Justia Agencies And Commissions Securities And Exchange Commission Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Amendment No. 1, and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, Relating to the Listing and Trading of Shares of the Innovator MSCI EAFE Power Buffer ETFs and Innovator MSCI Emerging Markets Power Buffer ETFs, Series of the Innovator ETFs Trust, Under NYSE Arca Rule 8.600-E, 59900-59903 [2019-24189]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Amendment No. 1, and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, Relating to the Listing and Trading of Shares of the Innovator MSCI EAFE Power Buffer ETFs and Innovator MSCI Emerging Markets Power Buffer ETFs, Series of the Innovator ETFs Trust, Under NYSE Arca Rule 8.600-E, 59900-59903 [2019-24189]

Download as PDF 59900 Federal Register / Vol. 84, No. 215 / Wednesday, November 6, 2019 / Notices III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act,62 and Rule 19b–4(f)(2) 63 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– PEARL–2019–33 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–PEARL–2019–33. 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–PEARL–2019–33 and should be submitted on or before November 27, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.64 Jill M. Peterson, Assistant Secretary. [FR Doc. 2019–24187 Filed 11–5–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–87437; File No. SR– NYSEArca–2019–62] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Amendment No. 1, and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, Relating to the Listing and Trading of Shares of the Innovator MSCI EAFE Power Buffer ETFs and Innovator MSCI Emerging Markets Power Buffer ETFs, Series of the Innovator ETFs Trust, Under NYSE Arca Rule 8.600–E October 31, 2019. I. Introduction On August 29, 2019, NYSE Arca, Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) 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 relating to the listing and trading of shares (‘‘Shares’’) of the Innovator MSCI EAFE Power Buffer ETFs and Innovator MSCI Emerging Markets Power Buffer ETFs (each a ‘‘Fund’’ and collectively the ‘‘Funds’’), series of the Innovator ETFs Trust (‘‘Trust’’), under NYSE Arca Rule 8.600–E, which governs the listing and trading of Managed Fund Shares. The proposed 64 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 62 15 U.S.C. 78s(b)(3)(A)(ii). 63 17 CFR 240.19b–4(f)(2). VerDate Sep<11>2014 17:43 Nov 05, 2019 1 15 Jkt 250001 PO 00000 Frm 00137 Fmt 4703 Sfmt 4703 rule change was published for comment in the Federal Register on September 18, 2019.3 On October 16, 2019, the Exchange filed Amendment No. 1 to the proposed rule change, which replaced and superseded the proposed rule change as originally filed.4 The Commission has received no comments on the proposed rule change. The Commission is publishing this notice to solicit comments on Amendment No. 1 from interested persons, and is approving the proposed rule change, as modified by Amendment No. 1, on an accelerated basis. II. Description of the Proposed Rule Change, as Modified by Amendment No. 1 The Exchange proposes to: (1) Permit the continued listing and trading of Shares of the Innovator MSCI EAFE Power Buffer ETF (July Series) and Innovator MSCI Emerging Markets Power Buffer ETF (July Series); (2) list and trade Shares of up to an additional eleven Innovator MSCI EAFE Power Buffer ETF Series of the Trust (‘‘EAFE Power Buffer Funds’’); and (3) list and trade Shares of up to an additional eleven Innovator MSCI Emerging Markets Power Buffer ETF Series of the Trust (‘‘Emerging Markets Power Buffer Funds’’).5 Innovator Capital Management, LLC (‘‘Adviser’’) is the investment adviser to the Funds and Milliman Financial Risk Management LLC (‘‘Sub-Adviser’’) is the sub-adviser. The investment objective of the EAFE Power Buffer Funds is to provide investors with returns that match those of the MSCI EAFE Investable Market Index—Price Return (‘‘MSCI EAFE Index’’) over a period of approximately one year, while providing a level of protection from MSCI EAFE Index losses. The investment objective of the 3 See Securities Exchange Act Release No. 86948 (September 12, 2019), 84 FR 49131. 4 In Amendment No. 1, the Exchange: (1) Clarified that it is submitting this proposal in order to allow each Fund to hold listed derivatives (i.e., FLEX and standardized options on the Indexes and on ETFs that track the Indexes) in a manner that does not comply with Commentary .01(d)(2) to NYSE Arca Rule 8.600–E; (2) clarified the Funds’ use of standardized options; (3) specified that while the Funds will invest primarily in FLEX and standardized options, they may also invest in cash and cash equivalents; and (4) made other technical, clarifying, and conforming changes. Amendment No. 1 is available at: https://www.sec.gov/ comments/sr-nysearca-2019-62/srnysearca2019626310013-193523.pdf. 5 The Trust is registered with the Commission as an investment company and has filed a registration statement on Form N–1A under the Securities Act of 1933 and the Investment Company Act of 1940 for each of the Innovator MSCI EAFE Power Buffer ETF (July Series and October Series) and Innovator MSCI Emerging Markets Power Buffer ETF (July Series and October Series). E:\FR\FM\06NON1.SGM 06NON1 Federal Register / Vol. 84, No. 215 / Wednesday, November 6, 2019 / Notices Emerging Markets Power Buffer Funds is to provide investors with returns that match those of the MSCI Emerging Markets Investable Market Index—Price Return (‘‘MSCI Emerging Markets Index’’ and, together with the MSCI EAFE Index, the ‘‘Indexes’’) over a period of approximately one year, while providing a level of protection from MSCI Emerging Markets Index losses. In particular, the Funds are actively managed funds that employ a defined outcome strategy 6 that: (1) For the EAFE Power Buffer Funds, seeks to provide investment returns during the outcome period that match the gains of the MSCI EAFE Index, up to a maximized annual return (‘‘EAFE Cap Level’’),7 while guarding against a decline in the MSCI EAFE Index of the first 15% (‘‘EAFE Power Buffer Strategy’’); and (2) for the Emerging Markets Power Buffer Funds, seeks to provide investment returns during the outcome period that match the gains of the MSCI Emerging Markets Index, up to a maximized annual return (‘‘Emerging Markets Cap Level’’),8 while guarding against a decline in the MSCI Emerging Markets Index of the first 15% (‘‘Emerging Markets Power Buffer Strategy’’). More specifically, pursuant to the EAFE Power Buffer Strategy, each EAFE Power Buffer Fund’s portfolio managers will seek to produce the following outcomes during the outcome period: • If the MSCI EAFE Index appreciates over the outcome period, the EAFE Power Buffer Fund will seek to provide shareholders with a total return that matches that of the MSCI EAFE Index, up to and including the EAFE Cap Level; • If the MSCI EAFE Index depreciates over the outcome period by 15% or less, 6 Defined outcome strategies are designed to participate in market gains and losses within predetermined ranges over a specified period (i.e., point to point). These outcomes are predicated on the assumption that an investment vehicle employing the strategy is held for the designated outcome periods. 7 The EAFE Cap Level will be determined with respect to each EAFE Power Buffer Fund on the inception date of the EAFE Power Buffer Fund and at the beginning of each outcome period and is determined based on the price of the FLEX options acquired by the EAFE Power Buffer Fund at that time. The EAFE Cap Level will be determined only once at the beginning of each outcome period and not within an outcome period. 8 The Emerging Markets Cap Level will be determined with respect to each Emerging Markets Power Buffer Fund on the inception date of the Emerging Markets Power Buffer Fund and at the beginning of each outcome period and is determined based on the price of the FLEX options acquired by the Emerging Markets Power Buffer Fund at that time. The Emerging Markets Cap Level will be determined only once at the beginning of each outcome period and not within an outcome period. VerDate Sep<11>2014 17:43 Nov 05, 2019 Jkt 250001 the EAFE Power Buffer Fund will seek to provide a total return of zero; and • If the MSCI EAFE Index decreases over the outcome period by more than 15%, the EAFE Power Buffer Fund will seek to provide a total return loss that is 15% less than the percentage loss on the MSCI EAFE Index with a maximum loss of approximately 85%. In addition, pursuant to the Emerging Markets Power Buffer Strategy, each Emerging Markets Power Buffer Fund’s portfolio managers will seek to produce the following outcomes during the outcome period: • If the MSCI Emerging Markets Index appreciates over the outcome period, the Emerging Markets Power Buffer Fund will seek to provide shareholders with a total return that matches that of the MSCI Emerging Markets Index, up to and including the Emerging Markets Cap Level; • If the MSCI Emerging Markets Index depreciates over the outcome period by 15% or less, the Emerging Markets Power Buffer Fund will seek to provide a total return of zero; • If the MSCI Emerging Markets Index decreases over the outcome period by more than 15%, the Emerging Markets Power Buffer Fund will seek to provide a total return loss that is 15% less than the percentage loss on the MSCI Emerging Markets Index with a maximum loss of approximately 85%. Under normal market conditions: 9 (1) Each EAFE Power Buffer Fund will invest primarily in FLEX options or standardized options contracts listed on a U.S. exchange that reference either the MSCI EAFE Index or ETFs 10 that track the MSCI EAFE Index; and (2) each Emerging Markets Power Buffer Fund will invest primarily in FLEX options or standardized options contracts listed on a U.S. exchange that reference either the MSCI Emerging Markets Index or ETFs 11 that track the MSCI Emerging Markets Index.12 Each of the Funds may invest its net assets (in the aggregate) in 9 The term ‘‘normal market conditions’’ is defined in NYSE Arca Rule 8.600–E(c)(5). 10 For purposes of this proposal, the term ‘‘ETFs’’ means Investment Company Units (as described in NYSE Arca Rule 5.2–E(j)(3)), Portfolio Depositary Receipts (as described in NYSE Arca Rule 8.100– E), and Managed Fund Shares (as described in NYSE Arca Rule 8.600–E). All ETFs will be listed and traded in the U.S. on a national securities exchange. 11 See supra note 10. 12 Options on the Indexes are traded on Cboe Exchange, Inc. (‘‘Cboe Options’’). Options on ETFs based on the Indexes are listed and traded in the U.S. on national securities exchanges. The Exchange, Cboe Options, and all other national securities exchanges are members of the Intermarket Surveillance Group (‘‘ISG’’). Moreover, Cboe Options and the Exchange are members of the Options Regulatory Surveillance Authority. PO 00000 Frm 00138 Fmt 4703 Sfmt 4703 59901 other investments (i.e., cash or cash equivalents 13) which the Adviser or Sub-Adviser believes will help each Fund to meet its investment objective and that will be disclosed at the end of each trading day. According to the Exchange, it is submitting this proposal in order to allow each Fund to hold listed derivatives (i.e., FLEX and standardized options on the Indexes and on ETFs that track the Indexes) in a manner that does not comply with Commentary .01(d)(2) to NYSE Arca Rule 8.600–E. Commentary .01(d)(2) to NYSE Arca Rule 8.600–E provides that the aggregate gross notional value of listed derivatives based on any five or fewer underlying reference assets shall not exceed 65% of the weight of the portfolio (including gross notional exposures), and the aggregate gross notional value of listed derivatives based on any single underlying reference asset shall not exceed 30% of the weight of the portfolio (including gross notional exposures). III. Discussion and Commission Findings After careful review, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.14 In particular, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with Section 6(b)(5) of the Act,15 which requires, among other things, that the Exchange’s rules be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The Commission also finds that the proposal is consistent with Section 11A(a)(1)(C)(iii) of the Act,16 which sets forth Congress’ finding that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure the availability to brokers, dealers and investors of information 13 Cash equivalents are the short-term instruments enumerated in Commentary .01(c) to NYSE Arca Rule 8.600–E. 14 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). 15 15 U.S.C. 78f(b)(5). 16 15 U.S.C. 78k–1(a)(1)(C)(iii). E:\FR\FM\06NON1.SGM 06NON1 59902 Federal Register / Vol. 84, No. 215 / Wednesday, November 6, 2019 / Notices with respect to quotations for and transactions in securities. According to the Exchange, intra-day and closing price information regarding Index options and ETF options is available from the Options Price Reporting Authority, Cboe Options’ website, and from major market data vendors. FINRA’s Trade Reporting and Compliance Engine (‘‘TRACE’’) will be a source of price information for certain fixed income securities to the extent transactions in such securities are reported to TRACE. Price information regarding U.S. government securities and other cash equivalents generally may be obtained from brokers and dealers who make markets in such securities or through nationally recognized pricing services through subscription agreements. Information regarding market price and trading volume of the Shares will be continually available on a real-time basis throughout the day on brokers’ computer screens and other electronic services. Information regarding the previous day’s closing price and trading volume information for the Shares will be published daily in the financial section of newspapers. Quotation and last sale information for the Shares will be available via the Consolidated Tape Association high-speed line. In addition, the Portfolio Indicative Value, as defined in NYSE Arca Rule 8.600– E(c)(3), will be widely disseminated by one or more major market data vendors at least every 15 seconds during the Core Trading Session. The Commission also believes that the proposal is reasonably designed to promote fair disclosure of information that may be necessary to price the Shares appropriately and to prevent trading when a reasonable degree of transparency cannot be assured. Under NYSE Arca Rule 8.600–E(d)(2)(D), if the Exchange becomes aware that the net asset value (‘‘NAV’’) or the Disclosed Portfolio (as defined in NYSE Arca Rule 8.600–E(c)(2)) is not disseminated to all market participants at the same time, the Exchange is required to halt trading in such series of Managed Fund Shares. In addition, the Exchange represents that if a Fund is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under NYSE Arca Rule 5.5– E(m). The Exchange also states that it has a general policy prohibiting the distribution of material, non-public information by its employees. Further, the issuer currently provides and maintains for the July Series, and will provide and maintain for any future series of a Fund, a publicly available web tool on its website that provides VerDate Sep<11>2014 17:43 Nov 05, 2019 Jkt 250001 existing and prospective shareholders with certain information to help inform investment decisions. The information provided includes the start and end dates of the current outcome period, the time remaining in the outcome period, the Funds’ current NAV, each Fund’s cap for the outcome period and the maximum investment gain available up to the cap for a shareholder purchasing Shares at the current NAV. The web tool also provides information regarding each Fund’s buffer. This information includes the remaining buffer available for a shareholder purchasing Shares at the current NAV or the amount of losses that a shareholder purchasing Shares at the current NAV would incur before benefitting from the protection of the buffer. The Shares do not qualify for generic listing because the Funds will not satisfy the requirements of Commentary .01(d)(2) to NYSE Arca Rule 8.600–E that the aggregate gross notional value of listed derivatives based on any five or fewer underlying reference assets shall not exceed 65% of the weight of the portfolio (including gross notional exposures) and the aggregate gross notional value of listed derivatives based on any single underlying reference asset shall not exceed 30% of the weight of the portfolio (including gross notional exposures). As noted above, under normal market conditions: (1) Each EAFE Power Buffer Fund will invest primarily in FLEX Options or standardized options contracts listed on a U.S. exchange that reference either the MSCI EAFE Index or ETFs that track the MSCI EAFE Index; and (2) each Emerging Markets Power Buffer Fund will invest primarily in FLEX Options or standardized options contracts listed on a U.S. exchange that reference either the MSCI Emerging Markets Index or ETFs that track the MSCI Emerging Markets Index. The Commission notes that, although the Funds’ holdings in these listed derivatives will not meet the requirements of Commentary .01(d)(2) to NYSE Arca Rule 8.600–E, the Indexes are broad-based; the ETFs will be listed and traded in the U.S. on national securities exchanges; and all Index and ETF options contacts held by the Funds will trade on markets that are a member of ISG or affiliated with a member of ISG, or with which the Exchange has in place a comprehensive surveillance sharing agreement, all of which help to mitigate concerns about the prices of the Shares being susceptible to manipulation. Additionally, in support of this proposal, the Exchange represents that: (1) With the exception of the requirements of Commentary .01(d)(2), PO 00000 Frm 00139 Fmt 4703 Sfmt 4703 each Fund will comply with the initial and continued listing standards under NYSE Arca Rule 8.600–E. (2) Trading in the Shares will be subject to the existing trading surveillances, administered by FINRA on behalf of the Exchange, or by regulatory staff of the Exchange, which are designed to detect violations of Exchange rules and applicable federal securities laws. (3) For initial and continued listing, the Funds will be in compliance with Rule 10A–3 under the Act,17 as provided by NYSE Arca Rule 5.3–E. (4) With respect to each of the proposed additional eleven series of each Fund, a minimum of 100,000 Shares will be outstanding at the commencement of trading on the Exchange. This approval order is based on all of the Exchange’s statements and representations, including those set forth above and in Amendment No. 1. IV. Solicitation of Comments on Amendment No. 1 to the Proposed Rule Change Interested persons are invited to submit written data, views, and arguments concerning whether Amendment No. 1 is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSEArca–2019–62 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEArca–2019–62. 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 17 17 E:\FR\FM\06NON1.SGM CFR 240.10A–3. 06NON1 Federal Register / Vol. 84, No. 215 / Wednesday, November 6, 2019 / Notices those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NYSEArca–2019–62, and should be submitted on or before November 27, 2019. V. Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 1 The Commission finds good cause to approve the proposed rule change, as modified by Amendment No. 1, prior to the thirtieth day after the date of publication of notice of the filing of Amendment No. 1 in the Federal Register. As discussed above, in Amendment No. 1, the Exchange: (1) Clarified that it is submitting this proposal in order to allow each Fund to hold listed derivatives (i.e., FLEX and standardized options on the Indexes and on ETFs that track the Indexes) in a manner that does not comply with Commentary .01(d)(2) to NYSE Arca Rule 8.600–E; (2) clarified the Funds’ use of standardized options; (3) specified that while the Funds will invest primarily in FLEX and standardized options, they may also invest in cash and cash equivalents; and (4) made other technical, clarifying, and conforming changes. The Commission believes that Amendment No. 1 does not raise any novel regulatory issues and provides additional clarity to the proposal. Accordingly, the Commission finds good cause, pursuant to Section 19(b)(2) of the Act,18 to approve the proposed rule change, as modified by Amendment No. 1, on an accelerated basis. VI. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,19 that the proposed rule change (SR–NYSEArca– 2019–62), as modified by Amendment 18 15 No. 1, be, and it hereby is, approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.20 Jill M. Peterson, Assistant Secretary. [FR Doc. 2019–24189 Filed 11–5–19; 8:45 am] BILLING CODE 8011–01–P SUSQUEHANNA RIVER BASIN COMMISSION Commission Meeting Susquehanna River Basin Commission. ACTION: Notice. AGENCY: The Susquehanna River Basin Commission will hold its regular business meeting on December 5, 2019, in Harrisburg, Pennsylvania. Details concerning the matters to be addressed at the business meeting are contained in the SUPPLEMENTARY INFORMATION section of this notice. Also the Commission published a document in the Federal Register on October 2, 2019, concerning its public hearing on October 31, 2019, in Harrisburg, Pennsylvania. DATES: The meeting will be held on Thursday, December 5, 2019, at 9 a.m. ADDRESSES: The meeting will be held at the Susquehanna River Basin Commission, 4423 N Front Street, Harrisburg, PA 17110. FOR FURTHER INFORMATION CONTACT: Jason E. Oyler, General Counsel and Secretary to the Commission, telephone: 717–238–0423; fax: 717–238–2436. SUPPLEMENTARY INFORMATION: The business meeting will include actions or presentations on the following items: (1) Informational presentation of interest to the lower Susquehanna River region; (2) proposed FY2020 fee schedule changes; (3) ratification/approval of contracts/ grants; (4) a report on delegated settlements; (5) Regulatory Program projects; and (6) waiver requests that have been submitted to the Commission. This agenda is complete at the time of issuance, but other items may be added, and some stricken without further notice. The listing of an item on the agenda does not necessarily mean that the Commission will take final action on it at this meeting. When the Commission does take final action, notice of these actions will be published in the Federal Register after the meeting. Any actions specific to projects will also be provided in writing directly to project sponsors. SUMMARY: U.S.C. 78s(b)(2). 19 Id. VerDate Sep<11>2014 20 17 17:43 Nov 05, 2019 Jkt 250001 PO 00000 CFR 200.30–3(a)(12). Frm 00140 Fmt 4703 Sfmt 4703 59903 Regulatory Program projects listed for Commission action were those that were the subject of public hearings conducted by the Commission on October 31, 2019, and identified in the notices for such hearings, which was published in 84 FR 52552, October 2, 2019. The public is invited to attend the Commission’s business meeting. Comments on the Regulatory Program projects are subject to a deadline of November 12, 2019. Written comments pertaining to other items on the agenda at the business meeting may be mailed to the Susquehanna River Basin Commission, 4423 North Front Street, Harrisburg, Pennsylvania 17110–1788, or submitted electronically through www.srbc.net/about/meetings-events/ business-meeting.html. Such comments are due to the Commission on or before November 26, 2019. Comments will not be accepted at the business meeting noticed herein. Authority: Pub. L. 91–575, 84 Stat. 1509 et seq., 18 CFR parts 806, 807, and 808. Dated: October 31, 2019. Jason E. Oyler, General Counsel and Secretary to the Commission. [FR Doc. 2019–24176 Filed 11–5–19; 8:45 am] BILLING CODE 7040–01–P DEPARTMENT OF TRANSPORTATION Federal Motor Carrier Safety Administration [Docket No. FMCSA–2019–0101] Agency Information Collection Activities; Information Collection Renewal: 391.41 CMV Driver Medication Form, OMB Control Number: 2126–0064 Federal Motor Carrier Safety Administration (FMCSA), DOT. ACTION: Notice and request for comments. AGENCY: In accordance with the Paperwork Reduction Act of 1995, FMCSA announces its plan to submit the renewal Information Collection Request (ICR) described below to the Office of Management and Budget (OMB) for its review and approval and invites public comment. This Information Collection (IC) is voluntary and may be utilized by certified Medical Examiners (ME) responsible for issuing Medical Examiner’s Certificates (MEC) to commercial motor vehicle (CMV) drivers. Certified MEs who choose to use this IC do so in an effort to communicate with treating healthcare professionals, who are responsible for SUMMARY: E:\FR\FM\06NON1.SGM 06NON1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 84, Number 215 (Wednesday, November 6, 2019)]
[Notices]
[Pages 59900-59903]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-24189]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87437; File No. SR-NYSEArca-2019-62]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Amendment No. 1, and Order Granting Accelerated Approval of a 
Proposed Rule Change, as Modified by Amendment No. 1, Relating to the 
Listing and Trading of Shares of the Innovator MSCI EAFE Power Buffer 
ETFs and Innovator MSCI Emerging Markets Power Buffer ETFs, Series of 
the Innovator ETFs Trust, Under NYSE Arca Rule 8.600-E

October 31, 2019.

I. Introduction

    On August 29, 2019, NYSE Arca, Inc. (``Exchange'' or ``NYSE Arca'') 
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 
relating to the listing and trading of shares (``Shares'') of the 
Innovator MSCI EAFE Power Buffer ETFs and Innovator MSCI Emerging 
Markets Power Buffer ETFs (each a ``Fund'' and collectively the 
``Funds''), series of the Innovator ETFs Trust (``Trust''), under NYSE 
Arca Rule 8.600-E, which governs the listing and trading of Managed 
Fund Shares. The proposed rule change was published for comment in the 
Federal Register on September 18, 2019.\3\ On October 16, 2019, the 
Exchange filed Amendment No. 1 to the proposed rule change, which 
replaced and superseded the proposed rule change as originally 
filed.\4\ The Commission has received no comments on the proposed rule 
change. The Commission is publishing this notice to solicit comments on 
Amendment No. 1 from interested persons, and is approving the proposed 
rule change, as modified by Amendment No. 1, on an accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 86948 (September 12, 
2019), 84 FR 49131.
    \4\ In Amendment No. 1, the Exchange: (1) Clarified that it is 
submitting this proposal in order to allow each Fund to hold listed 
derivatives (i.e., FLEX and standardized options on the Indexes and 
on ETFs that track the Indexes) in a manner that does not comply 
with Commentary .01(d)(2) to NYSE Arca Rule 8.600-E; (2) clarified 
the Funds' use of standardized options; (3) specified that while the 
Funds will invest primarily in FLEX and standardized options, they 
may also invest in cash and cash equivalents; and (4) made other 
technical, clarifying, and conforming changes. Amendment No. 1 is 
available at: https://www.sec.gov/comments/sr-nysearca-2019-62/srnysearca201962-6310013-193523.pdf.
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II. Description of the Proposed Rule Change, as Modified by Amendment 
No. 1

    The Exchange proposes to: (1) Permit the continued listing and 
trading of Shares of the Innovator MSCI EAFE Power Buffer ETF (July 
Series) and Innovator MSCI Emerging Markets Power Buffer ETF (July 
Series); (2) list and trade Shares of up to an additional eleven 
Innovator MSCI EAFE Power Buffer ETF Series of the Trust (``EAFE Power 
Buffer Funds''); and (3) list and trade Shares of up to an additional 
eleven Innovator MSCI Emerging Markets Power Buffer ETF Series of the 
Trust (``Emerging Markets Power Buffer Funds'').\5\ Innovator Capital 
Management, LLC (``Adviser'') is the investment adviser to the Funds 
and Milliman Financial Risk Management LLC (``Sub-Adviser'') is the 
sub-adviser.
---------------------------------------------------------------------------

    \5\ The Trust is registered with the Commission as an investment 
company and has filed a registration statement on Form N-1A under 
the Securities Act of 1933 and the Investment Company Act of 1940 
for each of the Innovator MSCI EAFE Power Buffer ETF (July Series 
and October Series) and Innovator MSCI Emerging Markets Power Buffer 
ETF (July Series and October Series).
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    The investment objective of the EAFE Power Buffer Funds is to 
provide investors with returns that match those of the MSCI EAFE 
Investable Market Index--Price Return (``MSCI EAFE Index'') over a 
period of approximately one year, while providing a level of protection 
from MSCI EAFE Index losses. The investment objective of the

[[Page 59901]]

Emerging Markets Power Buffer Funds is to provide investors with 
returns that match those of the MSCI Emerging Markets Investable Market 
Index--Price Return (``MSCI Emerging Markets Index'' and, together with 
the MSCI EAFE Index, the ``Indexes'') over a period of approximately 
one year, while providing a level of protection from MSCI Emerging 
Markets Index losses.
    In particular, the Funds are actively managed funds that employ a 
defined outcome strategy \6\ that: (1) For the EAFE Power Buffer Funds, 
seeks to provide investment returns during the outcome period that 
match the gains of the MSCI EAFE Index, up to a maximized annual return 
(``EAFE Cap Level''),\7\ while guarding against a decline in the MSCI 
EAFE Index of the first 15% (``EAFE Power Buffer Strategy''); and (2) 
for the Emerging Markets Power Buffer Funds, seeks to provide 
investment returns during the outcome period that match the gains of 
the MSCI Emerging Markets Index, up to a maximized annual return 
(``Emerging Markets Cap Level''),\8\ while guarding against a decline 
in the MSCI Emerging Markets Index of the first 15% (``Emerging Markets 
Power Buffer Strategy'').
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    \6\ Defined outcome strategies are designed to participate in 
market gains and losses within pre-determined ranges over a 
specified period (i.e., point to point). These outcomes are 
predicated on the assumption that an investment vehicle employing 
the strategy is held for the designated outcome periods.
    \7\ The EAFE Cap Level will be determined with respect to each 
EAFE Power Buffer Fund on the inception date of the EAFE Power 
Buffer Fund and at the beginning of each outcome period and is 
determined based on the price of the FLEX options acquired by the 
EAFE Power Buffer Fund at that time. The EAFE Cap Level will be 
determined only once at the beginning of each outcome period and not 
within an outcome period.
    \8\ The Emerging Markets Cap Level will be determined with 
respect to each Emerging Markets Power Buffer Fund on the inception 
date of the Emerging Markets Power Buffer Fund and at the beginning 
of each outcome period and is determined based on the price of the 
FLEX options acquired by the Emerging Markets Power Buffer Fund at 
that time. The Emerging Markets Cap Level will be determined only 
once at the beginning of each outcome period and not within an 
outcome period.
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    More specifically, pursuant to the EAFE Power Buffer Strategy, each 
EAFE Power Buffer Fund's portfolio managers will seek to produce the 
following outcomes during the outcome period:
     If the MSCI EAFE Index appreciates over the outcome 
period, the EAFE Power Buffer Fund will seek to provide shareholders 
with a total return that matches that of the MSCI EAFE Index, up to and 
including the EAFE Cap Level;
     If the MSCI EAFE Index depreciates over the outcome period 
by 15% or less, the EAFE Power Buffer Fund will seek to provide a total 
return of zero; and
     If the MSCI EAFE Index decreases over the outcome period 
by more than 15%, the EAFE Power Buffer Fund will seek to provide a 
total return loss that is 15% less than the percentage loss on the MSCI 
EAFE Index with a maximum loss of approximately 85%.
    In addition, pursuant to the Emerging Markets Power Buffer 
Strategy, each Emerging Markets Power Buffer Fund's portfolio managers 
will seek to produce the following outcomes during the outcome period:
     If the MSCI Emerging Markets Index appreciates over the 
outcome period, the Emerging Markets Power Buffer Fund will seek to 
provide shareholders with a total return that matches that of the MSCI 
Emerging Markets Index, up to and including the Emerging Markets Cap 
Level;
     If the MSCI Emerging Markets Index depreciates over the 
outcome period by 15% or less, the Emerging Markets Power Buffer Fund 
will seek to provide a total return of zero;
     If the MSCI Emerging Markets Index decreases over the 
outcome period by more than 15%, the Emerging Markets Power Buffer Fund 
will seek to provide a total return loss that is 15% less than the 
percentage loss on the MSCI Emerging Markets Index with a maximum loss 
of approximately 85%.
    Under normal market conditions: \9\ (1) Each EAFE Power Buffer Fund 
will invest primarily in FLEX options or standardized options contracts 
listed on a U.S. exchange that reference either the MSCI EAFE Index or 
ETFs \10\ that track the MSCI EAFE Index; and (2) each Emerging Markets 
Power Buffer Fund will invest primarily in FLEX options or standardized 
options contracts listed on a U.S. exchange that reference either the 
MSCI Emerging Markets Index or ETFs \11\ that track the MSCI Emerging 
Markets Index.\12\ Each of the Funds may invest its net assets (in the 
aggregate) in other investments (i.e., cash or cash equivalents \13\) 
which the Adviser or Sub-Adviser believes will help each Fund to meet 
its investment objective and that will be disclosed at the end of each 
trading day.
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    \9\ The term ``normal market conditions'' is defined in NYSE 
Arca Rule 8.600-E(c)(5).
    \10\ For purposes of this proposal, the term ``ETFs'' means 
Investment Company Units (as described in NYSE Arca Rule 5.2-
E(j)(3)), Portfolio Depositary Receipts (as described in NYSE Arca 
Rule 8.100-E), and Managed Fund Shares (as described in NYSE Arca 
Rule 8.600-E). All ETFs will be listed and traded in the U.S. on a 
national securities exchange.
    \11\ See supra note 10.
    \12\ Options on the Indexes are traded on Cboe Exchange, Inc. 
(``Cboe Options''). Options on ETFs based on the Indexes are listed 
and traded in the U.S. on national securities exchanges. The 
Exchange, Cboe Options, and all other national securities exchanges 
are members of the Intermarket Surveillance Group (``ISG''). 
Moreover, Cboe Options and the Exchange are members of the Options 
Regulatory Surveillance Authority.
    \13\ Cash equivalents are the short-term instruments enumerated 
in Commentary .01(c) to NYSE Arca Rule 8.600-E.
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    According to the Exchange, it is submitting this proposal in order 
to allow each Fund to hold listed derivatives (i.e., FLEX and 
standardized options on the Indexes and on ETFs that track the Indexes) 
in a manner that does not comply with Commentary .01(d)(2) to NYSE Arca 
Rule 8.600-E. Commentary .01(d)(2) to NYSE Arca Rule 8.600-E provides 
that the aggregate gross notional value of listed derivatives based on 
any five or fewer underlying reference assets shall not exceed 65% of 
the weight of the portfolio (including gross notional exposures), and 
the aggregate gross notional value of listed derivatives based on any 
single underlying reference asset shall not exceed 30% of the weight of 
the portfolio (including gross notional exposures).

III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule 
change, as modified by Amendment No. 1, is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to a national securities exchange.\14\ In particular, the 
Commission finds that the proposed rule change, as modified by 
Amendment No. 1, is consistent with Section 6(b)(5) of the Act,\15\ 
which requires, among other things, that the Exchange's rules be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, and, in general, to protect investors and the public 
interest. The Commission also finds that the proposal is consistent 
with Section 11A(a)(1)(C)(iii) of the Act,\16\ which sets forth 
Congress' finding that it is in the public interest and appropriate for 
the protection of investors and the maintenance of fair and orderly 
markets to assure the availability to brokers, dealers and investors of 
information

[[Page 59902]]

with respect to quotations for and transactions in securities.
---------------------------------------------------------------------------

    \14\ 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).
    \15\ 15 U.S.C. 78f(b)(5).
    \16\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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    According to the Exchange, intra-day and closing price information 
regarding Index options and ETF options is available from the Options 
Price Reporting Authority, Cboe Options' website, and from major market 
data vendors. FINRA's Trade Reporting and Compliance Engine (``TRACE'') 
will be a source of price information for certain fixed income 
securities to the extent transactions in such securities are reported 
to TRACE. Price information regarding U.S. government securities and 
other cash equivalents generally may be obtained from brokers and 
dealers who make markets in such securities or through nationally 
recognized pricing services through subscription agreements. 
Information regarding market price and trading volume of the Shares 
will be continually available on a real-time basis throughout the day 
on brokers' computer screens and other electronic services. Information 
regarding the previous day's closing price and trading volume 
information for the Shares will be published daily in the financial 
section of newspapers. Quotation and last sale information for the 
Shares will be available via the Consolidated Tape Association high-
speed line. In addition, the Portfolio Indicative Value, as defined in 
NYSE Arca Rule 8.600-E(c)(3), will be widely disseminated by one or 
more major market data vendors at least every 15 seconds during the 
Core Trading Session.
    The Commission also believes that the proposal is reasonably 
designed to promote fair disclosure of information that may be 
necessary to price the Shares appropriately and to prevent trading when 
a reasonable degree of transparency cannot be assured. Under NYSE Arca 
Rule 8.600-E(d)(2)(D), if the Exchange becomes aware that the net asset 
value (``NAV'') or the Disclosed Portfolio (as defined in NYSE Arca 
Rule 8.600-E(c)(2)) is not disseminated to all market participants at 
the same time, the Exchange is required to halt trading in such series 
of Managed Fund Shares. In addition, the Exchange represents that if a 
Fund is not in compliance with the applicable listing requirements, the 
Exchange will commence delisting procedures under NYSE Arca Rule 5.5-
E(m). The Exchange also states that it has a general policy prohibiting 
the distribution of material, non-public information by its employees. 
Further, the issuer currently provides and maintains for the July 
Series, and will provide and maintain for any future series of a Fund, 
a publicly available web tool on its website that provides existing and 
prospective shareholders with certain information to help inform 
investment decisions. The information provided includes the start and 
end dates of the current outcome period, the time remaining in the 
outcome period, the Funds' current NAV, each Fund's cap for the outcome 
period and the maximum investment gain available up to the cap for a 
shareholder purchasing Shares at the current NAV. The web tool also 
provides information regarding each Fund's buffer. This information 
includes the remaining buffer available for a shareholder purchasing 
Shares at the current NAV or the amount of losses that a shareholder 
purchasing Shares at the current NAV would incur before benefitting 
from the protection of the buffer.
    The Shares do not qualify for generic listing because the Funds 
will not satisfy the requirements of Commentary .01(d)(2) to NYSE Arca 
Rule 8.600-E that the aggregate gross notional value of listed 
derivatives based on any five or fewer underlying reference assets 
shall not exceed 65% of the weight of the portfolio (including gross 
notional exposures) and the aggregate gross notional value of listed 
derivatives based on any single underlying reference asset shall not 
exceed 30% of the weight of the portfolio (including gross notional 
exposures). As noted above, under normal market conditions: (1) Each 
EAFE Power Buffer Fund will invest primarily in FLEX Options or 
standardized options contracts listed on a U.S. exchange that reference 
either the MSCI EAFE Index or ETFs that track the MSCI EAFE Index; and 
(2) each Emerging Markets Power Buffer Fund will invest primarily in 
FLEX Options or standardized options contracts listed on a U.S. 
exchange that reference either the MSCI Emerging Markets Index or ETFs 
that track the MSCI Emerging Markets Index. The Commission notes that, 
although the Funds' holdings in these listed derivatives will not meet 
the requirements of Commentary .01(d)(2) to NYSE Arca Rule 8.600-E, the 
Indexes are broad-based; the ETFs will be listed and traded in the U.S. 
on national securities exchanges; and all Index and ETF options 
contacts held by the Funds will trade on markets that are a member of 
ISG or affiliated with a member of ISG, or with which the Exchange has 
in place a comprehensive surveillance sharing agreement, all of which 
help to mitigate concerns about the prices of the Shares being 
susceptible to manipulation.
    Additionally, in support of this proposal, the Exchange represents 
that:
    (1) With the exception of the requirements of Commentary .01(d)(2), 
each Fund will comply with the initial and continued listing standards 
under NYSE Arca Rule 8.600-E.
    (2) Trading in the Shares will be subject to the existing trading 
surveillances, administered by FINRA on behalf of the Exchange, or by 
regulatory staff of the Exchange, which are designed to detect 
violations of Exchange rules and applicable federal securities laws.
    (3) For initial and continued listing, the Funds will be in 
compliance with Rule 10A-3 under the Act,\17\ as provided by NYSE Arca 
Rule 5.3-E.
---------------------------------------------------------------------------

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

    (4) With respect to each of the proposed additional eleven series 
of each Fund, a minimum of 100,000 Shares will be outstanding at the 
commencement of trading on the Exchange.
    This approval order is based on all of the Exchange's statements 
and representations, including those set forth above and in Amendment 
No. 1.

IV. Solicitation of Comments on Amendment No. 1 to the Proposed Rule 
Change

    Interested persons are invited to submit written data, views, and 
arguments concerning whether Amendment No. 1 is consistent with the 
Act. Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSEArca-2019-62 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2019-62. 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

[[Page 59903]]

those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for website viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE, 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change. Persons submitting 
comments are cautioned that we do not redact or edit personal 
identifying information from comment submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEArca-2019-62, and should 
be submitted on or before November 27, 2019.

V. Accelerated Approval of Proposed Rule Change, as Modified by 
Amendment No. 1

    The Commission finds good cause to approve the proposed rule 
change, as modified by Amendment No. 1, prior to the thirtieth day 
after the date of publication of notice of the filing of Amendment No. 
1 in the Federal Register. As discussed above, in Amendment No. 1, the 
Exchange: (1) Clarified that it is submitting this proposal in order to 
allow each Fund to hold listed derivatives (i.e., FLEX and standardized 
options on the Indexes and on ETFs that track the Indexes) in a manner 
that does not comply with Commentary .01(d)(2) to NYSE Arca Rule 8.600-
E; (2) clarified the Funds' use of standardized options; (3) specified 
that while the Funds will invest primarily in FLEX and standardized 
options, they may also invest in cash and cash equivalents; and (4) 
made other technical, clarifying, and conforming changes. The 
Commission believes that Amendment No. 1 does not raise any novel 
regulatory issues and provides additional clarity to the proposal. 
Accordingly, the Commission finds good cause, pursuant to Section 
19(b)(2) of the Act,\18\ to approve the proposed rule change, as 
modified by Amendment No. 1, on an accelerated basis.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\19\ that the proposed rule change (SR-NYSEArca-2019-62), as 
modified by Amendment No. 1, be, and it hereby is, approved on an 
accelerated basis.
---------------------------------------------------------------------------

    \19\ Id.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
---------------------------------------------------------------------------

    \20\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-24189 Filed 11-5-19; 8:45 am]
BILLING CODE 8011-01-P

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