Federal Register / Vol. 85, No. 246 / Tuesday, December 22, 2020 / Notices 83643 

4OMB Report to the Congress on the Joint 

Committee Reductions for Fiscal Year 2021, 

February 10, 2020, available at https://

www.whitehouse.gov/wp-content/uploads/2020/02/ 

JC-sequestration_report_FY21_2-10-20.pdf. 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(iii). 

4 17 CFR 240.19b–4(f)(6). 

5Rule 14.11(f)(4) applies to Trust Issued Receipts 

that invest in ‘‘Financial Instruments.’’ The term 

‘‘Financial Instruments,’’ as defined in Rule 

14.11(f)(4)(A)(iv), means any combination of 

investments, including cash; securities; options on 

securities and indices; futures contracts; options on 

futures contracts; forward contracts; equity caps, 

collars and floors; and swap agreements. 

6The Commission approved BZX Rule 14.11(f)(4) 

in Securities Exchange Act Release No. 68619 

(January 10, 2013), 78 FR 3489 (January 16, 2013) 

(SR–BATS–2012–044). 

7See Securities Exchange Act No. 64470 (May 11, 

2011) 76 FR 28493 (May 15, 2011) (SR–NYSEArca– 

Continued 

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 2020 the PCAOB provided the 

Commission with a narrative 

description of its program issues and 

outlook for the 2021 budget year. In 

response, the Commission provided the 

PCAOB with economic assumptions and 

general budgetary guidance for the 2021 

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 and 

attended several meetings with staff of 

the PCAOB to further develop the 

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 

October 28, 2020. On November 19, 

2020, the PCAOB adopted its 2021 

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 2021 

budget adopted by the PCAOB that are 

not properly recoverable through the 

annual accounting support fee, and the 

Commission believes that the aggregate 

proposed 2021 annual accounting 

support fee does not exceed the 

PCAOB’s aggregate recoverable budget 

expenses for 2021. 

Significant uncertainty surrounding 

the impact of COVID–19 on the 

PCAOB’s operations reinforces the 

importance of continued coordination 

between the SEC and PCAOB. The 

Commission directs the PCAOB during 

2021 to continue to schedule monthly 

meetings, as necessary, with the 

Commission’s staff to discuss important 

policy initiatives, changes related to 

program areas, and significant impacts 

to the PCAOB’s 2021 budget, including 

significant differences between actual 

and budgeted amounts and anticipated 

cost-savings. Separately, the 

Commission directs the PCAOB to 

continue its written quarterly updates 

on recent activities, including strategic 

initiatives, for the PCAOB’s Office of 

Economic and Risk Analysis, Office of 

Data, Security, and Technology, and 

Division of Registration and Inspections. 

The PCAOB Board will make itself 

available to meet with the 

Commissioners on these and other 

topics. The PCAOB should also submit 

its 2020 annual report to the 

Commission by March 31, 2021. 

The Commission understands that the 

Office of Management and Budget 

(‘‘OMB’’) has determined that the 2021 

budget of the PCAOB is subject to 

sequestration under the Budget Control 

Act of 2011.4 For 2020, the PCAOB 

sequestered $16.8 million. That amount 

will become available in 2021. For 2021, 

the sequestration amount will be 5.7% 

or $16.4 million. Consequently, we 

expect the PCAOB will have 

approximately $0.4 million in excess 

funds available from the 2020 

sequestration for spending in 2021. 

Accordingly, the PCAOB has reduced its 

accounting support fee for 2021 by 

approximately $0.4 million. 

The Commission has determined that 

the PCAOB’s 2021 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 2021 are 

approved. 

By the Commission. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–28156 Filed 12–21–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90691; File No. SR– 

CboeBZX–2020–093] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To List and 

Trade Shares of the ProShares Short 

VIX Short-Term Futures ETF and the 

ProShares Ultra VIX Short-Term 

Futures ETF, Each a Series of 

ProShares Trust II, Under Rule 

14.11(f)(4), Trust Issued Receipts 

December 16, 2020. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on December 

14, 2020, Cboe BZX Exchange, Inc. 

(‘‘Exchange’’ or ‘‘BZX’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Exchange filed the 

proposal as a ‘‘non-controversial’’ 

proposed rule change pursuant to 

Section 19(b)(3)(A)(iii) of the Act 3 and 

Rule 19b–4(f)(6) thereunder.4 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 list and 

trade Shares of the ProShares Short VIX 

Short-Term Futures ETF (the ‘‘Short 

Fund’’) and the ProShares Ultra VIX 

Short-Term Futures ETF (the ‘‘Ultra 

Fund’’, and collectively the ‘‘Funds’’) 

under Rule 14.11(f)(4), which governs 

the listing and trading of Trust Issued 

Receipts 5 on the Exchange.6 The 

Exchange notes that the Funds have 

previously been approved by the 

Commission and are currently listed on 

Arca.7 This proposal is substantively 


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83644 Federal Register / Vol. 85, No. 246 / Tuesday, December 22, 2020 / Notices 

2011–23) (Proposal to list and trade Shares of the 

ProShares Short VIX Short-Term Futures ETF and 

the ProShares Ultra VIX Short-Term Futures ETF 

(the ‘‘Original Proposal’’)). See also Securities 

Exchange Act No. 65134 (August 15, 2011) 76 FR 

52037 (August 19, 2011) (SR–NYSEArca–2011–23) 

(Order approving the listing and trading of the 

ProShares Short VIX Short-Term Futures ETF and 

the ProShares Ultra VIX Short-Term Futures ETF). 

See also Securities Exchange Act No. 83000 (April 

5, 2018) 83 FR 15659 (April 11, 2018) (SR– 

NYSEArca–2018–17) (Notice of filing and 

immediate effectiveness to amend certain 

representations made in the Prior Proposal relating 

to Shares of the ProShares Short VIX Short-Term 

Futures ETF and the ProShares Ultra VIX ShortTerm Futures ETF (the ‘‘Prior Proposal’’)). 

8Rule 14.11(f)(4) applies to Trust Issued Receipts 

that invest in ‘‘Financial Instruments.’’ The term 

‘‘Financial Instruments,’’ as defined in Rule 

14.11(f)(4)(A)(iv), means any combination of 

investments, including cash; securities; options on 

securities and indices; futures contracts; options on 

futures contracts; forward contracts; equity caps, 

collars and floors; and swap agreements. 

9The Commission approved BZX Rule 14.11(f)(4) 

in Securities Exchange Act Release No. 68619 

(January 10, 2013), 78 FR 3489 (January 16, 2013) 

(SR–BATS–2012–044). 

10See Securities Exchange Act No. 64470 (May 

11, 2011) 76 FR 28493 (May 15, 2011) (SR– 

NYSEArca–2011–23) (Proposal to list and trade 

Shares of the ProShares Short VIX Short-Term 

Futures ETF and the ProShares Ultra VIX ShortTerm Futures ETF (the ‘‘Original Proposal’’)). See 

also Securities Exchange Act No. 65134 (August 15, 

2011) 76 FR 52037 (August 19, 2011) (SR– 

NYSEArca–2011–23) (Order approving the listing 

and trading of the ProShares Short VIX Short-Term 

Futures ETF and the ProShares Ultra VIX ShortTerm Futures ETF). See also Securities Exchange 

Act No. 83000 (April 5, 2018) 83 FR 15659 (April 

11, 2018) (SR–NYSEArca–2018–17) (Notice of filing 

and immediate effectiveness to amend certain 

representations made in the Prior Proposal relating 

to Shares of the ProShares Short VIX Short-Term 

Futures ETF and the ProShares Ultra VIX ShortTerm Futures ETF (the ‘‘Prior Proposal’’)). 

11The Trust filed on behalf of the Funds a 

registration statement on Form S–3 under the 

Securities Act of 1933 (File No. 333–231875) 

(‘‘Registration Statement’’) on May 11, 2020 that 

was declared effective on September 9, 2020. The 

Funds’ prospectus containing the previous 

investment objectives for the Funds was filed 

pursuant to Rule 424(b)(3) on February 15, 2018. A 

prospectus containing the new objectives, as 

described in the Prior Proposal, was filed pursuant 

to Rule 424(b)(3) on February 28, 2018 (the ‘‘Prior 

Registration Statement’’). The description of the 

Funds and the Shares contained in the Prior 

Proposal are based on the Prior Registration 

Statement. As noted above, all material 

representations contained within the Original 

Proposal as updated by the Prior Proposal remain 

true. The change to each Fund’s investment 

objective as described in the Prior Proposal was 

implemented effective as of the close of business on 

February 27, 2018. The Sponsor issued a press 

release dated February 26, 2018 regarding the 

Sponsor’s plans to reduce the target exposure for 

the Funds. See http://www.proshares.com/news/ 

proshare_capital_management_llc_plans_to_

reduce_target_exposure_on_two_etfs.html. 

12Standard & Poor’s Financial Services LLC, the 

index sponsor with respect to the Index, is not a 

broker-dealer and has implemented procedures 

designed to prevent the use and dissemination of 

material, non-public information regarding the 

Index. 

13 VIX is the ticker symbol for the Cboe Volatility 

Index, a popular measure of implied volatility. 

According to the Registration Statement, the goal of 

the VIX is to estimate the implied volatility of the 

S&P 500 over the next 30 days. A relatively high 

level of the VIX corresponds to a more volatile U.S. 

equity market as expressed by more costly options 

on the S&P 500 Index. The VIX represents one 

measure of the market’s expectation of the volatility 

over the next 30 day period. It is a composite value 

of options on the S&P 500 Index. The formula used 

to calculate the composite value utilizes current 

market prices for a series of out-of-the-money calls 

and puts for the front month and second month 

expirations. 

identical to the Original Proposal with 

updates from the Prior Proposal, and the 

issuer represents that all material 

representations contained within the 

Original Proposal as updated by the 

Prior Proposal remain true. Further, the 

Funds are already trading on the 

Exchange pursuant to unlisted trading 

privileges, as provided in Rule 14.11(j). 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://markets.cboe.com/us/ 

equities/regulation/rule_filings/bzx/), at 

the Exchange’s Office of the Secretary, 

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 

Exchange 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 these 

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 aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to list and 

trade Shares of the ProShares Short VIX 

Short-Term Futures ETF (the ‘‘Short 

Fund’’) and the ProShares Ultra VIX 

Short-Term Futures ETF (the ‘‘Ultra 

Fund’’, and collectively the ‘‘Funds’’) 

under Rule 14.11(f)(4), which governs 

the listing and trading of Trust Issued 

Receipts 8 on the Exchange.9 The 

Exchange notes that the Funds have 

previously been approved by the 

Commission and are currently listed on 

Arca.10 This proposal is substantively 

identical to the Original Proposal with 

updates from the Prior Proposal, and the 

issuer represents that all material 

representations contained within the 

Original Proposal as updated by the 

Prior Proposal remain true. Further, the 

Funds are already trading on the 

Exchange pursuant to unlisted trading 

privileges, as provided in Rule 14.11(j). 

The Sponsor, a Maryland limited 

liability company, serves as the Sponsor 

of Trust. The Sponsor is a commodity 

pool operator.11 Bank of New York 

Mellon serves as the administrator (the 

‘‘Administrator’’), custodian and 

transfer agent of the Funds and their 

respective Shares. SEI Investments 

Distribution Co. (‘‘Distributor’’) serves 

as Distributor of the Shares. Wilmington 

Trust Company, a Delaware banking 

corporation, is the sole trustee of the 

Trust. 

The Short Fund seeks, on a daily 

basis, to provide investment results 

(before fees and expenses) that 

correspond to one-half the inverse 

(¥0.5x) of the daily performance, at the 

time of the net asset value (‘‘NAV’’) 

calculation, of a benchmark that seeks to 

offer exposure to market volatility 

through publicly traded futures markets. 

The Ultra Fund seeks, on a daily basis, 

to provide investment results (before 

fees and expenses) that correspond to 

one and one-half times (1.5x) the daily 

performance, at the time of NAV 

calculation, of a benchmark that seeks to 

offer exposure to market volatility 

through publicly traded futures markets. 

The benchmark for the Funds is the S&P 

500 VIX Short-Term Futures Index 

(ticker symbol SPVIXSTR, the 

‘‘Index’’).12 The Index utilizes prices of 

the next two near-term VIX futures 

contracts to replicate a position that 

rolls the nearest month VIX futures 

contracts to the next month on a daily 

basis in equal fractional amounts. The 

Ultra Fund will take long positions in 

futures contracts based on the Cboe 

Volatility Index (‘‘VIX’’), while the 

Short Fund will take short positions in 

futures contracts based on the VIX. 

The Index is comprised of, and the 

value of the Funds will be based on, VIX 

futures contracts traded on the Cboe 

Futures Exchange, Inc. (‘‘CFE’’) 

(hereinafter referred to as ‘‘VIX Futures 

Contracts’’). VIX Futures Contracts are 

measures of the market’s expectation of 

the level of VIX at certain points in the 

future, and as such will behave 

differently than current or spot VIX 

values.13 The Funds are not linked to 

the VIX, and in many cases the Index, 

and by extension the Funds, could 


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Federal Register / Vol. 85, No. 246 / Tuesday, December 22, 2020 / Notices 83645 

14For the purpose of this filing, the term ‘‘Normal 

Market Conditions’’ shall have the same definition 

as Rule 14.11(i)(3)(D), which provides that Normal 

Market Conditions ‘‘includes, but is not limited to, 

the absence of trading halts in the applicable 

financial markets generally; operational issues 

causing dissemination of inaccurate market 

information or system failures; or force majeure 

type events such as natural or man-made disaster, 

act of God, armed conflict, act of terrorism, riot or 

labor disruption, or any similar intervening 

circumstance.’’ 

15To the extent practicable, the Funds will invest 

in swaps cleared through the facilities of a 

centralized clearing house. 

16According to the Registration Statement, the 

Sponsor will also attempt to mitigate the Funds’ 

credit risk by transacting only with large, wellcapitalized institutions using measures designed to 

determine the creditworthiness of a counterparty. 

The Sponsor will take various steps to limit 

counterparty credit risk, as described in the 

Registration Statement. 

17For purposes of this proposal, the term ‘‘Cash 

and Cash Equivalents’’ shall have the definition 

provided in Exchange Rule 14.11(i)(4)(C)(iii), 

applicable to Managed Fund Shares. 

significantly underperform or 

outperform the VIX. 

While the VIX represents a measure of 

the current expected volatility of the 

S&P 500 over the next 30 days, the 

prices of VIX Futures Contracts are 

based on the current expectation of 

what the expected 30-day volatility will 

be at a particular time in the future (on 

the expiration date). For example, a VIX 

Futures Contract purchased in March 

that expires in May, in effect, is a 

forward contract on what the level of 

the VIX, as a measure of 30-day implied 

volatility of the S&P 500, will be on the 

May expiration date. The forward 

volatility reading of the VIX may not 

correlate directly to the current 

volatility reading of the VIX because the 

implied volatility of the S&P 500 at a 

future expiration date may be different 

from the current implied volatility of 

the S&P 500. As a result, the Index and 

the Funds should be expected to 

perform very differently from one-half 

the inverse of the daily performance or 

a multiple of the daily performance of 

the Index over all periods of time. To 

illustrate, on December 4, 2019, the VIX 

closed at a price of 14.8 and the price 

of the February 2020 VIX Futures 

Contracts expiring on February 19, 2020 

was 18.125. In this example, the price 

of the VIX represented the 30-day 

implied, or ‘‘spot,’’ volatility (the 

volatility expected for the period from 

December 5, 2019 to January 5, 2020) of 

the S&P 500 and the February 2020 VIX 

Futures Contracts represented forward 

implied volatility (the volatility 

expected for the period from February 

19 to March 19, 2020) of the S&P 500. 

If the Short Fund is successful in 

meeting its objective, its value (before 

fees and expenses) should gain 

approximately half as much on a 

percentage basis as its Index when the 

Index declines on a given day. 

Conversely, its value (before fees and 

expenses) should lose approximately 

half as much on a percentage basis as 

the Index when the Index rises on a 

given day. 

If the Ultra Fund is successful in 

meeting its objective, its value (before 

fees and expenses) should gain 

approximately 1.5 times as much on a 

percentage basis as its Index when the 

Index rises on a given day. Conversely, 

its value (before fees and expenses) 

should lose approximately 1.5 times as 

much on a percentage basis as its Index 

when the Index declines on a given day. 

Each Fund will under Normal Market 

Conditions 14 invest in VIX Futures 

Contracts based on components of the 

Index to pursue its investment objective. 

In the event position accountability 

rules are reached with respect to VIX 

Futures Contracts, ProShare Capital 

Management LLC (‘‘the Sponsor’’), may, 

in its commercially reasonable 

judgment, cause such Fund to obtain 

exposure through swaps referencing the 

relevant Index or particular VIX Futures 

Contracts, or invest in other futures 

contracts or swaps not based on the 

particular VIX Futures Contracts if such 

instruments tend to exhibit trading 

prices or returns that correlate with the 

Index or any VIX Futures Contract and 

will further the investment objective of 

such Fund.15 The Funds may also invest 

in swaps if the market for a specific VIX 

Futures Contract experiences 

emergencies (e.g., natural disaster, 

terrorist attack or an act of God) or 

disruptions (e.g., a trading halt or a flash 

crash) that prevent a Fund from 

obtaining the appropriate amount of 

investment exposure to the affected VIX 

Futures Contracts directly or to other 

futures contracts.16 Each Fund also may 

invest in Cash and Cash Equivalents 17

such as U.S. Treasury securities or other 

high credit quality short-term fixedincome or similar securities (including 

shares of money market funds, bank 

deposits, bank money market accounts, 

certain variable rate-demand notes and 

repurchase agreements collateralized by 

government securities) that may serve as 

collateral for the futures contracts. 

If the Sponsor to the Trust issuing the 

Trust Issued Receipts is affiliated with 

a broker-dealer, such Sponsor to the 

Trust shall erect and maintain a ‘‘fire 

wall’’ between the Sponsor and the 

broker-dealer with respect to access to 

information concerning the composition 

and/or changes to such Trust portfolio. 

The Sponsor is not a broker-dealer, but 

is affiliated with a broker-dealer and has 

implemented and will maintain a ‘‘fire 

wall’’ with respect to such broker-dealer 

regarding access to information 

concerning the composition and/or 

changes to the portfolio. In the event 

that (a) the Sponsor becomes a brokerdealer or newly affiliated with a brokerdealer, or (b) any new sponsor is a 

broker-dealer or becomes affiliated with 

a broker-dealer, it will implement and 

maintain a fire wall with respect to its 

relevant personnel or such broker-dealer 

affiliate, as applicable, regarding access 

to information concerning the 

composition and/or changes to the 

portfolio, and will be subject to 

procedures designed to prevent the use 

and dissemination of material nonpublic information regarding such 

portfolio. 

Each of the Funds uses investment 

techniques that include the use of any 

one or a combination of VIX Futures 

Contracts and may, if applicable, 

include swaps. The Funds’ investment 

techniques may involve a small 

investment relative to the amount of 

investment exposure assumed and may 

result in losses exceeding the amounts 

invested. Such techniques, particularly 

when used to create leverage, may 

expose the Funds to potentially 

dramatic changes (losses or gains) in the 

value of their investments and imperfect 

correlation between the value of the 

investments and the security or Index. 

The Funds do not seek to achieve 

their stated investment objective over a 

period greater than one day because 

mathematical compounding prevents 

the Funds from perfectly achieving such 

results. Accordingly, results over 

periods of time greater than one day 

typically will not be a simple one-half 

of the inverse correlation (¥50%) or 

multiple correlation (+150%) of the 

period return of the Index and may 

differ significantly. 

According to the Registration 

Statement, each Fund is not actively 

managed by traditional methods, which 

typically involve effecting changes in 

the composition of a portfolio on the 

basis of judgments relating to economic, 

financial and market considerations 

with a view toward obtaining positive 

results under all market conditions. 

Rather, each Fund seeks to remain fully 

invested at all times in investment 

positions that, in combination, provide 

exposure to its Index consistent with its 

investment objective even during 

periods in which that benchmark is flat 

or moving in a manner which causes the 

value of a Fund to decline. 

In seeking to achieve each Fund’s 

investment objective, the Sponsor uses 

a mathematical approach to investing. 

Using this approach, the Sponsor 


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83646 Federal Register / Vol. 85, No. 246 / Tuesday, December 22, 2020 / Notices 

18A ‘‘Business Day’’ means any day other than a 

day when any of BZX, Cboe, CFE or other exchange 

material to the valuation or operation of the Funds, 

or the calculation of the VIX, options contracts 

underlying the VIX, VIX Futures Contracts or the 

Index is closed for trading. 

19Authorized participants have a cut-off time of 

2:00 p.m. E.T. to place creation and redemption 

orders. 

20According to the Registration Statement, net 

asset value means the total assets of the Funds 

including, but not limited to, all Cash and Cash 

Equivalents or other debt securities less total 

liabilities of the Funds, each determined on the 

basis of generally accepted accounting principles in 

the United States, consistently applied under the 

accrual method of accounting. Each Fund’s NAV is 

calculated once each trading day as of 4 p.m. (E.T.), 

or an earlier time as set forth on 

www.proshares.com. 

determines the type, quantity and mix 

of investment positions that the Sponsor 

believes in combination should produce 

returns consistent with such Fund’s 

objective. The Sponsor relies upon a 

pre-determined model to generate 

orders that result in repositioning the 

Funds’ investments in accordance with 

their respective investment objectives. 

The S&P 500 VIX Short-Term Futures 

Index 

According to the Registration 

Statement, the Index is intended to 

reflect the returns that are potentially 

available through an unleveraged 

investment in the VIX Futures Contracts 

comprising the Index (the ‘‘Index 

Components’’). 

Unlike the Index, the VIX, which is 

not a benchmark for any Fund, is 

calculated based on the prices of put 

and call options on the S&P 500, which 

are traded on Cboe Exchange, Inc. 

The S&P 500 VIX Short-Term Futures 

Index employs rules for selecting the 

Index Components and a formula to 

calculate a level for the Index from the 

prices of these components. Currently, 

the Index Components represent the 

prices of the two near-term VIX futures 

months, replicating a position that rolls 

the nearest month VIX Futures Contract 

to the next month VIX Futures Contract 

on a daily basis in equal fractional 

amounts. This results in a constant 

weighted average maturity of one 

month. The roll period begins on the 

Tuesday prior to the monthly CFE VIX 

Futures Contracts settlement date and 

runs through the Tuesday prior to the 

subsequent month’s CFE VIX Futures 

Contract settlement date. 

Calculation of the Index 

The level of the Index is calculated in 

accordance with the method described 

in the Registration Statement. The level 

of the Index will be published at least 

every 15 seconds both in real time from 

9:30 a.m. to 4:00 p.m., E.T. and at the 

close of trading on each Business Day 18

by Bloomberg L.P. and Reuters. 

The Index Components comprising 

the Index represent the prices of certain 

VIX Futures Contracts. The Index takes 

a daily rolling long position in contracts 

of specified maturities and is intended 

to reflect the returns that are potentially 

available through an unleveraged 

investment in those contracts. The 

Index measures the return from a rolling 

long position in the first and second 

month VIX Futures Contracts. The Index 

rolls continuously throughout each 

month from the first month VIX Futures 

Contract into the second month VIX 

Futures Contract. 

The Index rolls on a daily basis. 

According to the Registration Statement, 

one of the effects of daily rolling is to 

maintain a constant weighted average 

maturity for the underlying futures 

contracts. Unlike equities, which 

typically entitle the holder to a 

continuing stake in a corporation, 

futures contracts normally specify a 

certain date for the delivery of the 

underlying asset or financial instrument 

or, in the case of futures contracts 

relating to indices such as the VIX, a 

certain date for payment in cash of an 

amount determined by the level of the 

underlying index. The Index operates by 

selling, on a daily basis, Index 

Components with a nearby settlement 

date and purchasing Index Components 

with a longer-dated settlement date. The 

roll for each contract occurs on each 

Business Day according to a predetermined schedule that has the effect 

of keeping constant the weighted 

average maturity of the relevant Index 

Components. This process is known as 

‘‘rolling’’ a futures position, and the 

Index is a ‘‘rolling index’’. The constant 

weighted average maturity for the 

futures underlying the Index is one 

month. 

Because the Index incorporates this 

process of rolling futures positions on a 

daily basis, and the Funds, in general, 

also roll their positions on a daily basis, 

the daily roll is not anticipated to be a 

significant source of tracking error 

between the Funds and the Index. The 

Index is based on VIX Futures Contracts 

and not the VIX, and as such neither the 

Funds nor the Index are expected to 

track the VIX. 

Purchases and Redemptions of Creation 

Units 

The Funds will create and redeem 

Shares from time to time in one or more 

Creation Units. A Creation Unit is a 

block of 50,000 Shares. Except when 

aggregated in Creation Units, the Shares 

are not redeemable securities. 

On any Business Day, an authorized 

participant may place an order with the 

Distributor to create one or more 

Creation Units.19 The total cash 

payment required to create each 

Creation Unit is the NAV of 50,000 

Shares of each Fund on the purchase 

order date plus the applicable 

transaction fee. 

The procedures by which an 

authorized participant can redeem one 

or more Creation Units mirror the 

procedures for the purchase of Creation 

Units. On any Business Day, an 

authorized participant may place an 

order with the Distributor to redeem one 

or more Creation Units. The redemption 

proceeds from a Fund consist of the 

cash redemption amount. The cash 

redemption amount is equal to the NAV 

of the number of Creation Unit(s) of a 

Fund requested in the authorized 

participant’s redemption order as of the 

time of the calculation of a Fund’s NAV 

on the redemption order date, less 

applicable transaction fees. 

Availability of Information Regarding 

the Shares 

The NAV for the Funds’ Shares will 

be calculated by the Administrator once 

a day and will be disseminated daily to 

all market participants at the same 

time.20 Pricing information will be 

available on each Fund’s website 

including: (1) The prior Business Day’s 

reported NAV, the closing market price 

or the bid/ask price, daily trading 

volume, and a calculation of the 

premium and discount of the closing 

market price or bid/ask price against the 

NAV; and (2) data in chart format 

displaying the frequency distribution of 

discounts and premiums of the daily 

closing price against the NAV, within 

appropriate ranges, for each of the four 

previous calendar quarters. 

The intraday, closing, and settlement 

prices of the Index Components are also 

readily available from the websites of 

CFE (www.cfe.cboe.com), automated 

quotation systems, published or other 

public sources, or on-line information 

services such as Bloomberg or Reuters. 

Complete real-time data for component 

futures underlying the Index is available 

by subscription from Reuters and 

Bloomberg. Specifically, the level of the 

Index will be published at least every 15 

seconds both in real time from 9:30 a.m. 

to 4:00 p.m. E.T. and at the close of 

trading on each Business Day by 

Bloomberg and Reuters. The CFE also 

provides delayed futures information on 

current and past trading sessions and 

market news free of charge on its 

website. The specific contract 

specifications for component futures 


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Federal Register / Vol. 85, No. 246 / Tuesday, December 22, 2020 / Notices 83647 

21As defined in Rule 1.5(w), the term ‘‘Regular 

Trading Hours’’ means the time between 9:30 a.m. 

and 4:00 p.m. E.T. 

underlying the Index are also available 

on such websites, as well as other 

financial informational sources. 

Quotation and last-sale information 

regarding the Shares will be 

disseminated through the facilities of 

the Consolidated Tape Association 

(‘‘CTA’’). Quotation and last-sale 

information regarding VIX Futures 

Contracts will be available from the 

exchanges on which such instruments 

are traded. Quotation and last-sale 

information for swaps will be available 

from nationally recognized data services 

providers, such as Reuters and 

Bloomberg, through subscription 

agreements or from a broker-dealer who 

makes markets in such instruments. 

Quotation and last-sale information for 

swaps are available through third-party 

pricing services or broker-dealers who 

make markets in such instruments. 

Pricing information regarding Cash and 

Cash Equivalents in which the Funds 

may invest is generally available 

through nationally recognized data 

services providers, such as Reuters and 

Bloomberg, through subscription 

agreements. 

In addition, the Funds’ website at 

www.proshares.com will display the 

end of day closing Index level, and NAV 

per Share for the applicable Fund. The 

Funds will provide website disclosure 

of portfolio holdings daily and will 

include, as applicable, the notional 

value (in U.S. dollars) of VIX Futures 

Contracts, swaps, as well as Cash and 

Cash Equivalents held in the portfolio of 

the Funds. This website disclosure of 

the portfolio composition of the Funds 

will occur at the same time as the 

disclosure by the Funds of the portfolio 

composition to authorized participants 

so that all market participants are 

provided portfolio composition 

information at the same time. Therefore, 

the same portfolio information will be 

provided on the public website as well 

as in electronic files provided to 

authorized participants. 

In addition, in order to provide 

updated information relating to the 

Funds for use by investors and market 

professionals, an updated Intraday 

Indicative Value (‘‘IIV’’) will be 

calculated. The IIV is an indicator of the 

value of the VIX Futures Contracts, 

swaps, and Cash and/or Cash 

Equivalents less liabilities of a Fund at 

the time the IIV is disseminated. The IIV 

will be calculated and widely 

disseminated by one or more major 

market data vendors every 15 seconds 

throughout Regular Trading Hours.21

In addition, the IIV is available 

through on-line information services 

such as Bloomberg and Reuters. 

The IIV disseminated during Regular 

Trading Hours should not be viewed as 

an actual real time update of the NAV, 

which is calculated only once a day. 

The IIV also should not be viewed as a 

precise value of the Shares. 

The Exchange believes that 

dissemination of the IIV provides 

additional information regarding the 

Funds that is not otherwise available to 

the public and is useful to professionals 

and investors in connection with the 

related Shares trading on the Exchange 

or the creation or redemption of such 

Shares. 

Additional information regarding the 

Funds and the Shares, including 

investment strategies, risks, creation and 

redemption procedures, fees, portfolio 

holdings disclosure policies, 

distributions and taxes is included in 

the Registration Statement. 

Initial and Continued Listing 

The Shares of each Fund will conform 

to the initial and continued listing 

criteria under BZX Rule 14.11(f)(4). The 

Exchange represents that, for initial and 

continued listing, the Funds and the 

Trust must be in compliance with Rule 

10A–3 under the Act. A minimum of 

100,000 Shares of each Fund will be 

outstanding at the commencement of 

trading on the Exchange. The Exchange 

will obtain a representation from the 

issuer of the Shares that the NAV per 

Share for each Fund will be calculated 

daily and will be made available to all 

market participants at the same time. 

Trading Halts 

With respect to trading halts, the 

Exchange may consider all relevant 

factors in exercising its discretion to 

halt or suspend trading in the Shares of 

the Funds. The Exchange will halt 

trading in the Shares under the 

conditions specified in BZX Rule 11.18. 

Trading may be halted because of 

market conditions or for reasons that, in 

the view of the Exchange, make trading 

in the Shares inadvisable. These may 

include: (1) The extent to which trading 

is not occurring in the securities and/or 

the financial instruments composing the 

daily disclosed portfolio of the Funds; 

or (2) whether other unusual conditions 

or circumstances detrimental to the 

maintenance of a fair and orderly 

market are present. Trading in the 

Shares also will be subject to Rule 

14.11(f)(4)(C)(ii), which sets forth 

circumstances under which Shares of a 

Fund may be halted. 

The Exchange represents that the 

Exchange may halt trading during the 

day in which an interruption to the 

dissemination of the IIV, the value of 

the Index, the VIX or the value of the 

underlying VIX Futures Contracts 

occurs. If an interruption to the 

dissemination of the IIV, the value of an 

Index, the VIX or the value of the 

underlying VIX Futures Contracts 

persists past the trading day in which it 

occurred, the Exchange will halt trading 

no later than the beginning of the 

trading day following the interruption. 

In addition, if the Exchange becomes 

aware that the NAV with respect to the 

Shares is not disseminated to all market 

participants at the same time, it will halt 

trading in the Shares until such time as 

the NAV is available to all market 

participants. 

Suitability 

Currently, Interpretation and Policy 

.01 of Exchange Rule 3.7 

(Recommendations to Customers) 

provides that a member, in 

recommending a transaction in 

connection with products listed 

pursuant to Chapter XIV, must have 

reasonable grounds to believe that the 

recommendation is suitable for the 

customer based on any facts disclosed 

by the customer as to its other security 

holdings and as to its financial situation 

and needs. Further, the rule provides, 

that no member shall recommend to a 

customer a transaction in any such 

product unless the member has a 

reasonable basis for believing at the time 

of making the recommendation that the 

customer has such knowledge and 

experience in financial matters that he 

may reasonably be expected to be 

capable of evaluating the risks of the 

recommended transaction and is 

financially able to bear the risks of the 

recommended position. 

Prior to the commencement of 

trading, the Exchange will inform its 

members of the suitability requirements 

of, Interpretation and Policy .01 of 

Exchange Rule 3.7 in an Information 

Circular. Specifically, members will be 

reminded in the Information Circular 

that, in recommending transactions in 

the Shares, they must have a reasonable 

basis to believe that (1) the 

recommendation is suitable for a 

customer given reasonable inquiry 

concerning the customer’s investment 

objectives, financial situation, needs, 

and any other information known by 

such member, and (2) the customer can 

evaluate the special characteristics, and 

is able to bear the financial risks, of an 

investment in the Shares. In connection 

with the suitability obligation, the 

Information Circular will also provide 

that members must make reasonable 

efforts to obtain the following 


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83648 Federal Register / Vol. 85, No. 246 / Tuesday, December 22, 2020 / Notices 

22For a list of the current members and affiliate 

members of ISG, see www.isgportal.com. The 

Exchange notes that not all components of the 

Funds’ holdings may trade on markets that are 

members of ISG or with which the Exchange has in 

place a comprehensive surveillance sharing 

agreement. 

23As defined in Rule 1.5(w), ‘‘Regular Trading 

Hours’’ means the time between 9:30 a.m. and 4:00 

p.m. Eastern Time. 

information: (1) The customer’s 

financial status; (2) the customer’s tax 

status; (3) the customer’s investment 

objectives; and (4) such other 

information used or considered to be 

reasonable by such member or 

registered representative in making 

recommendations to the customer. 

In addition, FINRA has implemented 

increased sales practice and customer 

margin requirements for FINRA 

members applicable to inverse and 

leveraged ETFs (which include the 

Shares) and options on leveraged ETFs, 

as described in FINRA Regulatory 

Notices 09–31 (June 2009), 09–53 

(August 2009) and 09–65 (November 

2009) (the ‘‘FINRA Regulatory 

Notices’’). Members that carry customer 

accounts will be required to follow the 

FINRA guidance set forth in these 

notices. As noted above, each Fund will 

seek daily investment results, before 

fees and expenses, that correspond to 

the Index. The Funds do not seek to 

achieve their respective primary 

investment objective over a period of 

time greater than a single day. The 

return of the Funds for a period longer 

than a single day will not be a simple 

multiple (one-half of the inverse 

correlation (¥50%) with respect to the 

ProShares Short VIX Short-Term 

Futures ETF or multiple correlation 

(+150%) with respect to the ProShares 

Ultra VIX Short-Term Futures ETF) of 

the period return of the Index because 

the return of each Fund is the result of 

its return for each day compounded 

over the period and usually will differ 

in amount and possibly even direction 

for the same period. These differences 

can be significant. 

Trading Rules 

The Exchange deems the Shares to be 

equity securities, thus rendering trading 

in the Shares subject to the Exchange’s 

existing rules governing the trading of 

equity securities. The Exchange will 

allow trading in the Shares during all 

trading sessions and has the appropriate 

rules to facilitate transactions in the 

Shares during all trading sessions. As 

provided in BZX Rule 11.11(a), the 

minimum price variation for quoting 

and entry of orders in securities traded 

on the Exchange is $0.01, with the 

exception of securities that are priced 

less than $1.00, for which the minimum 

price variation for order entry is 

$0.0001. 

Surveillance 

Trading of the Shares through the 

Exchange will be subject to the 

Exchange’s surveillance procedures for 

derivative products, including Trust 

Issued Receipts. The Exchange will 

allow trading in the Shares during all 

trading sessions on the Exchange and 

has the appropriate rules to facilitate 

transactions in the Shares during all 

trading sessions. The Exchange believes 

that its surveillance procedures are 

adequate to properly monitor the 

trading of the Shares on the Exchange 

during all trading sessions and to deter 

and detect violations of Exchange rules 

and the applicable federal securities 

laws. All of the VIX Futures Contracts 

held by the Funds will trade on markets 

that are a member of ISG or affiliated 

with a member of ISG or with which the 

Exchange has in place a comprehensive 

surveillance sharing agreement.22 The 

Exchange, FINRA, on behalf of the 

Exchange, or both will communicate 

regarding trading in the Shares and the 

underlying listed instruments, including 

listed derivatives held by the Funds, 

with the ISG, other markets or entities 

who are members or affiliates of the ISG, 

or with which the Exchange has entered 

into a comprehensive surveillance 

sharing agreement. In addition, the 

Exchange, FINRA, on behalf of the 

Exchange, or both may obtain 

information regarding trading in the 

Shares and the underlying listed 

instruments, including listed 

derivatives, held by the Funds from 

markets and other entities that are 

members of ISG or with which the 

Exchange has in place a comprehensive 

surveillance sharing agreement. The 

Exchange also has a general policy 

prohibiting the distribution of material, 

non-public information by its 

employees. All statements and 

representations made in this filing 

regarding the Index composition, 

description of the portfolio or reference 

assets, limitations on portfolio holdings 

or reference assets, dissemination and 

availability of the Index, reference asset, 

and IIV, and the applicability of 

Exchange rules specified in this filing 

shall constitute continued listing 

requirements for the Funds. The issuer 

has represented to the Exchange that it 

will advise the Exchange of any failure 

by the Funds or the Shares to comply 

with the continued listing requirements, 

and, pursuant to its obligations under 

Section 19(g)(1) of the Act, the Exchange 

will surveil for compliance with the 

continued listing requirements. If the 

Funds or the Shares are not in 

compliance with the applicable listing 

requirements, the Exchange will 

commence delisting procedures under 

Exchange Rule 14.12. In addition, the 

Exchange also has a general policy 

prohibiting the distribution of material, 

non-public information by its 

employees. 

Information Circular 

Prior to the commencement of 

trading, the Exchange will inform its 

members in an Information Circular of 

the special characteristics and risks 

associated with trading the Shares. 

Specifically, the Information Circular 

will discuss the following: (1) The 

procedures for purchases and 

redemptions of Shares in Creation Units 

(and that Shares are not individually 

redeemable); (2) BZX Rule 3.7, which 

imposes suitability obligations on 

Exchange members with respect to 

recommending transactions in the 

Shares to customers; (3) how 

information regarding the IIV and the 

Disclosed Portfolio is disseminated; (4) 

the risks involved in trading the Shares 

outside of Regular Trading Hours 23

when an updated IIV will not be 

calculated or publicly disseminated; (5) 

the requirement that members deliver a 

prospectus to investors purchasing 

newly issued Shares prior to or 

concurrently with the confirmation of a 

transaction; and (6) trading information. 

The Information Circular will advise 

ETP Holders, prior to the 

commencement of trading, of the 

prospectus delivery requirements 

applicable to the Funds. The Exchange 

notes that investors purchasing Shares 

directly from the Funds will receive a 

prospectus. Members purchasing Shares 

from the Funds for resale to investors 

will deliver a prospectus to such 

investors. The Information Circular will 

reference the FINRA Regulatory Notices 

regarding sales practice and customer 

margin requirements for FINRA 

members applicable to leveraged ETFs 

and options on leveraged ETFs. The 

Information Circular will also discuss 

any exemptive, no-action and 

interpretive relief granted by the 

Commission from any rules under the 

Act. 

In addition, the Information Circular 

will reference that the Funds are subject 

to various fees and expenses described 

in the Registration Statement. The 

Information Circular will also reference 

that the Commodity Futures Trading 

Commission has regulatory jurisdiction 

over futures contracts traded on U.S. 

markets. 


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Federal Register / Vol. 85, No. 246 / Tuesday, December 22, 2020 / Notices 83649 

24 15 U.S.C. 78f. 

25 15 U.S.C. 78f(b)(5). 

The Information Circular will also 

disclose the trading hours of the Shares 

of the Funds and that the NAV for the 

Shares is calculated after 4:00 p.m. E.T. 

each trading day. The Information 

Circular will disclose that information 

about the Shares of the Funds is 

publicly available on the Funds’ 

website. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with Section 6(b) 

of the Act 24 in general and Section 

6(b)(5) of the Act 25 in particular in that 

it is 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 

facilitating transactions in securities, to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. 

The Exchange believes that the 

proposed rule change is designed to 

prevent fraudulent and manipulative 

acts and practices in that the Shares will 

be listed and traded on the Exchange 

pursuant to the initial and continued 

listing criteria under Rule 14.11(f)(4). If 

the Sponsor to the Trust issuing the 

Trust Issued Receipts is affiliated with 

a broker-dealer, such Sponsor to the 

Trust shall erect and maintain a ‘‘fire 

wall’’ between the Sponsor and the 

broker-dealer with respect to access to 

information concerning the composition 

and/or changes to the Funds’ portfolio. 

The Sponsor is not a broker-dealer, but 

is affiliated with a broker-dealer dealer 

and has implemented and will maintain 

a ‘‘fire wall’’ with respect to such 

broker-dealer regarding access to 

information concerning the composition 

and/or changes to the portfolio. In the 

event that (a) the Sponsor becomes a 

broker-dealer or newly affiliated with a 

broker-dealer, or (b) any new sponsor is 

a broker-dealer or becomes affiliated 

with a broker-dealer, it will implement 

and maintain a fire wall with respect to 

its relevant personnel or such brokerdealer affiliate, as applicable, regarding 

access to information concerning the 

composition and/or changes to the 

portfolio, and will be subject to 

procedures designed to prevent the use 

and dissemination of material nonpublic information regarding the 

portfolio. The Exchange, FINRA, on 

behalf of the Exchange, or both may 

obtain information regarding trading in 

the Shares and the underlying listed 

instruments, including listed 

derivatives, held by the Funds from 

markets and other entities that are 

members of ISG or with which the 

Exchange has in place a comprehensive 

surveillance sharing agreement. In 

addition, the Exchange also has a 

general policy prohibiting the 

distribution of material, non-public 

information by its employees. 

The proposed rule change is designed 

to promote just and equitable principles 

of trade and to protect investors and the 

public interest in that the Exchange will 

obtain a representation from the issuer 

of the Shares that the NAV will be 

calculated daily and that the NAV and 

the Funds’ holdings will be made 

available to all market participants at 

the same time. In addition, a large 

amount of information is publicly 

available regarding the Funds and the 

Shares, thereby promoting market 

transparency. Moreover, the IIV will be 

disseminated by one or more major 

market data vendors at least every 15 

seconds during Regular Trading Hours. 

On each Business Day, before 

commencement of trading in Shares 

during Regular Trading Hours, the 

Funds will disclose on their website the 

holdings that will form the basis for the 

Fund’s calculation of NAV at the end of 

the Business Day. Pricing information 

will be available on the Funds’ website 

including: (1) The prior Business Day’s 

reported NAV, the closing market price 

or the bid/ask price, daily trading 

volume, and a calculation of the 

premium and discount of the closing 

market price or bid/ask price against the 

NAV; and (2) data in chart format 

displaying the frequency distribution of 

discounts and premiums of the daily 

closing price against the NAV, within 

appropriate ranges, for each of the four 

previous calendar quarters. 

Additionally, information regarding 

market price and trading of the Shares 

will be continually available on a realtime basis throughout the day on 

brokers’ computer screens and other 

electronic services, and quotation and 

last sale information for the Shares will 

be available on the facilities of the CTA. 

The website for the Funds will include 

a form of the prospectus for each Fund 

and additional data relating to NAV and 

other applicable quantitative 

information. Trading in Shares of the 

Funds will be halted under the 

conditions specified in Exchange Rule 

11.18. Trading may also be halted 

because of market conditions or for 

reasons that, in the view of the 

Exchange, make trading in the Shares 

inadvisable. Finally, trading in the 

Shares will be subject to 

14.11(f)(4)(C)(ii), which sets forth 

circumstances under which Shares of 

the Funds may be halted. In addition, as 

noted above, investors will have ready 

access to information regarding the 

Funds’ holdings, the IIV, the Index 

value, and quotation and last sale 

information for the Shares. 

Quotation and last-sale information 

regarding the Shares will be 

disseminated through the facilities of 

the CTA. Quotation and last-sale 

information regarding VIX Futures 

Contracts will be available from the 

exchanges on which such instruments 

are traded. Quotation and last-sale 

information for swaps will be available 

from nationally recognized data services 

providers, such as Reuters and 

Bloomberg, through subscription 

agreements or from a broker-dealer who 

makes markets in such instruments. 

Quotation and last-sale information for 

swaps will be valued on the basis of 

quotations or equivalent indication of 

value supplied by a third- party pricing 

service or broker-dealer who makes 

markets in such instruments. Pricing 

information regarding Cash Equivalents 

in which the Fund may invest is 

generally available through nationally 

recognized data services providers, such 

as Reuters and Bloomberg, through 

subscription agreements. 

The proposed rule change is designed 

to perfect the mechanism of a free and 

open market and, in general, to protect 

investors and the public interest in that 

it will facilitate the listing and trading 

of an exchange-traded product that will 

enhance competition among market 

participants, to the benefit of investors 

and the marketplace. As noted above, 

the Exchange has in place surveillance 

procedures relating to trading in the 

Shares and may obtain information via 

ISG from other exchanges that are 

members of ISG or with which the 

Exchange has entered into a 

comprehensive surveillance sharing 

agreement. In addition, as noted above, 

investors will have ready access to 

information regarding the Funds’ 

holdings, the IIV, and quotation and last 

sale information for the Shares. The 

Information Circular will also reference 

the FINRA Regulatory Notices regarding 

sales practice and customer margin 

requirements for FINRA members 

applicable to leveraged ETFs and 

options on leveraged ETFs. 

For the above reasons, the Exchange 

believes that the proposed rule change 

is consistent with the requirements of 

Section 6(b)(5) of the Act. 


jbell on DSKJLSW7X2PROD with NOTICES
83650 Federal Register / Vol. 85, No. 246 / Tuesday, December 22, 2020 / Notices 

26 15 U.S.C. 78s(b)(3)(A). 

27 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

give the Commission written notice of its intent to 

file the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

28 17 CFR 240.19b–4(f)(6). 

29 17 CFR 240.19b–4(f)(6)(iii). 

30See supra note. 

31For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

32 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purpose of the Act. The Exchange 

notes that the proposed rule change, 

rather will facilitate the transfer from 

Arca and listing of additional exchangetraded products on the Exchange, which 

will enhance competition among listing 

venues, to the benefit of issuers, 

investors, and the marketplace more 

broadly. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has neither solicited 

nor received written comments on the 

proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 26 and Rule 19b– 

4(f)(6) thereunder.27

A proposed rule change filed under 

Rule 19b–4(f)(6) 28 normally does not 

become operative for 30 days after the 

date of the filing. However, pursuant to 

Rule 19b–4(f)(6)(iii),29 the Commission 

may designate a shorter time if such 

action is consistent with the protection 

of investors and the public interest. The 

Exchange has asked the Commission to 

waive the 30-day operative delay so that 

the proposal may become operative 

immediately upon filing. The Exchange 

states that waiver of the 30-day 

operative delay will allow the Funds to 

transfer listing to the Exchange as soon 

as is practicable and minimize the 

amount of time that the Funds’ listing 

venue will be in transition. The Funds 

have previously been approved by the 

Commission to list and trade on NYSE 

Arca, Inc.30 The Exchange states that 

this proposal is substantively identical 

to the Original Proposal, including 

changes from the Prior Proposal, and the 

issuer represents that all material 

representations contained within the 

Original Proposal, as updated by the 

Prior Proposal, remain true. For these 

reasons, the Commission believes that 

waiver of the 30-day operative delay is 

consistent with the protection of 

investors and the public interest. 

Accordingly, the Commission waives 

the 30-day operative delay and 

designates the proposed rule change 

operative upon filing.31

At any time within 60 days of the 

filing of such proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

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– 

CboeBZX–2020–093 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–CboeBZX–2020–093. 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–CboeBZX–2020–093 and 

should be submitted on or before 

January 12, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.32

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–28151 Filed 12–21–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90685; File No. SR– 

CboeBZX–2020–092] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To List and 

Trade Shares of the ProShares VIX 

Short-Term Futures ETF and the 

ProShares VIX Mid-Term Futures ETF, 

Each a Series of ProShares Trust II, 

Under Rule 14.11(f)(4) (Trust Issued 

Receipts) 

December 16, 2020. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on December 

14, 2020, Cboe BZX Exchange, Inc. 

(‘‘Exchange’’ or ‘‘BZX’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Exchange filed the 

proposal as a ‘‘non-controversial’’ 


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