Federal Register / Vol. 83, No. 247 / Thursday, December 27, 2018 / Notices 66783 

3 17 CFR 202.190. 

4See ‘‘OMB Report to the Congress on the Joint 

Committee Reductions for Fiscal Year 2019’’, 

Appendix page 16 of 17 available at https://

www.whitehouse.gov/wp-content/uploads/2018/02/ 

Sequestration_Report_February_2018.pdf . 

addition, the PCAOB must allocate the 

annual accounting support fee among 

issuers and among brokers and dealers. 

Section 109(b) of the Sarbanes-Oxley 

Act directs the PCAOB to establish a 

budget for each fiscal year in accordance 

with the PCAOB’s internal procedures, 

subject to approval by the Commission. 

Rule 190 of Regulation P governs the 

Commission’s review and approval of 

PCAOB budgets and annual accounting 

support fees.3 This budget rule 

provides, among other things, a 

timetable for the preparation and 

submission of the PCAOB budget and 

for Commission actions related to each 

budget, a description of the information 

that should be included in each budget 

submission, limits on the PCAOB’s 

ability to incur expenses and obligations 

except as provided in the approved 

budget, procedures relating to 

supplemental budget requests, 

requirements for the PCAOB to furnish 

on a quarterly basis certain budgetrelated information, and a list of 

definitions that apply to the rule and to 

general discussions of PCAOB budget 

matters. 

In accordance with the budget rule, in 

March 2018 the PCAOB provided the 

Commission with a narrative 

description of its program issues and 

outlook for the 2019 budget year. In 

response, the Commission provided the 

PCAOB with economic assumptions and 

general budgetary guidance for the 2019 

budget year. The PCAOB subsequently 

delivered a preliminary budget and 

budget justification to the Commission. 

Staff from the Commission’s Office of 

the Chief Accountant and Office of 

Financial Management dedicated a 

substantial amount of time to the review 

and analysis of the PCAOB’s programs, 

projects, and budget estimates; reviewed 

the PCAOB’s estimates of 2018 actual 

spending; and attended several meetings 

with management and staff of the 

PCAOB to further develop their 

understanding of the PCAOB’s budget 

and operations. During the course of 

this review, Commission staff relied 

upon representations and supporting 

documentation from the PCAOB. Based 

on this review, the Commission issued 

a ‘‘passback’’ letter to the PCAOB on 

November 1, 2018. On November 15, 

2018, the PCAOB adopted its 2019 

budget and accounting support fee 

during an open meeting, and 

subsequently submitted that budget to 

the Commission for approval. 

After considering the above, the 

Commission did not identify any 

proposed disbursements in the 2019 

budget adopted by the PCAOB that are 

not properly recoverable through the 

annual accounting support fee, and the 

Commission believes that the aggregate 

proposed 2019 annual accounting 

support fee does not exceed the 

PCAOB’s aggregate recoverable budget 

expenses for 2019. 

The Commission also acknowledges 

the PCAOB’s updated strategic plan, 

which involved extensive outreach, and 

encourages the PCAOB to continue 

keeping the Commission and its staff 

apprised of significant new 

developments during its 

implementation. In addition, the 

PCAOB should submit its 2018 annual 

report to the Commission by April 1, 

2019. 

The Commission directs the PCAOB 

during 2019 to schedule monthly 

meetings with the Commission’s staff 

about the transformation initiatives that 

are expected to have a significant 

impact on the 2020 PCAOB budget. In 

addition, the Commission directs the 

Board during 2019 to continue 

providing quarterly updates to the 

Commission that describe (i) the 

activities and progress towards the 

stated goals of the PCAOB’s Office of 

Economic and Risk Analysis (‘‘ERA’’); 

(ii) detailed information about the state 

of the PCAOB’s information technology 

program as administered by the 

PCAOB’s Office of Information 

Technology (‘‘OIT); and (iii) information 

about the PCAOB’s inspections program 

as administered by the PCAOB’s 

Division of Registration and Inspections 

(‘‘DRI’’), consistent with the quarterly 

updates reflected in the Commission’s 

Order approving the PCAOB’s annual 

budget and accounting support fee for 

calendar year 2018 dated January 10, 

2018. In addition, the quarterly updates 

should include updates on the 

transformation projects for ERA, OIT, 

and DRI. 

The Commission understands that the 

Office of Management and Budget 

(‘‘OMB’’) has determined that the 2019 

budget of the PCAOB is subject to 

sequestration under the Budget Control 

Act of 2011.4 For 2018, the PCAOB 

sequestered $17.2 million. That amount 

will become available in 2019. For 2019, 

the sequestration amount will be 6.2% 

or $17.0 million. Consequently, we 

expect the PCAOB will have 

approximately $0.2 million in excess 

funds available from the 2018 

sequestration for spending in 2019. 

Accordingly, the PCAOB has reduced its 

accounting support fee for 2019 by 

approximately $0.2 million. 

The Commission has determined that 

the PCAOB’s 2019 budget and annual 

accounting support fee are consistent 

with Section 109 of the Sarbanes-Oxley 

Act. Accordingly, 

It is ordered, pursuant to Section 109 

of the Sarbanes-Oxley Act, that the 

PCAOB budget and annual accounting 

support fee for calendar year 2019 are 

approved. 

By the Commission. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–27978 Filed 12–26–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

33332; 812–14961] 

RYZZ Capital Management, LLC, 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) of the Act for an exemption 

from sections 12(d)(1)(A) and 

12(d)(1)(B) of the Act. The requested 

order would permit (a) activelymanaged 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 


khammond on DSK30JT082PROD with NOTICES
66784 Federal Register / Vol. 83, No. 247 / Thursday, December 27, 2018 / Notices 

1Applicants request that the order apply to the 

new series of the Trust as well as to additional 

series of the Trust and any other open-end 

management investment company or series thereof 

that currently exist or that may be created in the 

future (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 such 

entity and any successor thereto is included in the 

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

conditions of the application. For purposes of the 

requested order, the term ‘‘successor’’ is limited to 

an entity that results from a reorganization into 

another jurisdiction or a change in the type of 

business organization. 

redeem Creation Units in-kind in a 

master-feeder structure. 

Applicants: RYZZ Capital 

Management, LLC (the ‘‘Initial 

Adviser’’), a Delaware limited liability 

company registered as an investment 

adviser under the Investment Advisers 

Act of 1940, ETF Series Solutions (the 

‘‘Trust’’), a Delaware statutory trust 

registered under the Act as an open-end 

management investment company with 

multiple series, and Quasar Distributors, 

LLC (the ‘‘Initial Distributor’’), a 

Delaware limited liability company 

registered as a broker under the 

Securities Exchange Act of 1934. 

Filing Dates: The application was 

filed on October 4, 2018. 

Hearing or Notification of Hearing: An 

order granting the requested relief will 

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: RYZZ Capital Management, 

LLC, 9260 East Raintree Drive, Suite 

100, Scottsdale, Arizona 85260, ETF 

Series Solutions, 615 East Michigan 

Street, 4th Floor, Milwaukee, Wisconsin 

53202, and Quasar Distributors, LLC, 

777 East Wisconsin Avenue, 6th Floor, 

Milwaukee, Wisconsin 53202. 

FOR FURTHER INFORMATION CONTACT: Jill 

Corrigan, Senior Counsel, at (202) 551– 

8929, or Parisa Haghshenas, Branch 

Chief, at (202) 551–6723 (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 only 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 persons that are affiliated 

persons, or second-tier affiliates, of the 

Funds, solely by virtue of certain 


khammond on DSK30JT082PROD with NOTICES
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 


khammond on DSK30JT082PROD with NOTICES