Federal Register / Vol. 83, No. 243 / Wednesday, December 19, 2018 / Notices 65189 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 84481 

(Oct. 24, 2018), 83 FR 54624. 

4 15 U.S.C. 78s(b)(2). 

5 Id. 

6 17 CFR 200.30–3(a)(31). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 83319 

(May 24, 2018), 83 FR 25097 (May 31, 2018) (SR– 

NYSEArca–2018–15) (‘‘Prior Order’’). 

4See Securities Exchange Act Release No. 84486 

(Oct. 25, 2018), 83 FR 54794 (‘‘Notice’’). 

5 In Amendment No. 1, the Exchange: (1) 

Corrected its description of the current listing rule 

applicable to the Shares; (2) clarified the scope of 

the Fund’s permitted investments in over-thecounter (‘‘OTC’’) derivatives; (3) supplemented its 

arguments in support of the proposed rule change; 

and (4) made technical changes. Amendment No. 1 

is available at: https://www.sec.gov/comments/srnyseArca-2018-75/srnysearca201875-4628265-176

398.pdf. Amendment No. 1 is not subject to notice 

and comment because it does not materially alter 

the substance of the proposed rule change or raise 

unique or novel regulatory issues. 

6See Prior Order, supra note 3. 

7See id. 

8See Commentary .01(e) to NYSE Arca Rule 

8.600–E. 

9See Notice, supra note 3, 83 FR at 59794. 

10See id. 

11See id., 83 FR at 54794, n.10. 

(‘‘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 

permit the listing and trading of P.M.- 

settled series on certain broad-based 

index options on a pilot basis. The 

proposed rule change was published for 

comment in the Federal Register on 

October 30, 2018.3 The Commission has 

received no comment letters on the 

proposed rule change. 

Section 19(b)(2) of the Act 4 provides 

that, within 45 days of the publication 

of notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day after 

publication of the notice for this 

proposed rule change is December 14, 

2018. The Commission is extending this 

45-day time period. 

The Commission finds that it is 

appropriate to designate a longer period 

within which to take action on the 

proposed rule change so that it has 

sufficient time to consider the proposed 

rule change. Accordingly, the 

Commission, pursuant to Section 

19(b)(2) of the Act,5 designates January 

28, 2019 as the date by which the 

Commission shall either approve or 

disapprove or institute proceedings to 

determine whether to disapprove the 

proposed rule change (File Number SR– 

CboeEDGX–2018–037). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2018–27404 Filed 12–18–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84818; File No. SR– 

NYSEArca–2018–75] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Approving a 

Proposed Rule Change, as Modified by 

Amendment No. 1 Thereto, Regarding 

the Listing and Trading of Shares of 

the PGIM Ultra Short Bond ETF 

December 13, 2018. 

I. Introduction 

On October 12, 2018, 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 modify the rule governing the 

listing and trading of shares (‘‘Shares’’) 

of the PGIM Ultra Short Bond ETF 

(‘‘Fund’’). The Commission previously 

approved the listing and trading of the 

Shares subject to a representation that 

the Fund’s investments in OTC 

derivatives would not exceed 20% of 

the Fund’s net assets.3 The Exchange 

now seeks to permit the Fund to invest 

up to 50% of its net assets in OTC 

derivatives under certain circumstances. 

The proposed rule change was 

published for comment in the Federal 

Register on October 31, 2018.4 On 

November 7, 2018, the Exchange filed 

Amendment No. 1 to the proposed rule 

change.5 The Commission has not 

received any comments on the proposed 

rule change. This order approves the 

proposed rule change, as modified by 

Amendment No. 1. 

II. Description of the Proposed Rule 

Change, as Modified by Amendment 

No. 1 

The Shares are Managed Fund Shares 

that do not satisfy all of the criteria for 

generic listing set forth in Commentary 

.01 to NYSE Arca Rule 8.600–E. Thus, 

the Exchange currently lists and trades 

the Shares pursuant to a rule (‘‘Listing 

Rule’’) approved by Commission.6 The 

Listing Rule requires that the Fund’s 

portfolio meet all requirements of 

Commentary .01 to NYSE Arca Rule 

8.600–E except for those set forth in 

Commentary .01(a)(1), Commentary 

.01(b)(4) and Commentary .01(b)(5).7

Accordingly, the Listing Rule limits the 

Fund’s investments in OTC derivatives 

to 20% of the Fund’s assets and, for 

purposes of calculating this limit, the 

portfolio’s investment in OTC 

derivatives is calculated using the 

aggregate gross notional value of the 

OTC derivatives.8

The Exchange proposes to allow: (1) 

Up to 50% of the Fund’s assets to be 

invested in OTC derivatives that are 

used to reduce currency, interest rate, 

credit, or duration risk arising from the 

Fund’s investments (‘‘Hedging 

Derivatives’’); and (2) up to 20% of the 

Fund’s assets to be invested in OTC 

derivatives other than Hedging 

Derivatives. For purposes of calculating 

the proposed alternative limits, the 

portfolio’s investments in OTC 

derivatives would be calculated using 

the aggregate gross notional value of the 

OTC derivatives. 

According to the Exchange, the 

Fund’s adviser and sub-adviser believe 

that it is important to provide the Fund 

with additional flexibility to manage 

risk associated with its investments and, 

depending on market conditions, it may 

be necessary for the Fund to utilize 

additional OTC derivatives for this 

purpose.9 Generally, according to the 

Exchange, OTC derivatives may be 

customized to a greater degree than 

exchange-listed derivatives, which may 

allow the Fund to better hedge its assets 

and may mitigate trading its costs.10

The Exchange also states that the 

Commission has previously approved 

an exception from the requirements of 

Commentary .01(e) relating to 

investments in OTC derivatives similar 

to those proposed with respect to the 

Fund.11

III. Discussion 

After careful review, the Commission 

finds that the Exchange’s proposed rule 

change, as modified by Amendment No. 

1, to amend the Listing Rule applicable 

to the Shares consistent with the Act 

and the rules and regulations 


amozie on DSK3GDR082PROD with NOTICES1
65190 Federal Register / Vol. 83, No. 243 / Wednesday, December 19, 2018 / Notices 

12 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). 

13See Securities Exchange Act Release No. 80657 

(May 11, 2017), 82 FR 22702 (May 17, 2017) (SR– 

NYSEArca–2017–09). The Commission also notes 

that the proposed alternative limits are consistent 

with derivatives requirements in listing rules for 

another issue of Managed Fund Shares. See 

Securities Exchange Act Release No. 84047 

(September 6, 2018), 83 FR 46200 (September 12, 

2018) (SR–NASDAQ–2017–128). 

14See Securities Exchange Act Release No. 80657, 

supra note 13. The addition of duration risk to the 

uses of Hedging Derivative in the current proposal 

does not alter the Commission’s analysis. 

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

16 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4A Retail Order is an agency order that originates 

from a natural person and is submitted to the 

Exchange by an ETP Holder, provided that no 

change is made to the terms of the order to price 

or side of market and the order does not originate 

from a trading algorithm or any other computerized 

methodology. See Securities Exchange Act Release 

No. 67540 (July 30, 2012), 77 FR 46539 (August 3, 

2012) (SR–NYSEArca–2012–77). 

5See Securities Exchange Act Release No. 83828 

(August 10, 2018), 83 FR 40816 (August 16, 2018) 

(SR–NYSEArca–2018–58). An ETP Holder that 

qualifies for the Retail Order Step-Up Tier 2 also 

receives a credit of $0.0035 per share for orders (not 

just Retail Orders) that provide displayed liquidity 

to the order book in Tape C Securities, and an 

incremental credit of $0.0002 per share for orders 

that provide non-displayed liquidity to the order 

book in Tape C Securities. The incremental credit 

is in addition to the ETP Holder’s or Market Maker’s 

Tiered or Basic Rate credit(s). Pursuant to the Retail 

Order Step-Up Tier 2, ETP Holders and Market 

Makers pay a fee of $0.0027 per share for orders that 

take liquidity from the order book in Tape C 

Securities. 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(4) and (5). 

thereunder applicable to a national 

securities exchange.12 The Exchange 

proposes to modify only the Listing 

Rule’s limit on OTC derivatives, and the 

proposed alternative limits are 

substantially similar to OTC derivatives 

limits for another issue of Managed 

Fund Shares that also invests 

principally in fixed-income securities.13

The Commission approved a listing rule 

allowing that fund to similarly invest up 

to: (1) 50% of its assets in OTC 

derivatives to reduce currency, interest 

rate, or credit risk arising from the 

fund’s investments; and (2) 20% of its 

assets in OTC derivatives other than 

OTC derivatives used to hedge the 

fund’s portfolio against currency, 

interest rate, or credit risk.14

For the foregoing reason, the 

Commission finds that the proposed 

rule change, as modified by Amendment 

No. 1, is consistent with of the Act and 

the rules and regulations thereunder 

applicable to a national securities 

exchange. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Exchange Act,15

that the proposed rule change (SR– 

NYSEArca–2018–75), as modified by 

Amendment No. 1 be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2018–27407 Filed 12–18–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84819; File No. SR– 

NYSEArca–2018–90] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending the NYSE Arca 

Equities Fees and Charges 

December 13, 2018. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on December 

3, 2018, NYSE Arca, Inc. (the 

‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

NYSE Arca Equities Fees and Charges 

(‘‘Fee Schedule’’). The proposed rule 

change is available on the Exchange’s 

website at www.nyse.com, at the 

principal office of the Exchange, and at 

the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend the 

Fee Schedule by increasing the credit 

applicable to the Retail Order Step-Up 

Tier 2, as described below. 

The Exchange currently has a Retail 

Order Step-Up Tier 2 credit of $0.0035 

per share for Retail Orders 4 that provide 

displayed liquidity during the month in 

Tape A, Tape B and Tape C Securities 

that applies to ETP Holders, including 

Market Makers, that provide liquidity an 

average daily share volume per month 

of 1.10% or more of the U.S. CADV, and 

execute an ADV of Retail Orders with a 

time-in-force designation of Day that 

add or remove liquidity during the 

month that is an increase of 0.35% or 

more of the U.S. CADV above their 

April 2018 ADV taken as a percentage 

of U.S. CADV. Retail Orders with a 

time-in-force designation of Day that 

remove liquidity from the Book are not 

charged a fee.5 The Exchange proposes 

to increase the current credit for Retail 

Orders that provide displayed liquidity 

during the month in Tape A, Tape B and 

Tape C Securities to $0.0038 per share. 

The Exchange is not proposing any 

other change to the Retail Order StepUp Tier 2. 

For all other fees and credits, tiered or 

basic rates apply based on a firm’s 

qualifying levels. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,6 in general, and 

furthers the objectives of Sections 

6(b)(4) and (5) of the Act,7 in particular, 

because it provides for the equitable 

allocation of reasonable dues, fees, and 

other charges among its members, 

issuers and other persons using its 

facilities and does not unfairly 

discriminate between customers, 

issuers, brokers or dealers. 


amozie on DSK3GDR082PROD with NOTICES1