Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 82011 

1The registrant filed its most recent Form ADV, 

which was an ‘‘other-than-annual amendment,’’ on 

May 31, 2017. 

2Rule 204–1 under the Act requires any adviser 

that is required to complete Form ADV to amend 

the form at least annually and to submit the 

amendments electronically through the Investment 

Adviser Registration Depository. 

3 17 CFR 200.30–5(e)(2). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 89874 

(September 15, 2020), 85 FR 59338 (‘‘Notice’’). 

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

5See Securities Exchange Act Release No. 90296, 

85 FR 70696 (November 5, 2020). The Commission 

designated December 20, 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 15 U.S.C. 78s(b)(2)(B). 

7See Securities Exchange Act Release Nos. 89185 

(June 29, 2020), 85 FR 40328 (July 6, 2020) (SR– 

NYSEArca–2019–95) (Notice of Filing of 

Amendment No. 6 and Order Granting Accelerated 

Approval of a Proposed Rule Change, as Modified 

by Amendment No. 6, to Adopt NYSE Arca Rule 

8.601–E to Permit the Listing and Trading of Active 

Proxy Portfolio Shares and To List and Trade 

Shares of the Natixis U.S. Equity Opportunities ETF 

Under Proposed NYSE Arca Rule 8.601–E) (‘‘Active 

Proxy Portfolio Shares Approval Order’’). 

8Rule 8.601–E(c)(3) defines the term ‘‘Proxy 

Portfolio’’ as a specified portfolio of securities, 

other financial instruments and/or cash designed to 

track closely the daily performance of the Actual 

Portfolio of a series of Active Proxy Portfolio Shares 

as provided in the exemptive relief pursuant to the 

1940 Act applicable to such series. Rule 8.601– 

E(c)(2) defines the term ‘‘Actual Portfolio’’ as 

identities and quantities of the securities and other 

assets held by the Investment Company that shall 

form the basis for the Investment Company’s 

calculation of NAV at the end of the business day. 

adviser under section 203A of the Act, 

the Commission shall by order, cancel 

the registration of such person. 

Section 203A of the Act prohibits an 

investment adviser from registering with 

the Commission under certain 

circumstances. Rule 203A–2(d) under 

the Act provides an exemption to this 

prohibition, permitting an adviser to 

register with the Commission if the 

adviser would otherwise be required to 

register as an investment adviser with 

15 or more state securities authorities 

(‘‘multi-state adviser exemption’’). The 

registrant indicated on its most recently 

filed Form ADV that it is relying on the 

multi-state adviser exemption to register 

with the Commission and that it has no 

clients and no assets under 

management.1 It appears that the 

registrant is not eligible for the multistate adviser exemption because it is not 

required to register as an investment 

adviser with 15 or more state securities 

authorities. Therefore, it appears that 

the registrant is prohibited from 

registering as an investment adviser 

with the Commission. Furthermore, the 

registrant has not filed a Form ADV 

annual updating amendment as required 

by rule 204–1 under the Act.2 Therefore, 

it appears that the registrant is not in 

existence or otherwise not engaged in 

business as an investment adviser. 

Accordingly, the Commission believes 

that reasonable grounds exist for a 

finding that the registrant is not eligible 

to be registered with the Commission as 

an investment adviser and that the 

registration should be cancelled 

pursuant to section 203(h) of the Act. 

Notice is also given that any 

interested person may, January 8, 2021, 

at 5:30 p.m., submit to the Commission 

in writing a request for a hearing on the 

cancellation, accompanied by a 

statement as to the nature of his or her 

interest, the reason for such request, and 

the issues, if any, of fact or law 

proposed to be controverted, and he or 

she may request that he or she be 

notified if the Commission should order 

a hearing thereon. Any such 

communication should be emailed to 

the Commission’s Secretary at 

Secretarys-Office@sec.gov. 

At any time after January 8, 2021, the 

Commission may issue an order 

cancelling the registration, upon the 

basis of the information stated above, 

unless an order for a hearing on the 

cancellation shall be issued upon 

request or upon the Commission’s own 

motion. Persons who requested a 

hearing, or who requested to be advised 

as to whether a hearing is ordered, will 

receive any notices and orders issued in 

this matter, including the date of the 

hearing (if ordered) and any 

postponements thereof. Any adviser 

whose registration is cancelled under 

delegated authority may appeal that 

decision directly to the Commission in 

accordance with rules 430 and 431 of 

the Commission’s rules of practice (17 

CFR 201.430 and 431). 

ADDRESSES: The Commission: 

Secretarys-Office@sec.gov. 

FOR FURTHER INFORMATION CONTACT: 

Alexis Palascak, Senior Counsel at 202– 

551–6999; SEC, Division of Investment 

Management, Investment Adviser 

Regulation Office, 100 F Street NE, 

Washington, DC 20549–8549. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority.3

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–27788 Filed 12–16–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90652; File No. SR– 

NYSEArca–2020–77] 

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 8.601–E To Adopt Generic Listing 

Standards for Active Proxy Portfolio 

Shares 

December 11, 2020. 

I. Introduction 

On August 31, 2020, NYSE Arca, Inc. 

(‘‘NYSE Arca’’ or ‘‘Exchange’’) 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 NYSE Arca Rule 8.601–E to 

adopt generic listing standards for 

Active Proxy Portfolio Shares. The 

proposed rule change was published for 

comment in the Federal Register on 

September 21, 2020.3 On October 30, 

2020, pursuant to Section 19(b)(2) of the 

Exchange 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 comments on the proposed 

rule change. The Commission is 

publishing this order to solicit 

comments on the proposed rule change 

from interested persons and to institute 

proceedings pursuant to Section 

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

whether to approve or disapprove the 

proposed rule change. 

II. Description of the Proposed Rule 

Change 

Earlier this year, the Commission 

approved the Exchange’s proposal to 

adopt listing standards for Active Proxy 

Portfolio Shares as set forth in NYSE 

Arca Rule 8.601–E.7 Active Proxy 

Portfolio Shares are securities (a) issued 

by an investment company (‘‘Investment 

Company’’) registered under the 

Investment Company Act of 1940 

(‘‘1940 Act’’) organized as an open-end 

management investment company that 

invests in a portfolio of securities 

selected by the Investment Company’s 

investment adviser consistent with the 

Investment Company’s investment 

objectives and policies; (b) issued in a 

specified minimum number of shares, or 

multiples thereof, in return for a deposit 

by the purchaser of the Proxy Portfolio 8

and/or cash with a value equal to the 

next determined net asset value 

(‘‘NAV’’); (c) when aggregated in the 

82012 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 

9See NYSE Arca Rule 8.601–E(c)(1). 

10Rule 8.601–E(d)(2)(A) requires for continued 

listing on the Exchange that each series of Active 

Proxy Portfolio Shares must make its Proxy 

Portfolio publicly available on its website at least 

once daily and must make it available to all market 

participants at the same time. Pursuant to Rule 

8.601–E(c)(3), the website for each series of Active 

Proxy Portfolio Shares must disclose the 

information regarding the Proxy Portfolio as 

provided in the exemptive relief pursuant to the 

1940 Act applicable to such series, including the 

following, to the extent applicable: (i) Ticker 

symbol; (ii) CUSIP or other identifier; (iii) 

description of holding; (iv) quantity of each security 

or other asset held; and (v) percentage weighting of 

the holding in the portfolio. 

11Rule 8.601–E(d)(2)(A) requires for continued 

listing on the Exchange that each series of Active 

Proxy Portfolio Shares must publicly disseminate 

its Actual Portfolio within at least 60 days following 

the end of every fiscal quarter and must make it 

publicly available to all market participants at the 

same time. 

12The Commission has approved the listing and 

trading on the Exchange of series of Active Proxy 

Portfolio Shares pursuant to NYSE Arca Rule 

8.601–E. See Active Proxy Portfolio Shares 

Approval Order, supra note 7, Securities Exchange 

Act Release Nos. 89192 (June 30, 2020), 85 FR 

40699 (July 7, 2020) (SR–NYSEArca–2019–96) 

(Notice of Filing of Amendment No. 5 and Order 

Granting Accelerated Approval of a Proposed Rule 

Change, as Modified by Amendment No. 5, to List 

and Trade Two Series of Active Proxy Portfolio 

Shares Issued by the American Century ETF Trust 

under NYSE Arca Rule 8.601–E) (‘‘American 

Century Approval Order’’); 89191 (June 30, 2020), 

85 FR 40358 (July 6, 2020) (SR–NYSEArca–2019– 

92) (Notice of Filing of Amendment No. 3 and 

Order Granting Accelerated Approval of a Proposed 

Rule Change, as Modified by Amendment No. 3, to 

List and Trade Four Series of Active Proxy Portfolio 

Shares Issued by T. Rowe Price Exchange-Traded 

Funds, Inc. under NYSE Arca Rule 8.601–E) (‘‘T. 

Rowe Price Approval Order’’); 89438 (July 31, 2020) 

(SR–NYSEArca–2020–51) (Order Granting Approval 

of a Proposed Rule Change, as Modified by 

Amendment No. 2, to List and Trade Shares of 

Natixis Vaughan Nelson Select ETF and Natixis 

Vaughan Nelson MidCap ETF under NYSE Arca 

Rule 8.601–E) (‘‘Natixis Approval Order,’’ and 

collectively with the Natixis Approval Order, 

American Century Approval Order, and T. Rowe 

Price Approval Order, the ‘‘Approval Orders’’). 

13 17 CFR 240.19b–4(e). Rule 19b–4(e)(1) under 

the Act provides that the listing and trading of a 

new derivative securities product by a selfregulatory organization (‘‘SRO’’) is not deemed a 

proposed rule change, pursuant to paragraph (c)(1) 

of Rule 19b–4, if the Commission has approved, 

pursuant to section 19(b) of the Act, the SRO’s 

trading rules, procedures and listing standards for 

the product class that would include the new 

derivative securities product and the SRO has a 

surveillance program for the product class. See 17 

CFR 240.19b–4(e)(1). Under Rule 19b–4(e), the term 

‘‘new derivative securities product’’ means any type 

of option, warrant, hybrid securities product or any 

other security, other than a single equity option or 

a security futures product, whose value is based, in 

whole or in part, upon the performance of, or 

interest in, an underlying instrument. See 17 CFR 

240.19b–4(e). Under Rule 19b–4(c)(1), a stated 

policy, practice, or interpretation of the SRO shall 

be deemed to be a proposed rule change unless it 

is reasonably and fairly implied by an existing rule 

of the SRO. 17 CFR 240.19b–4(c)(1). 17 CFR 

240.19b–4(c)(1). 

14For example, if the components of a series of 

Active Proxy Portfolio Shares included a security or 

asset that is not specified in proposed amended 

Commentary .01, the Exchange would file a 

separate proposed rule change with the 

Commission to list the series of Active Proxy 

Portfolio Shares. 

same specified minimum number of 

Active Proxy Portfolio Shares, or 

multiples thereof, may be redeemed at 

a holder’s request in return for the Proxy 

Portfolio and/or cash to the holder by 

the issuer with a value equal to the next 

determined NAV; and (d) the portfolio 

holdings for which are disclosed within 

at least 60 days following the end of 

every fiscal quarter.9 Further, a series of 

Active Proxy Portfolio Shares discloses 

its Proxy Portfolio on a daily basis,10

and discloses its Actual Portfolio on a 

quarterly basis.11

NYSE Arca Rule 8.601–E, 

Commentary .01, currently requires that 

the Exchange submit a proposed rule 

change with the Commission to list and 

trade each new series of Active Proxy 

Portfolio Shares.12 The Exchange 

proposes to amend NYSE Arca Rule 

8.601–E to adopt ‘‘generic’’ listing 

standards that would allow the 

Exchange to approve the listing and 

trading (including pursuant to unlisted 

trading privileges) of series of Active 

Proxy Portfolio Shares that satisfy those 

generic listing standards pursuant to 

Rule 19b–4(e) under the Act.13

A. Proposed Amendments to Rule 

8.601–E, Commentary .01 

The Exchange proposes to amend 

Commentary .01 to Rule 8.601–E to state 

that the Exchange may approve Active 

Proxy Portfolio Shares for listing and/or 

trading (including pursuant to unlisted 

trading privileges) pursuant to Rule 

19b–4(e) under the Act. The Exchange 

would also specify within Commentary 

.01 that components of a series of Active 

Proxy Portfolio Shares listed pursuant to 

Rule 19b–4(e) shall satisfy the criteria 

set forth in Rule 8.601–E upon initial 

listing and on a continual basis. In 

addition, the Exchange would specify 

that it will file separate proposals under 

Section 19(b) of the Act before the 

listing and trading of a series of Active 

Proxy Portfolio Shares with components 

that do not satisfy the criteria set forth 

in proposed amended Commentary .01 

or components other than those 

specified in amended Commentary 

.01.14

Proposed Commentary .01(a) to Rule 

8.601–E would provide that the Actual 

Portfolio and Proxy Portfolio for a series 

of Active Proxy Portfolio Shares would 

include only the following components: 

(1) U.S. exchange-traded securities 

that are common stocks; preferred 

stocks; American Depositary Receipts; 

and real estate investment trusts; 

(2) Foreign common stocks that (a) are 

listed on a foreign exchange that is a 

member of the Intermarket Surveillance 

Group or with which the Exchange has 

in place a comprehensive surveillance 

sharing agreement; and (b) trade on such 

foreign exchange contemporaneously 

with shares of a series of Active Proxy 

Portfolio Shares in the Exchange’s Core 

Trading Session; 

(3) U.S. exchange-traded funds that 

are listed under the following NYSE 

Arca rules: Investment Company Units 

(Rule 5.2–E(j)(3)); Exchange-Traded 

Fund Shares (Rule 5.2–E(j)(8)); Portfolio 

Depositary Receipts (Rule 8.100–E); 

Managed Fund Shares (Rule 8.600–E); 

Active Proxy Portfolio Shares (Rule 

8.601–E); and Managed Portfolio Shares 

(Rule 8.900–E); 

(4) Equity Gold Shares (listed under 

NYSE Arca Rule 5.2–E(j)(5)); 

(5) Index-Linked Securities (listed 

under NYSE Arca Rule 5.2–E(j)(6)); 

(6) Commodity-Based Trust Shares 

(listed under NYSE Arca Rule 8.201–E); 

(7) Currency Trust Shares (listed 

under NYSE Arca Rule 8.202–E); 

(8) The following securities, which 

are required to be organized as 

commodity pools: Commodity Index 

Trust Shares (listed under NYSE Arca 

Rule 8.203–E); Commodity Futures 

Trust Shares (listed under NYSE Arca 

Rule 8.204–E); Trust Units (listed under 

NYSE Arca Rule 8.500–E); and Managed 

Trust Securities (listed under NYSE 

Arca Rule 8.700–E); 

(9) The following securities if 

organized as commodity pools: Trust 

Issued Receipts (listed under NYSE 

Arca Rule 8.200–E) and Partnership 

Units (listed under NYSE Arca Rule 

8.300–E); 

(10) U.S. exchange-traded futures that 

trade contemporaneously with shares of 

a series of Active Proxy Portfolio Shares 

in the Exchange’s Core Trading Session; 

and 

(11) Cash and cash equivalents, which 

cash equivalents would be limited to 

short-term U.S. Treasury securities, 

government money market funds, and 

repurchase agreements. 

Proposed Commentary .01(b) to Rule 

8.601–E would provide that a series of 

Active Proxy Portfolio Shares will not 

hold short positions in securities and 

other financial instruments referenced 

in the list of permitted investments in 

Commentary .01(a). Proposed 

Commentary .01(c) would provide that 

the securities referenced in proposed 

Commentary .01(a)(3)–(9) would also 

include securities listed on another 

national securities exchange pursuant to 

substantially equivalent listing rules. 

The Exchange states that the 

securities and financial instruments 

enumerated in proposed Commentary 

.01(a) to Rule 8.601–E are consistent 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 82013 

15See supra note 12. 

16 15 U.S.C. 78s(b)(2)(B). 

17 Id. 

18 15 U.S.C. 78f(b)(5). 

19See supra note 7 and accompanying text. The 

Commission notes that it also recently approved 

substantively similar rules for Cboe BZX Exchange, 

Inc.’s Tracking Fund Shares and The Nasdaq Stock 

Market LLC’s Proxy Portfolio Shares. See Securities 

Exchange Act Release Nos. 88887 (May 15, 2020), 

85 FR 30990 (May 21, 2020) (SR–CboeBZX–2019– 

107) (Notice of Filing of Amendment No. 5 and 

Order Granting Accelerated Approval of a Proposed 

Rule Change, as Modified by Amendment No. 5, to 

Adopt Rule 14.11(m), Tracking Fund Shares, and to 

List and Trade Shares of the Fidelity Blue Chip 

Value ETF, Fidelity Blue Chip Growth ETF, and 

Fidelity New Millennium ETF) and 89110 (June 22, 

2020), 85 FR 38461 (June 26, 2020) (SR–NASDAQ– 

2020–032) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change to Adopt 

Nasdaq Rule 5750 to List and Trade Proxy Portfolio 

Shares). 

20The Exchange states that the following series of 

Active Proxy Portfolio Shares are currently listed 

and traded on the Exchange: American Century Mid 

Cap Growth Impact ETF, American Century 

Sustainable Equity ETF, T. Rowe Price Blue Chip 

Growth ETF, T. Rowe Price Dividend Growth ETF, 

T. Rowe Price Growth Stock ETF, and T. Rowe 

Price Equity Income ETF. See American Century 

Approval Order and T. Rowe Price Approval Order, 

supra note 12. The Commission notes that the three 

Natixis funds noted above have also been approved 

for listing and trading on the Exchange. See supra 

notes 7 and 12. In addition, shares of similar 

products have been approved or filed for immediate 

effectiveness for listing and trading on Cboe BZX 

Exchange, Inc. See, for example, supra note 19 and 

90530 (November 30, 2020), 85 FR 78366 

(December 4, 2020) (SR–CboeBZX–2020–085) 

(Notice of Filing and Immediate Effectiveness of a 

Proposed Rule Change Relating to List and Trade 

Shares of the Fidelity Growth Opportunities ETF, 

Fidelity Magellan ETF, Fidelity Real Estate 

Investment ETF, and Fidelity Small-Mid Cap 

Opportunities ETF Under Rule 14.11(m) (Tracking 

Fund Shares)). 

21Under Rule 19b–4(e), the term ‘‘new derivative 

securities product’’ means any type of option, 

warrant, hybrid securities product, or any other 

security, other than a single equity option or a 

security futures product, whose value is based, in 

whole or in part, upon the performance of, or 

interest in, an underlying instrument. See 17 CFR 

240.19b–4(e). 

with, and limited to, the ‘‘permissible 

investments’’ for series of Active Proxy 

Portfolio Shares previously approved by 

the Commission for Exchange listing 

and trading, as described in the 

Approval Orders,15 and as permitted by 

their respective exemptive relief under 

the 1940 Act. 

The Exchange states that the 

regulatory staff of the Exchange, or the 

Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’), on behalf of 

the Exchange, will communicate as 

needed regarding trading in Active 

Proxy Portfolio Shares, other exchangetraded equity securities and futures 

contracts with other markets that are 

members of the Intermarket 

Surveillance Group (‘‘ISG’’), including 

U.S. and foreign exchanges on which 

the components are traded. In addition, 

the Exchange may obtain information 

regarding trading in Active Proxy 

Portfolio Shares from other markets that 

are members of the ISG, including all 

U.S. securities exchanges and futures 

exchanges on which the equity 

securities and futures contracts are 

traded, or with which the Exchange has 

in place a comprehensive surveillance 

sharing agreement. The Exchange 

represents that its surveillance 

procedures are adequate to continue to 

properly monitor the trading of Active 

Proxy Portfolio Shares in all trading 

sessions and to deter and detect 

violations of Exchange rules. 

Specifically, the Exchange intends to 

utilize its existing surveillance 

procedures applicable to derivative 

products, which will include Active 

Proxy Portfolio Shares, to monitor 

trading in the Active Proxy Portfolio 

Shares. 

The Exchange states that the Active 

Proxy Portfolio Shares will conform to 

the initial and continued listing criteria 

under Rule 8.601–E. All Active Proxy 

Portfolio Shares listed and/or traded 

pursuant to Rule 8.601–E (including 

pursuant to unlisted trading privileges) 

are subject to all Exchange rules and 

procedures that currently govern the 

trading of equity securities on the 

Exchange. The issuer of a series of 

Active Proxy Portfolio Shares will be 

required to comply with Rule 10A–3 

under the Act for the initial and 

continued listing of Active Proxy 

Portfolio Shares, as provided under 

NYSE Arca Rule 5.3–E. 

Prior to listing pursuant to proposed 

amended Commentary .01 to Rule 

8.601–E, an issuer would be required to 

represent to the Exchange that it will 

notify the Exchange of any failure by a 

series of Active Proxy Portfolio Shares 

to comply with the continued listing 

requirements, and, pursuant to its 

obligations under Section 19(g)(1) of the 

Act, the Exchange will monitor for 

compliance with the continued listing 

requirements. If a series of Active Proxy 

Portfolio Shares is not in compliance 

with the applicable listing requirements, 

the Exchange will commence delisting 

procedures under NYSE Arca Rule 5.5– 

E(m). 

III. Proceedings To Determine Whether 

To Approve or Disapprove SR– 

NYSEArca–2020–77 and Grounds for 

Disapproval Under Consideration 

The Commission is instituting 

proceedings pursuant to Section 

19(b)(2)(B) of the Act 16 to determine 

whether the proposed rule change 

should be approved or disapproved. 

Institution of such proceedings is 

appropriate at this time in view of the 

legal and policy issues raised by the 

proposed rule change. Institution of 

proceedings does not indicate that the 

Commission has reached any 

conclusions with respect to any of the 

issues involved. Rather, as described 

below, the Commission seeks and 

encourages interested persons to 

provide additional comment on the 

proposed rule change to inform the 

Commission’s analysis of whether to 

approve or disapprove the proposed 

rule change. 

Pursuant to Section 19(b)(2)(B) of the 

Act,17 the Commission is providing 

notice of the grounds for disapproval 

under consideration. The Commission is 

instituting proceedings to allow for 

additional analysis of the proposed rule 

change’s consistency with Section 

6(b)(5) of the Act, which requires, 

among other things, that the rules of a 

national securities exchange be 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and to 

protect investors and the public interest, 

and not be designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers.18

The Exchange proposes to adopt 

generic listing standards for Active 

Proxy Portfolio Shares, which would 

allow the Exchange to list and trade 

Active Proxy Portfolio Shares that meet 

the requirements of Commentary .01 

without filing a proposed rule change 

with the Commission. As noted above, 

however, the Commission only recently 

approved the listing and trading of 

Active Proxy Portfolio Shares on the 

Exchange.19 Further, the Exchange 

states that only six series of Active 

Proxy Portfolio Shares are currently 

listed and traded on the Exchange.20

Accordingly, the Commission and the 

Exchange, as well as the marketplace, 

more generally, have limited experience 

with respect to this type of new 

derivative securities product.21 In the 

past, a new derivative securities product 

typically had a significant history of 

being listed and traded on an exchange 

before the Commission approved its 

generic listing standards. For example, 

the Commission approved the 

Exchange’s listing standards for 

Managed Fund Shares in 2008, but did 

not approve the generic listing 

82014 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 

22See Securities Exchange Act Release No. 78397 

(July 22, 2016), 81 FR 49320 (July 27, 2016 (SR– 

NYSEArca–2015–110) (Order Granting Approval of 

Proposed Rule Change, as Modified by Amendment 

No. 7 Thereto, Amending NYSE Arca Equities Rule 

8.600 to Adopt Generic Listing Standards for 

Managed Fund Shares) and Securities Exchange Act 

Release No. 57619 (April 4, 2008), 73 FR 19544 

(April 10, 2008) (Notice of Filing of Amendment 

No. 1 to Proposed Rule Change and Order Granting 

Accelerated Approval of Such Proposed Rule 

Change, as Modified by Amendment No. 1 Thereto, 

Relating to Rules Permitting the Listing and Trading 

of Managed Fund Shares, Trading Hours and Halts, 

Listing Fees Applicable to Managed Fund Shares, 

and the Listing and Trading of Shares of the 

PowerShares Active AlphaQ Fund, PowerShares 

Active Alpha Multi-Cap Fund, PowerShares Active 

Mega-Cap Portfolio, and the PowerShares Active 

Low Duration Portfolio). 

23 17 CFR 201.700(b)(3). 

24See id. 

25See id. 

26 15 U.S.C. 78f(b)(5). 27 17 CFR 240.19b–4. 28Section 19(b)(2) of the Act, as amended by the 

Securities Act Amendments of 1975, Public Law 

94–29 (June 4, 1975), grants the Commission 

flexibility to determine what type of proceeding— 

either oral or notice and opportunity for written 

comments—is appropriate for consideration of a 

particular proposal by a self-regulatory 

organization. See Securities Act Amendments of 

1975, Senate Comm. on Banking, Housing & Urban 

Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 

(1975). 

29See Notice, supra note 3. 30 17 CFR 200.30–3(a)(57). 

standards for the same until 2016.22

Given the relatively short amount of 

time the Commission has had to oversee 

and observe Active Proxy Portfolio 

Shares and other similarly structured 

exchange traded products, the 

Commission is concerned that there is 

insufficient experience to determine 

that the proposal to permit generic 

listing and trading of Active Proxy 

Portfolio Shares is consistent with 

Section 6(b)(5) of the Act, including 

whether the proposal is designed to 

prevent fraudulent and manipulative 

acts and practices and to protect 

investors and the public interest. 

Under the Commission’s Rules of 

Practice, the ‘‘burden to demonstrate 

that a proposed rule change is 

consistent with the Exchange Act and 

the rules and regulations issued 

thereunder . . . is on the [SRO] that 

proposed the rule change.’’ 23 The 

description of a proposed rule change, 

its purpose and operation, its effect, and 

a legal analysis of its consistency with 

applicable requirements must all be 

sufficiently detailed and specific to 

support an affirmative Commission 

finding,24 and any failure of an SRO to 

provide this information may result in 

the Commission not having a sufficient 

basis to make an affirmative finding that 

a proposed rule change is consistent 

with the Act and the applicable rules 

and regulations.25 The Commission 

notes that the Exchange has provided no 

data or analysis to support the 

determination that, in the absence of 

significant market or regulatory 

experience, its proposal to permit the 

listing and trading of Active Proxy 

Portfolio Shares pursuant to a generic 

listing standards raises no new or novel 

concerns. 

Accordingly, the Commission is 

instituting proceedings to allow for 

additional consideration and comment 

on the issues raised herein, including 

whether the proposal is consistent with 

the Act. 

IV. Procedure: Request for Written 

Comments 

The Commission requests that 

interested persons provide written 

submissions of their views, data, and 

arguments with respect to the issues 

identified above, as well as any other 

concerns they may have with the 

proposal. In particular, the Commission 

invites the written views of interested 

persons concerning whether the 

proposal is consistent with Section 

6(b)(5) 26 of the Act or any other 

provision of the Act, or the rules and 

regulations thereunder. Although there 

do not appear to be any issues relevant 

to approval or disapproval that would 

be facilitated by an oral presentation of 

views, data, and arguments, the 

Commission will consider, pursuant to 

Rule 19b–4 under the Act,27 any request 

for an opportunity to make an oral 

presentation.28

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

proposal should be approved or 

disapproved by January 7, 2021. Any 

person who wishes to file a rebuttal to 

any other person’s submission must file 

that rebuttal by January 21, 2021. The 

Commission asks that commenters 

address the sufficiency of the 

Exchange’s statements in support of the 

proposal, which are set forth in the 

Notice,29 in addition to any other 

comments they may wish to submit 

about the proposed rule change. 

Comments may be submitted by any 

of the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSEArca–2020–77 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–2020–77. 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 (http://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–2020–77 and 

should be submitted by January 7, 2021. 

Rebuttal comments should be submitted 

by January 21, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.30

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–27731 Filed 12–16–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

34139; 812–15113] 

Palmer Square Capital BDC Inc., et al. 

December 14, 2020. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice. 

Notice of application for an order 

(‘‘Order’’) under sections 17(d) and 57(i) 

of the Investment Company Act of 1940 

(the ‘‘Act’’) and rule 17d–1 under the