as reported by the Options Clearing Corporation (the ‘‘OCC’’). See OCC Monthly Statistics Reports, available here, https:// www.theocc.com/webapps/monthly-volume-reports. E:\FR\FM\18JAN1.SGM 18JAN1

Agencies

[Federal Register Volume 83, Number 12 (Thursday, January 18, 2018)]
[Notices]
[Pages 2695-2700]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-00721]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82487; File No. SR-NYSEArca-2017-138]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To List and Trade 
the Shares of the Goldman Sachs Access Emerging Markets Local Currency 
Bond ETF Under Commentary .02 to NYSE Arca Rule 5.2-E(j)(3)

January 11, 2018.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934

[[Page 2696]]

(``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that 
on December 28, 2017, NYSE Arca, Inc. (``Exchange'' or ``NYSE Arca'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the self-regulatory organization. The Commission 
is publishing this notice to solicit comments on the proposed rule 
change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to list and trade the shares of the Goldman 
Sachs Access Emerging Markets Local Currency Bond ETF (the ``Fund''), a 
series of Goldman Sachs ETF Trust (the ``Trust''), under Commentary .02 
to NYSE Arca Rule 5.2-E(j)(3) (``Investment Company Units''). The 
proposed rule change is available on the Exchange's website at 
www.nyse.com, at the principal office of the Exchange, and at the 
Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to list and trade shares (``Shares'') of the 
Goldman Sachs Access Emerging Markets Local Currency Bond ETF 
(``Fund'') under Commentary .02 to NYSE Arca Rule 5.2-E(j)(3), which 
governs the listing and trading of Investment Company Units (``ICUs'') 
on the Exchange.\4\ The Fund will be an index-based exchange traded 
fund (``ETF''). The Shares will be offered by the Goldman Sachs ETF 
Trust (the ``Trust''), which is registered with the Commission as an 
investment company and has filed a registration statement on Form N-1A 
(the ``Registration Statement'') with the Commission on behalf of the 
Fund.\5\
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    \4\ NYSE Arca Rule 5.2-E(j)(3)(A) provides that an Investment 
Company Unit is a security that represents an interest in a 
registered investment company that holds securities comprising, or 
otherwise based on or representing an interest in, an index or 
portfolio of securities (or holds securities in another registered 
investment company that holds securities comprising, or otherwise 
based on or representing an interest in, an index or portfolio of 
securities).
    \5\ See the Trust's post-effective amendment to the Trust's 
registration statement on Form N-1A, dated November 9, 2017 (File 
Nos. 333-200933 and 811-23013) (``Registration Statement''). The 
descriptions of the Fund and the Shares contained herein are based, 
in part, on information in the Registration Statement. In addition, 
the Commission has issued an order granting certain exemptive relief 
to the Trust under the Investment Company Act of 1940. See 
Investment Company Act Release No. 31465 (February 23, 2015) (File 
No. 812-14361).
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    The investment adviser to the Fund will be Goldman Sachs Asset 
Management, L.P. (``Adviser''), a wholly-owned subsidiary of The 
Goldman Sachs Group, Inc.\6\ ALPS Distributors, Inc. will serve as the 
distributor (the ``Distributor'') of Fund Shares on an agency basis. 
The Bank of New York Mellon (the ``Administrator'') will be the 
administrator, custodian and transfer agent for the Fund.
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    \6\ The Adviser is not registered as a broker-dealer but is 
affiliated with a broker-dealer and has implemented and will 
maintain a ``fire wall'' with respect to such broker-dealer 
affiliate regarding access to information concerning the composition 
of and/or changes to the Fund's portfolio.
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Goldman Sachs Access Emerging Markets Local Currency Bond ETF
Principal Investments
    According to the Registration Statement, the Fund will seek to 
provide investment results that closely correspond, before fees and 
expenses, to the performance of the Citi Goldman Sachs Emerging Markets 
Local Currency Government Bond Index (the ``Index''). Under normal 
market conditions,\7\ the Fund will seek to achieve its investment 
objective by investing at least 80% of its assets (exclusive of 
collateral held from securities lending) in securities included in the 
Index.
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    \7\ The term ``normal market conditions'' for these purposes 
will have the same meaning as the term defined in NYSE Arca Rule 
8.600-E(c)(5).
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Other Investments
    While, under normal market conditions, the Fund will seek to 
achieve its investment objective by investing at least 80% of its 
assets (exclusive of collateral held from securities lending) in 
securities included in the Index, the Fund may invest up to 20% of its 
net assets in the securities and financial instruments not included in 
the Index, as described below.
    The Fund may invest in commercial paper and other short-term 
obligations issued or guaranteed by U.S. corporations, non-U.S. 
corporations or other entities.
    The Fund may hold foreign currencies.
    The Fund may invest in investment company securities, including 
exchange-traded funds (``ETFs'') \8\ and money market funds.
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    \8\ For purposes of this filing, ETFs include Investment Company 
Units (as described in NYSE Arca Rule 5.2-E (j)(3)); Portfolio 
Depositary Receipts (as described in NYSE Arca Rule 8.100-E); and 
Managed Fund Shares (as described in NYSE Arca Rule 8.600-E). The 
ETFs all will be listed and traded in the U.S. on registered 
exchanges. The Fund will not invest in inverse or leveraged (e.g., 
+2x, -2X) index ETFs.
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    The Fund may invest in equity and fixed income securities of 
foreign issuers, including securities quoted or denominated in a 
currency other than U.S. dollars.
    The Fund may invest in Global Depositary Notes, credit linked notes 
and loan participation notes.
    The Fund may purchase and sell futures contracts and may also 
purchase and write call and put options on futures contracts. The Fund 
may purchase and sell futures contracts based on US and foreign 
securities indices, foreign currencies, interest rates and 
Eurodollars.\9\
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    \9\ In the aggregate, at least 90% of the weight of the Fund's 
holdings invested in futures shall consist of futures for which the 
Exchange may obtain information via the ISG from other members or 
affiliates of the ISG or for which the principal market is a market 
with which the Exchange has a comprehensive surveillance sharing 
agreement.
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    The Fund may enter into interest rate, credit, total return, and 
currency swaps. The Fund also may enter into index swaps.
    The Fund may invest in foreign currency forward contracts.
    The Fund may enter into repurchase and reverse repurchase 
agreements.
    The Fund may invest in U.S. Government Securities.
    The Fund may invest in zero coupon, deferred interest, pay-in-kind 
and capital appreciation bonds.
    The Fund may invest in inflation protected securities of varying 
maturities issued by the U.S. Treasury and other U.S. and non-U.S. 
Government agencies and corporations.
    The Fund may invest in restricted securities (Rule 144A 
securities).
Citi Goldman Sachs Emerging Markets Local Currency Government Bond 
Index
    The Index is a rules-based index that is designed to measure the 
performance of bonds issued by emerging market

[[Page 2697]]

governments and denominated in the local currency of the issuer that 
meet certain liquidity and fundamental screening criteria. As of July 
31, 2017, there were 189 issues in the Index.
    The Index is a custom index that is owned and calculated by FTSE 
Fixed Income LLC (``FTSE'' or the ``Index Provider''), and is based on 
the Citi Emerging Markets Government Bond Index (the ``Reference 
Index'') using concepts developed with Goldman Sachs Asset 
Management.\10\
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    \10\ The Index Provider is not a broker-dealer and is not 
affiliated with a broker dealer and has implemented procedures 
designed to prevent the use and dissemination of material, non-
public information regarding the Index.
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    The Index Provider constructs the Index in accordance with a rules-
based methodology that involves two steps:
Step 1
    In the first step, the Index Provider defines the universe of 
potential index components (``Universe'') by applying specified 
criteria to the constituent securities of the Reference Index. The 
Reference Index includes sovereign debt issued in local currency that 
has a minimum of one year to maturity and is rated at least C by S&P or 
Ca by Moody's. Issuers need to have a minimum of local currency 
equivalent of $10 billion outstanding for three consecutive months to 
be eligible for inclusion in the Reference Index. Only constituents of 
the Reference Index that have a minimum local currency equivalent of 
approximately $1 billion outstanding are included in the Universe. 
Provided there are 10 or more countries represented in the Universe, 
the weight of each country within the Universe is capped at 10%.
Step 2
    In the second step, the Index Provider applies a fundamental screen 
to the Universe. Issuers are measured by two fundamental factors, money 
supply growth and current account to gross domestic product (``GDP''). 
The Index Provider ranks each issuer based on the two fundamental 
factors, equally weighted. The Index is constructed by including the 
highest ranking eligible securities, screening out lowest ranking 
eligible securities.
    The Index is rebalanced (i) monthly on the last business day of 
each month, to account for changes in maturities or ratings migration, 
and (ii) quarterly, to account for updates to the constituent 
securities on the basis of the fundamental factors (as described 
above).
    As of July 31, 2017, issuers from the following emerging market 
countries were included in the Index: Brazil, Chile, Colombia, Hungary, 
Indonesia, Malaysia, Mexico, Peru, Poland, Russia, South Africa, and 
Thailand. The countries included in the Index may change over time. The 
percentage of the portfolio exposed to any country or geographic region 
will vary from time to time as the weightings of the securities within 
the Index change, and the Fund may not be invested in each country or 
geographic region at all times. All such issuers are a government of a 
foreign country or a political subdivision of a foreign country.
    The Exchange is submitting this proposed rule change because the 
Index does not meet all of the ``generic'' listing requirements of 
Commentary .02 to NYSE Arca Rule 5.2-E(j)(3) applicable to the listing 
of Units. The Index meets all such requirements except for those set 
forth in Commentary .02(a)(5) to NYSE Arca Rule 5.2-E(j)(3) that an 
underlying index or portfolio (excluding one consisting entirely of 
exempted securities) must include a minimum of 13 non-affiliated 
issuers. Specifically, as of July 31, 2017, the Index included 
components from 12 non-affiliated issuers, each of which is a foreign 
government or political subdivision of a foreign country.\11\
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    \11\ The 12 non-affiliated issuers are the following; Republic 
of Colombia; Kingdom of Thailand; Government of Malaysia; Republic 
of Hungary; Indonesia Republic; Mexico (United Mexican States); 
Republic of Peru; Republic of Poland; Republic of South Africa; 
Brazil (Federative Republic and Secretaria Tesouro Nacional); Chile 
(Republic of Chile and Banco Central de Chile); and Russian 
Federation.
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    The Exchange represents that (1) except for the requirement under 
Commentary .02(a)(5) to NYSE Arca Rule 5.2-E(j)(3) that an underlying 
index or portfolio (excluding one consisting entirely of exempted 
securities) must include a minimum of 13 non-affiliated issuers, the 
Shares of the Fund would satisfy all of the generic listing standards 
under NYSE Arca Rule 5.2-E(j)(3); (2) the continued listing standards 
under NYSE Arca Rules 5.2-E(j)(3) and 5.5-E(g)(2) applicable to ICUs 
shall apply to the Shares; and (3) the Trust is required to comply with 
Rule 10A-3 \12\ under the Act for the initial and continued listing of 
the Shares.
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    \12\ 17 CFR 240.10A-3.
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    The Exchange represents that the Fund will comply with the initial 
and continued listing requirements of NYSE Arca Rules 5.2-E(j)(3) and 
5.5-E(g)(2) applicable to ICUs on a continued basis. In addition, the 
Exchange represents that the Shares will comply with all other 
requirements applicable to ICUs including, but not limited to, 
requirements relating to the dissemination of key information such as 
the Index value and Intraday Indicative Value, rules governing the 
trading of equity securities, initial minimum number of shares required 
to be outstanding at commencement of trading, hours of trading in the 
Exchange's Early, Core and Late Trading Sessions, trading halts, 
surveillance,\13\ and the Information Bulletin to ETP Holders, as set 
forth in prior Commission orders approving the generic listing rules 
applicable to the listing and trading of ICUs.\14\
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    \13\ The Exchange or the Financial Industry Regulatory Authority 
(``FINRA''), on behalf of the Exchange, or both, will communicate as 
needed regarding trading in the Shares and certain futures with 
other markets and other entities that are members of the Intermarket 
Surveillance Group (``ISG''), and the Exchange or FINRA, on behalf 
of the Exchange, or both, may obtain trading information regarding 
trading in the Shares and certain futures from such markets and 
other entities. In addition, the Exchange may obtain information 
regarding trading in the Shares and certain futures from markets and 
other entities that are members of ISG or with which the Exchange 
has in place a comprehensive surveillance sharing agreement. For a 
list of current members of ISG, see www.isgportal.org. In addition, 
the Exchange is able to access from FINRA, as needed, trade 
information for certain fixed income securities held by the Fund 
reported to FINRA's Trade Reporting and Compliance Engine 
(``TRACE'').
    \14\ See Securities Exchange Act Release Nos. 55621 (April 12, 
2007), 72 FR 19571 (April 18, 2007) (SR-NYSEArca-006-86) (order 
approving generic listing standards for ICUs based on international 
or global indexes); 44551 (July 12, 2001), 66 FR 37716 (July 19, 
2001) (SR-PCX-2001-14) (order approving generic listing standards 
for ICUs and Portfolio Depositary Receipts); 41983 (October 6, 
1999), 64 FR 56008 (October 15, 1999) (SR-PCX-98-29) (order 
approving rules for listing and trading of ICUs); 55783 (May 17, 
2007), 72 FR 29194 (May 24, 2007) (SR-NYSEArca-2007-36) (notice of 
filing of proposed rule change and Amendment No. 1 thereto to 
establish generic listing standards for exchange-traded funds based 
on fixed income indexes and order granting accelerated approval of 
proposed rule change as amended); 55437 (March 9, 2007), 72 FR 12233 
(March 15, 2007) (SR-Amex-2006-118) (approving generic listing 
standards for series of ETFs based on Fixed Income and Combination 
Indexes).
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    The Exchange believes it is appropriate to permit the listing and 
trading of the Shares notwithstanding that the requirement of 
Commentary .02(a)(5) to NYSE Arca Rule 5.2-E(j)(3) is not met because 
the non-affiliated issuers represented by the Index components each is 
and will be a foreign sovereign government or government entity with a 
substantial amount of debt issuances outstanding, and, therefore, will 
make manipulation of the Index less feasible.\15\ In addition,

[[Page 2698]]

the Index currently substantially exceeds the requirements of 
Commentary .02(a)(2) and Commentary .02(a)(4) \16\ to NYSE Arca Rule 
5.2-E(j)(3).\17\
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    \15\ The Exchange notes, for informational purposes, that, as of 
November 30, 2017, the largest bond in the Index had $32.5 billion 
outstanding and the smallest bond in the Index had $762 million 
outstanding. The average size of Index component bonds was $4.8 
billion and the total value of bonds in the Index was $998.7 
billion. As of July 31, 2017, the twelve sovereign entities which 
have debt issues included in the Index had approximately $3.1 
trillion in debt outstanding in the aggregate, with each such 
sovereign entity having approximately the following debt amount 
outstanding: Brazil ($1.1 trillion), Chile ($83.7 billion), Colombia 
($88.6 billion), Hungary ($91.7 billion), Indonesia ($237.6 
billion), Malaysia $168.3 billion), Mexico ($444.9 billion), Peru 
($39.3 billion), Poland ($237.4 billion), Russia ($185.6 billion), 
South Africa ($171.9 billion), and Thailand ($229.7 billion).
    \16\ Commentary .02(a)(2) to NYSE Arca Rule 5.2-E(j)(3) provides 
that components that in aggregate account for at least 75% of the 
Fixed Income Securities portion of the weight of the index or 
portfolio each shall have a minimum original principal amount 
outstanding of $100 million or more. Commentary .02(a)(4) to NYSE 
Arca Rule 5.2-E(j)(3) provides that no component fixed-income 
security (excluding Treasury Securities and GSE Securities) shall 
represent more than 30% of the Fixed Income Securities portion of 
the weight of the index or portfolio and the top 5 fixed-income 
securities (excluding Treasury Securities and GSE Securities) shall 
not represent more than 65% of the Fixed Income Securities portion 
of the weight of the index or portfolio.
    \17\ The Exchange notes, for informational purposes, that, as of 
July 31, 2017, the Index included 189 components; components that in 
aggregate accounted for 100% of the weight of the Index each had a 
minimum original principal amount outstanding of $100 million or 
more; no single component represented more than 3.23% of the weight 
of the Index; and the top 5 Index components represented 11.49% of 
the weight of the Index. The Index Provider has stated that the 
Index methodology is implemented in accordance with International 
Organization of Securities Commissions (``IOSCO'') ``Principles for 
Financial Benchmarks''. See https://www.yieldbook.com/m/indices/announcements.shtml?view=rq.
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    The Index will at all times include a minimum of ten non-affiliated 
issuers that are foreign sovereign government or government entities, 
and a minimum of 75 components, in addition to meeting the other 
continued listing requirements of Commentary .02 to NYSE Arca Rule 5.2-
E (j)(3).
    All statements and representations made in this filing regarding 
(a) the description of the index, portfolio or reference asset, (b) 
limitations on index or portfolio holdings or reference assets, or (c) 
the applicability of Exchange listing rules specified in this rule 
filing will constitute continued listing requirements for listing the 
Shares of the Fund on the Exchange.
    The issuer must notify the Exchange of any failure by the Fund to 
comply with the continued listing requirements, and, pursuant to its 
obligations under Section 19(g)(1) of the Act, the Exchange will 
monitor for compliance with the continued listing requirements. If the 
Fund is not in compliance with the applicable listing requirements, the 
Exchange will commence delisting procedures under NYSE Arca Rule 5.5-
E(m).
2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section 
6(b) of the Act \18\ in general and Section 6(b)(5) of the Act \19\ 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, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system.
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    \18\ 15 U.S.C. 78f.
    \19\ 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 
generic listing criteria in Commentary .02 to NYSE Arca Rule 5.2-
E(j)(3), except that the Index does not meet the requirement in 
Commentary .02(a)(5) to NYSE Arca Rule 5.2-E(j)(3) that an underlying 
index or portfolio (excluding one consisting entirely of exempted 
securities) must include a minimum of 13 non-affiliated issuers. 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.
    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 Index will at all times include a minimum of ten non-
affiliated issuers that are foreign sovereign government or government 
entities; as noted above, such sovereign issuers have a substantial 
amount of debt outstanding.\20\ The Index will at all times include at 
least 75 components. In addition, the Index will meet the other 
continued listing requirements of Commentary .02 to NYSE Arca Rule 5.2-
E (j)(3).\21\ The Exchange believes the Index is and will continue to 
be well-diversified based on the minimum number of components (75) of 
at least ten sovereign issuers with substantial amounts of debt 
outstanding, and is therefore not susceptible to manipulation.
---------------------------------------------------------------------------

    \20\ See note 15, supra.
    \21\ See note 16, supra.
---------------------------------------------------------------------------

    In addition, the Exchange will obtain a representation from the 
issuer of the Shares that the net asset value (``NAV'') per Share will 
be calculated daily every day the New York Stock Exchange is open, and 
that the NAV will be made available to all market participants at the 
same time. In addition, a large amount of publicly available 
information will be publicly available regarding the Fund and the 
Shares, thereby promoting market transparency.
    Moreover, the Intraday Indicative Value (``IIV'') will be widely 
disseminated by one or more major market data vendors at least every 15 
seconds during the Exchange's Core Trading Session (normally, 9:30 a.m. 
to 4:00 p.m., Eastern Time). Information regarding market price and 
trading volume of the Shares will be continually available on a real-
time basis throughout the day on brokers' computer screens and other 
electronic services, and quotations and last sale information will be 
available via the Consolidated Tape Association (``CTA'') high-speed 
line. Quotation and last sale information for the Shares will be 
available via the CTA high-speed line. Price information for the Index 
components will be available from automated quotation systems, 
published or other public sources, or online information services such 
as Bloomberg or Reuters. The Fund's website, 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. On each business 
day, before commencement of trading in Shares in the Core Trading 
Session on the Exchange, the Trust will disclose on its website the 
following information regarding each portfolio holding, as applicable 
to the type of holding: Ticker symbol, CUSIP number or other 
identifier, if any; a description of the holding (including the type of 
holding); the identity of the security, index or other asset or 
instrument underlying the holding, if any; maturity date, if any; 
coupon rate, if any; effective date, if any; for options, the strike 
price; market value of the holding; quantity of each security or other 
asset held; and the percentage weighting of the holding in the Fund's 
portfolio. In addition, a portfolio composition file, which will 
include the security names and quantities of securities and other 
assets required to be delivered in exchange for the Fund's Shares, 
together with estimates and actual cash components, will be publicly 
disseminated prior to the opening of the Exchange via the National 
Securities Clearing

[[Page 2699]]

Corporation. Moreover, prior to commencement of trading, the Exchange 
will inform its ETP Holders in an Information Bulletin of the special 
characteristics and risks associated with trading the Shares. Trading 
in Shares of the Fund will be halted if the circuit breaker parameters 
in NYSE Arca Rule 7.12-E have been reached or because of market 
conditions or for reasons that, in the view of the Exchange, make 
trading the Shares inadvisable. In addition, as noted above, investors 
will have ready access to information regarding the Fund's portfolio, 
the IIV, the Index value, and quotation and last sale information for 
the Shares.
    The proposed rule change is designed to perfect the mechanism of a 
free and open market and, in general, to protect investors and the 
public interest in that it will facilitate the listing and trading of 
an additional type of exchange-traded product that will enhance 
competition among market participants, to the benefit of investors and 
the marketplace. As noted above, the Shares will be subject to the 
existing trading surveillances administered by the Exchange and FINRA 
on behalf of the Exchange. The Exchange or FINRA, on behalf of the 
Exchange, or both, will communicate as needed regarding trading in the 
Shares and certain futures with other markets and other entities that 
are members of ISG, and the Exchange, FINRA on behalf of the Exchange, 
or both, may obtain trading information in the Shares and certain 
futures from such markets and other entities. In addition, the Exchange 
may obtain information regarding trading in the Shares and certain 
futures from markets and other entities that are members of ISG or with 
which the Exchange has in place a comprehensive surveillance sharing 
agreement. In addition, as noted above, investors will have ready 
access to information regarding the Fund's holdings, the IIV, and 
quotation and last sale information for the Shares.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange believes that 
the proposed rule change will facilitate the listing and trading of an 
additional type of exchange-traded fund that principally holds fixed 
income securities of foreign sovereign governments and government 
entities and 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

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \22\ and Rule 19b-
4(f)(6) thereunder.\23\
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78s(b)(3)(A).
    \23\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission.
---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \24\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \25\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has asked the Commission to waive the 30-day operative delay so that 
the proposal may become operative immediately upon filing.
---------------------------------------------------------------------------

    \24\ 17 CFR 240.19b-4(f)(6).
    \25\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    As discussed above, the Exchange proposes to list and trade the 
Shares. The Fund will seek to provide investment results that closely 
correspond, before fees and expenses, to the performance of the Index. 
The Exchange notes that the Index meets all of the generic listing 
requirements under Commentary .02 to NYSE Arca Rule 5.2-E(j)(3), except 
the requirement in Commentary .02(a)(5) that the underlying index or 
portfolio (excluding one consisting entirely of exempted securities) 
include a minimum of 13 non-affiliated issuers. Instead, the Index will 
at all times include a minimum of 10 non-affiliated issuers that are 
foreign sovereign government or government entities and a minimum of 75 
components, in addition to meeting the other listing requirements of 
Commentary .02 to NYSE Arca Rule 5.2-E(j)(3). Moreover, the Fund will 
comply with the listing requirements of NYSE Arca Rules 5.2-E(j)(3) and 
5.5-E(g)(2) applicable to ICUs on a continued basis, and will comply 
with all other requirements applicable to ICUs.
    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
According to the Exchange, waiver of the operative delay would benefit 
the market and investors by permitting trading of the Shares prior to 
the 30-day delayed operative date, thereby enhancing market 
competition. The Commission hereby waives the 30-day operative delay 
and designates the proposal operative upon filing.\26\
---------------------------------------------------------------------------

    \26\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule change should be approved or 
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 [email protected]. Please include 
File Number SR-NYSEArca-2017-138 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2017-138. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your

[[Page 2700]]

comments more efficiently, please use only one method. The Commission 
will post all comments on the Commission's internet website (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 website 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. Persons submitting comments are cautioned that we do 
not redact or edit personal identifying information from comment 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
NYSEArca-2017-138 and should be submitted on or before February 8, 
2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\27\
---------------------------------------------------------------------------

    \27\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-00721 Filed 1-17-18; 8:45 am]
BILLING CODE 8011-01-P
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