Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Continue Listing and Trading Shares of the Cambria Sovereign Bond ETF, 22303-22305 [2018-10140]

Download as PDF amozie on DSK3GDR082PROD with NOTICES Federal Register / Vol. 83, No. 93 / Monday, May 14, 2018 / Notices application for registration with the Commission where the Commission is their ARA. Such transfer agents must also amend their Form TA–1 if the existing information on their Form TA– 1 becomes inaccurate, misleading, or incomplete within 60 days following the date the information became inaccurate, misleading or incomplete. Registration filings on Form TA–1 and amendments thereto must be filed with the Commission electronically, absent an exemption, on EDGAR pursuant to Regulation S–T (17 CFR 232). The Commission annually receives approximately 186 filings on Form TA– 1 from transfer agents required to register as such with the Commission. Included in this figure are approximately 178 amendments made annually by transfer agents to their Form TA–1 as required by Rule 17Ac2– 1(c) to address information that has become inaccurate, misleading, or incomplete and approximately 8 new applications by transfer agents for registration on Form TA–1 as required by Rule 17Ac2–1(a). Based on past submissions, the staff estimates that on average approximately twelve hours are required for initial completion of Form TA–1 and that on average one and onehalf hours are required for an amendment to Form TA–1 by each such firm. Thus, the subtotal burden for new applications for registration filed on Form TA–1 each year is 96 hours (12 hours times 8 filers) and the subtotal burden for amendments to Form TA–1 filed each year is 267 hours (1.5 hours times 178 filers). The cumulative total is 363 burden hours per year (96 hours plus 267 hours). An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number. The public may view background documentation for this information collection at the following website: www.reginfo.gov. Comments should be directed to: (i) Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503, or by sending an email to: Shagufta_ Ahmed@omb.eop.gov; and (ii) Pamela Dyson, Director/Chief Information Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 100 F Street NE, Washington, DC 20549, or by sending an email to: PRA_Mailbox@sec.gov. Comments must be submitted to OMB within 30 days of this notice. VerDate Sep<11>2014 18:02 May 11, 2018 Jkt 244001 Dated: May 8, 2018. Eduardo A. Aleman, Assistant Secretary. the most significant parts of such statements. [FR Doc. 2018–10144 Filed 5–11–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–83187; File No. SR– CboeBZX–2018–032] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Continue Listing and Trading Shares of the Cambria Sovereign Bond ETF May 8, 2018. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on May 1, 2018, Cboe BZX Exchange, Inc. (‘‘Exchange’’ or ‘‘BZX’’) 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 Substance of the Proposed Rule Change The Exchange filed a proposal to amend a representation made in a proposed rule change previously filed with the Commission pursuant to Rule 19b–4 relating to the Cambria Sovereign Bond ETF (the ‘‘Fund’’) (f/k/a Cambria Sovereign High Yield Bond ETF). The text of the proposed rule change is available at the Exchange’s website at www.markets.cboe.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 1 15 2 17 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00065 Fmt 4703 22303 Sfmt 4703 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The shares of the Fund (the ‘‘Shares’’) are listed and traded on the Exchange under Rule 14.11(i), which governs the listing and trading of Managed Fund Shares, pursuant to an immediately effective rule filing.3 The Fund is a series of the Cambria ETF Trust (the ‘‘Trust’’), which is organized as a Delaware statutory trust and is registered with the Commission as an open-end management investment company.4 In this proposed rule change, the Exchange proposes to amend a representation made in the Prior Notice relating to changes to the investment strategy of the Fund, as described below.5 The Prior Notice (and the Arca Approval Order) contains the following representation regarding the holdings of the Fund: ‘‘under normal market 3 See Securities Exchange Act Release No. 79618 (December 20, 2016), 81 FR 95252 (December 27, 2016) (SR–BatsBZX–2016–88) (the ‘‘Prior Notice’’). The Exchange notes that the Commission previously approved a proposal to list and trade the Shares on NYSE Arca, Inc. See Securities Exchange Act Release No. 75540 (July 28, 2015), 80 FR 46359 (August 4, 2015) (SR–NYSEArca–2015–50) (the ‘‘Arca Approval Order’’). 4 See Registration Statement on Form N–1A for the Trust, dated September 30, 2015 (File Nos. 333– 180879 and 811–22704) (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. 30340 (January 4, 2013) (File No. 812–13959). The Trust also submitted to the Commission a ‘‘Supplement dated January 20, 2017 to the Summary Prospectus, Statutory Prospectus (collectively, the ‘‘Prospectuses’’) and Statement of Additional Information (‘‘SAI’’) dated September 1, 2016, as each may be amended or supplemented’’ (the ‘‘January 20 Supplement’’) outlining the proposed change to the investment strategy as well as a ‘‘Supplement dated August 24, 2017 to the Summary Prospectus, Statutory Prospectus (collectively, the ‘‘Prospectuses’’) and Statement of Additional Information (‘‘SAI’’) dated September 1, 2016, as each may be amended or supplemented’’ in order to provide notice that the investment strategy change had been replaced as described in the January 20 Supplement. See https:// www.sec.gov/Archives/edgar/data/1529390/0001 39834417000671/fp0023454_497.htm and https:// www.sec.gov/Archives/edgar/data/1529390/000 139834417010795/fp0027628_497.htm, respectively. 5 The Exchange notes that while a change was made to the principal investment strategy, there were no changes to the Fund’s investment objective, the method or methods used to select the Fund’s portfolio investments, or the Fund’s fees and expenses. E:\FR\FM\14MYN1.SGM 14MYN1 22304 Federal Register / Vol. 83, No. 93 / Monday, May 14, 2018 / Notices amozie on DSK3GDR082PROD with NOTICES conditions,6 at least 80% of the value of the Fund’s net assets (plus borrowings for investment purposes) will be invested in sovereign and quasisovereign high yield bonds (commonly known as ‘‘junk bonds’’).7’’ Based on the changes to the Fund’s investment strategy outlined in the January 20 Supplement, the Exchange is proposing to change this representation such that it is consistent with the new investment strategy. The Exchange proposes that the sentence would instead read ‘‘under normal market conditions,8 at least 80% of the value of the Fund’s net assets (plus borrowings for investment purposes) will be invested in sovereign and quasi-sovereign bonds.’’ Practically speaking, while the Fund is currently required to hold at least 80% of its net assets in high yield (i.e. lower credit quality) sovereign and quasi-sovereign bonds, this proposed change will additionally allow the Fund to hold investment grade (i.e. higher credit quality) sovereign and quasisovereign bonds, thereby increasing the credit quality of the Fund’s holdings in sovereign and quasi-sovereign bonds. As noted above, the investment objective of the Fund will remain unchanged. All other statements and representations made in the Prior Notice regarding the description of the portfolio or reference assets, limitations on portfolio holdings or reference assets, dissemination and availability of reference assets and intraday indicative values, and the applicability of Exchange listing rules specified in the Prior Notice remain true and shall continue to constitute continued listing requirements for the 6 The term ‘‘under normal market conditions’’ includes, but is not limited to, the absence of extreme volatility or trading halts in the equity markets or the financial markets generally; operational issues causing dissemination of inaccurate market information; or force majeure type events such as systems failure, natural or manmade disaster, act of God, armed conflict, act of terrorism, riot or labor disruption or any similar intervening circumstance. 7 Sovereign and quasi-sovereign bonds include securities issued or guaranteed by foreign governments (including political subdivisions) or their authorities, agencies, or instrumentalities or by supra-national agencies. Supra-national agencies are agencies whose member nations make capital contributions to support the agencies’ activities. Examples include the International Bank for Reconstruction and Development (the World Bank), the Asian Development Bank, the European Coal and Steel Community, and the Inter-American Development Bank. 8 The term ‘‘under normal market conditions’’ includes, but is not limited to, the absence of extreme volatility or trading halts in the equity markets or the financial markets generally; operational issues causing dissemination of inaccurate market information; or force majeure type events such as systems failure, natural or manmade disaster, act of God, armed conflict, act of terrorism, riot or labor disruption or any similar intervening circumstance. VerDate Sep<11>2014 18:02 May 11, 2018 Jkt 244001 Fund. Additionally, the change proposed above will constitute a continued listing requirement for the Fund. 2. Statutory Basis The Exchange believes that the proposal is consistent with Section 6(b) of the Act 9 in general and Section 6(b)(5) of the Act 10 in particular in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to, and perfect the mechanism of a free and open market and, in general, to protect investors and the public interest. Specifically, the Exchange believes that the proposal is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to, and perfect the mechanism of a free and open market and, in general, to protect investors and the public interest. As described above, all of the representations from the Prior Notice which formed the basis for the Prior Notice becoming immediately effective remain true and will continue to constitute continued listing requirements for the Fund with the exception of the single representation that the Exchange is proposing to amend. This proposed change will not make any changes to the types of instruments that the Fund can hold, but will allow the Fund to hold those instruments when they are issued by more creditworthy issuers. As such, the Exchange believes that the proposal does not raise any substantive issues that were not previously addressed in the Prior Notice and Arca Approval Order. As proposed, the Fund would be able to continue to hold the same lower credit quality sovereign and quasisovereign bonds and the only additional investments that would become available to the Fund would be investment grade sovereign and quasisovereign bonds. As such, the Exchange believes that the proposal is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest because there are no substantive issues raised by this proposal that were not otherwise 9 15 U.S.C. 78f. U.S.C. 78f(b)(5). 10 15 PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 addressed by the Prior Notice and the Arca Approval Order. 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 believes that the proposal to allow the Fund to amend its investment strategy will enhance competition among both market participants and listing venues, 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 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 11 and Rule 19b– 4(f)(6) thereunder.12 A proposed rule change filed pursuant to Rule 19b–4(f)(6) under the Act 13 normally does not become operative for 30 days after the date of its filing. However, Rule 19b–4(f)(6)(iii) 14 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 to allow the Fund to immediately improve the credit quality of its bond portfolio while complying with the applicable continued listing representations. The Exchange does not believe that there is any reason for delay when the change is only designed to allow the Fund to hold higher credit quality versions of instruments that it is already allowed to hold. The 11 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. 13 17 CFR 240.19b–4(f)(6). 14 17 CFR 240.19b–4(f)(6)(iii). 12 17 E:\FR\FM\14MYN1.SGM 14MYN1 Federal Register / Vol. 83, No. 93 / Monday, May 14, 2018 / Notices Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. Accordingly, the Commission hereby waives the 30-day operative delay and designates the proposed rule change operative upon filing.15 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: amozie on DSK3GDR082PROD with NOTICES Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number CboeBZX–2018–032 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 CboeBZX–2018–032. 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 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 15 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). VerDate Sep<11>2014 18:02 May 11, 2018 Jkt 244001 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 CboeBZX–2018–032 and should be submitted on or before June 4, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–10140 Filed 5–11–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–541, OMB Control No. 3235–0620] Submission for OMB Review; Comment Request Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549–2736. Extension: Rule 22c–2. Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) the Securities and Exchange Commission (the ‘‘Commission’’) has submitted to the Office of Management and Budget a request for extension of the previously approved collection of information discussed below. Rule 22c–2 (17 CFR 270.22c–2) under the Investment Company Act of 1940 (15 U.S.C. 80a) (the ‘‘Investment Company Act’’ or ‘‘Act’’) requires the board of directors (including a majority of independent directors) of most registered open-end investment companies (‘‘funds’’) to either approve a redemption fee of up to two percent or determine that imposition of a redemption fee is not necessary or appropriate for the fund. Rule 22c–2 16 17 PO 00000 CFR 200.30–3(a)(12). Frm 00067 Fmt 4703 Sfmt 4703 22305 also requires a fund to enter into written agreements with their financial intermediaries (such as broker-dealers and retirement plan administrators) under which the fund, upon request, can obtain certain shareholder identity and trading information from the intermediaries. The written agreement must also allow the fund to direct the intermediary to prohibit further purchases or exchanges by specific shareholders that the fund has identified as being engaged in transactions that violate the fund’s market timing policies. These requirements enable funds to obtain the information that they need to monitor the frequency of short-term trading in omnibus accounts and enforce their market timing policies. The rule includes three ‘‘collections of information’’ within the meaning of the Paperwork Reduction Act of 1995 (‘‘PRA’’).1 First, the rule requires boards to either approve a redemption fee of up to two percent or determine that imposition of a redemption fee is not necessary or appropriate for the fund. Second, funds must enter into information sharing agreements with all of their ‘‘financial intermediaries’’ 2 and maintain a copy of the written information sharing agreement with each intermediary in an easily accessible place for six years. Third, pursuant to the information sharing agreements, funds must have systems that enable them to request frequent trading information upon demand from their intermediaries, and to enforce any restrictions on trading required by funds under the rule. The collections of information created by rule 22c–2 are necessary for funds to effectively assess redemption fees, enforce their policies in frequent trading, and monitor short-term trading, including market timing, in omnibus accounts. These collections of information are mandatory for funds that redeem shares within seven days of purchase. The collections of information 1 44 U.S.C. 3501–3520. rule defines a Financial Intermediary as: (i) Any broker, dealer, bank, or other person that holds securities issued by the fund in nominee name; (ii) a unit investment trust or fund that invests in the fund in reliance on section 12(d)(i)(E) of the Act; and (iii) in the case of a participant directed employee benefit plan that owns the securities issued by the fund, a retirement plan’s administrator under section 316(A) of the Employee Retirement Security Act of 1974 (29 U.S.C. 1002(16)(A) or any person that maintains the plans’ participant records. Financial Intermediary does not include any person that the fund treats as an individual investor with respect to the fund’s policies established for the purpose of eliminating or reducing any dilution of the value of the outstanding securities issued by the fund. Rule 22c– 2(c)(1). 2 The E:\FR\FM\14MYN1.SGM 14MYN1

Agencies

[Federal Register Volume 83, Number 93 (Monday, May 14, 2018)]
[Notices]
[Pages 22303-22305]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-10140]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83187; File No. SR-CboeBZX-2018-032]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To 
Continue Listing and Trading Shares of the Cambria Sovereign Bond ETF

May 8, 2018.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on May 1, 2018, Cboe BZX Exchange, Inc. (``Exchange'' or ``BZX'') 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to amend a representation made in a 
proposed rule change previously filed with the Commission pursuant to 
Rule 19b-4 relating to the Cambria Sovereign Bond ETF (the ``Fund'') 
(f/k/a Cambria Sovereign High Yield Bond ETF).
    The text of the proposed rule change is available at the Exchange's 
website at www.markets.cboe.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 shares of the Fund (the ``Shares'') are listed and traded on 
the Exchange under Rule 14.11(i), which governs the listing and trading 
of Managed Fund Shares, pursuant to an immediately effective rule 
filing.\3\ The Fund is a series of the Cambria ETF Trust (the 
``Trust''), which is organized as a Delaware statutory trust and is 
registered with the Commission as an open-end management investment 
company.\4\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 79618 (December 20, 
2016), 81 FR 95252 (December 27, 2016) (SR-BatsBZX-2016-88) (the 
``Prior Notice''). The Exchange notes that the Commission previously 
approved a proposal to list and trade the Shares on NYSE Arca, Inc. 
See Securities Exchange Act Release No. 75540 (July 28, 2015), 80 FR 
46359 (August 4, 2015) (SR-NYSEArca-2015-50) (the ``Arca Approval 
Order'').
    \4\ See Registration Statement on Form N-1A for the Trust, dated 
September 30, 2015 (File Nos. 333-180879 and 811-22704) (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. 30340 (January 4, 
2013) (File No. 812-13959). The Trust also submitted to the 
Commission a ``Supplement dated January 20, 2017 to the Summary 
Prospectus, Statutory Prospectus (collectively, the 
``Prospectuses'') and Statement of Additional Information (``SAI'') 
dated September 1, 2016, as each may be amended or supplemented'' 
(the ``January 20 Supplement'') outlining the proposed change to the 
investment strategy as well as a ``Supplement dated August 24, 2017 
to the Summary Prospectus, Statutory Prospectus (collectively, the 
``Prospectuses'') and Statement of Additional Information (``SAI'') 
dated September 1, 2016, as each may be amended or supplemented'' in 
order to provide notice that the investment strategy change had been 
replaced as described in the January 20 Supplement. See https://www.sec.gov/Archives/edgar/data/1529390/000139834417000671/fp0023454_497.htm and https://www.sec.gov/Archives/edgar/data/1529390/000139834417010795/fp0027628_497.htm, respectively.
---------------------------------------------------------------------------

    In this proposed rule change, the Exchange proposes to amend a 
representation made in the Prior Notice relating to changes to the 
investment strategy of the Fund, as described below.\5\ The Prior 
Notice (and the Arca Approval Order) contains the following 
representation regarding the holdings of the Fund: ``under normal 
market

[[Page 22304]]

conditions,\6\ at least 80% of the value of the Fund's net assets (plus 
borrowings for investment purposes) will be invested in sovereign and 
quasi-sovereign high yield bonds (commonly known as ``junk 
bonds'').\7\'' Based on the changes to the Fund's investment strategy 
outlined in the January 20 Supplement, the Exchange is proposing to 
change this representation such that it is consistent with the new 
investment strategy. The Exchange proposes that the sentence would 
instead read ``under normal market conditions,\8\ at least 80% of the 
value of the Fund's net assets (plus borrowings for investment 
purposes) will be invested in sovereign and quasi-sovereign bonds.''
---------------------------------------------------------------------------

    \5\ The Exchange notes that while a change was made to the 
principal investment strategy, there were no changes to the Fund's 
investment objective, the method or methods used to select the 
Fund's portfolio investments, or the Fund's fees and expenses.
    \6\ The term ``under normal market conditions'' includes, but is 
not limited to, the absence of extreme volatility or trading halts 
in the equity markets or the financial markets generally; 
operational issues causing dissemination of inaccurate market 
information; or force majeure type events such as systems failure, 
natural or man- made disaster, act of God, armed conflict, act of 
terrorism, riot or labor disruption or any similar intervening 
circumstance.
    \7\ Sovereign and quasi-sovereign bonds include securities 
issued or guaranteed by foreign governments (including political 
subdivisions) or their authorities, agencies, or instrumentalities 
or by supra-national agencies. Supra-national agencies are agencies 
whose member nations make capital contributions to support the 
agencies' activities. Examples include the International Bank for 
Reconstruction and Development (the World Bank), the Asian 
Development Bank, the European Coal and Steel Community, and the 
Inter-American Development Bank.
    \8\ The term ``under normal market conditions'' includes, but is 
not limited to, the absence of extreme volatility or trading halts 
in the equity markets or the financial markets generally; 
operational issues causing dissemination of inaccurate market 
information; or force majeure type events such as systems failure, 
natural or man- made disaster, act of God, armed conflict, act of 
terrorism, riot or labor disruption or any similar intervening 
circumstance.
---------------------------------------------------------------------------

    Practically speaking, while the Fund is currently required to hold 
at least 80% of its net assets in high yield (i.e. lower credit 
quality) sovereign and quasi-sovereign bonds, this proposed change will 
additionally allow the Fund to hold investment grade (i.e. higher 
credit quality) sovereign and quasi-sovereign bonds, thereby increasing 
the credit quality of the Fund's holdings in sovereign and quasi-
sovereign bonds. As noted above, the investment objective of the Fund 
will remain unchanged. All other statements and representations made in 
the Prior Notice regarding the description of the portfolio or 
reference assets, limitations on portfolio holdings or reference 
assets, dissemination and availability of reference assets and intraday 
indicative values, and the applicability of Exchange listing rules 
specified in the Prior Notice remain true and shall continue to 
constitute continued listing requirements for the Fund. Additionally, 
the change proposed above will constitute a continued listing 
requirement for the Fund.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section 
6(b) of the Act \9\ in general and Section 6(b)(5) of the Act \10\ in 
particular in that it is designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, to remove impediments to, and perfect the 
mechanism of a free and open market and, in general, to protect 
investors and the public interest. Specifically, the Exchange believes 
that the proposal is designed to prevent fraudulent and manipulative 
acts and practices, to promote just and equitable principles of trade, 
to remove impediments to, and perfect the mechanism of a free and open 
market and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    As described above, all of the representations from the Prior 
Notice which formed the basis for the Prior Notice becoming immediately 
effective remain true and will continue to constitute continued listing 
requirements for the Fund with the exception of the single 
representation that the Exchange is proposing to amend. This proposed 
change will not make any changes to the types of instruments that the 
Fund can hold, but will allow the Fund to hold those instruments when 
they are issued by more creditworthy issuers. As such, the Exchange 
believes that the proposal does not raise any substantive issues that 
were not previously addressed in the Prior Notice and Arca Approval 
Order. As proposed, the Fund would be able to continue to hold the same 
lower credit quality sovereign and quasi-sovereign bonds and the only 
additional investments that would become available to the Fund would be 
investment grade sovereign and quasi-sovereign bonds.
    As such, the Exchange believes that the proposal is designed to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade, to remove impediments to and perfect 
the mechanism of a free and open market and a national market system, 
and, in general, to protect investors and the public interest because 
there are no substantive issues raised by this proposal that were not 
otherwise addressed by the Prior Notice and the Arca Approval Order.

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 believes that 
the proposal to allow the Fund to amend its investment strategy will 
enhance competition among both market participants and listing venues, 
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

    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 \11\ and Rule 19b-
4(f)(6) thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \13\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \14\ 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 to allow 
the Fund to immediately improve the credit quality of its bond 
portfolio while complying with the applicable continued listing 
representations. The Exchange does not believe that there is any reason 
for delay when the change is only designed to allow the Fund to hold 
higher credit quality versions of instruments that it is already 
allowed to hold. The

[[Page 22305]]

Commission believes that waiver of the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
Accordingly, the Commission hereby waives the 30-day operative delay 
and designates the proposed rule change operative upon filing.\15\
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    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \15\ 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).
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    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 CboeBZX-2018-032 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 CboeBZX-2018-032. 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 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 CboeBZX-2018-032 and should be submitted on 
or before June 4, 2018.
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    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-10140 Filed 5-11-18; 8:45 am]
 BILLING CODE 8011-01-P
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