Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change, as Modified by Amendment No. 1, To List and Trade Shares of the iShares California Short Maturity Muni Bond ETF of the iShares U.S. ETF Trust Under Rule 14.11(i), Managed Fund Shares, 59669-59672 [2019-24088]

Download as PDF Federal Register / Vol. 84, No. 214 / Tuesday, November 5, 2019 / Notices proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of these provisions and their purposes under the Act, relative to the economic baseline, which includes the requirement that municipal advisor professionals demonstrate, by passing an examination, that they meet professional standards deemed necessary or appropriate in the public interest or for the protection of investors, municipal entities and obligated persons. Moreover, the MSRB has no reason to believe that revisions to the Series 54 examination content outline will pose any greater burden on individuals associated with smaller municipal advisors than those associated with larger municipal advisors or that the burden could be materially reduced while still achieving the purposes of the Act of protection of investors against fraud. Lastly, the proposed rule change is more explanatory in nature to ensure individuals have an enhanced understanding of the functions and associated tasks covered on the Series 54 examination. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 21 and paragraph (f) of Rule 19b–4 thereunder.22 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. khammond on DSKJM1Z7X2PROD with NOTICES 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: 21 15 22 17 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f). VerDate Sep<11>2014 16:34 Nov 04, 2019 Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– MSRB–2019–12 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–MSRB–2019–12. 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 MSRB. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–MSRB–2019–12 and should be submitted on or before November 26, 2019. For the Commission, pursuant to delegated authority.23 Jill M. Peterson, Assistant Secretary. [FR Doc. 2019–24090 Filed 11–4–19; 8:45 am] BILLING CODE 8011–01–P 23 17 Jkt 250001 PO 00000 CFR 200.30–3(a)(12). Frm 00058 Fmt 4703 Sfmt 4703 59669 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–87421; File No. SR– CboeBZX–2019–068] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change, as Modified by Amendment No. 1, To List and Trade Shares of the iShares California Short Maturity Muni Bond ETF of the iShares U.S. ETF Trust Under Rule 14.11(i), Managed Fund Shares October 30, 2019. I. Introduction On July 19, 2019, Cboe BZX Exchange, Inc. (‘‘Exchange’’ or ‘‘BZX’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to amend Cboe BZX Rule 14.11(c) to list and trade shares (‘‘Shares’’) of the iShares California Short Maturity Muni Bond ETF (‘‘Fund’’) of the iShares U.S. ETF Trust under BZX Rule 14.11(i). The proposed rule change was published for comment in the Federal Register on August 7, 2019.3 On September 19, 2019, pursuant to Section 19(b)(2) of the Act,4 the Commission designated a longer 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.5 On October 1, 2019, the Exchange filed Amendment No. 1 to the proposed rule change, which replaced in its entirety the proposed rule change as originally submitted.6 The Commission has received no comments on the proposal. The Commission is publishing this order to institute proceedings pursuant to Section 19(b)(2)(B) of the Act 7 to determine whether to approve or disapprove the proposed rule change, as modified by Amendment No. 1. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 86546 (Aug. 1, 2019), 84 FR 38689. 4 15 U.S.C. 78s(b)(2). 5 See Securities Exchange Act Release No. 87018, 84 FR 50501 (Sep. 25, 2019). The Commission designated November 5, 2019 as the date by which the Commission shall approve or disapprove, or institute proceedings to determine whether to approve or disapprove, the proposed rule change. 6 Amendment No. 1 is available at: https:// www.sec.gov/comments/sr-cboebzx-2019-068/ srcboebzx2019068-6362715-196411.pdf. 7 15 U.S.C. 78s(b)(2)(B). 2 17 E:\FR\FM\05NON1.SGM 05NON1 59670 Federal Register / Vol. 84, No. 214 / Tuesday, November 5, 2019 / Notices khammond on DSKJM1Z7X2PROD with NOTICES II. Summary of the Proposed Rule Change, as Modified by Amendment No. 1 8 BZX Rule 14.11(i) permits the Exchange to generically list Managed Fund Shares 9 issued by a fund whose portfolio components satisfy certain criteria. The Exchange must file separate proposals under Section 19(b) of the Act to list and trade shares of a series of Managed Fund Shares with portfolio components that do not satisfy the applicable generic listing criteria (including portfolio components not specified in the generic listing standards).10 According to the Exchange, the Fund will satisfy all of the applicable generic listing requirements except for BZX Rule 14.11(i)(4)(C)(ii)(a),11 which requires that fixed income securities in a fund’s portfolio that in the aggregate account for at least 75% of the fixed income weight of the portfolio each have a minimum principal amount outstanding of $100 million or more. Accordingly, the Exchange filed the pending proposal to seek Commission approval to list and trade the Shares. BlackRock Fund Advisors (‘‘Adviser’’) is the investment adviser to the Fund.12 The Fund will seek to maximize tax-free current income from a portfolio composed of short maturity, investmentgrade municipal bonds issued in the State of California. To achieve its objective, the Fund will invest, under Normal Market Conditions,13 at least 80% of its net assets in U.S.-dollar denominated investment-grade shortterm fixed- and floating-rate Municipal Securities, as defined below, with remaining maturities of five years or less, issued in the State of California by or on behalf of California state or local 8 For a full description of the proposal, see Amendment No. 1, supra note 6. 9 ‘‘Managed Fund Shares’’ is defined in BZX Rule 14.11(i)(3)(A). 10 See BZX Rule 14.11(i)(4)(C). 11 See Amendment No. 1, supra note 6, 84 FR at 14. 12 BFA is an indirect wholly owned subsidiary of BlackRock, Inc. 13 The term ‘‘Normal Market Conditions’’ includes, but is not limited to, the absence of trading halts in the applicable financial markets generally; operational issues causing dissemination of inaccurate market information or system failures; or force majeure type events such as natural or manmade disaster, act of God, armed conflict, act of terrorism, riot or labor disruption, or any similar intervening circumstance. In the absence of Normal Market Conditions, the Fund may temporarily depart from its normal investment process, provided that such departure is, in the opinion of the Adviser, consistent with the Fund’s investment objective and in the best interest of the Fund. For example, the Fund may hold a higher than normal proportion of its assets in cash in response to adverse market, economic or political conditions. See id. at 7, n.8. VerDate Sep<11>2014 16:34 Nov 04, 2019 Jkt 250001 governments or agencies, whose interest payments are exempt from U.S. federal, including the federal alternative minimum tax, and California state income taxes. Under Normal Market Conditions, the Fund will seek to maintain a weighted average maturity that is less than three years.14 Municipal Securities include only the following instruments: General obligation bonds; limited obligation bonds (or revenue bonds); municipal notes; municipal commercial paper; tender option bonds; variable rate demand notes and demand obligations; municipal lease obligations, stripped securities; structured securities; 15 zero coupon securities; and shares of exchange-traded and non-exchangetraded investment companies that principally invest in such Municipal Securities. Other Portfolio Holdings. The Fund may also, to a limited extent (under Normal Market Conditions, less than 20% of the Fund’s net assets), invest in certain futures, options and swap contracts; 16 cash and cash equivalents; as well as in Municipal Securities of issuers located outside of California whose interest payments are exempt from regular federal income taxes.17 The Fund may also enter into repurchase and reverse repurchase agreements for Municipal Securities (collectively, ‘‘Repurchase Agreements’’). The Fund may also invest in short-term instruments (‘‘Short-Term Instruments’’),18 which includes 14 Weighted average maturity is a U.S. dollarweighted average of the remaining term to maturity of the underlying securities in the Fund’s portfolio. For the purposes of determining the Fund’s weighted average maturity, a security’s final maturity date will be used for calculation purposes. 15 Structured securities, when combined with those instruments held as part of the other portfolio holdings described below, will not exceed 20% of the Fund’s net assets. See id. at 9, n.20 16 Such futures, options and swap contracts will include only the following: Interest rate futures, interest rate options, and interest rate swaps. The derivatives will be centrally cleared and they will be collateralized. At least 90% of the Fund’s net assets that are invested in listed derivatives will be invested in instruments that trade in markets that are members or affiliates of members of the Intermarket Surveillance Group or are parties to a comprehensive surveillance sharing with the Exchange. See id. at 10, n.24. 17 Issuers located outside of California may be states, territories and possessions of the U.S., including the District of Columbia, and their political subdivisions, agencies and instrumentalities. 18 The Fund may invest in Short-Term Instruments, including money market instruments, on an ongoing basis to provide liquidity or for other reasons. Money market instruments are generally short-term investments that include only the following: (i) Shares of money market funds; (ii) obligations issued or guaranteed by the U.S. government, its agencies or instrumentalities (including government-sponsored enterprises); (iii) PO 00000 Frm 00059 Fmt 4703 Sfmt 4703 exchange traded and non-exchange traded investment companies that invest in money market instruments. Investment Restrictions. The Fund may hold up to an aggregate amount of 15% of its net assets in illiquid assets (calculated at the time of investment), as deemed illiquid by the Adviser under the 1940 Act. The Fund will monitor its portfolio liquidity on an ongoing basis to determine whether, in light of current circumstances, an adequate level of liquidity is being maintained, and will consider taking appropriate steps in order to maintain adequate liquidity if, through a change in values, net assets, or other circumstances, more than 15% of the Fund’s net assets are held in illiquid assets.19 Additionally, the Exchange states that the Fund will launch with at least 300,000 Shares outstanding. The Exchange also states: (1) The portfolio will hold a minimum of 15 different Municipal Securities from at least 15 unique issuers when at least six creation units are outstanding, but will never hold fewer than 10 different Municipal negotiable certificates of deposit, bankers’ acceptances, fixed-time deposits and other obligations of U.S. and non-U.S. banks (including non-U.S. branches) and similar institutions; (iv) commercial paper, including asset-backed commercial paper; (v) non-convertible corporate debt securities (e.g., bonds and debentures) with remaining maturities at the date of purchase of not more than 397 days and that satisfy the rating requirements set forth in Rule 2a–7 under the 1940 Act; and (vi) short-term U.S. dollar-denominated obligations of non-U.S. banks (including U.S. branches) that, in the opinion of BFA, are of comparable quality to obligations of U.S. banks which may be purchased by the Fund. All money market securities acquired by the Fund will be rated investment grade. The Fund does not intend to invest in any unrated money market securities. However, it may do so, to a limited extent, such as where a rated money market security becomes unrated, if such money market security is determined by the Adviser to be of comparable quality. BFA may determine that unrated securities are of comparable quality based on such credit quality factors that it deems appropriate, which may include, among other things, performing an analysis similar, to the extent possible, to that performed by a nationally recognized statistical rating organization rating similar securities and issuers. 19 Illiquid assets are defined by Rule 22e–4. In reaching liquidity decisions, the Adviser may consider factors including: The frequency of trades and quotes for the security; the number of dealers wishing to purchase or sell the security and the number of other potential purchasers; dealer undertakings to make a market in the security; the nature of the security and the nature of the marketplace trades (e.g., the time needed to dispose of the security, the method of soliciting offers, and the mechanics of transfer); any legal or contractual restrictions on the ability to transfer the security or asset; significant developments involving the issuer or counterparty specifically (e.g., default, bankruptcy, etc.) or the securities markets generally; and settlement practices, registration procedures, limitations on currency conversion or repatriation, and transfer limitations (for foreign securities or other assets). See id. at 12–13. E:\FR\FM\05NON1.SGM 05NON1 Federal Register / Vol. 84, No. 214 / Tuesday, November 5, 2019 / Notices Securities from at least 10 unique issuers; (2) no single obligor will account for more than 10% of the weight of the Fund’s portfolio and no 10 obligors will account for more than 75% of the weight of the Fund’s portfolio.20 Additionally, no more than 50% of the Fund’s assets will be invested in issuers that are more than 5% of the value of the Fund’s assets, and the Fund will not invest more than 25% of its assets in any single issuer.21 khammond on DSKJM1Z7X2PROD with NOTICES III. Proceedings To Determine Whether To Approve or Disapprove SR– CboeBZX–2019–068 and Grounds for Disapproval Under Consideration The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act 22 to determine whether the proposed rule change, as modified by Amendment No. 1, should be approved or disapproved. Institution of such proceedings is appropriate at this time in view of the legal and policy issues raised by the proposal. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, as described below, the Commission seeks and encourages interested persons to provide comments on the proposal. Pursuant to Section 19(b)(2)(B) of the Act,23 the Commission is providing notice of the grounds for disapproval under consideration. The Commission is instituting proceedings to allow for additional analysis of the proposal’s consistency with Section 6(b)(5) of the Act, which requires, among other things, that the rules of a national securities exchange be ‘‘designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade,’’ and ‘‘to protect investors and the public interest.’’ 24 Specifically, the Commission seeks comment regarding the following: 1. Would the proposed requirement that the portfolio hold a minimum of ten different Municipal Securities from at least ten unique issuers or, when at least six creation units are outstanding, fifteen different Municipal Securities from at least fifteen unique issuers be sufficient to ensure that the Fund’s portfolio isn’t susceptible to manipulation? 2. Would the proposed concentration limit, i.e., that no single obligor will account for more than 10% of the weight of the Fund’s portfolio and no ten obligors will account for more than 75% of the weight of the Fund’s portfolio, be sufficient to ensure that the 20 See id. at 13. id. at 13–14. 22 15 U.S.C. 78s(b)(2)(B). 23 Id. 24 15 U.S.C. 78f(b)(5). 21 See VerDate Sep<11>2014 16:34 Nov 04, 2019 Jkt 250001 Fund’s portfolio isn’t susceptible to manipulation? 3. Taken collectively, would the proposed listing requirements adequately ensure that the Fund’s portfolio would not be susceptible to manipulation? IV. Procedure: Request for Written Comments The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the proposal. In particular, the Commission invites the written views of interested persons concerning whether the proposed rule change, as modified by Amendment No. 1, is consistent with Section 6(b)(5) or any other provision of the Act, or the rules and regulations thereunder. Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b–4 under the Act,25 any request for an opportunity to make an oral presentation.26 Interested persons are invited to submit written data, views, and arguments regarding whether the proposed rule change, as modified by Amendment No. 1, should be approved or disapproved by November 26, 2019. Any person who wishes to file a rebuttal to any other person’s submission must file that rebuttal by December 10, 2019. The Commission asks that commenters address the sufficiency of the Exchange’s statements in support of the proposal, which are set forth in Amendment No. 1,27 in addition to any other comments they may wish to submit about the proposal. In this regard, the Commission seeks comment on the Exchange’s proposed generic listing standards for Shares based on an index or portfolio of Municipal Securities. The Commission specifically seeks comment on whether the proposed requirement that an underlying index or portfolio must include a minimum of 500 component Municipal Securities is consistent with the requirement that the rules of a 25 17 CFR 240.19b-4. 19(b)(2) of the Act, as amended by the Securities Acts Amendments of 1975, Public Law 94–29 (June 4, 1975), grants the Commission flexibility to determine what type of proceeding— either oral or notice and opportunity for written comments—is appropriate for consideration of a particular proposal by a self-regulatory organization. See Securities Acts Amendments of 1975, Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). 27 See supra note 6. 26 Section PO 00000 Frm 00060 Fmt 4703 Sfmt 4703 59671 national securities exchange be ‘‘designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade,’’ and ‘‘to protect investors and the public interest.’’ 28 Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– CboeBZX–2019–068 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–CboeBZX–2019–068. 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 SR–CboeBZX–2019–068 and should be submitted by November 26, 2019. Rebuttal comments should be submitted by December 10, 2019. 28 15 E:\FR\FM\05NON1.SGM U.S.C. 78f(b)(5). 05NON1 59672 Federal Register / Vol. 84, No. 214 / Tuesday, November 5, 2019 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.29 Jill M. Peterson, Assistant Secretary. [FR Doc. 2019–24088 Filed 11–4–19; 8:45 am] BILLING CODE 8011–01–P DEPARTMENT OF TRANSPORTATION Federal Motor Carrier Safety Administration [Docket No. FMCSA–2019–0230] Qualification of Drivers; Exemption Applications; Implantable Cardioverter Defibrillators Federal Motor Carrier Safety Administration (FMCSA), DOT. ACTION: Notice of applications for exemption; request for comments. AGENCY: FMCSA announces receipt of applications from six individuals for an exemption from the prohibition in the Federal Motor Carrier Safety Regulations (FMCSRs) against operation of a commercial motor vehicle (CMV) by persons with a current clinical diagnosis of myocardial infarction, angina pectoris, coronary insufficiency, thrombosis, or any other cardiovascular disease of a variety known to be accompanied by syncope (transient loss of consciousness), dyspnea (shortness of breath), collapse, or congestive heart failure. If granted, the exemptions would enable these individuals with implantable cardioverter defibrillators (ICDs) to operate CMVs in interstate commerce. SUMMARY: Comments must be received on or before December 5, 2019. ADDRESSES: You may submit comments identified by the Federal Docket Management System (FDMS) Docket ID FMCSA–2019–0230 using any of the following methods: • Federal eRulemaking Portal: Go to https://www.regulations.gov/ docket?D=FMCSA-2019-0230. Follow the online instructions for submitting comments. • Mail: Docket Management Facility; U.S. Department of Transportation, 1200 New Jersey Avenue SE, West Building Ground Floor, Room W12–140, Washington, DC 20590–0001. • Hand Delivery: West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue SE, Washington, DC, between 9 a.m. and 5 p.m., ET, Monday through Friday, except Federal Holidays. khammond on DSKJM1Z7X2PROD with NOTICES DATES: 29 17 CFR 200.30–3(a)(57). VerDate Sep<11>2014 16:34 Nov 04, 2019 Jkt 250001 • Fax: (202) 493–2251. To avoid duplication, please use only one of these four methods. See the ‘‘Public Participation’’ portion of the SUPPLEMENTARY INFORMATION section for instructions on submitting comments. FOR FURTHER INFORMATION CONTACT: Ms. Christine A. Hydock, Chief, Medical Programs Division, (202) 366–4001, fmcsamedical@dot.gov, FMCSA, Department of Transportation, 1200 New Jersey Avenue SE, Room W64–224, Washington, DC 20590–0001. Office hours are from 8:30 a.m. to 5 p.m., ET, Monday through Friday, except Federal holidays. If you have questions regarding viewing or submitting material to the docket, contact Docket Operations, (202) 366–9826. SUPPLEMENTARY INFORMATION: choose the document to review. If you do not have access to the internet, you may view the docket online by visiting the Docket Management Facility in Room W12–140 on the ground floor of the DOT West Building, 1200 New Jersey Avenue SE, Washington, DC 20590, between 9 a.m. and 5 p.m., ET, Monday through Friday, except Federal holidays. I. Public Participation C. Privacy Act In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to www.regulations.gov, as described in the system of records notice (DOT/ALL– 14 FDMS), which can be reviewed at www.dot.gov/privacy. A. Submitting Comments If you submit a comment, please include the docket number for this notice (Docket No. FMCSA–2019–0230), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission. To submit your comment online, go https://www.regulations.gov/ docket?D=FMCSA-2019-0230. Click on the ‘‘Comment Now!’’ button and type your comment into the text box on the following screen. Choose whether you are submitting your comment as an individual or on behalf of a third party and then submit. If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 81⁄2 by 11 inches, suitable for copying and electronic filing. If you submit comments by mail and would like to know that they reached the facility, please enclose a stamped, self-addressed postcard or envelope. FMCSA will consider all comments and material received during the comment period. II. Background Under 49 U.S.C. 31136(e) and 31315(b), FMCSA may grant an exemption from the FMCSRs for no longer than a 5-year period if it finds such exemption would likely achieve a level of safety that is equivalent to, or greater than, the level that would be achieved absent such exemption. The statute also allows the Agency to renew exemptions at the end of the 5-year period. FMCSA grants medical exemptions from the FMCSRs for a 2year period to align with the maximum duration of a driver’s medical certification. The six individuals listed in this notice have requested an exemption from 49 CFR 391.41(b)(4). Accordingly, the Agency will evaluate the qualifications of each applicant to determine whether granting the exemption will achieve the required level of safety mandated by statute. The physical qualification standard found in § 391.41(b)(4) states that a person is physically qualified to drive a CMV if that person has no current clinical diagnosis of myocardial infarction, angina pectoris, coronary insufficiency, thrombosis, or any other cardiovascular disease of a variety known to be accompanied by syncope, dyspnea, collapse, or congestive cardiac failure. In addition to the regulations, FMCSA has published advisory criteria 1 to assist medical examiners in determining whether drivers with certain medical B. Viewing Documents and Comments To view comments, as well as any documents mentioned in this notice as being available in the docket, go to https://www.regulations.gov/ docket?D=FMCSA-2019-0230 and 1 These criteria may be found in 49 CFR part 391, APPENDIX A TO PART 391—MEDICAL ADVISORY CRITERIA, section D. Cardiovascular: § 391.41(b)(4), paragraph 4, which is available on the internet at https://www.gpo.gov/fdsys/pkg/CFR2015-title49-vol5/pdf/CFR-2015-title49-vol5part391-appA.pdf. PO 00000 Frm 00061 Fmt 4703 Sfmt 4703 E:\FR\FM\05NON1.SGM 05NON1

Agencies

[Federal Register Volume 84, Number 214 (Tuesday, November 5, 2019)]
[Notices]
[Pages 59669-59672]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-24088]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87421; File No. SR-CboeBZX-2019-068]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Order 
Instituting Proceedings To Determine Whether To Approve or Disapprove a 
Proposed Rule Change, as Modified by Amendment No. 1, To List and Trade 
Shares of the iShares California Short Maturity Muni Bond ETF of the 
iShares U.S. ETF Trust Under Rule 14.11(i), Managed Fund Shares

October 30, 2019.

I. Introduction

    On July 19, 2019, Cboe BZX Exchange, Inc. (``Exchange'' or ``BZX'') 
filed with the Securities and Exchange Commission (``Commission''), 
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to 
amend Cboe BZX Rule 14.11(c) to list and trade shares (``Shares'') of 
the iShares California Short Maturity Muni Bond ETF (``Fund'') of the 
iShares U.S. ETF Trust under BZX Rule 14.11(i). The proposed rule 
change was published for comment in the Federal Register on August 7, 
2019.\3\ On September 19, 2019, pursuant to Section 19(b)(2) of the 
Act,\4\ the Commission designated a longer 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.\5\ On October 1, 2019, the Exchange filed 
Amendment No. 1 to the proposed rule change, which replaced in its 
entirety the proposed rule change as originally submitted.\6\ The 
Commission has received no comments on the proposal. The Commission is 
publishing this order to institute proceedings pursuant to Section 
19(b)(2)(B) of the Act \7\ to determine whether to approve or 
disapprove the proposed rule change, as modified by Amendment No. 1.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 86546 (Aug. 1, 
2019), 84 FR 38689.
    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 87018, 84 FR 50501 
(Sep. 25, 2019). The Commission designated November 5, 2019 as the 
date by which the Commission shall approve or disapprove, or 
institute proceedings to determine whether to approve or disapprove, 
the proposed rule change.
    \6\ Amendment No. 1 is available at: https://www.sec.gov/comments/sr-cboebzx-2019-068/srcboebzx2019068-6362715-196411.pdf.
    \7\ 15 U.S.C. 78s(b)(2)(B).

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[[Page 59670]]

II. Summary of the Proposed Rule Change, as Modified by Amendment No. 1 
8
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    \8\ For a full description of the proposal, see Amendment No. 1, 
supra note 6.
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    BZX Rule 14.11(i) permits the Exchange to generically list Managed 
Fund Shares \9\ issued by a fund whose portfolio components satisfy 
certain criteria. The Exchange must file separate proposals under 
Section 19(b) of the Act to list and trade shares of a series of 
Managed Fund Shares with portfolio components that do not satisfy the 
applicable generic listing criteria (including portfolio components not 
specified in the generic listing standards).\10\
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    \9\ ``Managed Fund Shares'' is defined in BZX Rule 
14.11(i)(3)(A).
    \10\ See BZX Rule 14.11(i)(4)(C).
---------------------------------------------------------------------------

    According to the Exchange, the Fund will satisfy all of the 
applicable generic listing requirements except for BZX Rule 
14.11(i)(4)(C)(ii)(a),\11\ which requires that fixed income securities 
in a fund's portfolio that in the aggregate account for at least 75% of 
the fixed income weight of the portfolio each have a minimum principal 
amount outstanding of $100 million or more. Accordingly, the Exchange 
filed the pending proposal to seek Commission approval to list and 
trade the Shares.
---------------------------------------------------------------------------

    \11\ See Amendment No. 1, supra note 6, 84 FR at 14.
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    BlackRock Fund Advisors (``Adviser'') is the investment adviser to 
the Fund.\12\ The Fund will seek to maximize tax-free current income 
from a portfolio composed of short maturity, investment-grade municipal 
bonds issued in the State of California. To achieve its objective, the 
Fund will invest, under Normal Market Conditions,\13\ at least 80% of 
its net assets in U.S.-dollar denominated investment-grade short-term 
fixed- and floating-rate Municipal Securities, as defined below, with 
remaining maturities of five years or less, issued in the State of 
California by or on behalf of California state or local governments or 
agencies, whose interest payments are exempt from U.S. federal, 
including the federal alternative minimum tax, and California state 
income taxes. Under Normal Market Conditions, the Fund will seek to 
maintain a weighted average maturity that is less than three years.\14\
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    \12\ BFA is an indirect wholly owned subsidiary of BlackRock, 
Inc.
    \13\ The term ``Normal Market Conditions'' includes, but is not 
limited to, the absence of trading halts in the applicable financial 
markets generally; operational issues causing dissemination of 
inaccurate market information or system failures; or force majeure 
type events such as natural or man-made disaster, act of God, armed 
conflict, act of terrorism, riot or labor disruption, or any similar 
intervening circumstance. In the absence of Normal Market 
Conditions, the Fund may temporarily depart from its normal 
investment process, provided that such departure is, in the opinion 
of the Adviser, consistent with the Fund's investment objective and 
in the best interest of the Fund. For example, the Fund may hold a 
higher than normal proportion of its assets in cash in response to 
adverse market, economic or political conditions. See id. at 7, n.8.
    \14\ Weighted average maturity is a U.S. dollar-weighted average 
of the remaining term to maturity of the underlying securities in 
the Fund's portfolio. For the purposes of determining the Fund's 
weighted average maturity, a security's final maturity date will be 
used for calculation purposes.
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    Municipal Securities include only the following instruments: 
General obligation bonds; limited obligation bonds (or revenue bonds); 
municipal notes; municipal commercial paper; tender option bonds; 
variable rate demand notes and demand obligations; municipal lease 
obligations, stripped securities; structured securities; \15\ zero 
coupon securities; and shares of exchange-traded and non-exchange-
traded investment companies that principally invest in such Municipal 
Securities.
---------------------------------------------------------------------------

    \15\ Structured securities, when combined with those instruments 
held as part of the other portfolio holdings described below, will 
not exceed 20% of the Fund's net assets. See id. at 9, n.20
---------------------------------------------------------------------------

    Other Portfolio Holdings. The Fund may also, to a limited extent 
(under Normal Market Conditions, less than 20% of the Fund's net 
assets), invest in certain futures, options and swap contracts; \16\ 
cash and cash equivalents; as well as in Municipal Securities of 
issuers located outside of California whose interest payments are 
exempt from regular federal income taxes.\17\ The Fund may also enter 
into repurchase and reverse repurchase agreements for Municipal 
Securities (collectively, ``Repurchase Agreements''). The Fund may also 
invest in short-term instruments (``Short-Term Instruments''),\18\ 
which includes exchange traded and non-exchange traded investment 
companies that invest in money market instruments.
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    \16\ Such futures, options and swap contracts will include only 
the following: Interest rate futures, interest rate options, and 
interest rate swaps. The derivatives will be centrally cleared and 
they will be collateralized. At least 90% of the Fund's net assets 
that are invested in listed derivatives will be invested in 
instruments that trade in markets that are members or affiliates of 
members of the Intermarket Surveillance Group or are parties to a 
comprehensive surveillance sharing with the Exchange. See id. at 10, 
n.24.
    \17\ Issuers located outside of California may be states, 
territories and possessions of the U.S., including the District of 
Columbia, and their political subdivisions, agencies and 
instrumentalities.
    \18\ The Fund may invest in Short-Term Instruments, including 
money market instruments, on an ongoing basis to provide liquidity 
or for other reasons. Money market instruments are generally short-
term investments that include only the following: (i) Shares of 
money market funds; (ii) obligations issued or guaranteed by the 
U.S. government, its agencies or instrumentalities (including 
government-sponsored enterprises); (iii) negotiable certificates of 
deposit, bankers' acceptances, fixed-time deposits and other 
obligations of U.S. and non-U.S. banks (including non-U.S. branches) 
and similar institutions; (iv) commercial paper, including asset-
backed commercial paper; (v) non-convertible corporate debt 
securities (e.g., bonds and debentures) with remaining maturities at 
the date of purchase of not more than 397 days and that satisfy the 
rating requirements set forth in Rule 2a-7 under the 1940 Act; and 
(vi) short-term U.S. dollar-denominated obligations of non-U.S. 
banks (including U.S. branches) that, in the opinion of BFA, are of 
comparable quality to obligations of U.S. banks which may be 
purchased by the Fund. All money market securities acquired by the 
Fund will be rated investment grade. The Fund does not intend to 
invest in any unrated money market securities. However, it may do 
so, to a limited extent, such as where a rated money market security 
becomes unrated, if such money market security is determined by the 
Adviser to be of comparable quality. BFA may determine that unrated 
securities are of comparable quality based on such credit quality 
factors that it deems appropriate, which may include, among other 
things, performing an analysis similar, to the extent possible, to 
that performed by a nationally recognized statistical rating 
organization rating similar securities and issuers.
---------------------------------------------------------------------------

    Investment Restrictions. The Fund may hold up to an aggregate 
amount of 15% of its net assets in illiquid assets (calculated at the 
time of investment), as deemed illiquid by the Adviser under the 1940 
Act. The Fund will monitor its portfolio liquidity on an ongoing basis 
to determine whether, in light of current circumstances, an adequate 
level of liquidity is being maintained, and will consider taking 
appropriate steps in order to maintain adequate liquidity if, through a 
change in values, net assets, or other circumstances, more than 15% of 
the Fund's net assets are held in illiquid assets.\19\
---------------------------------------------------------------------------

    \19\ Illiquid assets are defined by Rule 22e-4. In reaching 
liquidity decisions, the Adviser may consider factors including: The 
frequency of trades and quotes for the security; the number of 
dealers wishing to purchase or sell the security and the number of 
other potential purchasers; dealer undertakings to make a market in 
the security; the nature of the security and the nature of the 
marketplace trades (e.g., the time needed to dispose of the 
security, the method of soliciting offers, and the mechanics of 
transfer); any legal or contractual restrictions on the ability to 
transfer the security or asset; significant developments involving 
the issuer or counterparty specifically (e.g., default, bankruptcy, 
etc.) or the securities markets generally; and settlement practices, 
registration procedures, limitations on currency conversion or 
repatriation, and transfer limitations (for foreign securities or 
other assets). See id. at 12-13.
---------------------------------------------------------------------------

    Additionally, the Exchange states that the Fund will launch with at 
least 300,000 Shares outstanding. The Exchange also states: (1) The 
portfolio will hold a minimum of 15 different Municipal Securities from 
at least 15 unique issuers when at least six creation units are 
outstanding, but will never hold fewer than 10 different Municipal

[[Page 59671]]

Securities from at least 10 unique issuers; (2) no single obligor will 
account for more than 10% of the weight of the Fund's portfolio and no 
10 obligors will account for more than 75% of the weight of the Fund's 
portfolio.\20\ Additionally, no more than 50% of the Fund's assets will 
be invested in issuers that are more than 5% of the value of the Fund's 
assets, and the Fund will not invest more than 25% of its assets in any 
single issuer.\21\
---------------------------------------------------------------------------

    \20\ See id. at 13.
    \21\ See id. at 13-14.
---------------------------------------------------------------------------

III. Proceedings To Determine Whether To Approve or Disapprove SR-
CboeBZX-2019-068 and Grounds for Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section 
19(b)(2)(B) of the Act \22\ to determine whether the proposed rule 
change, as modified by Amendment No. 1, should be approved or 
disapproved. Institution of such proceedings is appropriate at this 
time in view of the legal and policy issues raised by the proposal. 
Institution of proceedings does not indicate that the Commission has 
reached any conclusions with respect to any of the issues involved. 
Rather, as described below, the Commission seeks and encourages 
interested persons to provide comments on the proposal.
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

    Pursuant to Section 19(b)(2)(B) of the Act,\23\ the Commission is 
providing notice of the grounds for disapproval under consideration. 
The Commission is instituting proceedings to allow for additional 
analysis of the proposal's consistency with Section 6(b)(5) of the Act, 
which requires, among other things, that the rules of a national 
securities exchange be ``designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade,'' and ``to protect investors and the public 
interest.'' \24\ Specifically, the Commission seeks comment regarding 
the following:
---------------------------------------------------------------------------

    \23\ Id.
    \24\ 15 U.S.C. 78f(b)(5).

    1. Would the proposed requirement that the portfolio hold a 
minimum of ten different Municipal Securities from at least ten 
unique issuers or, when at least six creation units are outstanding, 
fifteen different Municipal Securities from at least fifteen unique 
issuers be sufficient to ensure that the Fund's portfolio isn't 
susceptible to manipulation?
    2. Would the proposed concentration limit, i.e., that no single 
obligor will account for more than 10% of the weight of the Fund's 
portfolio and no ten obligors will account for more than 75% of the 
weight of the Fund's portfolio, be sufficient to ensure that the 
Fund's portfolio isn't susceptible to manipulation?
    3. Taken collectively, would the proposed listing requirements 
adequately ensure that the Fund's portfolio would not be susceptible 
to manipulation?

IV. Procedure: Request for Written Comments

    The Commission requests that interested persons provide written 
submissions of their views, data, and arguments with respect to the 
issues identified above, as well as any other concerns they may have 
with the proposal. In particular, the Commission invites the written 
views of interested persons concerning whether the proposed rule 
change, as modified by Amendment No. 1, is consistent with Section 
6(b)(5) or any other provision of the Act, or the rules and regulations 
thereunder. Although there do not appear to be any issues relevant to 
approval or disapproval that would be facilitated by an oral 
presentation of views, data, and arguments, the Commission will 
consider, pursuant to Rule 19b-4 under the Act,\25\ any request for an 
opportunity to make an oral presentation.\26\
---------------------------------------------------------------------------

    \25\ 17 CFR 240.19b-4.
    \26\ Section 19(b)(2) of the Act, as amended by the Securities 
Acts Amendments of 1975, Public Law 94-29 (June 4, 1975), grants the 
Commission flexibility to determine what type of proceeding--either 
oral or notice and opportunity for written comments--is appropriate 
for consideration of a particular proposal by a self-regulatory 
organization. See Securities Acts Amendments of 1975, Senate Comm. 
on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st 
Sess. 30 (1975).
---------------------------------------------------------------------------

    Interested persons are invited to submit written data, views, and 
arguments regarding whether the proposed rule change, as modified by 
Amendment No. 1, should be approved or disapproved by November 26, 
2019. Any person who wishes to file a rebuttal to any other person's 
submission must file that rebuttal by December 10, 2019. The Commission 
asks that commenters address the sufficiency of the Exchange's 
statements in support of the proposal, which are set forth in Amendment 
No. 1,\27\ in addition to any other comments they may wish to submit 
about the proposal.
---------------------------------------------------------------------------

    \27\ See supra note 6.
---------------------------------------------------------------------------

    In this regard, the Commission seeks comment on the Exchange's 
proposed generic listing standards for Shares based on an index or 
portfolio of Municipal Securities. The Commission specifically seeks 
comment on whether the proposed requirement that an underlying index or 
portfolio must include a minimum of 500 component Municipal Securities 
is consistent with the requirement that the rules of a national 
securities exchange be ``designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade,'' and ``to protect investors and the public 
interest.'' \28\
---------------------------------------------------------------------------

    \28\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-CboeBZX-2019-068 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CboeBZX-2019-068. 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 SR-CboeBZX-2019-068 and should be submitted 
by November 26, 2019. Rebuttal comments should be submitted by December 
10, 2019.


[[Page 59672]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\29\
---------------------------------------------------------------------------

    \29\ 17 CFR 200.30-3(a)(57).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-24088 Filed 11-4-19; 8:45 am]
 BILLING CODE 8011-01-P
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