Federal Register / Vol. 83, No. 247 / Thursday, December 27, 2018 / Notices 66785 

2The requested relief would apply to direct sales 

of shares in Creation Units by a Fund to a Fund of 

Funds and redemptions of those shares. Applicants, 

moreover, are not seeking relief from section 17(a) 

for, and the requested relief will not apply to, 

transactions where a Fund could be deemed an 

Affiliated Person, or a Second-Tier Affiliate, of a 

Fund of Funds because an Adviser or an entity 

controlling, controlled by or under common control 

with an Adviser provides investment advisory 

services to that Fund of Funds. 

ownership interests, to effectuate 

purchases and redemptions in-kind. The 

deposit procedures for in-kind 

purchases of Creation Units and the 

redemption procedures for in-kind 

redemptions of Creation Units will be 

the same for all purchases and 

redemptions and Deposit Instruments 

and Redemption Instruments will be 

valued in the same manner as those 

Portfolio Instruments currently held by 

the Funds. Applicants also seek relief 

from the prohibitions on affiliated 

transactions in section 17(a) to permit a 

Fund to sell its shares to and redeem its 

shares from a Fund of Funds, and to 

engage in the accompanying in-kind 

transactions with the Fund of Funds.2

The purchase of Creation Units by a 

Fund of Funds directly from a Fund will 

be accomplished in accordance with the 

policies of the Fund of Funds and will 

be based on the NAVs of the Funds. 

9. Applicants also request relief to 

permit a Feeder Fund to acquire shares 

of another registered investment 

company managed by the Adviser 

having substantially the same 

investment objectives as the Feeder 

Fund (‘‘Master Fund’’) beyond the 

limitations in section 12(d)(1)(A) and 

permit the Master Fund, and any 

principal underwriter for the Master 

Fund, to sell shares of the Master Fund 

to the Feeder Fund beyond the 

limitations in section 12(d)(1)(B). 

10. Section 6(c) of the Act permits the 

Commission to exempt any persons or 

transactions from any provision of the 

Act if such exemption is necessary or 

appropriate in the public interest and 

consistent with the protection of 

investors and the purposes fairly 

intended by the policy and provisions of 

the Act. Section 12(d)(1)(J) of the Act 

provides that the Commission may 

exempt any person, security, or 

transaction, or any class or classes of 

persons, securities, or transactions, from 

any provision of section 12(d)(1) if the 

exemption is consistent with the public 

interest and the protection of investors. 

Section 17(b) of the Act authorizes the 

Commission to grant an order 

permitting a transaction otherwise 

prohibited by section 17(a) if it finds 

that (a) the terms of the proposed 

transaction are fair and reasonable and 

do not involve overreaching on the part 

of any person concerned; (b) the 

proposed transaction is consistent with 

the policies of each registered 

investment company involved; and (c) 

the proposed transaction is consistent 

with the general purposes of the Act. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–27985 Filed 12–26–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84682; File No. SR–ISE– 

2018–95] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend 

Supplementary Material .07 to ISE Rule 

722 

November 29, 2018. 

Correction 

In notice document 2018–26405 

beginning on page 62938 in the issue of 

Thursday, December 6, 2018, make the 

following correction: 

On page 62939, in the third column, 

the last line of the first full paragraph 

‘‘December 26, 2018’’ should read 

‘‘December 27, 2018’’. 

[FR Doc. C1–2018–26405 Filed 12–26–18; 8:45 am] 

BILLING CODE 1301–00–D 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84685; File No. SR–Phlx– 

2018–76] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the Pilot 

Period for the Listing of P.M.-Settled 

Nasdaq-100 Index Options Expiring on 

the Third Friday of the Month 

November 29, 2018. 

Correction 

In notice document 2018–26396 

beginning on page 62942 in the issue of 

Thursday, December 6, 2018, make the 

following correction: 

On page 62943, in the third column, 

the last line of the first full paragraph 

‘‘December 26, 2018’’ should read 

‘‘December 27, 2018’’. 

[FR Doc. C1–2018–26396 Filed 12–26–18; 8:45 am] 

BILLING CODE 1301–00–D 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

33330; 812–14960] 

OSI ETF Trust, et al. 

December 19, 2018. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice. 

Notice of an application for an order 

under section 6(c) of the Investment 

Company Act of 1940 (the ‘‘Act’’) for an 

exemption from sections 2(a)(32), 

5(a)(1), 22(d), and 22(e) of the Act and 

rule 22c–1 under the Act, under 

sections 6(c) and 17(b) of the Act for an 

exemption from sections 17(a)(1) and 

17(a)(2) of the Act, and under section 

12(d)(1)(J) for an exemption from 

sections 12(d)(1)(A) and 12(d)(1)(B) of 

the Act. The requested order would 

permit (a) actively-managed series of 

certain open-end management 

investment companies (‘‘Funds’’) to 

issue shares redeemable in large 

aggregations only (‘‘Creation Units’’); (b) 

secondary market transactions in Fund 

shares to occur at negotiated market 

prices rather than at net asset value 

(‘‘NAV’’); (c) certain Funds to pay 

redemption proceeds, under certain 

circumstances, more than seven days 

after the tender of shares for 

redemption; (d) certain affiliated 

persons of a Fund to deposit securities 

into, and receive securities from, the 

Fund in connection with the purchase 

and redemption of Creation Units; (e) 

certain registered management 

investment companies and unit 

investment trusts outside of the same 

group of investment companies as the 

Funds (‘‘Funds of Funds’’) to acquire 

shares of the Funds; and (f) certain 

Funds (‘‘Feeder Funds’’) to create and 

redeem Creation Units in-kind in a 

master-feeder structure. 

Applicants: OSI ETF Trust (the 

‘‘Trust’’), a Delaware statutory trust that 

is registered under the Act as an openend management investment company 

with multiple series, O’Shares 

Investment Advisers, LLC (‘‘Initial 

Adviser’’), a Delaware limited liability 

company registered as an investment 

adviser under the Investment Advisers 

Act of 1940, and Foreside Fund 

Services, LLC (the ‘‘Distributor’’), a 

Delaware limited liability company and 

broker-dealer registered under the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’). 

Filing Dates: The application was 

filed on October 3, 2018. 

Hearing or Notification of Hearing: An 

order granting the requested relief will 


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66786 Federal Register / Vol. 83, No. 247 / Thursday, December 27, 2018 / Notices 

1Applicants request that the order apply to the 

Initial Funds, as well as to future series of the Trust, 

and any other open-end management investment 

companies or series thereof (each, included in the 

term ‘‘Fund’’), each of which will operate as an 

actively-managed ETF. Any Fund will (a) be 

advised by the Initial Adviser or an entity 

controlling, controlled by, or under common 

control with the Initial Adviser (each, an 

‘‘Adviser’’) and (b) comply with the terms and 

conditions of the application. 

2The requested relief would apply to direct sales 

of shares in Creation Units by a Fund to a Fund of 

Funds and redemptions of those shares. Applicants, 

moreover, are not seeking relief from section 17(a) 

be issued unless the Commission orders 

a hearing. Interested persons may 

request a hearing by writing to the 

Commission’s Secretary and serving 

applicants with a copy of the request, 

personally or by mail. Hearing requests 

should be received by the Commission 

by 5:30 p.m. on January 14, 2019, and 

should be accompanied by proof of 

service on applicants, in the form of an 

affidavit, or for lawyers, a certificate of 

service. Pursuant to rule 0–5 under the 

Act, hearing requests should state the 

nature of the writer’s interest, any facts 

bearing upon the desirability of a 

hearing on the matter, the reason for the 

request, and the issues contested. 

Persons who wish to be notified of a 

hearing may request notification by 

writing to the Commission’s Secretary. 

ADDRESSES: Secretary, Securities and 

Exchange Commission, 100 F Street NE, 

Washington, DC 20549–1090; 

Applicants: Michael W. Mundt, Esq., 

Stradley Ronon Stevens & Young, LLP, 

1250 Connecticut Avenue NW, Ste. 500, 

Washington, DC 20036; Louise Anne 

Poirier, O’Shares Investment Advisers, 

LLC, 1010 Sherbrooke St. West, Suite 

2105, Montreal, QC H3A 2R7 Canada. 

FOR FURTHER INFORMATION CONTACT: 

Bruce R. MacNeil, Senior Counsel, at 

(202) 551–6817, or Kaitlin C. Bottock, 

Branch Chief, at (202) 551–6825 

(Division of Investment Management, 

Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

website by searching for the file 

number, or for an applicant using the 

Company name box, at http://

www.sec.gov/search/search.htm or by 

calling (202) 551–8090. 

Summary of the Application 

1. Applicants request an order that 

would allow Funds to operate as 

actively-managed exchange traded 

funds (‘‘ETFs’’).1 Fund shares will be 

purchased and redeemed at their NAV 

in Creation Units only. All orders to 

purchase Creation Units and all 

redemption requests will be placed by 

or through an ‘‘Authorized Participant,’’ 

which will have signed a participant 

agreement with the Distributor. Shares 

will be listed and traded individually on 

a national securities exchange, where 

share prices will be based on the current 

bid/offer market. Certain Funds may 

operate as Feeder Funds in a masterfeeder structure. Any order granting the 

requested relief would be subject to the 

terms and conditions stated in the 

application. 

2. Each Fund will consist of a 

portfolio of securities and other assets 

and investment positions (‘‘Portfolio 

Instruments’’). Each Fund will disclose 

on its website the identities and 

quantities of the Portfolio Instruments 

that will form the basis for the Fund’s 

calculation of NAV at the end of the 

day. 

3. Shares will be purchased and 

redeemed in Creation Units and 

generally on an in-kind basis. Except 

where the purchase or redemption will 

include cash under the limited 

circumstances specified in the 

application, purchasers will be required 

to purchase Creation Units by 

depositing specified instruments 

(‘‘Deposit Instruments’’), and 

shareholders redeeming their shares 

will receive specified instruments 

(‘‘Redemption Instruments’’). The 

Deposit Instruments and the 

Redemption Instruments will each 

correspond pro rata to the positions in 

the Fund’s portfolio (including cash 

positions) except as specified in the 

application. 

4. Because shares will not be 

individually redeemable, applicants 

request an exemption from section 

5(a)(1) and section 2(a)(32) of the Act 

that would permit the Funds to register 

as open-end management investment 

companies and issue shares that are 

redeemable in Creation Units only. 

5. Applicants also request an 

exemption from section 22(d) of the Act 

and rule 22c-1 under the Act as 

secondary market trading in shares will 

take place at negotiated prices, not at a 

current offering price described in a 

Fund’s prospectus, and not at a price 

based on NAV. Applicants state that (a) 

secondary market trading in shares does 

not involve a Fund as a party and will 

not result in dilution of an investment 

in shares, and (b) to the extent different 

prices exist during a given trading day, 

or from day to day, such variances occur 

as a result of third-party market forces, 

such as supply and demand. Therefore, 

applicants assert that secondary market 

transactions in shares will not lead to 

discrimination or preferential treatment 

among purchasers. Finally, applicants 

represent that share market prices will 

be disciplined by arbitrage 

opportunities, which should prevent 

shares from trading at a material 

discount or premium from NAV. 

6. With respect to Funds that hold 

non-U.S. Portfolio Instruments and that 

effect creations and redemptions of 

Creation Units in kind, applicants 

request relief from the requirement 

imposed by section 22(e) in order to 

allow such Funds to pay redemption 

proceeds within fifteen calendar days 

following the tender of Creation Units 

for redemption. Applicants assert that 

the requested relief would not be 

inconsistent with the spirit and intent of 

section 22(e) to prevent unreasonable, 

undisclosed or unforeseen delays in the 

actual payment of redemption proceeds. 

7. Applicants request an exemption to 

permit Funds of Funds to acquire Fund 

shares beyond the limits of section 

12(d)(1)(A) of the Act; and the Funds, 

and any principal underwriter for the 

Funds, and/or any broker or dealer 

registered under the Exchange Act, to 

sell shares to Funds of Funds beyond 

the limits of section 12(d)(1)(B) of the 

Act. The application’s terms and 

conditions are designed to, among other 

things, help prevent any potential (i) 

undue influence over a Fund through 

control or voting power, or in 

connection with certain services, 

transactions, and underwritings, (ii) 

excessive layering of fees, and (iii) 

overly complex fund structures, which 

are the concerns underlying the limits 

in sections 12(d)(1)(A) and (B) of the 

Act. 

8. Applicants request an exemption 

from sections 17(a)(1) and 17(a)(2) of the 

Act to permit a person who is an 

affiliated person, as defined in section 

2(a)(3) of the Act (‘‘Affiliated Person’’), 

or an affiliated person of an Affiliated 

Person (‘‘Second-Tier Affiliate’’), of the 

Funds, solely by virtue of certain 

ownership interests, to effectuate 

purchases and redemptions in-kind. The 

deposit procedures for in-kind 

purchases of Creation Units and the 

redemption procedures for in-kind 

redemptions of Creation Units will be 

the same for all purchases and 

redemptions and Deposit Instruments 

and Redemption Instruments will be 

valued in the same manner as those 

Portfolio Instruments currently held by 

the Funds. Applicants also seek relief 

from the prohibitions on affiliated 

transactions in section 17(a) to permit a 

Fund to sell its shares to and redeem its 

shares from a Fund of Funds, and to 

engage in the accompanying in-kind 

transactions with the Fund of Funds.2


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Federal Register / Vol. 83, No. 247 / Thursday, December 27, 2018 / Notices 66787 

for, and the requested relief will not apply to, 

transactions where a Fund could be deemed an 

Affiliated Person, or a Second-Tier Affiliate, of a 

Fund of Funds because an investment adviser to the 

Funds is also an investment adviser to a Fund of 

Funds. 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 84279 

(Sept. 25, 2018), 83 FR 49437 (‘‘Notice’’). 

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

5See Securities Exchange Act Release No. 84576, 

83 FR 58315 (Nov. 19, 2018). The Commission 

designated December 30, 2018, as the date by which 

it should approve, disapprove, or institute 

proceedings to determine whether to disapprove the 

proposed rule change. 

6 15 U.S.C. 78s(b)(2)(B). 

7The Commission notes that additional aspects 

and information regarding the proposal can be 

found in the Notice. See Notice, supra note 3. 

8Equity Index-Linked Securities are securities 

that provide for the payment at maturity based on 

the performance of an underlying index or indexes 

of equity securities, securities of closed-end 

management investment companies registered 

under the Investment Company Act of 1940 (‘‘1940 

Act’’), and/or Investment Company Units (as 

described in NYSE Arca Rule 5.2–E(j)(3)). In the 

proposal, the Exchange also refers to these 

securities as ‘‘Exchange-Traded Notes’’ or ‘‘ETNs.’’ 

9NYSE Arca Rule 5.2–E(j)(6)(B)(I)(1)(b)(v) 

provides that all component securities shall be 

either: (A) Securities (other than foreign country 

securities and American Depository Receipts 

(‘‘ADRs’’)) that are (x) issued by a 1934 Act 

reporting company or by an investment company 

registered under the 1940 Act, which in each case 

is listed on a national securities exchange, and (y) 

an ‘‘NMS stock’’ (as defined in Rule 600 of SEC 

Regulation NMS); or (B) Foreign country securities 

or ADRs, provided that foreign country securities or 

foreign country securities underlying ADRs having 

their primary trading market outside the United 

States on foreign trading markets that are not 

members of the Intermarket Surveillance Group 

(‘‘ISG’’) or parties to comprehensive surveillance 

sharing agreements with the Exchange will not in 

the aggregate represent more than 50% of the dollar 

weight of the index, and provided further that: (i) 

The securities of any one such market do not 

represent more than 20% of the dollar weight of the 

index; and (ii) the securities of any two such 

markets do not represent more than 33% of the 

dollar weight of the index. 

10NYSE Arca Rule 5.2–E(j)(3) provides that the 

term ‘‘US Component Stock’’ shall mean an equity 

security that is registered under Sections 12(b) or 

12(g) of the Securities Exchange Act of 1934 or an 

American Depositary Receipt, the underlying equity 

security of which is registered under Sections 12(b) 

or 12(g) of the Securities Exchange Act of 1934. 

11NYSE Arca Rule 5.2–E(j)(3) provides that the 

term ‘‘Non-US Component Stock’’ shall mean an 

equity security that is not registered under Sections 

12(b) or 12(g) of the Securities Exchange Act of 

1934 and that is issued by an entity that (a) is not 

organized, domiciled or incorporated in the United 

States, and (b) is an operating company (including 

Real Estate Investment Trusts (REITS) and income 

trusts, but excluding investment trusts, unit trusts, 

mutual funds, and derivatives). 

12The text of proposed NYSE Arca Rule 5.2– 

E(j)(6)(B)(I)(1)(b)(v)(1) is comparable to the 

requirement for US Component Stocks in 

Commentary .01(a)(A)(5) to NYSE Arca Rule 5.2– 

E(j)(3). The text of proposed NYSE Arca Rule 5.2– 

E(j)(6)(B)(I)(1)(b)(v)(2) is comparable to the 

Continued 

The purchase of Creation Units by a 

Fund of Funds directly from a Fund will 

be accomplished in accordance with the 

policies of the Fund of Funds and will 

be based on the NAVs of the Funds. 

9. Applicants also request relief to 

permit a Feeder Fund to acquire shares 

of another registered investment 

company managed by the Adviser 

having substantially the same 

investment objectives as the Feeder 

Fund (‘‘Master Fund’’) beyond the 

limitations in section 12(d)(1)(A) and 

permit the Master Fund, and any 

principal underwriter for the Master 

Fund, to sell shares of the Master Fund 

to the Feeder Fund beyond the 

limitations in section 12(d)(1)(B). 

10. Section 6(c) of the Act permits the 

Commission to exempt any persons or 

transactions from any provision of the 

Act if such exemption is necessary or 

appropriate in the public interest and 

consistent with the protection of 

investors and the purposes fairly 

intended by the policy and provisions of 

the Act. Section 12(d)(1)(J) of the Act 

provides that the Commission may 

exempt any person, security, or 

transaction, or any class or classes of 

persons, securities, or transactions, from 

any provision of section 12(d)(1) if the 

exemption is consistent with the public 

interest and the protection of investors. 

Section 17(b) of the Act authorizes the 

Commission to grant an order 

permitting a transaction otherwise 

prohibited by section 17(a) if it finds 

that (a) the terms of the proposed 

transaction are fair and reasonable and 

do not involve overreaching on the part 

of any person concerned; (b) the 

proposed transaction is consistent with 

the policies of each registered 

investment company involved; and (c) 

the proposed transaction is consistent 

with the general purposes of the Act. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–27984 Filed 12–26–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84863; File No. SR– 

NYSEArca–2018–67] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove a Proposed 

Rule Change To Amend NYSE Arca 

Rule 5.2–E(j)(6) Relating to Equity 

Index-Linked Securities Listing 

Standards Set Forth in NYSE Arca Rule 

5.2–E(j)(6)(B)(I) 

December 19, 2018. 

On September 10, 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’’ or 

‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

amend listing standards set forth in 

NYSE Arca Rule 5.2–E(j)(6)(B)(I) relating 

to criteria applicable to components of 

an index underlying an issue of Equity 

Index-Linked Securities. The proposed 

rule change was published for comment 

in the Federal Register on October 1, 

2018.3

On November 13, 2018, 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 The Commission 

has received no comment letters on the 

proposed rule change. This order 

institutes proceedings under Section 

19(b)(2)(B) of the Act 6 to determine 

whether to approve or disapprove the 

proposed rule change. 

I. Summary of the Proposal 7

NYSE Arca Rule 5.2–E(j)(6)(B)(I) sets 

forth the listing standards applicable to 

Equity Index-Linked Securities.8 The 

Exchange proposes to amend NYSE 

Arca Rule 5.2–E(j)(6)(B)(I) relating to 

criteria applicable to components of an 

index underlying an issue of Equity 

Index-Linked Securities, as described 

below.9

Proposed Amendments to NYSE Arca 

Rule 5.2–E(j)(6)(B)(I)(1)(b)(v) 

The Exchange proposes to amend 

NYSE Arca Rule 5.2–E(j)(6)(B)(I)(1)(b)(v) 

to provide that all component securities 

of an index underlying an issue of 

Equity Index-Linked Securities shall be 

either (1) U.S. Component Stocks (as 

described in NYSE Arca Rule 5.2– 

E(j)(3)) 10 that are listed on a national 

securities exchange and are NMS Stocks 

as defined in Rule 600 of Regulation 

NMS under the Exchange Act; or (2) 

Non-U.S. Component Stocks (as 

described in NYSE Arca Rule 5.2– 

E(j)(3)) 11 that are listed and traded on 

an exchange that has last-sale 

reporting.12 The proposed amendment, 


khammond on DSK30JT082PROD with NOTICES