Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving a Proposed Rule Change, as Modified by Amendment No. 2, Regarding the Continued Listing and Trading of Shares of the Natixis Loomis Sayles Short Duration Income ETF, 65386-65389 [2018-27509]

Download as PDF 65386 Federal Register / Vol. 83, No. 244 / Thursday, December 20, 2018 / Notices khammond on DSK30JT082PROD with NOTICES provide the Subadvised Series with continuous and comprehensive investment management services, subject to the supervision of, and policies established by, the Trust’s board of trustees (the ‘‘Board’’). The Investment Management Agreement permits the Adviser, subject to the approval of the Board, to delegate to one or more Sub-Advisers the responsibility to provide the day-to-day portfolio investment management of each Subadvised Series, subject to the supervision and direction of the Adviser.2 The primary responsibility for managing the Subadvised Series will remain vested in the Adviser. The Adviser will hire, evaluate, allocate assets to and oversee the Sub-Advisers, including determining whether a SubAdviser should be terminated, at all times subject to the authority of the Board. 2. Applicants request an exemption to permit the Adviser, subject to Board approval, to hire a Non-Affiliated SubAdviser, pursuant to Sub-Advisory Agreements and materially amend SubAdvisory Agreements with NonAffiliated Sub-Advisers without obtaining the shareholder approval required under section 15(a) of the Act and rule 18f–2 under the Act.3 Applicants also seek an exemption from the Disclosure Requirements to permit a Subadvised Series to disclose (as both a dollar amount and a percentage of the Subadvised Series’ net assets): (a) The aggregate fees paid to the Adviser; (b) the aggregate fees paid to Non-Affiliated Sub-Advisers; and (c) the fee paid to each Affiliated Sub-Adviser. 3. Applicants agree that any order granting the requested relief will be subject to the terms and conditions stated in the application. Such terms and conditions provide for, among other safeguards, appropriate disclosure to Subadvised Series’ shareholders and notification about sub-advisory changes and enhanced Board oversight to protect a ‘‘Subadvised Series’’). For purposes of the requested order, ‘‘successor’’ is limited to an entity that results from a reorganization into another jurisdiction or a change in the type of business organization. 2 A ‘‘Sub-Adviser’’ for a Subadvised Series is an investment sub-adviser for that Series that is not an ‘‘affiliated person’’ (as such term is defined in Section 2(a)(3) of the Act) of the Subadvised Series or the Adviser, except to the extent that an affiliation arises solely because the Sub-Adviser serves as a sub-adviser to one or more Subadvised Series (each a ‘‘Non-Affiliated Sub-Adviser’’ and collectively, the ‘‘Non-Affiliated Sub-Advisers’’). 3 The requested relief will not extend to any subadviser which is an affiliated person, as defined in section 2(a)(3) of the Act, of the Subadvised Series or of its Adviser, other than by reason of serving as a sub-adviser to one or more of the Subadvised Series (‘‘Affiliated Sub-Adviser’’). VerDate Sep<11>2014 17:21 Dec 19, 2018 Jkt 247001 the interests of the Subadvised Series’ shareholders. 4. Section 6(c) of the Act provides that the Commission may exempt any person, security, or transaction or any class or classes of persons, securities, or transactions from any provisions of the Act, or any rule thereunder, if such relief is necessary or appropriate in the public interest and consistent with the protection of investors and purposes fairly intended by the policy and provisions of the Act. Applicants believe that the requested relief meets this standard because, as further explained in the application, the Investment Management Agreements will remain subject to shareholder approval while the role of the SubAdvisers is substantially equivalent to that of individual portfolio managers, so that requiring shareholder approval of Sub-Advisory Agreements would impose unnecessary delays and expenses on the Subadvised Series. Applicants believe that the requested relief from the Disclosure Requirements meets this standard because it will improve the Adviser’s ability to negotiate fees paid to the Sub-Advisers that are more advantageous for the Subadvised Series. For the Commission, by the Division of Investment Management, under delegated authority. Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2018–27516 Filed 12–19–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–84826; File No. SR– NYSEArca–2018–25] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving a Proposed Rule Change, as Modified by Amendment No. 2, Regarding the Continued Listing and Trading of Shares of the Natixis Loomis Sayles Short Duration Income ETF December 14, 2018. I. Introduction On April 16, 2018, NYSE Arca, Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 a proposed rule change to amend the listing 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 PO 00000 Frm 00050 Fmt 4703 Sfmt 4703 requirements applicable to the shares (‘‘Shares’’) of the Natixis Loomis Sayles Short Duration Income ETF (‘‘Fund’’). The proposed rule change was published for comment in the Federal Register on May 3, 2018.4 On June 5, 2018, the Commission extended the time period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to approve or disapprove the proposed rule change to August 1, 2018.5 On June 6, 2018, the Exchange filed Amendment No. 1 to the proposed rule change, which replaced and superseded the proposed rule change as originally filed. On July 27, 2018, the Commission noticed filing of Amendment No. 1 and instituted proceedings to determine whether to approve or disapprove the proposed rule change.6 On July 27, 2018, pursuant to Section 19(b)(2) of the Act,7 the Commission designated a longer period within which to issue an order approving or disapproving the proposed rule change.8 On December 6, 2018, the Exchange filed Amendment No. 2 to the proposed rule change, which replaced and superseded the proposed rule change as modified by Amendment No. 1.9 On October 22, 4 See Securities Exchange Act Release No. 83122 (April 27, 2018), 83 FR 19578. 5 See Securities Exchange Act Release No. 83385, 83 FR 27034 (June 11, 2018). 6 See Securities Exchange Act Release No. 83733, 83 FR 37831 (August 2, 2018). 7 15 U.S.C. 78s(b)(2). 8 See Securities Exchange Act Release No. 84462, 83 FR 54153 (October 26, 2018). The Commission designated December 29, 2018, as the date by which the Commission shall either approve or disapprove the proposed rule change. 9 In Amendment No. 2, the Exchange: (1) Clarified the scope of asset-backed securities (‘‘ABSs’’) in which the Fund may invest; (2) limited the junior loans in which the Fund may invest to those that satisfy all of the criteria in Commentary .01(b) to Rule 8.600–E; (3) clarified the scope of mortgagebacked securities (‘‘MBSs’’) in which the Fund may invest; (4) eliminated as permitted investments of the Fund publicly or privately issued interests in investment pools whose underlying assets are credit default, credit-linked, interest rate, currency exchange, equity-linked or other types of swap contracts and related underlying securities or securities loan agreements; (5) established and provided support for the following diversification requirements with respect to the Fund’s investments in non-agency ABS and MBS, which collectively may comprise up to 30% of the weight of the Fund’s ‘‘Fixed Income Securities’’ (defined below): (a) Up to 25% of such weight may be in ABS, provided that up to 5% of the weight of its Fixed Income Securities investments may be in CBOs, CLOs and CDOs, in the aggregate; (b) up to 15% of its Fixed Income Securities investments may be in MBS, including CMOs but excluding CMBS; and (c) up to 15% of its Fixed Income Securities investments may be in CMBS; and (6) made other technical, non-substantive, and conforming changes. Because Amendment No. 2 makes clarifying modifications, provides additional representations, and eliminates a permitted category of investments, it is not subject to notice E:\FR\FM\20DEN1.SGM 20DEN1 Federal Register / Vol. 83, No. 244 / Thursday, December 20, 2018 / Notices 2018, the Commission extended the time period for Commission action to December 29, 2018.10 The Commission received no comments on the proposed rule change. This order approves the proposed rule change, as modified by Amendment No. 2. II. Description of the Proposal 11 khammond on DSK30JT082PROD with NOTICES Pursuant to Commentary .01 to NYSE Arca Rule 8.600–E,12 the Exchange listed and began trading the Shares on December 28, 2017. The Shares are offered by Natixis ETF Trust (‘‘Trust’’), which is registered as an open-end management investment company under the Investment Company Act of 1940 (‘‘1940 Act’’).13 Natixis Advisors, L.P. (‘‘Adviser’’) is the investment adviser for the Fund. Loomis, Sayles & Company, L.P. is the Fund’s sub-adviser (‘‘Sub-Adviser’’). The Fund’s investment objective is current income consistent with preservation of capital. The Exchange filed this proposed rule change because the Fund would like to invest in assets that may not satisfy all of the requirements of Commentary .01 to NYSE Arca Rule 8.600–E, as discussed further below. and comment. All of the amendments to the proposed rule change are available at: https:// www.sec.gov/comments/sr-nysearca-2018-25/ nysearca201825.htm. 10 See Securities Exchange Act Release No. 84462, 83 FR 54153 (October 26, 2018). 11 Additional information regarding the Fund, the Trust (defined infra), and the Shares can be found in Amendment No. 2, supra note 9, and the Registration Statement, infra note 13. 12 NYSE Arca Rule 8.600–E governs the listing and trading of Managed Fund Shares on the Exchange. A ‘‘Managed Fund Share’’ is a security that (1) represents an interest in a registered investment company (‘‘Investment Company’’) organized as an open-end management investment company or similar entity, that invests in a portfolio of securities selected by the Investment Company’s investment adviser consistent with the Investment Company’s investment objectives and policies; (2) is issued in a specified aggregate minimum number in return for a deposit of a specified portfolio of securities and/or a cash amount with a value equal to the next determined net asset value (‘‘NAV’’); and (3) when aggregated in the same specified minimum number, may be redeemed at a holder’s request, which holder will be paid a specified portfolio of securities and/or cash with a value equal to the next determined NAV. See NYSE Arca Rule 8.600–E(c)(1). Pursuant to Commentary .01 to NYSE Arca Rule 8.600–E, the Exchange may approve Managed Fund Shares for listing and trading pursuant to Rule 19b–4(e) under the Act provided that components the actively managed fund’s portfolio comply with specified criteria upon initial listing and on a continual basis. 13 On December 26, 2017, the Trust filed with the Commission its registration statement on Form N– 1A under the Securities Act of 1933 (15 U.S.C. 77a), and under the 1940 Act relating to the Fund (File Nos. 333–210156 and 811–23146) (‘‘Registration Statement’’). In addition, the Commission has issued an order granting certain exemptive relief to the Trust under the 1940 Act. See Investment Company Act Release No. 30654 (August 20, 2013) (File No. 812–13942–02). VerDate Sep<11>2014 17:21 Dec 19, 2018 Jkt 247001 A. The Fund’s Contemplated Investments While the Fund may hold any portion of its assets in cash (U.S. dollars, foreign currencies or multinational currency units) and/or cash equivalents, under normal market conditions,14 the Fund will invest at least 80% of its net assets in the following: • U.S. Government Securities, including U.S. Treasury Bills, U.S. Treasury Notes and Bonds, U.S. Treasury Floating Rate Notes, Treasury Inflation-Protected Securities, and obligations of U.S. agencies or instrumentalities (e.g., ‘‘Ginnie Maes’’, ‘‘Fannie Maes’’ and ‘‘Freddie Macs’’); • agency and non-agency assetbacked securities (‘‘ABS’’); 15 • U.S. dollar-denominated foreign securities, including emerging market securities; • Adjustable-Rate Mortgage Securities; • junior and senior loans; 16 • bank loans, loan participations and assignments; • agency and non-agency mortgagebacked securities (‘‘MBS’’); 17 • zero coupon and pay-in-kind securities; • corporate bonds; • Non-US government securities, supranational entities obligations issued by foreign governments, or international agencies and instrumentalities; • inflation-linked and inflationindexed securities; • money market instruments; 18 • mortgage-related securities (such as Government National Mortgage Association or Federal National Mortgage Association certificates); • mortgage dollar rolls; • variable and floating rate securities; • Rule 144A securities; • taxable municipal securities; • step-coupon securities; and • stripped securities (collectively, ‘‘Fixed Income Securities’’). 14 The term ‘‘normal market conditions’’ is defined in NYSE Arca Rule 8.600–E(c)(5). 15 ABSs may include collateralized bond obligations (‘‘CBOs’’), collateralized loan obligations (‘‘CLOs’’), and other collateralized debt obligations (‘‘CDOs’’). 16 The Fund’s investment in junior loans is subject to all criteria in Commentary .01(b) to Rule 8.600–E, including the criteria relating to minimum original principal amount outstanding (Commentary .01(b)(1), portfolio weighting (Commentary .01(b)(2), and the numerical and other criteria in Commentary .01(b)(4). See Amendment No. 2, supra note 9, at 6, n.7. 17 MBS may include collateralized mortgage obligations (‘‘CMOs’’) and commercial mortgagebacked securities (‘‘CMBS’’). 18 Money market instruments are short-term instruments referenced in Commentary .01(c) to NYSE Arca Rule 8.600–E. PO 00000 Frm 00051 Fmt 4703 Sfmt 4703 65387 Additionally, under normal market conditions,19 the Fund may invest its remaining assets in the following: • short sales of Fixed Income Securities; • exchange-traded funds (‘‘ETFs’’) 20 and exchange-traded notes (‘‘ETNs’’); 21 • the following swaps: Interest rate, credit default, credit default swaps index (‘‘CDX’’), commodity, equitylinked, fixed income, credit default, credit-linked and currency exchange swaps or an index or indexes of the foregoing; • swaptions; • the following options: U.S. exchange-traded and over-the-counter (‘‘OTC’’) options on Fixed Income Securities, domestic and foreign equity and fixed income indices, CDX, U.S. Treasury futures contracts, interest rates and currencies; • futures on Fixed Income Securities, domestic and foreign equity and fixed income indices, interest rates and CDX; and • shares of non-exchange-traded open-end investment company securities. B. The Contemplated Investments’ Possible Non-Compliance With the Generic Listing Requirements The Exchange filed this proposed rule change to allow the Fund’s portfolio to not satisfy the two ‘‘generic’’ listing criteria of Commentary .01 to NYSE Arca Rule 8.600–E going forward. First, as noted above, the Fund desires to invest in non-exchange traded investment company securities (e.g., mutual fund shares). Such shares, which could comprise at most up to 20% of the Fund’s net assets, would not satisfy the requirements of Commentary .01(a)(1) to Rule 8.600–E.22 According to 19 See supra note 14. ETFs will be listed and traded in the U.S. on a national securities exchange. While the Fund may invest in inverse ETFs, the Fund will not invest in leveraged (e.g., 2X, –2X, 3X or –3X) ETFs. See Amendment No. 2, supra note 9, at 7, n.11. 21 ETNs are Index-Linked Securities as described in NYSE Arca Rule 5.2–E(j)(6). See id. at 7, n.12. 22 Commentary .01(a)(1) to Rule 8.600–E requires that the component stocks of the equity portion of a portfolio that are U.S. Component Stocks shall meet certain criteria initially and on a continuing basis. Specifically: Commentary .01(a)(1)(A) requires that component stocks (excluding Derivative Securities Products and Index-Linked Securities) that in the aggregate account for at least 90% of the equity weight of the portfolio (excluding such Derivative Securities Products and IndexLinked Securities) each shall have a minimum market value of at least $75 million; Commentary .01(a)(1)(B) requires that component stocks (excluding Derivative Securities Products and Index-Linked Securities) that in the aggregate account for at least 70% of the equity weight of the portfolio (excluding such Derivative Securities Products and Index-Linked Securities) each shall 20 All E:\FR\FM\20DEN1.SGM Continued 20DEN1 65388 Federal Register / Vol. 83, No. 244 / Thursday, December 20, 2018 / Notices khammond on DSK30JT082PROD with NOTICES the Exchange, the Fund would utilize such investments to help the Fund meet its investment objective and to equitize cash in the short term.23 Second, the Fund seeks to modify the limit on non-agency, non-governmentsponsored entity (‘‘GSE’’) and privatelyissued mortgage-related and other assetbacked securities. Instead, of the 20% limit in Commentary .01(b)(5),24 the Exchange proposes that up to 30% of the weight of the Fixed Income Securities portion of the Fund’s portfolio consist of non-agency, nonGSE and privately-issued mortgagerelated and other asset-backed securities, provided that: (1) Up to 25% of such weight may be in ABS, provided that up to 5% of the weight of its Fixed Income Securities investments may be in CBOs, CLOs and CDOs, in the aggregate; (2) up to 15% of its Fixed Income Securities investments may be in MBS, including CMOs but excluding CMBS; and (3) up to 15% of its Fixed Income Securities investments may be in CMBS. The Exchange asserts that these limits would provide additional diversification to the Fund’s ABS and MBS investments and reduce concerns that the Fund’s investment in such securities would be readily susceptible to market manipulation. According to the Adviser, permitting such investments: (1) Would be in the best interest of the Fund’s shareholders because such investments have the have a minimum monthly trading volume of 250,000 shares, or minimum notional volume traded per month of $25,000,000, averaged over the last six months; Commentary .01(a)(1)(C) requires that the most heavily weighted component stock (excluding Derivative Securities Products and Index-Linked Securities) shall not exceed 30% of the equity weight of the portfolio, and, to the extent applicable, the five most heavily weighted component stocks (excluding Derivative Securities Products and Index-Linked Securities) shall not exceed 65% of the equity weight of the portfolio; Commentary .01(a)(1)(D) requires that, where the equity portion of the portfolio does not include Non-U.S. Component Stocks, the equity portion of the portfolio shall include a minimum of 13 component stocks, provided that there shall be no minimum number of component stocks if (i) one or more series of Derivative Securities Products or Index-Linked Securities constitute, at least in part, components underlying a series of Managed Fund Shares, or (ii) one or more series of Derivative Securities Products or Index-Linked Securities account for 100% of the equity weight of the portfolio of a series of Managed Fund Shares; and Commentary .01(a)(1)(E) requires that, except as provided herein, equity securities in the portfolio shall be U.S. Component Stocks listed on a national securities exchange and shall be NMS Stocks as defined in Rule 600 of Regulation NMS under the Securities Exchange Act of 1934. 23 See id. 24 Commentary .01(b)(5) to Rule 8.600–E prohibits non-agency, non-GSE and privately-issued mortgage-related and other asset-backed securities components of a portfolio from accounting (in the aggregate) for more than 20% of the weight of the fixed income portion of the portfolio. VerDate Sep<11>2014 17:21 Dec 19, 2018 Jkt 247001 potential to reduce the overall risk profile of the Fund’s portfolio through diversification; and (2) would afford the Fund greater flexibility to invest in the most liquid available Fixed Income Securities issues.25 The Exchange would require the Shares to satisfy all the other requirements of Rule 8.600–E.26 III. Discussion and Commission Findings After careful review, the Commission finds that the Exchange’s proposal to amend the listing requirements applicable to the Shares is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange.27 In particular, the Commission finds that the proposed rule change, as modified by Amendment No. 2, is consistent with Section 6(b)(5) of the Act,28 which requires, among other things, that the Exchange’s rules be designed to prevent fraudulent and manipulative acts and practices, 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. As mentioned above, the Shares would continue to satisfy all of the generic listing criteria except for the requirements of Commentary .01(b)(5) to NYSE Arca Rule 8.600–E,29 and Commentary .01(a)(1)(A) through (E) to Rule 8.600–E. The Commission believes that permitting the Fund to invest up to 20% of its net assets in non-exchange traded investment company securities would not render the Shares susceptible to manipulation. The Commission has previously approved listing rules for other series of Managed Fund Shares that permit investments in such securities.30 With respect to the proposed 30% limit on non-agency, non-GSE and 25 See id. id. at 15. 27 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 28 15 U.S.C. 78f(b)(5). 29 Commentary .01(b)(5) to NYSE Arca Rule 8.600–E provides that non-agency, non-government sponsored entity and privately issued mortgagerelated and other asset-backed securities components of a portfolio may not account, in the aggregate, for more than 20% of the weight of the fixed income portion of the portfolio. 30 See, e.g., Securities Exchange Act Release No. 78414 (July 26, 2016), 81 FR 50576 (August 1, 2016) (SR–NYSEArca–2016–79) (approving the listing and trading of shares of the Virtus Japan Alpha ETF under NYSE Arca Equities Rule 8.600). 26 See PO 00000 Frm 00052 Fmt 4703 Sfmt 4703 privately-issued mortgage-related and other asset-backed securities, the Commission believes that the proposed sub-limits described above, are sufficient to diversify the Fund’s portfolio of such securities and mitigate manipulation concerns. The Commission notes that it recently approved a similar limit for an issue of Managed Fund Shares permitted to invest in fixed income securities.31 In support of this proposal, the Exchange has also made the following representations: (1) The Fund will only purchase U.S. dollar denominated non-agency ABS and MBS that are settled through DTC.32 (2) All statements and representations made in this filing regarding (a) the description of the portfolio, (b) limitations on portfolio holdings or reference assets, or (c) the applicability of Exchange listing rules specified in this rule filing shall constitute continued listing requirements for listing the Shares on the Exchange.33 (3) The issuer will advise 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(m)–E.34 (4) The Exchange has appropriate rules to facilitate transactions in the Shares during all trading sessions.35 (5) The Exchange has in place surveillance procedures that are adequate to properly monitor trading in the Shares in all trading sessions and to deter and detect violations of Exchange rules and federal securities laws applicable to trading on the Exchange.36 (6) For continued listing, the Fund will be in compliance with Rule 10A– 3 under the Act, as provided by NYSE Arca Rule 5.3–E.37 This approval order is based on all of the Exchange’s representations, including those set forth above and in the Amendment No. 2. For the foregoing reasons, the Commission finds that the proposed 31 See Securities Exchange Act Release No. 84047 (September 6, 2018), 83 FR 46200 (September 12, 2018) (SR–Nasdaq–2017–128) (approving the listing and trading of shares of the Western Asset Total Return ETF). 32 See Amendment No. 2, supra note 9, at 12. 33 See id. at 19. 34 See id. 35 See id. at 17. 36 See id. at 18. 37 See id. at 18. See also 17 CFR 240.10A–3. E:\FR\FM\20DEN1.SGM 20DEN1 Federal Register / Vol. 83, No. 244 / Thursday, December 20, 2018 / Notices rule change, as modified by Amendment No. 2, is consistent with Section 6(b)(5) of the Act 38 and the rules and regulations thereunder applicable to a national securities exchange. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,39 that the proposed rule change (SR–NYSEArca– 2018–25), as modified by Amendment No. 2, be, and it hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.40 Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2018–27509 Filed 12–19–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION FEDERAL REGISTER CITATION OF PREVIOUS ANNOUNCEMENT: 83 FR 64630, 17 December 2018. PREVIOUSLY ANNOUNCED TIME AND DATE OF THE MEETING: Wednesday, December 19, 2018 at 10:00 a.m. The following item will not be considered during the Open Meeting on Wednesday, July 18, 2018: • Whether to issue a Request for Comment on nature and content of quarterly reports and earnings releases issued by reporting companies. CHANGES IN THE MEETING: CONTACT PERSON FOR MORE INFORMATION: For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact the Office of the Secretary at (202) 551– 5400. Dated: December 18, 2018. Brent J. Fields, Secretary. [FR Doc. 2018–27753 Filed 12–18–18; 4:15 pm] BILLING CODE 8011–01–P SMALL BUSINESS ADMINISTRATION [Disaster Declaration #15838 and #15839; CALIFORNIA Disaster Number CA–00296] khammond on DSK30JT082PROD with NOTICES Presidential Declaration of a Major Disaster for Public Assistance Only for the State of California U.S. Small Business Administration. ACTION: Notice. 38 15 U.S.C. 78f(b)(5). U.S.C. 78s(b)(2). 40 17 CFR 200.30–3(a)(12). 17:21 Dec 19, 2018 Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. ADDRESSES: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205–6734. Notice is hereby given that as a result of the President’s major disaster declaration on 12/11/2018, Private Non-Profit organizations that provide essential services of a governmental nature may file disaster loan applications at the address listed above or other locally announced locations. The following areas have been determined to be adversely affected by the disaster: SUPPLEMENTARY INFORMATION: Primary Counties: Butte, Los Angeles, Ventura. The Interest Rates are: Percent For Physical Damage: Non-Profit Organizations with Credit Available Elsewhere ... Non-Profit Organizations without Credit Available Elsewhere ..................................... For Economic Injury: Non-Profit Organizations without Credit Available Elsewhere ..................................... 2.750 2.750 Jkt 247001 (Catalog of Federal Domestic Assistance Number 59008) James Rivera, Associate Administrator for Disaster Assistance. PO 00000 Frm 00053 Fmt 4703 Sfmt 4703 [Disaster Declaration #15696 and #15697; North Carolina Disaster Number NC–00099] Presidential Declaration Amendment of a Major Disaster for the State of North Carolina U.S. Small Business Administration. ACTION: Amendment 8. AGENCY: This is an amendment of the Presidential declaration of a major disaster for the State of North Carolina (FEMA–4393–DR), dated 09/14/2018. Incident: Hurricane Florence. Incident Period: 09/07/2018 through 09/29/2018. DATES: Issued on 12/13/2018. Physical Loan Application Deadline Date: 12/19/2018. Economic Injury (EIDL) Loan Application Deadline Date: 06/14/2019. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205–6734. SUPPLEMENTARY INFORMATION: The notice of the President’s major disaster declaration for the State of North Carolina, dated 09/14/2018, is hereby amended to extend the deadline for filing applications for physical damages as a result of this disaster to 12/19/2018. All other information in the original declaration remains unchanged. SUMMARY: (Catalog of Federal Domestic Assistance Number 59008) James Rivera, Associate Administrator for Disaster Assistance. BILLING CODE 8025–01–P SURFACE TRANSPORTATION BOARD 2.750 The number assigned to this disaster for physical damage is 158385 and for economic injury is 158390. BILLING CODE 8025–01–P SMALL BUSINESS ADMINISTRATION [FR Doc. 2018–27552 Filed 12–19–18; 8:45 am] [FR Doc. 2018–27553 Filed 12–19–18; 8:45 am] 39 15 VerDate Sep<11>2014 Issued on 12/11/2018. Physical Loan Application Deadline Date: 02/11/2019. Economic Injury (EIDL) Loan Application Deadline Date: 09/11/2019. DATES: FOR FURTHER INFORMATION CONTACT: Sunshine Act Meetings AGENCY: This is a Notice of the Presidential declaration of a major disaster for Public Assistance Only for the State of California (FEMA–4407– DR), dated 12/11/2018. Incident: Wildfires. Incident Period: 11/08/2018 through 11/25/2018. SUMMARY: 65389 [Docket No. FD 36258] Dover and Delaware River Railroad, LLC—Lease with Interchange Commitment and Trackage Rights Exemption—Norfolk Southern Railway Company and New Jersey Transit Corporation Dover and Delaware River Railroad, LLC (DDRR), a noncarrier, has filed a verified notice of exemption under 49 CFR 1150.31 to (1) lease from Norfolk Southern Railway Company (NS) and E:\FR\FM\20DEN1.SGM 20DEN1

Agencies

[Federal Register Volume 83, Number 244 (Thursday, December 20, 2018)]
[Notices]
[Pages 65386-65389]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27509]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84826; File No. SR-NYSEArca-2018-25]


Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving a 
Proposed Rule Change, as Modified by Amendment No. 2, Regarding the 
Continued Listing and Trading of Shares of the Natixis Loomis Sayles 
Short Duration Income ETF

December 14, 2018.

I. Introduction

    On April 16, 2018, NYSE Arca, Inc. (``Exchange'' or ``NYSE Arca'') 
filed with the Securities and Exchange Commission (``Commission''), 
pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 
(``Act'') \2\ and Rule 19b-4 thereunder,\3\ a proposed rule change to 
amend the listing requirements applicable to the shares (``Shares'') of 
the Natixis Loomis Sayles Short Duration Income ETF (``Fund''). The 
proposed rule change was published for comment in the Federal Register 
on May 3, 2018.\4\ On June 5, 2018, the Commission extended the time 
period within which to approve the proposed rule change, disapprove the 
proposed rule change, or institute proceedings to determine whether to 
approve or disapprove the proposed rule change to August 1, 2018.\5\ On 
June 6, 2018, the Exchange filed Amendment No. 1 to the proposed rule 
change, which replaced and superseded the proposed rule change as 
originally filed. On July 27, 2018, the Commission noticed filing of 
Amendment No. 1 and instituted proceedings to determine whether to 
approve or disapprove the proposed rule change.\6\ On July 27, 2018, 
pursuant to Section 19(b)(2) of the Act,\7\ the Commission designated a 
longer period within which to issue an order approving or disapproving 
the proposed rule change.\8\ On December 6, 2018, the Exchange filed 
Amendment No. 2 to the proposed rule change, which replaced and 
superseded the proposed rule change as modified by Amendment No. 1.\9\ 
On October 22,

[[Page 65387]]

2018, the Commission extended the time period for Commission action to 
December 29, 2018.\10\ The Commission received no comments on the 
proposed rule change. This order approves the proposed rule change, as 
modified by Amendment No. 2.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
    \4\ See Securities Exchange Act Release No. 83122 (April 27, 
2018), 83 FR 19578.
    \5\ See Securities Exchange Act Release No. 83385, 83 FR 27034 
(June 11, 2018).
    \6\ See Securities Exchange Act Release No. 83733, 83 FR 37831 
(August 2, 2018).
    \7\ 15 U.S.C. 78s(b)(2).
    \8\ See Securities Exchange Act Release No. 84462, 83 FR 54153 
(October 26, 2018). The Commission designated December 29, 2018, as 
the date by which the Commission shall either approve or disapprove 
the proposed rule change.
    \9\ In Amendment No. 2, the Exchange: (1) Clarified the scope of 
asset-backed securities (``ABSs'') in which the Fund may invest; (2) 
limited the junior loans in which the Fund may invest to those that 
satisfy all of the criteria in Commentary .01(b) to Rule 8.600-E; 
(3) clarified the scope of mortgage-backed securities (``MBSs'') in 
which the Fund may invest; (4) eliminated as permitted investments 
of the Fund publicly or privately issued interests in investment 
pools whose underlying assets are credit default, credit-linked, 
interest rate, currency exchange, equity-linked or other types of 
swap contracts and related underlying securities or securities loan 
agreements; (5) established and provided support for the following 
diversification requirements with respect to the Fund's investments 
in non-agency ABS and MBS, which collectively may comprise up to 30% 
of the weight of the Fund's ``Fixed Income Securities'' (defined 
below): (a) Up to 25% of such weight may be in ABS, provided that up 
to 5% of the weight of its Fixed Income Securities investments may 
be in CBOs, CLOs and CDOs, in the aggregate; (b) up to 15% of its 
Fixed Income Securities investments may be in MBS, including CMOs 
but excluding CMBS; and (c) up to 15% of its Fixed Income Securities 
investments may be in CMBS; and (6) made other technical, non-
substantive, and conforming changes. Because Amendment No. 2 makes 
clarifying modifications, provides additional representations, and 
eliminates a permitted category of investments, it is not subject to 
notice and comment. All of the amendments to the proposed rule 
change are available at: https://www.sec.gov/comments/sr-nysearca-2018-25/nysearca201825.htm.
    \10\ See Securities Exchange Act Release No. 84462, 83 FR 54153 
(October 26, 2018).
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II. Description of the Proposal \11\
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    \11\ Additional information regarding the Fund, the Trust 
(defined infra), and the Shares can be found in Amendment No. 2, 
supra note 9, and the Registration Statement, infra note 13.
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    Pursuant to Commentary .01 to NYSE Arca Rule 8.600-E,\12\ the 
Exchange listed and began trading the Shares on December 28, 2017. The 
Shares are offered by Natixis ETF Trust (``Trust''), which is 
registered as an open-end management investment company under the 
Investment Company Act of 1940 (``1940 Act'').\13\ Natixis Advisors, 
L.P. (``Adviser'') is the investment adviser for the Fund. Loomis, 
Sayles & Company, L.P. is the Fund's sub-adviser (``Sub-Adviser''). The 
Fund's investment objective is current income consistent with 
preservation of capital. The Exchange filed this proposed rule change 
because the Fund would like to invest in assets that may not satisfy 
all of the requirements of Commentary .01 to NYSE Arca Rule 8.600-E, as 
discussed further below.
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    \12\ NYSE Arca Rule 8.600-E governs the listing and trading of 
Managed Fund Shares on the Exchange. A ``Managed Fund Share'' is a 
security that (1) represents an interest in a registered investment 
company (``Investment Company'') organized as an open-end management 
investment company or similar entity, that invests in a portfolio of 
securities selected by the Investment Company's investment adviser 
consistent with the Investment Company's investment objectives and 
policies; (2) is issued in a specified aggregate minimum number in 
return for a deposit of a specified portfolio of securities and/or a 
cash amount with a value equal to the next determined net asset 
value (``NAV''); and (3) when aggregated in the same specified 
minimum number, may be redeemed at a holder's request, which holder 
will be paid a specified portfolio of securities and/or cash with a 
value equal to the next determined NAV. See NYSE Arca Rule 8.600-
E(c)(1). Pursuant to Commentary .01 to NYSE Arca Rule 8.600-E, the 
Exchange may approve Managed Fund Shares for listing and trading 
pursuant to Rule 19b-4(e) under the Act provided that components the 
actively managed fund's portfolio comply with specified criteria 
upon initial listing and on a continual basis.
    \13\ On December 26, 2017, the Trust filed with the Commission 
its registration statement on Form N-1A under the Securities Act of 
1933 (15 U.S.C. 77a), and under the 1940 Act relating to the Fund 
(File Nos. 333-210156 and 811-23146) (``Registration Statement''). 
In addition, the Commission has issued an order granting certain 
exemptive relief to the Trust under the 1940 Act. See Investment 
Company Act Release No. 30654 (August 20, 2013) (File No. 812-13942-
02).
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A. The Fund's Contemplated Investments

    While the Fund may hold any portion of its assets in cash (U.S. 
dollars, foreign currencies or multinational currency units) and/or 
cash equivalents, under normal market conditions,\14\ the Fund will 
invest at least 80% of its net assets in the following:
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    \14\ The term ``normal market conditions'' is defined in NYSE 
Arca Rule 8.600-E(c)(5).
---------------------------------------------------------------------------

     U.S. Government Securities, including U.S. Treasury Bills, 
U.S. Treasury Notes and Bonds, U.S. Treasury Floating Rate Notes, 
Treasury Inflation-Protected Securities, and obligations of U.S. 
agencies or instrumentalities (e.g., ``Ginnie Maes'', ``Fannie Maes'' 
and ``Freddie Macs'');
     agency and non-agency asset-backed securities (``ABS''); 
\15\
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    \15\ ABSs may include collateralized bond obligations 
(``CBOs''), collateralized loan obligations (``CLOs''), and other 
collateralized debt obligations (``CDOs'').
---------------------------------------------------------------------------

     U.S. dollar-denominated foreign securities, including 
emerging market securities;
     Adjustable-Rate Mortgage Securities;
     junior and senior loans; \16\
---------------------------------------------------------------------------

    \16\ The Fund's investment in junior loans is subject to all 
criteria in Commentary .01(b) to Rule 8.600-E, including the 
criteria relating to minimum original principal amount outstanding 
(Commentary .01(b)(1), portfolio weighting (Commentary .01(b)(2), 
and the numerical and other criteria in Commentary .01(b)(4). See 
Amendment No. 2, supra note 9, at 6, n.7.
---------------------------------------------------------------------------

     bank loans, loan participations and assignments;
     agency and non-agency mortgage-backed securities 
(``MBS''); \17\
---------------------------------------------------------------------------

    \17\ MBS may include collateralized mortgage obligations 
(``CMOs'') and commercial mortgage-backed securities (``CMBS'').
---------------------------------------------------------------------------

     zero coupon and pay-in-kind securities;
     corporate bonds;
     Non-US government securities, supranational entities 
obligations issued by foreign governments, or international agencies 
and instrumentalities;
     inflation-linked and inflation-indexed securities;
     money market instruments; \18\
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    \18\ Money market instruments are short-term instruments 
referenced in Commentary .01(c) to NYSE Arca Rule 8.600-E.
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     mortgage-related securities (such as Government National 
Mortgage Association or Federal National Mortgage Association 
certificates);
     mortgage dollar rolls;
     variable and floating rate securities;
     Rule 144A securities;
     taxable municipal securities;
     step-coupon securities; and
     stripped securities (collectively, ``Fixed Income 
Securities'').
    Additionally, under normal market conditions,\19\ the Fund may 
invest its remaining assets in the following:
---------------------------------------------------------------------------

    \19\ See supra note 14.
---------------------------------------------------------------------------

     short sales of Fixed Income Securities;
     exchange-traded funds (``ETFs'') \20\ and exchange-traded 
notes (``ETNs''); \21\
---------------------------------------------------------------------------

    \20\ All ETFs will be listed and traded in the U.S. on a 
national securities exchange. While the Fund may invest in inverse 
ETFs, the Fund will not invest in leveraged (e.g., 2X, -2X, 3X or -
3X) ETFs. See Amendment No. 2, supra note 9, at 7, n.11.
    \21\ ETNs are Index-Linked Securities as described in NYSE Arca 
Rule 5.2-E(j)(6). See id. at 7, n.12.
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     the following swaps: Interest rate, credit default, credit 
default swaps index (``CDX''), commodity, equity-linked, fixed income, 
credit default, credit-linked and currency exchange swaps or an index 
or indexes of the foregoing;
     swaptions;
     the following options: U.S. exchange-traded and over-the-
counter (``OTC'') options on Fixed Income Securities, domestic and 
foreign equity and fixed income indices, CDX, U.S. Treasury futures 
contracts, interest rates and currencies;
     futures on Fixed Income Securities, domestic and foreign 
equity and fixed income indices, interest rates and CDX; and
     shares of non-exchange-traded open-end investment company 
securities.

B. The Contemplated Investments' Possible Non-Compliance With the 
Generic Listing Requirements

    The Exchange filed this proposed rule change to allow the Fund's 
portfolio to not satisfy the two ``generic'' listing criteria of 
Commentary .01 to NYSE Arca Rule 8.600-E going forward.
    First, as noted above, the Fund desires to invest in non-exchange 
traded investment company securities (e.g., mutual fund shares). Such 
shares, which could comprise at most up to 20% of the Fund's net 
assets, would not satisfy the requirements of Commentary .01(a)(1) to 
Rule 8.600-E.\22\ According to

[[Page 65388]]

the Exchange, the Fund would utilize such investments to help the Fund 
meet its investment objective and to equitize cash in the short 
term.\23\
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    \22\ Commentary .01(a)(1) to Rule 8.600-E requires that the 
component stocks of the equity portion of a portfolio that are U.S. 
Component Stocks shall meet certain criteria initially and on a 
continuing basis. Specifically: Commentary .01(a)(1)(A) requires 
that component stocks (excluding Derivative Securities Products and 
Index-Linked Securities) that in the aggregate account for at least 
90% of the equity weight of the portfolio (excluding such Derivative 
Securities Products and Index-Linked Securities) each shall have a 
minimum market value of at least $75 million; Commentary 
.01(a)(1)(B) requires that component stocks (excluding Derivative 
Securities Products and Index-Linked Securities) that in the 
aggregate account for at least 70% of the equity weight of the 
portfolio (excluding such Derivative Securities Products and Index-
Linked Securities) each shall have a minimum monthly trading volume 
of 250,000 shares, or minimum notional volume traded per month of 
$25,000,000, averaged over the last six months; Commentary 
.01(a)(1)(C) requires that the most heavily weighted component stock 
(excluding Derivative Securities Products and Index-Linked 
Securities) shall not exceed 30% of the equity weight of the 
portfolio, and, to the extent applicable, the five most heavily 
weighted component stocks (excluding Derivative Securities Products 
and Index-Linked Securities) shall not exceed 65% of the equity 
weight of the portfolio; Commentary .01(a)(1)(D) requires that, 
where the equity portion of the portfolio does not include Non-U.S. 
Component Stocks, the equity portion of the portfolio shall include 
a minimum of 13 component stocks, provided that there shall be no 
minimum number of component stocks if (i) one or more series of 
Derivative Securities Products or Index-Linked Securities 
constitute, at least in part, components underlying a series of 
Managed Fund Shares, or (ii) one or more series of Derivative 
Securities Products or Index-Linked Securities account for 100% of 
the equity weight of the portfolio of a series of Managed Fund 
Shares; and Commentary .01(a)(1)(E) requires that, except as 
provided herein, equity securities in the portfolio shall be U.S. 
Component Stocks listed on a national securities exchange and shall 
be NMS Stocks as defined in Rule 600 of Regulation NMS under the 
Securities Exchange Act of 1934.
    \23\ See id.
---------------------------------------------------------------------------

    Second, the Fund seeks to modify the limit on non-agency, non-
government-sponsored entity (``GSE'') and privately-issued mortgage-
related and other asset-backed securities. Instead, of the 20% limit in 
Commentary .01(b)(5),\24\ the Exchange proposes that up to 30% of the 
weight of the Fixed Income Securities portion of the Fund's portfolio 
consist of non-agency, non-GSE and privately-issued mortgage-related 
and other asset-backed securities, provided that: (1) Up to 25% of such 
weight may be in ABS, provided that up to 5% of the weight of its Fixed 
Income Securities investments may be in CBOs, CLOs and CDOs, in the 
aggregate; (2) up to 15% of its Fixed Income Securities investments may 
be in MBS, including CMOs but excluding CMBS; and (3) up to 15% of its 
Fixed Income Securities investments may be in CMBS. The Exchange 
asserts that these limits would provide additional diversification to 
the Fund's ABS and MBS investments and reduce concerns that the Fund's 
investment in such securities would be readily susceptible to market 
manipulation. According to the Adviser, permitting such investments: 
(1) Would be in the best interest of the Fund's shareholders because 
such investments have the potential to reduce the overall risk profile 
of the Fund's portfolio through diversification; and (2) would afford 
the Fund greater flexibility to invest in the most liquid available 
Fixed Income Securities issues.\25\
---------------------------------------------------------------------------

    \24\ Commentary .01(b)(5) to Rule 8.600-E prohibits non-agency, 
non-GSE and privately-issued mortgage-related and other asset-backed 
securities components of a portfolio from accounting (in the 
aggregate) for more than 20% of the weight of the fixed income 
portion of the portfolio.
    \25\ See id.
---------------------------------------------------------------------------

    The Exchange would require the Shares to satisfy all the other 
requirements of Rule 8.600-E.\26\
---------------------------------------------------------------------------

    \26\ See id. at 15.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    After careful review, the Commission finds that the Exchange's 
proposal to amend the listing requirements applicable to the Shares is 
consistent with the Act and the rules and regulations thereunder 
applicable to a national securities exchange.\27\ In particular, the 
Commission finds that the proposed rule change, as modified by 
Amendment No. 2, is consistent with Section 6(b)(5) of the Act,\28\ 
which requires, among other things, that the Exchange's rules be 
designed to prevent fraudulent and manipulative acts and practices, 
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.
---------------------------------------------------------------------------

    \27\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \28\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    As mentioned above, the Shares would continue to satisfy all of the 
generic listing criteria except for the requirements of Commentary 
.01(b)(5) to NYSE Arca Rule 8.600-E,\29\ and Commentary .01(a)(1)(A) 
through (E) to Rule 8.600-E.
---------------------------------------------------------------------------

    \29\ Commentary .01(b)(5) to NYSE Arca Rule 8.600-E provides 
that non-agency, non-government sponsored entity and privately 
issued mortgage-related and other asset-backed securities components 
of a portfolio may not account, in the aggregate, for more than 20% 
of the weight of the fixed income portion of the portfolio.
---------------------------------------------------------------------------

    The Commission believes that permitting the Fund to invest up to 
20% of its net assets in non-exchange traded investment company 
securities would not render the Shares susceptible to manipulation. The 
Commission has previously approved listing rules for other series of 
Managed Fund Shares that permit investments in such securities.\30\
---------------------------------------------------------------------------

    \30\ See, e.g., Securities Exchange Act Release No. 78414 (July 
26, 2016), 81 FR 50576 (August 1, 2016) (SR-NYSEArca-2016-79) 
(approving the listing and trading of shares of the Virtus Japan 
Alpha ETF under NYSE Arca Equities Rule 8.600).
---------------------------------------------------------------------------

    With respect to the proposed 30% limit on non-agency, non-GSE and 
privately-issued mortgage-related and other asset-backed securities, 
the Commission believes that the proposed sub-limits described above, 
are sufficient to diversify the Fund's portfolio of such securities and 
mitigate manipulation concerns. The Commission notes that it recently 
approved a similar limit for an issue of Managed Fund Shares permitted 
to invest in fixed income securities.\31\
---------------------------------------------------------------------------

    \31\ See Securities Exchange Act Release No. 84047 (September 6, 
2018), 83 FR 46200 (September 12, 2018) (SR-Nasdaq-2017-128) 
(approving the listing and trading of shares of the Western Asset 
Total Return ETF).
---------------------------------------------------------------------------

    In support of this proposal, the Exchange has also made the 
following representations:
    (1) The Fund will only purchase U.S. dollar denominated non-agency 
ABS and MBS that are settled through DTC.\32\
---------------------------------------------------------------------------

    \32\ See Amendment No. 2, supra note 9, at 12.
---------------------------------------------------------------------------

    (2) All statements and representations made in this filing 
regarding (a) the description of the portfolio, (b) limitations on 
portfolio holdings or reference assets, or (c) the applicability of 
Exchange listing rules specified in this rule filing shall constitute 
continued listing requirements for listing the Shares on the 
Exchange.\33\
---------------------------------------------------------------------------

    \33\ See id. at 19.
---------------------------------------------------------------------------

    (3) The issuer will advise 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(m)-E.\34\
---------------------------------------------------------------------------

    \34\ See id.
---------------------------------------------------------------------------

    (4) The Exchange has appropriate rules to facilitate transactions 
in the Shares during all trading sessions.\35\
---------------------------------------------------------------------------

    \35\ See id. at 17.
---------------------------------------------------------------------------

    (5) The Exchange has in place surveillance procedures that are 
adequate to properly monitor trading in the Shares in all trading 
sessions and to deter and detect violations of Exchange rules and 
federal securities laws applicable to trading on the Exchange.\36\
---------------------------------------------------------------------------

    \36\ See id. at 18.
---------------------------------------------------------------------------

    (6) For continued listing, the Fund will be in compliance with Rule 
10A-3 under the Act, as provided by NYSE Arca Rule 5.3-E.\37\
---------------------------------------------------------------------------

    \37\ See id. at 18. See also 17 CFR 240.10A-3.
---------------------------------------------------------------------------

This approval order is based on all of the Exchange's representations, 
including those set forth above and in the Amendment No. 2.
    For the foregoing reasons, the Commission finds that the proposed

[[Page 65389]]

rule change, as modified by Amendment No. 2, is consistent with Section 
6(b)(5) of the Act \38\ and the rules and regulations thereunder 
applicable to a national securities exchange.
---------------------------------------------------------------------------

    \38\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\39\ that the proposed rule change (SR-NYSEArca-2018-25), as 
modified by Amendment No. 2, be, and it hereby is, approved.
---------------------------------------------------------------------------

    \39\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\40\
---------------------------------------------------------------------------

    \40\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2018-27509 Filed 12-19-18; 8:45 am]
 BILLING CODE 8011-01-P
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