Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Amendment No. 2 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 2, to List and Trade Shares of the SPDR SSGA Responsible Reserves ESG ETF under NYSE Arca Rule 8.600-E, 32062-32065 [2020-11400]
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Federal Register / Vol. 85, No. 103 / Thursday, May 28, 2020 / Notices
Comments may be submitted by any of
the following methods:
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
[Release No. 34–88924; File No. SR–
NYSEArca–2020–07]
• 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–
NYSE–2020–47 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.
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All submissions should refer to File
Number SR–NYSE–2020–47. 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–NYSE–2020–47, and
should be submitted on or before June
18, 2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.29
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–11474 Filed 5–27–20; 8:45 am]
BILLING CODE 8011–01–P
29 17
CFR 200.30–3(a)(12), (59).
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Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of
Amendment No. 2 and Order Granting
Accelerated Approval of a Proposed
Rule Change, as Modified by
Amendment No. 2, to List and Trade
Shares of the SPDR SSGA
Responsible Reserves ESG ETF under
NYSE Arca Rule 8.600–E
I. Introduction
On January 14, 2020, 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 to list and trade shares
(‘‘Shares’’) of the SPDR SSGA
Responsible Reserves ESG ETF
(‘‘Fund’’), under NYSE Arca Rule 8.600–
E (Managed Fund Shares). The proposed
rule change was published for comment
in the Federal Register on January 30,
2020.3 On March 12, 2020, 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 disapprove the
proposed rule change.5 On April 22,
2020, the Exchange filed Amendment
No. 1 to the proposed rule change,
which replaced and superseded the
proposed rule change as originally
filed.6 On April 24, 2020, the
Commission published notice of
Amendment No. 1 and instituted
proceedings under Section 19(b)(2)(B) of
the Act 7 to determine whether to
approve or disapprove the proposed
rule change.8 On May 11, 2020, the
Exchange filed Amendment No. 2 to the
proposed rule change, which replaced
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 88031
(January 24, 2020), 85 FR 5493.
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 88364,
85 FR 15550 (March 18, 2020). The Commission
designated April 29, 2020, as the date by which the
Commission shall approve or disapprove, or
institute proceedings to determine whether to
disapprove, the proposed rule change.
6 Amendment No. 1 is available on the
Commission’s website at: https://www.sec.gov/
comments/sr-nysearca-2020-07/srnysearca2020077104394-215848.pdf.
7 15 U.S.C. 78s(b)(2)(B).
8 See Securities Exchange Act Release No. 88738,
85 FR 24050 (April 30, 2020).
2 17
Frm 00060
II. Description of the Proposed Rule
Change, as Modified by Amendment
No. 2 10
A. Description of the Fund
May 21, 2020.
PO 00000
and superseded the proposed rule
change, as modified by Amendment No.
1.9 The Commission has received no
comment letters on the proposal. The
Commission is publishing this notice to
solicit comments on Amendment No. 2
from interested persons, and is
approving the proposed rule change, as
modified by Amendment No. 2, on an
accelerated basis.
Fmt 4703
Sfmt 4703
The Exchange proposes to list and
trade Shares of the Fund under NYSE
Arca Rule 8.600–E, which governs the
listing and trading of Managed Fund
Shares on the Exchange. The Fund is a
series of the SSGA Active Trust
(‘‘Trust’’).11 SSGA Funds Management,
Inc. (‘‘Adviser’’) will be the investment
adviser to the Fund,12 State Street
9 In Amendment No. 2, the Exchange: (i) Clarified
that the Fund would not be permitted to invest in
sovereign debt obligations issued or guaranteed by
emerging market countries or their agencies; (ii)
represented that the Fund may not invest more than
5% of its total assets in any one Short-Term Fixed
Income Security (as defined below) at the time of
purchase (excluding U.S. Government securities
and inflation-protected public obligations
(‘‘TIPS’’)); (iii) clarified that the Fund’s holdings in
Short-Term Fixed Income Securities, and cash and
cash equivalents will allow the Fund to maintain
a maximum dollar-weighted average maturity of
sixty days or less and dollar-weighted average life
of 120 days or less and will have remaining
maturities of 397 calendar days or less; (iv)
represented that the Fund’s Short-Term Fixed
Income Securities all will be investment grade; (v)
represented that the Fund’s fixed income
investments as a whole, including Short-Term
Fixed Income Securities and cash equivalents, will
include at least 13 non-affiliated issuers; and (vi)
made technical, clarifying, and conforming changes.
Amendment No. 2 is available on the Commission’s
website at: https://www.sec.gov/comments/srnysearca-2020-07/srnysearca202007-7180920216791.pdf.
10 Additional information regarding the Fund, the
Trust, and the Shares can be found in Amendment
No. 2, supra note 9, and in the Registration
Statement, infra note 11.
11 The Exchange states that on December 20,
2019, the Trust filed with the Commission an
amendment to its registration statement on Form N–
1A under the Securities Act of 1933 (15 U.S.C. 77a)
(‘‘Securities Act’’) and the Investment Company Act
of 1940 (‘‘1940 Act’’) relating to the Fund (File Nos.
333–173276 and 811–22542) (‘‘Registration
Statement’’). The Exchange also states that the
Commission has issued an order granting certain
exemptive relief under the 1940 Act to the Trust.
See Investment Company Act Release No. 29524,
December 13, 2010) (File No. 812–13487)
(‘‘Exemptive Order’’). The Exchange represents that
investments made by the Fund will comply with
the conditions set forth in the Exemptive Order.
12 The Exchange states that the Adviser is a
wholly-owned subsidiary of State Street Global
Advisors, Inc., which itself is a wholly-owned
subsidiary of State Street Corporation. The
Exchange states that the Adviser is not registered as
a broker-dealer but is affiliated with a broker-dealer
and has implemented and will maintain a fire wall
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Federal Register / Vol. 85, No. 103 / Thursday, May 28, 2020 / Notices
Global Advisors Funds Distributors,
LLC will be the distributor of the Fund’s
Shares, and State Street Bank and Trust
Company will be the custodian and
transfer agent for the Fund.
According to the Exchange, the
investment objective of the Fund will be
to seek to maximize current income
while giving consideration to
environmental, social and governance
(‘‘ESG’’) criteria, consistent with the
preservation of capital and liquidity by
investing in a portfolio of high-quality,
short-term debt obligations. The Fund
will follow an investment process in
which the Adviser bases its decisions on
the relative attractiveness of different
short-term debt instruments while
considering ESG criteria at the time of
purchase. According to the Exchange,
the Adviser intends to consider ESG
criteria at the time of purchase by using
ESG-related metrics for each Fund
investment. The potential investment
universe will first be screened to remove
issuers involved in, and/or which derive
significant revenue from, certain
practices, industries or product lines,
including: extreme event controversies,
controversial weapons, civilian
firearms, thermal coal extraction,
tobacco, and UN global compact
violations. While issuers in the financial
services sector are not included in the
initial screening process, the Adviser
will consider scoring criteria to assign
an ESG rating to issuers in the financial
services sector.
1. Principal Investments
2. Other Investments
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According to the Exchange, the Fund
will attempt to meet its investment
objective by investing in a broad range
of ‘‘Short-Term Fixed Income
Securities,’’ as described below. Under
normal market conditions,13 the Fund
will invest at least 80% of its net assets
in Short-Term Fixed Income Securities,
and cash and cash equivalents 14 to
maintain a maximum dollar-weighted
average maturity of sixty days or less
with respect to such broker-dealer affiliate
regarding access to information concerning the
composition of and/or changes to the portfolio. The
Exchange further states that in the event that (a) the
Adviser becomes registered as a broker-dealer or
newly affiliated with one or more broker-dealers, or
(b) any new adviser or sub-adviser is a registered
broker-dealer or becomes affiliated with a brokerdealer, it will implement and maintain a fire wall
with respect to its relevant personnel or its brokerdealer affiliate, as applicable, regarding access to
information concerning the composition of and/or
changes to the portfolio, and will be subject to
procedures designed to prevent the use and
dissemination of material non-public information
regarding the portfolio.
13 The term ‘‘normal market conditions’’ is
defined in NYSE Arca Rule 8.600–E(c)(5).
14 The term ‘‘cash equivalents’’ is defined in
Commentary .01(c) to NYSE Arca Rule 8.600–E.
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16:32 May 27, 2020
and dollar-weighted average life of 120
days or less. Short-Term Fixed Income
Securities in which the Fund will invest
will have remaining maturities of 397
calendar days or less, and will consist
of the following:
• short-term obligations of the U.S.
Government, its agencies,
instrumentalities, authorities or political
subdivisions (other than cash
equivalents);
• mortgage pass-through securities; 15
• corporate bonds, floating rate bonds
or variable rate bonds (including
‘‘inverse floaters’’);
• bank obligations, including
negotiable certificates of deposit, time
deposits and bankers’ acceptances 16
(other than cash equivalents);
• zero coupon securities;
• Eurodollar Certificates of Deposit
(‘‘ECDs’’), Eurodollar Time Deposits
(‘‘ETDs’’) and Yankee Certificates of
Deposit (‘‘YCDs’’); 17
• TIPS of the U.S. Treasury, as well
as TIPS of major governments other than
the United States;
• repurchase and reverse repurchase
agreements (other than repurchase and
reverse repurchase agreements that are
cash equivalents);
• sovereign debt obligations issued or
guaranteed by foreign governments
(excluding emerging market countries)
or their agencies;
• commercial paper (other than cash
equivalents); and
• private placements, restricted
securities and Rule 144A securities.
Jkt 250001
While the Fund, under normal market
conditions, will invest at least 80% of
the Fund’s net assets in the securities
described above in ‘‘Principal
Investments,’’ the Fund may invest its
remaining assets in exchange traded
funds (‘‘ETFs’’) 18 and securities of nonexchange-traded investment company
15 The Exchange states that the Fund will seek to
obtain exposure to U.S. agency mortgage passthrough securities primarily through the use of ‘‘tobe-announced’’ or ‘‘TBA transactions.’’
16 Under normal market conditions, the Fund
intends to invest more than 25% of its total assets
in bank obligations.
17 The Exchange states that ECDs and ETDs are
U.S. dollar denominated certificates of deposit and
time deposits, respectively, issued by non-U.S.
branches of domestic banks and non-U.S. banks,
and YCDs are U.S. dollar denominated certificates
of deposit issued by U.S. branches of non-U.S.
banks.
18 The Exchange states that for purposes of this
filing, ‘‘ETFs’’ are 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. The Fund will not invest in
inverse or leveraged (e.g., 2X, –2X, 3X or –3X) ETFs.
PO 00000
Frm 00061
Fmt 4703
Sfmt 4703
32063
securities, subject to applicable
limitations under Section 12(d)(1) of the
1940 Act.19 The Exchange represents
that the Fund will not invest in
securities or other financial instruments
that have not been described in this
proposed rule change.
B. Application of Generic Listing
Requirements
The Exchange states that it submitted
this proposed rule change because the
portfolio for the Fund will not meet all
of the generic listing requirements of
Commentary .01 to NYSE Arca Rule
8.600–E applicable to the listing of
Managed Fund Shares. The Exchange
represents that the Fund’s portfolio
would meet all such requirements
except for those set forth in
Commentary .01(a)(1)(A) through (E)
with respect to the Fund’s investments
in non-exchange-traded investment
company securities 20 and Commentary
.01(b)(3) to NYSE Arca Rule 8.600–E
with respect to the Fund’s investments
in Short-Term Fixed Income
Securities.21
The Fund may invest in shares of
non-exchange traded open-end
management investment company
19 The Exchange states that investments in other
non-exchange-traded open-end management
investment company securities will not exceed 20%
of the total assets of the Fund.
20 Commentary .01(a)(1) to NYSE Arca Rule
8.600–E provides that the component stocks of the
equity portion of a portfolio that are U.S.
Component Stocks shall meet the following criteria
initially and on a continuing basis (subject to
exclusions for Derivative Securities Products and
Index-Linked Securities): (A) component stocks that
in the aggregate account for at least 90% of the
equity weight of the portfolio each shall have a
minimum market value of at least $75 million; (B)
component stocks that in the aggregate account for
at least 70% of the equity weight of the portfolio
each shall have a minimum monthly trading
volume of 250,000 shares, or minimum notional
volume traded per month of $25,000,000, averaged
over the last six months; (C) the most heavily
weighted component stock shall not exceed 30% of
the equity weight of the portfolio, and, to the extent
applicable, the five most heavily weighted
component shall not exceed 65% of the equity
weight of the portfolio; (D) where the equity portion
of the portfolio does not include Non-U.S.
Component Stocks, the equity portion of the
portfolio shall include a minimum of 13 component
stocks; (E) except as provided in (F), equity
securities in the portfolio shall be U.S. Component
Stocks listed on a national securities exchange and
shall be NMS Stocks as defined in Rule 600 of
Regulation NMS under the Act; and (F) no more
than 10% of the equity weight of a portfolio shall
consist of non-exchange-traded American
Depositary Receipts.
21 Commentary .01(b)(3) to NYSE Arca Rule
8.600–E requires that an underlying portfolio
(excluding exempted securities) that includes fixed
income securities shall include a minimum of 13
non-affiliated issuers, provided, however, that there
shall be no minimum number of non-affiliated
issuers required for fixed income securities if at
least 70% of the weight of the portfolio consists of
equity securities as described in Commentary .01(a)
to NYSE Arca Rule 8.600–E.
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Federal Register / Vol. 85, No. 103 / Thursday, May 28, 2020 / Notices
securities, which are equity securities.
To the extent the Fund invests in shares
of non-exchange-traded open-end
management investment company
securities, the Fund will not comply
with the requirements of Commentary
.01(a)(1)(A) through (E) to NYSE Arca
Rule 8.600–E (U.S. Component Stocks)
with respect to such holdings. The
Exchange notes that investments in nonexchange-traded open-end management
investment company securities will not
exceed 20% of the total assets of the
Fund. In addition, the Fund will invest
in such securities only to the extent that
those investments would be consistent
with the requirements of Section
12(d)(1) of the 1940 Act and the rules
thereunder. The Exchange further notes
that such securities must satisfy
applicable 1940 Act diversification
requirements and have a net asset value
based on the value of securities and
financial assets the investment company
holds.
In addition, the Exchange states that
the Fund’s investments in Short-Term
Fixed Income Securities may not
comply with Commentary .01(b)(3) to
NYSE Arca Rule 8.600–E. Commentary
.01(b)(3) requires that an underlying
portfolio (excluding exempted
securities) that includes fixed income
securities to include a minimum of 13
non-affiliated issuers, unless at least
70% of the weight of the portfolio
consists of equity securities as described
in Commentary .01(a) to NYSE Arca
Rule 8.600–E. The Exchange believes
that any concerns related to noncompliance with this requirement are
mitigated by the types of instruments
that the Fund would hold. The Adviser
represents that the Fund is not a money
market fund but its investment strategy
follows certain guidelines applicable to
such funds. Specifically, the Fund will
only invest in Short-Term Fixed Income
Securities to allow the Fund to maintain
a maximum dollar-weighted average
maturity of sixty days or less and dollarweighted average life of 120 days or
less. The Fund will only invest in ShortTerm Fixed Income Securities that have
remaining maturities of 397 calendar
days or less and that are investment
grade. The Fund’s Short-Term Fixed
Income Securities will include those
instruments that are included in the
definition of cash and cash equivalents,
but are not considered cash and cash
equivalents because they have
maturities of three months or greater
and up to 397 days. In addition, the
Fund’s Short-Term Fixed Income
Securities may include securities that
are not of the type characterized as cash
equivalents, including foreign
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16:32 May 27, 2020
Jkt 250001
government securities (excluding
emerging market countries’ securities)
and corporate bonds. The Exchange
represents that the Fund’s investments
in sovereign debt obligations (which
will not include obligations of emerging
market countries), corporate bonds,
floating rate bonds, and variable rate
bonds will be limited to 30% of the
Fund’s total assets. The Exchange also
represents that the Fund may not invest
more than 5% of its total assets in any
one Short-Term Fixed Income Security
(excluding U.S. Government securities
and TIPS) at time of purchase. In
addition, the Exchange states that the
Fund’s fixed income investments as a
whole, including Short-Term Fixed
Income Securities and cash equivalents,
will include at least 13 non-affiliated
issuers.
The Exchange notes that, other than
Commentary .01(a)(1)(A) through (E)
regarding the Fund’s investments in
non-exchange-traded investment
company securities and Commentary
.01(b)(3) regarding the Fund’s
investments in Short-Term Fixed
Income Securities, as described above,
the Fund will meet all other
requirements of Rule 8.600–E.
III. Discussion and Commission’s
Findings
After careful review, the Commission
finds that the proposed rule change, as
modified by Amendment No. 2, is
consistent with the Act and the rules
and regulations thereunder applicable to
a national securities exchange.22 In
particular, the Commission finds that
the proposed rule change, as modified
by Amendment No. 2, is consistent with
Section 6(b)(5) of the Act,23 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.
According to the Exchange, other than
Commentary .01(a)(1)(A) through (E)
with respect to the Fund’s investments
in non-exchange-traded investment
company securities and Commentary
.01(b)(3) with respect to the Fund’s
investments in Short-Term Fixed
Income Securities, as described above,
the Fund will meet all other
requirements of NYSE Arca Rule 8.600–
22 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).
23 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00062
Fmt 4703
Sfmt 4703
E, and the Shares of the Fund will
conform to the initial and continued
listing criteria under NYSE Arca Rule
8.600–E.
With respect to the Fund’s
investments in shares of non-exchangetraded open-end investment company
securities, which will not comply with
the requirements for equity securities
set forth in Commentary .01(a)(1)(A)
through (E) to NYSE Arca Rule 8.600–
E,24 the Commission notes that: (1) Such
securities must satisfy applicable 1940
Act diversification requirements; and (2)
the value of such securities is based on
the value of securities and financial
assets held by those investment
companies.25 In addition, the Exchange
states that investments in non-exchangetraded open-end management
investment company securities will not
exceed 20% of the total assets of the
Fund.26 The Commission therefore
believes that the Fund’s investments in
non-exchange-traded open-end
management investment company
securities would not make the Shares
susceptible to fraudulent or
manipulative acts and practices.27
The Fund’s investments in ShortTerm Fixed Income Securities will not
meet the requirement for 13 nonaffiliated issuers in Commentary
.01(b)(3) to NYSE Arca Rule 8.600–E.28
The Commission, however, believes that
certain restrictions on the Short-Term
Fixed Income Securities help to mitigate
concerns regarding the Shares being
susceptible to manipulation because of
the Fund’s investment in the ShortTerm Fixed Income Securities.29
Specifically, the Exchange states that
Short-Term Fixed Income Securities
will include instruments that are
included in the definition of cash
equivalents,30 but are not considered
cash equivalents because they have
maturities of three months or greater. As
proposed, the Fund’s investments in
Short-Term Fixed Income Securities
will also include sovereign debt
24 See
supra note 20.
Amendment No. 2, supra note 9.
26 See id.
27 The Commission notes it has approved other
exchange-traded funds that can hold non-exchangetraded open-end management investment company
securities in a manner that does not comply with
Commentary .01(a)(1) to Rule 8.600–E. See, e.g.,
Securities Exchange Act Release No. 86362 (July 12,
2019), 84 FR 34457 (July 18, 2019) (SR–NYSEArca–
2019–36).
28 See supra note 21.
29 The Commission notes that the Short-Term
Fixed Income Securities will comply with all other
requirements for fixed income securities set forth in
Commentary .01(b) to NYSE Arca Rule 8.600–E, and
the cash equivalents the Fund may invest in will
comply with the requirements of Commentary
.01(c). See Amendment No. 2, supra note 9.
30 See supra note 14.
25 See
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obligations (which will not include
obligations of emerging market
countries), corporate bonds, floating rate
bonds and variable rate bonds, but such
holdings would be limited to 30% of the
Fund’s total assets.31 In addition,
although the Fund’s investments in
Short-Term Fixed Income Securities
would include sovereign debt, they
would exclude sovereign debt
obligations of emerging market
countries.32 Further, the Short-Term
Fixed Income Securities in which the
Fund may invest will have remaining
maturities of 397 days or less and will
be investment grade.33 In addition, the
Fund may not invest more than 5% of
its total assets, measured at the time of
purchase, in any one Short-Term Fixed
Income Security (excluding U.S.
Government securities and TIPS).34 The
Exchange also states that the Fund’s
fixed income investments as a whole,
including Short-Term Fixed Income
Securities and cash equivalents, will
include at least 13 non-affiliated
issuers.35
The Exchange represents that all
statements and representations made in
the filing regarding (a) the description of
the portfolio holdings or reference
assets, (b) limitations on portfolio
holdings or reference assets, or (c) the
applicability of Exchange listing rules
specified in the filing shall constitute
continued listing requirements for
listing the Shares of the Fund on the
Exchange. In addition, the issuer has
represented to the Exchange that it will
advise the Exchange of any failure by
the Fund to comply with the continued
listing requirements, and, pursuant to
its obligations under Section 19(g)(1) of
the Act, the Exchange will monitor 36 for
compliance with the continued listing
requirements. If the Fund is not in
compliance with the applicable listing
requirements, the Exchange will
commence delisting procedures under
NYSE Arca Rule 5.5–E(m).
This approval order is based on all of
the Exchange’s representations,
31 See
Amendment No. 2, supra note 9.
id.
33 See id.
34 See id.
35 See id.
36 The Commission notes that certain proposals
for the listing and trading of exchange-traded
products include a representation that the exchange
will ‘‘surveil’’ for compliance with the continued
listing requirements. See, e.g., Securities Exchange
Act Release No. 77499 (April 1, 2016), 81 FR 20428,
20432 (April 7, 2016) (SR–BATS–2016–04). In the
context of this representation, it is the
Commission’s view that ‘‘monitor’’ and ‘‘surveil’’
both mean ongoing oversight of compliance with
the continued listing requirements. Therefore, the
Commission does not view ‘‘monitor’’ as a more or
less stringent obligation than ‘‘surveil’’ with respect
to the continued listing requirements.
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32 See
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Jkt 250001
including those set forth above and in
Amendment No. 2. For the foregoing
reasons, the Commission finds that the
proposed rule change, as modified by
Amendment No. 2, is consistent with
Section 6(b)(5) of the Act 37 and the
rules and regulations thereunder
applicable to a national securities
exchange.
IV. Solicitation of Comments on
Amendment No. 2 to the Proposed Rule
Change
Interested persons are invited to
submit written views, data, and
arguments concerning whether
Amendment No. 2 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–2020–07 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–2020–07. 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–NYSEArca–2020–07 and
should be submitted on or before June
18, 2020.
V. Accelerated Approval of the
Proposed Rule Change, as Modified by
Amendment No. 2
The Commission finds good cause to
approve the proposed rule change, as
modified by Amendment No. 2, prior to
the thirtieth day after the date of
publication of notice of the filing of
Amendment No. 2 in the Federal
Register. The Commission notes that
Amendment No. 2 clarified the
investments of the Fund and restrictions
thereon and the application of NYSE
Arca Rule 8.600–E, Commentary .01 to
the Fund’s investments. Amendment
No. 2 also provided other clarifications
and additional information related to
the proposed rule change. The changes
and additional information in
Amendment No. 2 assist the
Commission in evaluating the
Exchange’s proposal and in determining
that it is consistent with the Act.
Accordingly, the Commission finds
good cause, pursuant to Section 19(b)(2)
of the Act,38 to approve the proposed
rule change, as modified by Amendment
No. 2, on an accelerated basis.
VI. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,39 that the
proposed rule change (SR–NYSEArca–
2020–07), as modified by Amendment
No. 2, be, and it hereby is, approved on
an accelerated basis.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.40
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–11400 Filed 5–27–20; 8:45 am]
BILLING CODE 8011–01–P
38 15
U.S.C. 78s(b)(2).
39 Id.
37 15
PO 00000
U.S.C. 78f(b)(5).
Frm 00063
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E:\FR\FM\28MYN1.SGM
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28MYN1
]]>Agencies
[Federal Register Volume 85, Number 103 (Thursday, May 28, 2020)]
[Notices]
[Pages 32062-32065]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-11400]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88924; File No. SR-NYSEArca-2020-07]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Amendment No. 2 and Order Granting Accelerated Approval of a
Proposed Rule Change, as Modified by Amendment No. 2, to List and Trade
Shares of the SPDR SSGA Responsible Reserves ESG ETF under NYSE Arca
Rule 8.600-E
May 21, 2020.
I. Introduction
On January 14, 2020, 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 to list and trade shares (``Shares'') of the SPDR
SSGA Responsible Reserves ESG ETF (``Fund''), under NYSE Arca Rule
8.600-E (Managed Fund Shares). The proposed rule change was published
for comment in the Federal Register on January 30, 2020.\3\ On March
12, 2020, 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 disapprove the proposed rule change.\5\ On
April 22, 2020, the Exchange filed Amendment No. 1 to the proposed rule
change, which replaced and superseded the proposed rule change as
originally filed.\6\ On April 24, 2020, the Commission published notice
of Amendment No. 1 and instituted proceedings under Section 19(b)(2)(B)
of the Act \7\ to determine whether to approve or disapprove the
proposed rule change.\8\ On May 11, 2020, the Exchange filed Amendment
No. 2 to the proposed rule change, which replaced and superseded the
proposed rule change, as modified by Amendment No. 1.\9\ The Commission
has received no comment letters on the proposal. The Commission is
publishing this notice to solicit comments on Amendment No. 2 from
interested persons, and is approving the proposed rule change, as
modified by Amendment No. 2, on an accelerated basis.
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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. 88031 (January 24,
2020), 85 FR 5493.
\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 88364, 85 FR 15550
(March 18, 2020). The Commission designated April 29, 2020, as the
date by which the Commission shall approve or disapprove, or
institute proceedings to determine whether to disapprove, the
proposed rule change.
\6\ Amendment No. 1 is available on the Commission's website at:
https://www.sec.gov/comments/sr-nysearca-2020-07/srnysearca202007-7104394-215848.pdf.
\7\ 15 U.S.C. 78s(b)(2)(B).
\8\ See Securities Exchange Act Release No. 88738, 85 FR 24050
(April 30, 2020).
\9\ In Amendment No. 2, the Exchange: (i) Clarified that the
Fund would not be permitted to invest in sovereign debt obligations
issued or guaranteed by emerging market countries or their agencies;
(ii) represented that the Fund may not invest more than 5% of its
total assets in any one Short-Term Fixed Income Security (as defined
below) at the time of purchase (excluding U.S. Government securities
and inflation-protected public obligations (``TIPS'')); (iii)
clarified that the Fund's holdings in Short-Term Fixed Income
Securities, and cash and cash equivalents will allow the Fund to
maintain a maximum dollar-weighted average maturity of sixty days or
less and dollar-weighted average life of 120 days or less and will
have remaining maturities of 397 calendar days or less; (iv)
represented that the Fund's Short-Term Fixed Income Securities all
will be investment grade; (v) represented that the Fund's fixed
income investments as a whole, including Short-Term Fixed Income
Securities and cash equivalents, will include at least 13 non-
affiliated issuers; and (vi) made technical, clarifying, and
conforming changes. Amendment No. 2 is available on the Commission's
website at: https://www.sec.gov/comments/sr-nysearca-2020-07/srnysearca202007-7180920-216791.pdf.
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II. Description of the Proposed Rule Change, as Modified by Amendment
No. 2 \10\
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\10\ Additional information regarding the Fund, the Trust, and
the Shares can be found in Amendment No. 2, supra note 9, and in the
Registration Statement, infra note 11.
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A. Description of the Fund
The Exchange proposes to list and trade Shares of the Fund under
NYSE Arca Rule 8.600-E, which governs the listing and trading of
Managed Fund Shares on the Exchange. The Fund is a series of the SSGA
Active Trust (``Trust'').\11\ SSGA Funds Management, Inc. (``Adviser'')
will be the investment adviser to the Fund,\12\ State Street
[[Page 32063]]
Global Advisors Funds Distributors, LLC will be the distributor of the
Fund's Shares, and State Street Bank and Trust Company will be the
custodian and transfer agent for the Fund.
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\11\ The Exchange states that on December 20, 2019, the Trust
filed with the Commission an amendment to its registration statement
on Form N-1A under the Securities Act of 1933 (15 U.S.C. 77a)
(``Securities Act'') and the Investment Company Act of 1940 (``1940
Act'') relating to the Fund (File Nos. 333-173276 and 811-22542)
(``Registration Statement''). The Exchange also states that the
Commission has issued an order granting certain exemptive relief
under the 1940 Act to the Trust. See Investment Company Act Release
No. 29524, December 13, 2010) (File No. 812-13487) (``Exemptive
Order''). The Exchange represents that investments made by the Fund
will comply with the conditions set forth in the Exemptive Order.
\12\ The Exchange states that the Adviser is a wholly-owned
subsidiary of State Street Global Advisors, Inc., which itself is a
wholly-owned subsidiary of State Street Corporation. The Exchange
states that the Adviser is not registered as a broker-dealer but is
affiliated with a broker-dealer and has implemented and will
maintain a fire wall with respect to such broker-dealer affiliate
regarding access to information concerning the composition of and/or
changes to the portfolio. The Exchange further states that in the
event that (a) the Adviser becomes registered as a broker-dealer or
newly affiliated with one or more broker-dealers, or (b) any new
adviser or sub-adviser is a registered broker-dealer or becomes
affiliated with a broker-dealer, it will implement and maintain a
fire wall with respect to its relevant personnel or its broker-
dealer affiliate, as applicable, regarding access to information
concerning the composition of and/or changes to the portfolio, and
will be subject to procedures designed to prevent the use and
dissemination of material non-public information regarding the
portfolio.
---------------------------------------------------------------------------
According to the Exchange, the investment objective of the Fund
will be to seek to maximize current income while giving consideration
to environmental, social and governance (``ESG'') criteria, consistent
with the preservation of capital and liquidity by investing in a
portfolio of high-quality, short-term debt obligations. The Fund will
follow an investment process in which the Adviser bases its decisions
on the relative attractiveness of different short-term debt instruments
while considering ESG criteria at the time of purchase. According to
the Exchange, the Adviser intends to consider ESG criteria at the time
of purchase by using ESG-related metrics for each Fund investment. The
potential investment universe will first be screened to remove issuers
involved in, and/or which derive significant revenue from, certain
practices, industries or product lines, including: extreme event
controversies, controversial weapons, civilian firearms, thermal coal
extraction, tobacco, and UN global compact violations. While issuers in
the financial services sector are not included in the initial screening
process, the Adviser will consider scoring criteria to assign an ESG
rating to issuers in the financial services sector.
1. Principal Investments
According to the Exchange, the Fund will attempt to meet its
investment objective by investing in a broad range of ``Short-Term
Fixed Income Securities,'' as described below. Under normal market
conditions,\13\ the Fund will invest at least 80% of its net assets in
Short-Term Fixed Income Securities, and cash and cash equivalents \14\
to maintain a maximum dollar-weighted average maturity of sixty days or
less and dollar-weighted average life of 120 days or less. Short-Term
Fixed Income Securities in which the Fund will invest will have
remaining maturities of 397 calendar days or less, and will consist of
the following:
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\13\ The term ``normal market conditions'' is defined in NYSE
Arca Rule 8.600-E(c)(5).
\14\ The term ``cash equivalents'' is defined in Commentary
.01(c) to NYSE Arca Rule 8.600-E.
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short-term obligations of the U.S. Government, its
agencies, instrumentalities, authorities or political subdivisions
(other than cash equivalents);
mortgage pass-through securities; \15\
---------------------------------------------------------------------------
\15\ The Exchange states that the Fund will seek to obtain
exposure to U.S. agency mortgage pass-through securities primarily
through the use of ``to-be-announced'' or ``TBA transactions.''
---------------------------------------------------------------------------
corporate bonds, floating rate bonds or variable rate
bonds (including ``inverse floaters'');
bank obligations, including negotiable certificates of
deposit, time deposits and bankers' acceptances \16\ (other than cash
equivalents);
---------------------------------------------------------------------------
\16\ Under normal market conditions, the Fund intends to invest
more than 25% of its total assets in bank obligations.
---------------------------------------------------------------------------
zero coupon securities;
Eurodollar Certificates of Deposit (``ECDs''), Eurodollar
Time Deposits (``ETDs'') and Yankee Certificates of Deposit (``YCDs'');
\17\
---------------------------------------------------------------------------
\17\ The Exchange states that ECDs and ETDs are U.S. dollar
denominated certificates of deposit and time deposits, respectively,
issued by non-U.S. branches of domestic banks and non-U.S. banks,
and YCDs are U.S. dollar denominated certificates of deposit issued
by U.S. branches of non-U.S. banks.
---------------------------------------------------------------------------
TIPS of the U.S. Treasury, as well as TIPS of major
governments other than the United States;
repurchase and reverse repurchase agreements (other than
repurchase and reverse repurchase agreements that are cash
equivalents);
sovereign debt obligations issued or guaranteed by foreign
governments (excluding emerging market countries) or their agencies;
commercial paper (other than cash equivalents); and
private placements, restricted securities and Rule 144A
securities.
2. Other Investments
While the Fund, under normal market conditions, will invest at
least 80% of the Fund's net assets in the securities described above in
``Principal Investments,'' the Fund may invest its remaining assets in
exchange traded funds (``ETFs'') \18\ and securities of non-exchange-
traded investment company securities, subject to applicable limitations
under Section 12(d)(1) of the 1940 Act.\19\ The Exchange represents
that the Fund will not invest in securities or other financial
instruments that have not been described in this proposed rule change.
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\18\ The Exchange states that for purposes of this filing,
``ETFs'' are 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. The Fund will not invest in
inverse or leveraged (e.g., 2X, -2X, 3X or -3X) ETFs.
\19\ The Exchange states that investments in other non-exchange-
traded open-end management investment company securities will not
exceed 20% of the total assets of the Fund.
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B. Application of Generic Listing Requirements
The Exchange states that it submitted this proposed rule change
because the portfolio for the Fund will not meet all of the generic
listing requirements of Commentary .01 to NYSE Arca Rule 8.600-E
applicable to the listing of Managed Fund Shares. The Exchange
represents that the Fund's portfolio would meet all such requirements
except for those set forth in Commentary .01(a)(1)(A) through (E) with
respect to the Fund's investments in non-exchange-traded investment
company securities \20\ and Commentary .01(b)(3) to NYSE Arca Rule
8.600-E with respect to the Fund's investments in Short-Term Fixed
Income Securities.\21\
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\20\ Commentary .01(a)(1) to NYSE Arca Rule 8.600-E provides
that the component stocks of the equity portion of a portfolio that
are U.S. Component Stocks shall meet the following criteria
initially and on a continuing basis (subject to exclusions for
Derivative Securities Products and Index-Linked Securities): (A)
component stocks that in the aggregate account for at least 90% of
the equity weight of the portfolio each shall have a minimum market
value of at least $75 million; (B) component stocks that in the
aggregate account for at least 70% of the equity weight of the
portfolio each shall have a minimum monthly trading volume of
250,000 shares, or minimum notional volume traded per month of
$25,000,000, averaged over the last six months; (C) the most heavily
weighted component stock shall not exceed 30% of the equity weight
of the portfolio, and, to the extent applicable, the five most
heavily weighted component shall not exceed 65% of the equity weight
of the portfolio; (D) where the equity portion of the portfolio does
not include Non-U.S. Component Stocks, the equity portion of the
portfolio shall include a minimum of 13 component stocks; (E) except
as provided in (F), equity securities in the portfolio shall be U.S.
Component Stocks listed on a national securities exchange and shall
be NMS Stocks as defined in Rule 600 of Regulation NMS under the
Act; and (F) no more than 10% of the equity weight of a portfolio
shall consist of non-exchange-traded American Depositary Receipts.
\21\ Commentary .01(b)(3) to NYSE Arca Rule 8.600-E requires
that an underlying portfolio (excluding exempted securities) that
includes fixed income securities shall include a minimum of 13 non-
affiliated issuers, provided, however, that there shall be no
minimum number of non-affiliated issuers required for fixed income
securities if at least 70% of the weight of the portfolio consists
of equity securities as described in Commentary .01(a) to NYSE Arca
Rule 8.600-E.
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The Fund may invest in shares of non-exchange traded open-end
management investment company
[[Page 32064]]
securities, which are equity securities. To the extent the Fund invests
in shares of non-exchange-traded open-end management investment company
securities, the Fund will not comply with the requirements of
Commentary .01(a)(1)(A) through (E) to NYSE Arca Rule 8.600-E (U.S.
Component Stocks) with respect to such holdings. The Exchange notes
that investments in non-exchange-traded open-end management investment
company securities will not exceed 20% of the total assets of the Fund.
In addition, the Fund will invest in such securities only to the extent
that those investments would be consistent with the requirements of
Section 12(d)(1) of the 1940 Act and the rules thereunder. The Exchange
further notes that such securities must satisfy applicable 1940 Act
diversification requirements and have a net asset value based on the
value of securities and financial assets the investment company holds.
In addition, the Exchange states that the Fund's investments in
Short-Term Fixed Income Securities may not comply with Commentary
.01(b)(3) to NYSE Arca Rule 8.600-E. Commentary .01(b)(3) requires that
an underlying portfolio (excluding exempted securities) that includes
fixed income securities to include a minimum of 13 non-affiliated
issuers, unless at least 70% of the weight of the portfolio consists of
equity securities as described in Commentary .01(a) to NYSE Arca Rule
8.600-E. The Exchange believes that any concerns related to non-
compliance with this requirement are mitigated by the types of
instruments that the Fund would hold. The Adviser represents that the
Fund is not a money market fund but its investment strategy follows
certain guidelines applicable to such funds. Specifically, the Fund
will only invest in Short-Term Fixed Income Securities to allow the
Fund to maintain a maximum dollar-weighted average maturity of sixty
days or less and dollar-weighted average life of 120 days or less. The
Fund will only invest in Short-Term Fixed Income Securities that have
remaining maturities of 397 calendar days or less and that are
investment grade. The Fund's Short-Term Fixed Income Securities will
include those instruments that are included in the definition of cash
and cash equivalents, but are not considered cash and cash equivalents
because they have maturities of three months or greater and up to 397
days. In addition, the Fund's Short-Term Fixed Income Securities may
include securities that are not of the type characterized as cash
equivalents, including foreign government securities (excluding
emerging market countries' securities) and corporate bonds. The
Exchange represents that the Fund's investments in sovereign debt
obligations (which will not include obligations of emerging market
countries), corporate bonds, floating rate bonds, and variable rate
bonds will be limited to 30% of the Fund's total assets. The Exchange
also represents that the Fund may not invest more than 5% of its total
assets in any one Short-Term Fixed Income Security (excluding U.S.
Government securities and TIPS) at time of purchase. In addition, the
Exchange states that the Fund's fixed income investments as a whole,
including Short-Term Fixed Income Securities and cash equivalents, will
include at least 13 non-affiliated issuers.
The Exchange notes that, other than Commentary .01(a)(1)(A) through
(E) regarding the Fund's investments in non-exchange-traded investment
company securities and Commentary .01(b)(3) regarding the Fund's
investments in Short-Term Fixed Income Securities, as described above,
the Fund will meet all other requirements of Rule 8.600-E.
III. Discussion and Commission's Findings
After careful review, the Commission finds that the proposed rule
change, as modified by Amendment No. 2, is consistent with the Act and
the rules and regulations thereunder applicable to a national
securities exchange.\22\ In particular, the Commission finds that the
proposed rule change, as modified by Amendment No. 2, is consistent
with Section 6(b)(5) of the Act,\23\ 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.
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\22\ 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).
\23\ 15 U.S.C. 78f(b)(5).
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According to the Exchange, other than Commentary .01(a)(1)(A)
through (E) with respect to the Fund's investments in non-exchange-
traded investment company securities and Commentary .01(b)(3) with
respect to the Fund's investments in Short-Term Fixed Income
Securities, as described above, the Fund will meet all other
requirements of NYSE Arca Rule 8.600-E, and the Shares of the Fund will
conform to the initial and continued listing criteria under NYSE Arca
Rule 8.600-E.
With respect to the Fund's investments in shares of non-exchange-
traded open-end investment company securities, which will not comply
with the requirements for equity securities set forth in Commentary
.01(a)(1)(A) through (E) to NYSE Arca Rule 8.600-E,\24\ the Commission
notes that: (1) Such securities must satisfy applicable 1940 Act
diversification requirements; and (2) the value of such securities is
based on the value of securities and financial assets held by those
investment companies.\25\ In addition, the Exchange states that
investments in non-exchange-traded open-end management investment
company securities will not exceed 20% of the total assets of the
Fund.\26\ The Commission therefore believes that the Fund's investments
in non-exchange-traded open-end management investment company
securities would not make the Shares susceptible to fraudulent or
manipulative acts and practices.\27\
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\24\ See supra note 20.
\25\ See Amendment No. 2, supra note 9.
\26\ See id.
\27\ The Commission notes it has approved other exchange-traded
funds that can hold non-exchange-traded open-end management
investment company securities in a manner that does not comply with
Commentary .01(a)(1) to Rule 8.600-E. See, e.g., Securities Exchange
Act Release No. 86362 (July 12, 2019), 84 FR 34457 (July 18, 2019)
(SR-NYSEArca-2019-36).
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The Fund's investments in Short-Term Fixed Income Securities will
not meet the requirement for 13 non-affiliated issuers in Commentary
.01(b)(3) to NYSE Arca Rule 8.600-E.\28\ The Commission, however,
believes that certain restrictions on the Short-Term Fixed Income
Securities help to mitigate concerns regarding the Shares being
susceptible to manipulation because of the Fund's investment in the
Short-Term Fixed Income Securities.\29\ Specifically, the Exchange
states that Short-Term Fixed Income Securities will include instruments
that are included in the definition of cash equivalents,\30\ but are
not considered cash equivalents because they have maturities of three
months or greater. As proposed, the Fund's investments in Short-Term
Fixed Income Securities will also include sovereign debt
[[Page 32065]]
obligations (which will not include obligations of emerging market
countries), corporate bonds, floating rate bonds and variable rate
bonds, but such holdings would be limited to 30% of the Fund's total
assets.\31\ In addition, although the Fund's investments in Short-Term
Fixed Income Securities would include sovereign debt, they would
exclude sovereign debt obligations of emerging market countries.\32\
Further, the Short-Term Fixed Income Securities in which the Fund may
invest will have remaining maturities of 397 days or less and will be
investment grade.\33\ In addition, the Fund may not invest more than 5%
of its total assets, measured at the time of purchase, in any one
Short-Term Fixed Income Security (excluding U.S. Government securities
and TIPS).\34\ The Exchange also states that the Fund's fixed income
investments as a whole, including Short-Term Fixed Income Securities
and cash equivalents, will include at least 13 non-affiliated
issuers.\35\
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\28\ See supra note 21.
\29\ The Commission notes that the Short-Term Fixed Income
Securities will comply with all other requirements for fixed income
securities set forth in Commentary .01(b) to NYSE Arca Rule 8.600-E,
and the cash equivalents the Fund may invest in will comply with the
requirements of Commentary .01(c). See Amendment No. 2, supra note
9.
\30\ See supra note 14.
\31\ See Amendment No. 2, supra note 9.
\32\ See id.
\33\ See id.
\34\ See id.
\35\ See id.
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The Exchange represents that all statements and representations
made in the filing regarding (a) the description of the portfolio
holdings or reference assets, (b) limitations on portfolio holdings or
reference assets, or (c) the applicability of Exchange listing rules
specified in the filing shall constitute continued listing requirements
for listing the Shares of the Fund on the Exchange. In addition, the
issuer has represented to the Exchange that it will advise the Exchange
of any failure by the Fund to comply with the continued listing
requirements, and, pursuant to its obligations under Section 19(g)(1)
of the Act, the Exchange will monitor \36\ for compliance with the
continued listing requirements. If the Fund is not in compliance with
the applicable listing requirements, the Exchange will commence
delisting procedures under NYSE Arca Rule 5.5-E(m).
---------------------------------------------------------------------------
\36\ The Commission notes that certain proposals for the listing
and trading of exchange-traded products include a representation
that the exchange will ``surveil'' for compliance with the continued
listing requirements. See, e.g., Securities Exchange Act Release No.
77499 (April 1, 2016), 81 FR 20428, 20432 (April 7, 2016) (SR-BATS-
2016-04). In the context of this representation, it is the
Commission's view that ``monitor'' and ``surveil'' both mean ongoing
oversight of compliance with the continued listing requirements.
Therefore, the Commission does not view ``monitor'' as a more or
less stringent obligation than ``surveil'' with respect to the
continued listing requirements.
---------------------------------------------------------------------------
This approval order is based on all of the Exchange's
representations, including those set forth above and in Amendment No.
2. For the foregoing reasons, the Commission finds that the proposed
rule change, as modified by Amendment No. 2, is consistent with Section
6(b)(5) of the Act \37\ and the rules and regulations thereunder
applicable to a national securities exchange.
---------------------------------------------------------------------------
\37\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
IV. Solicitation of Comments on Amendment No. 2 to the Proposed Rule
Change
Interested persons are invited to submit written views, data, and
arguments concerning whether Amendment No. 2 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-2020-07 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-2020-07. 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-NYSEArca-2020-07 and should be submitted
on or before June 18, 2020.
V. Accelerated Approval of the Proposed Rule Change, as Modified by
Amendment No. 2
The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 2, prior to the thirtieth day
after the date of publication of notice of the filing of Amendment No.
2 in the Federal Register. The Commission notes that Amendment No. 2
clarified the investments of the Fund and restrictions thereon and the
application of NYSE Arca Rule 8.600-E, Commentary .01 to the Fund's
investments. Amendment No. 2 also provided other clarifications and
additional information related to the proposed rule change. The changes
and additional information in Amendment No. 2 assist the Commission in
evaluating the Exchange's proposal and in determining that it is
consistent with the Act. Accordingly, the Commission finds good cause,
pursuant to Section 19(b)(2) of the Act,\38\ to approve the proposed
rule change, as modified by Amendment No. 2, on an accelerated basis.
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\38\ 15 U.S.C. 78s(b)(2).
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VI. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\39\ that the proposed rule change (SR-NYSEArca-2020-07), as
modified by Amendment No. 2, be, and it hereby is, approved on an
accelerated basis.
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\39\ Id.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\40\
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\40\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-11400 Filed 5-27-20; 8:45 am]
BILLING CODE 8011-01-P
