27042 Federal Register / Vol. 83, No. 112 / Monday, June 11, 2018 / Notices 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

the directors/trustees may fully carry 

out the obligations imposed upon the 

Board by the conditions contained in 

the Application. Such reports, materials 

and data shall be submitted more 

frequently if deemed appropriate by the 

Board. The obligations of the 

Participants to provide these reports, 

materials and data to the Board, when 

it so reasonably requests, shall be a 

contractual obligation of all Participants 

under their participation agreement 

with the Fund. 

13. All reports of potential or existing 

conflicts received by a Board, and all 

Board action with regard to determining 

the existence of a conflict, notifying 

Participants of a conflict and 

determining whether any proposed 

action adequately remedies a conflict, 

will be properly recorded in the minutes 

of the Board or other appropriate 

records, and such minutes or other 

records shall be made available to the 

Commission upon request. 

14. Each Fund will not accept a 

purchase order from a Qualified Plan if 

such purchase would make the 

Qualified Plan an owner of 10 percent 

or more of the assets of a Fund unless 

the Qualified Plan executes an 

agreement with the Fund governing 

participation in the Fund that includes 

the conditions set forth herein to the 

extent applicable. A Qualified Plan will 

execute an application containing an 

acknowledgement of this condition at 

the time of its initial purchase of shares. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–12509 Filed 6–8–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–789, OMB Control No. 

3235–0371] 

Proposed Collection; Comment 

Request; Generic ICR: Generic 

Clearance for the Collection of 

Qualitative Feedback on Agency 

Service Delivery 

Upon Written Request Copies Available 

From: U.S. Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission 

(‘‘Commission’’) is soliciting comments 

on the collection of information 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 

Management and Budget for extension 

and approval. 

The information collection activity 

will garner qualitative customer and 

stakeholder feedback in an efficient, 

timely manner, in accordance with the 

Administration’s commitment to 

improving service delivery. By 

qualitative feedback we mean 

information that provides useful 

insights on perceptions and opinions, 

but are not statistical surveys that yield 

quantitative results that can be 

generalized to the population of study. 

This feedback will provide insights into 

customer or stakeholder perceptions, 

experiences and expectations, provide 

an early warning of issues with service, 

or focus attention on areas where 

communication, training or changes in 

operations might improve delivery of 

products or services. These collections 

will allow for ongoing, collaborative and 

actionable communications between the 

SEC and its customers and stakeholders. 

It will also allow feedback to contribute 

directly to the improvement of program 

management. 

Feedback collected under this generic 

clearance will provide useful 

information, but it will not yield data 

that can be generalized to the overall 

population. This type of generic 

clearance for qualitative information 

will not be used for quantitative 

information collections that are 

designed to yield reliably actionable 

results, such as monitoring trends over 

time or documenting program 

performance. Depending on the degree 

of influence the results are likely to 

have, such collections may still be 

eligible for submission for other generic 

mechanisms that are designed to yield 

quantitative results. 

Below is the projected average 

estimates for the next three years: 

Expected Annual Number of 

Activities: [10]. 

Respondents: [20,000]. 

Annual Responses: [20,000]. 

Frequency of Response: Once per 

request. 

Average Minutes per Response: [10]. 

Burden Hours: [3500]. 

Written comments are invited on: (a) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

Commission, including whether the 

information shall have practical utility; 

(b) the accuracy of the Commission’s 

estimates of the burden of the proposed 

collection of information; (c) ways to 

enhance the quality, utility, and clarity 

of the information to be collected; and 

(d) ways to minimize the burden of the 

collection of information on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology. 

Consideration will be given to 

comments and suggestions submitted in 

writing within 60 days of this 

publication. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid OMB 

control number. 

Please direct your written comments 

to: Pamela Dyson, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Candace 

Kenner, 100 F Street NE, Washington, 

DC 20549, or send an email to: PRA_

Mailbox@sec.gov. 

Dated: June 5, 2018. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–12434 Filed 6–8–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83381; File No. SR– 

NYSEArca–2018–38] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change Relating to the Index 

Methodology Applicable to Indexes 

Underlying iShares California AMTFree Muni Bond ETF and iShares New 

York AMT-Free Muni Bond ETF 

June 5, 2018. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that, on May 21, 

2018, NYSE Arca, Inc. (‘‘Exchange’’ or 

‘‘NYSE Arca’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes changes 

relating to the index methodology 

applicable to the indexes underlying 


daltland on DSKBBV9HB2PROD with NOTICES
Federal Register / Vol. 83, No. 112 / Monday, June 11, 2018 / Notices 27043 

4On July 1, 2017 (as revised October 18, 2017), 

the Trust filed an amendment to its registration 

statement on Form N–1A under the Securities Act 

of 1933 (15 U.S.C. 77a) (‘‘1933 Act’’) and the 

Investment Company Act of 1940 (‘‘1940 Act’’) (15 

U.S.C. 80a–1) (File Nos. 333–92935 and 811–09729) 

(the ‘‘Registration Statement’’). The description of 

the operation of the Trust and the Funds herein is 

based, in part, on the Registration Statement. The 

Commission has issued an order granting certain 

exemptive relief to the Trust under the 1940 Act. 

See Investment Company Act Release No. 27608 

(December 21, 2006) (File No. 812–13208) 

(‘‘Exemptive Order’’). 

5The Funds were initially listed on the American 

Stock Exchange, Inc. (‘‘Amex’’) (now NYSE 

American LLC) on October 4, 2007 pursuant to the 

generic listing criteria of Amex Rule 1000A. On 

October 6, 2008, the listings transferred from the 

Amex to NYSE Arca, which changes were effected 

pursuant to NYSE Arca Equities Rule 5.2(j)(3), 

Commentary .02. 

6The Commission previously has approved 

proposed rule changes relating to listing and trading 

on the Exchange of Units based on municipal bond 

indexes. See Securities Exchange Act Release Nos. 

67985 (October 4, 2012), 77 FR 61804 (October 11, 

2012) (SR–NYSEArca–2012–92) (order approving 

proposed rule change relating to the listing and 

trading of iShares 2018 S&P AMT-Free Municipal 

Series and iShares 2019 S&P AMT-Free Municipal 

Series under NYSE Arca Equities Rule 5.2(j)(3), 

Commentary .02); 67729 (August 24, 2012), 77 FR 

52776 (August 30, 2012) (SR–NYSEArca–2012–92) 

(notice of proposed rule change relating to the 

listing and trading of iShares 2018 S&P AMT-Free 

Municipal Series and iShares 2019 S&P AMT-Free 

Municipal Series under NYSE Arca Equities Rule 

5.2(j)(3), Commentary .02); 72523, (July 2, 2014), 79 

FR 39016 (July 9, 2014) (SR–NYSEArca–2014–37) 

(order approving proposed rule change relating to 

the listing and trading of iShares 2020 S&P AMTFree Municipal Series under NYSE Arca Equities 

Rule 5.2(j)(3), Commentary .02); 72172 (May 15, 

2014), 79 FR 29241 (May 21, 2014) (SR–NYSEArca– 

2014–37) (notice of proposed rule change relating 

to the listing and trading of iShares 2020 S&P AMTFree Municipal Series under NYSE Arca Equities 

Rule 5.2(j)(3), Commentary .02); 72464 (June 25, 

2014), 79 FR 37373 (July 1, 2014) (File No. SR– 

NYSEArca–2014–45) (order approving proposed 

rule change governing the continued listing and 

trading of shares of the PowerShares Insured 

California Municipal Bond Portfolio, PowerShares 

Insured National Municipal Bond Portfolio, and 

PowerShares Insured New York Municipal Bond 

Portfolio); 75468 (July 16, 2015), 80 FR 43500 (July 

22, 2015) (SR–NYSEArca–2015–25) (order 

approving proposed rule change relating to the 

listing and trading of iShares iBonds Dec 2021 

AMT-Free Muni Bond ETF and iShares iBonds Dec 

2022 AMT-Free Muni Bond ETF under NYSE Arca 

Equities Rule 5.2(j)(3)); 74730 (April 15, 2015), 76 

FR 22234 (April 21, 2015) (notice of proposed rule 

change relating to the listing and trading of iShares 

iBonds Dec 2021 AMT-Free Muni Bond ETF and 

iShares iBonds Dec 2022 AMT-Free Muni Bond 

ETF under NYSE Arca Equities Rule 5.2(j)(3), 

Commentary .02); 74730 75376 (July 7, 2015), 80 FR 

40113 (July 13, 2015) (SR–NYSEArca–2015–18) 

(order approving proposed rule change relating to 

the listing and trading of Vanguard Tax-Exempt 

Bond Index Fund under NYSE Arca Equities Rule 

5.2(j)(3)). The Commission also has issued a notice 

of filing and immediate effectiveness of a proposed 

rule change relating to listing and trading on the 

Exchange of shares of the iShares Taxable 

Municipal Bond Fund. See Securities Exchange Act 

Release No. 63176 (October 25, 2010), 75 FR 66815 

(October 29, 2010) (SR–NYSEArca–2010–94). The 

Commission has approved for Exchange listing and 

trading of shares of actively managed funds of that 

principally hold municipal bonds. See, e.g., 

Securities Exchange Act Release Nos. 60981 

(November 10, 2009), 74 FR 59594 (November 18, 

2009) (SR–NYSEArca–2009–79) (order approving 

listing and trading of shares of the PIMCO ShortTerm Municipal Bond Strategy Fund and PIMCO 

Intermediate Municipal Bond Strategy Fund); 79293 

(November 10, 2016), 81 FR 81189 (November 17, 

2016) (SR–NYSEArca–2016–107) (order approving 

listing and trading of shares of Cumberland 

Municipal Bond ETF). The Commission also has 

approved listing and trading on the Exchange of 

shares of the SPDR Nuveen S&P High Yield 

Municipal Bond Fund under Commentary .02 of 

NYSE Arca Equities Rule 5.2(j)(3). See Securities 

Exchange Act Release No. 63881 (February 9, 2011), 

76 FR 9065 (February 16, 2011) (SR–NYSEArca– 

2010–120). 

7An investment adviser to an open-end fund is 

required to be registered under the Investment 

Advisers Act of 1940 (the ‘‘Advisers Act’’). As a 

result, the Adviser and its related personnel are 

subject to the provisions of Rule 204A–1 under the 

Advisers Act relating to codes of ethics. This Rule 

requires investment advisers to adopt a code of 

ethics that reflects the fiduciary nature of the 

relationship to clients as well as compliance with 

other applicable securities laws. Accordingly, 

procedures designed to prevent the communication 

and misuse of non-public information by an 

investment adviser must be consistent with Rule 

204A–1 under the Advisers Act. In addition, Rule 

206(4)–7 under the Advisers Act makes it unlawful 

for an investment adviser to provide investment 

advice to clients unless such investment adviser has 

(i) adopted and implemented written policies and 

procedures reasonably designed to prevent 

violation, by the investment adviser and its 

supervised persons, of the Advisers Act and the 

Commission rules adopted thereunder; (ii) 

implemented, at a minimum, an annual review 

regarding the adequacy of the policies and 

procedures established pursuant to subparagraph (i) 

above and the effectiveness of their 

implementation; and (iii) designated an individual 

(who is a supervised person) responsible for 

administering the policies and procedures adopted 

under subparagraph (i) above. 

8The Commission approved continued listing 

and trading of Shares of the Funds in Securities 

Exchange Act Release Nos. 82295 (December 12, 

2017), 82 FR 60056 (December 18, 2017) (SR– 

NYSEArca–2017–56) (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 Shares of 

Twelve Series of Investment Company Units 

Pursuant to NYSE Arca Rule 5.2–E(j)(3) 

(‘‘Municipal Bond ETF Order’’). In that filing, the 

Exchange proposed to facilitate the listing and 

trading of Shares of the Funds, in addition to other 

series of Units based on municipal bond indexes 

notwithstanding the fact that the indices on which 

they are based do not meet the requirements of 

Commentary .02(a)(2) to Rule 5.2–E(j)(3). See 

‘‘Application of the Generic Listing Criteria’’, infra. 

9The Index Provider is not a broker-dealer or 

affiliated with a broker-dealer and has implemented 

procedures designed to prevent the use and 

dissemination of material, non-public information 

regarding the Indexes. 

10On November 7, 2014, S&P Dow Jones Indices 

(‘‘S&P’’) issued a press release announcing 

methodology changes for the Indexes to be 

implemented prior to the February 2015 month-end 

rebalances for such indexes (‘‘S&P 

Announcement’’). On April 3, 2015, S&P issued a 

Continued 

shares of the following series of 

Investment Company Units that are 

currently listed and traded on the 

Exchange under NYSE Arca Rule 5.2– 

E(j)(3): iShares California AMT-Free 

Muni Bond ETF and iShares New York 

AMT-Free Muni Bond ETF. The 

proposed change is available on the 

Exchange’s website at www.nyse.com, at 

the principal office of the Exchange, and 

at the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

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

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange currently lists and 

trades shares (‘‘Shares’’) of the iShares 

California AMT-Free Muni Bond ETF 

(‘‘CA Fund’’) and iShares New York 

AMT-Free Muni Bond ETF (‘‘NY Fund’’ 

and, together with the CA Fund, the 

‘‘Funds’’) 4 under NYSE Arca Rule 5.2– 

E(j)(3), which governs the listing and 

trading of Investment Company Units 

(‘‘Units’’) based on fixed income 

securities indexes.5 The Funds are 

series of the iShares Trust (‘‘Trust’’).6

The Exchange is proposing changes 

relating to the index methodology 

applicable to indexes underlying Shares 

of the Funds, as described below. 

Blackrock Fund Advisors is the 

investment adviser (‘‘BFA’’ or 

‘‘Adviser’’) for the Funds.7 Blackrock 

Investments, LLC is the Funds’ 

distributor (‘‘Distributor’’). State Street 

Bank and Trust Company is the 

administrator, custodian and fund 

accounting and transfer agent for each 

Fund.8

Changes to Indexes Underlying the 

Funds 

The index currently underlying the 

CA Fund is the S&P California AMTFree Muni Bond Index (‘‘CA Index’’) 

and the index underlying the NY Fund 

is the S&P New York AMT-Free Muni 

Bond Index (‘‘NY Index’’, and, together 

with the CA Index, the ‘‘Indexes’’). S&P 

Dow Jones Indices LLC, the index 

provider (‘‘Index Provider’’) for the 

Indexes,9 previously proposed changes 

to the inclusion rules of both the CA 

Index and the NY Index.10 While no 


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27044 Federal Register / Vol. 83, No. 112 / Monday, June 11, 2018 / Notices 

press release cancelling the proposed methodology 

change. S&P would be expected to issue a press 

release prior to implementing any future material 

changes to the methodology that would include the 

implementation date for such changes. Any future 

material changes to the Indexes for the Funds 

would be reflected in an amendment to the Funds’ 

Registration Statement. 

11The Commission has approved the Exchange’s 

proposed rule change to facilitate the continued 

listing and trading of shares of the Funds 

notwithstanding the fact that the indices on which 

they are based do not meet the requirements of 

Commentary .02(a)(2) to Rule 5.2(j)(3). Commentary 

.02 to Rule 5.2–E(j)(3) sets forth the generic listing 

requirements for an index of fixed income securities 

underlying a series of Units. One of the enumerated 

listing requirements is that component fixed 

income securities that, in the aggregate, account for 

at least 75% of the weight of the index each shall 

have a minimum principal amount outstanding of 

$100 million or more. (Commentary .02(a)(2) to 

NYSE Arca Rule 5.2–E(j)(3)). Each of the indices on 

which the Funds are based do not meet such 

requirement but meet all of the other requirements 

of such rule. See also Municipal Bond ETF Order, 

note 8, supra. 

12The term ‘‘normal market conditions’’ includes, 

but is not limited to, the absence of trading halts 

in the applicable financial markets generally; 

operational issues (e.g., systems failure) causing 

dissemination of inaccurate market information; or 

force majeure type events such as natural or 

manmade disaster, act of God, armed conflict, act 

of terrorism, riot or labor disruption or any similar 

intervening circumstance. 

13S&P announced changes to the Indexes in 2014, 

but such changes were not implemented. See note 

10, supra. This proposed rule change is intended 

to accommodate continued listing and trading of 

the Funds based on the Indexes in the event the 

Indexes were to change consistent with the S&P 

Announcement. 

14See Municipal Bond ETF Order, supra, note 8, 

in which the Commission approved continued 

listing and trading of Shares of the Funds and ten 

other series of Units where the applicable 

underlying bond index did not satisfy Commentary 

.02(a)(2) of Rule 5.2–E(j)(3), provided that such 

municipal bond index contained at least 500 

component securities on a continuous basis, in 

addition to satisfying other specified criteria. See 

also, Securities Exchange Act Release No. 79767 

(January 10, 2017), 82 FR 4950 (January 17, 2017) 

(SR–NYSEArca–2016–62) (order approving 

proposed rule change relating to the listing and 

future changes to the methodologies 

applicable to the Indexes have been 

announced by the Index Provider, the 

Exchange is proposing continued listing 

criteria to accommodate continued 

listing and trading of Shares of the 

Funds in accordance with possible 

future changes to the CA Index and NY 

Index methodologies, as described 

below, in the event such changes were 

to be implemented.11

The Funds and the Indexes 

The iShares California AMT-Free Muni 

Bond ETF 

The CA Fund currently seeks to track 

the investment results of the CA Index, 

which measures the performance of the 

investment-grade segment of the 

California municipal bond market. As of 

December 29, 2017, the CA Index 

included 2,229 component fixed income 

municipal bond securities from 206 

distinct municipal bond issuers in the 

State of California. The most heavily 

weighted security in the index 

represented approximately 0.56% of the 

total weight of the index and the 

aggregate weight of the top five most 

heavily weighted securities in the index 

represented approximately 2.52% of the 

total weight of the index. 

Approximately 39.15% of the weight of 

the components in the index had a 

minimum original principal amount 

outstanding of $100 million or more. In 

addition, the total dollar amount 

outstanding of issues in the index was 

approximately $148,688,995,000 and 

the average dollar amount outstanding 

of issues in the index was 

approximately $66,706,593. 

Under normal market conditions,12

the CA Fund invests at least 90% of its 

assets in the component securities of the 

CA Index. With respect to the remaining 

10% of its assets, the CA Fund may 

invest in short-term debt instruments 

issued by state governments, 

municipalities or local authorities, cash, 

exchange-traded U.S. Treasury futures 

and municipal money market funds, as 

well as in municipal bond securities not 

included in the CA Index, but which the 

Adviser believes will help the CA Fund 

track the CA Index. The CA Index is a 

subset of the S&P National AMT-Free 

Municipal Bond IndexTM and is 

comprised of municipal bonds issued in 

the State of California. The CA Index 

includes municipal bonds from issuers 

in the State of California that are 

California state or local governments or 

agencies whose interest payments are 

exempt from U.S. federal and California 

state income taxes and the federal 

alternative minimum tax (‘‘AMT’’). Each 

bond in the current CA Index must be 

a constituent of an offering where the 

original offering amount of the 

constituent bonds in the aggregate was 

at least $100 million. The bond must 

have a total minimum par amount of 

$25 million to be eligible for inclusion. 

To remain in the CA Index, bonds must 

maintain a total minimum par amount 

greater than or equal to $25 million as 

of the next ‘‘Rebalancing Date’’. 

iShares New York AMT-Free Muni 

Bond ETF 

The NY Fund seeks to track the 

investment results of the NY Index, 

which measures the performance of the 

investment-grade segment of the New 

York municipal bond market. As of 

December 29, 2017, the NY Index 

included 2,404 component fixed income 

municipal bond securities from 42 

distinct municipal bond issuers in the 

State of New York. The most heavily 

weighted security in the NY Index 

represented approximately 1.02% of the 

total weight of the index and the 

aggregate weight of the top five most 

heavily weighted securities in the NY 

Index represented approximately 2.17% 

of the total weight of the index. 

Approximately 30.95% of the weight of 

the components in the index had a 

minimum original principal amount 

outstanding of $100 million or more. 

In addition, the total dollar amount 

outstanding of issues in the index was 

approximately $140,192,465,000 and 

the average dollar amount outstanding 

of issues in the index was 

approximately $58,389,198. 

Under normal market conditions, the 

NY Fund invests at least 90% of its 

assets in the component securities of the 

NY Index. With respect to the remaining 

10% of its assets, the NY Fund may 

invest in short-term debt instruments 

issued by state governments, 

municipalities or local authorities, cash, 

exchange-traded U.S. Treasury futures 

and municipal money market funds, as 

well as in municipal bond securities not 

included in the NY Index, but which the 

Adviser believes will help the NY Fund 

track the NY Index. 

The NY Index also is a subset of the 

S&P National AMT-Free Municipal 

Bond IndexTM and is comprised of 

municipal bonds issued in the State of 

New York. The NY Index includes 

municipal bonds from issuers in the 

State of New York that are New York 

state or local governments or agencies 

whose interest payments are exempt 

from U.S. federal and New York state 

income taxes and the federal AMT. Each 

bond in the NY Index must be a 

constituent of an offering where the 

original offering amount of the 

constituent bonds in the aggregate was 

at least $100 million. The bond must 

have a minimum total par amount of 

$25 million to be eligible for inclusion. 

To remain in the NY Index, bonds must 

maintain a minimum total par amount 

greater than or equal to $25 million as 

of the next Rebalancing Date. 

Requirements for the CA Index and NY 

Index 

The Adviser wishes to position the 

Funds to accommodate continued 

listing and trading of Shares of the 

Funds in the event that changes, 

consistent with those described below, 

are implemented in the Index 

methodologies.13

On a continuous basis, the CA Index 

and NY Index will contain at least 500 

component securities.14 In addition, at 


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trading of the PowerShares Build America Bond 

Portfolio). 

15For comparison purposes, the Exchange notes 

that, in the Municipal Bond ETF Order, the 

Commission approved the continued listing and 

trading of shares of the VanEck Vectors High-Yield 

Municipal Index ETF based on the Bloomberg 

Barclays Municipal Custom High Yield Composite 

Index, which is comprised of three total return, 

market size weighted benchmark indices with 

weights as follows: (i) 50% weight in Muni High 

Yield/$100 Million Deal Size Index, (ii) 25% weight 

in Muni High Yield/Under $100 Million Deal Size 

Index, and (iii) 25% weight in Muni Baa Rated/ 

$100 Million Deal Size Index. At least 90% of the 

weight of the Muni High Yield/$100 Million Deal 

Size Index is comprised of securities that have an 

outstanding par value of at least $3 million and 

were issued as part of a transaction of at least $100 

million. At least 90% of the weight of the Muni 

High Yield/Under $100 Million Deal Size Index is 

comprised of securities that have an outstanding 

par value of at least $3 million and were issued as 

part of a transaction of under $100 million but over 

$20 million. At least 90% of the weight of the Muni 

Baa Rated/$100 Million Deal Size Index is 

comprised of securities that have an outstanding 

par value of at least $7 million and were issued as 

part of a transaction of at least $100 million. 

16The CA Index and NY Index would continue 

to meet the requirements of NYSE Arca Rule 5.2– 

E(j)(3), Commentary .02(a)(4), which provides that 

no component fixed-income security (excluding 

Treasury Securities and GSE Securities) shall 

represent more than 30% of the Fixed Income 

Securities portion of the weight of the index or 

portfolio, and the five most heavily weighted 

component fixed-income securities in the index or 

portfolio shall not in the aggregate account for more 

than 65% of the Fixed Income Securities portion of 

the weight of the index or portfolio. 

17Specifically, in the event the NY Index 

methodology specifies a minimum par amount of 

between $5 million and $25 million with an 

original offering amount for bond components of 

$20 million or more; or, in the event the CA Index 

methodology specifies a minimum par amount of 

between $15 million and $25 million with an 

original offering amount for bond components of 

$100 million or more, such changes would be 

deemed consistent with the respective Index 

descriptions above. 

18See note 11, supra. 

19 17 CFR 240.10A–3. 

20The IIV is widely disseminated by one or more 

major market data vendors at least every 15 seconds 

during the Exchange’s Core Trading Session of 9:30 

a.m. to 4:00 p.m., Eastern time. Currently, it is the 

Exchange’s understanding that several major market 

data vendors display and/or make widely available 

IIVs taken from the CTA or other data feeds. 

21See, e.g., Securities Exchange Act Release Nos. 

55783 (May 17, 2007), 72 FR 29194 (May 24, 2007) 

(SR–NYSEArca–2007–36) (order approving NYSE 

Arca generic listing standards for Units based on a 

fixed income index); 44551 (July 12, 2001), 66 FR 

37716 (July 19, 2001) (SR–PCX–2001–14) (order 

approving generic listing standards for Units and 

Portfolio Depositary Receipts); 41983 (October 6, 

1999), 64 FR 56008 (October 15, 1999) (SR–PCX– 

98–29) (order approving rules for listing and trading 

of Units). 

least 90% of the weight of the CA Index 

will consist of securities that have an 

outstanding par value of at least $15 

million and were issued as part of a 

transaction of at least $100 million; and 

at least 90% of the weight of the NY 

Index will consist of securities that have 

an outstanding par value of at least $5 

million and were issued as part of a 

transaction of at least $20 million.15 At 

each monthly rebalancing, no one issuer 

can represent more than 25% of the 

weight of the applicable Index, and the 

aggregate weight of those issuers 

representing at least 5% of such Index 

cannot exceed 50% of the weight of the 

applicable Index.16

Application of the Generic Listing 

Criteria 

The Exchange is submitting this 

proposed rule change to permit the 

continued listing and trading of Shares 

of each of the Funds in the event that 

the methodologies applicable to the 

Indexes are revised in a manner 

consistent with the descriptions above 

in ‘‘Requirements for the CA Index and 

NY Index’’.17 The Indexes would satisfy 

all of the requirements of the generic 

listing criteria of NYSE Arca Rule 5.2– 

E(j)(3), except for those set forth in 

Commentary .02(a)(2).18

The Exchange believes that, 

notwithstanding that the CA Index 

would not satisfy the criterion in NYSE 

Arca Rule 5.2–E(j)(3), Commentary 

.02(a)(2), the CA Index would be 

sufficiently broad-based to deter 

potential manipulation. As of December 

29, 2017, the CA Index included 2,229 

component fixed income municipal 

bond securities from 206 distinct 

municipal bond issuers in the State of 

California. The Adviser anticipates that 

the number of CA Index components 

would increase significantly if the 

methodology changes described above 

were implemented in that a reduction in 

the minimum par amount required for 

inclusion in the CA Index would permit 

a larger number of municipal bond 

issues to be eligible for inclusion. In 

addition, the CA Index securities would 

be sufficiently large to deter potential 

manipulation in view of the substantial 

total dollar amount outstanding and the 

average dollar amount outstanding of 

the CA Index issues, as referenced 

above. 

The Exchange believes that, 

notwithstanding that the NY Index 

would not satisfy the criterion in NYSE 

Arca Rule 5.2–E(j)(3), Commentary 

.02(a)(2), the NY Index would be 

sufficiently broad-based to deter 

potential manipulation. As of December 

29, 2017, the NY Index included 2,404 

component fixed income municipal 

bond securities from 42 distinct 

municipal bond issuers in the State of 

New York. The Adviser anticipates that 

the number of NY Index components 

would increase significantly if the 

methodology changes described above 

were implemented in that a reduction in 

the minimum par amount required for 

inclusion in the NY Index would permit 

a larger number of municipal bond 

issues to be eligible for inclusion. In 

addition, the NY Index securities would 

be sufficiently large to deter potential 

manipulation in view of the substantial 

total dollar amount outstanding and the 

average dollar amount outstanding of 

NY Index issues, as referenced above. 

The Adviser represents that reducing 

the required par amount outstanding 

both allows for more diversity of issuers 

in an Index and would significantly 

expand the universe of municipal 

securities that a Fund could purchase, 

and, are a better representation of the 

securities that issuers bring to the 

municipal bond market in California 

and New York. 

With respect to each of the Funds, the 

value of each Index would be calculated 

and disseminated via a major market 

data vendor at least once daily; further, 

the components and percentage 

weightings of each Index also would be 

available from major market data 

vendors. In addition, the portfolio of 

securities held by each Fund are 

disclosed daily on the Funds’ website at 

www.iShares.com. 

The Exchange represents that: (1) 

With respect to the Funds, except for 

Commentary .02(a)(2) to NYSE Arca 

Rule 5.2–E(j)(3), the Indexes currently 

satisfy all of the generic listing 

standards under NYSE Arca Rule 5.2– 

E(j)(3); (2) the continued listing 

standards under NYSE Arca Rules 5.2– 

E(j)(3) and 5.5(g)(2) applicable to Units 

shall apply to the Shares of the Funds; 

and (3) the Trust is required to comply 

with Rule 10A–3 19 under the Act for the 

initial and continued listing of the 

Shares of the Funds. In addition, the 

Exchange represents that the Shares of 

the Funds will comply with all other 

requirements applicable to Units 

including, but not limited to, 

requirements relating to the 

dissemination of key information such 

as the value of the Indexes and the 

applicable Intraday Indicative Value 

(‘‘IIV’’),20 rules governing the trading of 

equity securities, trading hours, trading 

halts, surveillance, and the Information 

Bulletin to Equity Trading Permit 

Holders (‘‘ETP Holders’’), as set forth in 

Exchange rules applicable to Units and 

prior Commission orders approving the 

generic listing rules applicable to the 

listing and trading of Units.21

Each of the Indexes is sponsored by 

the Index Provider, which is 

independent of the Funds and the 

Adviser. The Index Provider determines 

the composition and relative weightings 

of the securities in the Indexes and 


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27046 Federal Register / Vol. 83, No. 112 / Monday, June 11, 2018 / Notices 

22Under accounting procedures followed by the 

Funds, trades made on the prior business day (‘‘T’’) 

will be booked and reflected in NAV on the current 

business day (‘‘T+1’’). Accordingly, the Funds will 

be able to disclose at the beginning of the business 

day the portfolio that will form the basis for the 

NAV calculation at the end of the business day. 23 17 CFR 240.10A–3. 

publishes information regarding the 

market value of the Indexes. The Index 

Provider is not a broker-dealer or 

affiliated with a broker-dealer and has 

implemented procedures designed to 

prevent the use and dissemination of 

material, non-public information 

regarding the Indexes. In the event the 

Index Provider becomes registered as a 

broker-dealer or affiliated with a brokerdealer, the Index Provider will 

implement and maintain a ‘‘fire wall’’ 

with respect to its relevant personnel or 

broker-dealer affiliate regarding access 

to information concerning changes and 

adjustments to the Indexes. 

The current value of each of the 

Indexes is widely disseminated by one 

or more major market data vendors at 

least once per day, as required by NYSE 

Arca Rule 5.2–E(j)(3), Commentary 

.02(b)(ii). The IIVs for Shares of the 

Funds are disseminated by one or more 

major market data vendors, updated at 

least every 15 seconds during the 

Exchange’s Core Trading Session, as 

required by NYSE Arca Rule 5.2–E(j)(3), 

Commentary .02 (c), and Commentary 

.01(c), respectively. 

With the exception of Commentary 

.02(a)(2) to NYSE Arca Rule 5.2–E(j)(3), 

the CA Index and NY Index will meet 

all other requirements of Commentary 

.02(a) to NYSE Arca Rule 5.2–E(j)(3). 

Availability of Information 

On each business day, before 

commencement of trading in Shares of 

each Fund in the Core Trading Session 

on the Exchange, a Fund discloses on its 

website the portfolio that will form the 

basis for a Fund’s calculation of net 

asset value (‘‘NAV’’) at the end of the 

business day.22

On a daily basis, each Fund discloses 

for each portfolio security or other 

financial instrument of a Fund the 

following information on the Funds’ 

website: Ticker symbol (if applicable), 

name of security and financial 

instrument, a common identifier such as 

CUSIP or ISIN (if applicable), number of 

shares (if applicable), and dollar value 

of securities and financial instruments 

held in the portfolio, and percentage 

weighting of the security and financial 

instrument in the applicable portfolio. 

The website information is publicly 

available at no charge. 

The current value of the Indexes 

would be widely disseminated by one or 

more major market data vendors at least 

once per day, as required by NYSE Arca 

Rule 5.2–E(j)(3), Commentary .02 (b)(ii). 

The IIV for Shares of each Fund are 

disseminated by one or more major 

market data vendors, updated at least 

every 15 seconds during the Exchange’s 

Core Trading Session, as required by 

NYSE Arca Rule 5.2–E(j)(3), 

Commentary .02(c). 

Investors can also obtain the Trust’s 

Statement of Additional Information 

(‘‘SAI’’), the Funds’ Shareholder 

Reports, and their Form N–CSR and 

Form N–SAR, filed twice a year. The 

Trust’s SAI and Shareholder Reports are 

available free upon request from the 

Trust, and those documents and the 

Form N–CSR and Form N–SAR may be 

viewed on-screen or downloaded from 

the Commission’s website at 

www.sec.gov. Information regarding 

market price and trading volume of the 

Shares of each Fund are continually 

available on a real-time basis throughout 

the day on brokers’ computer screens 

and other electronic services. 

Information regarding the previous 

day’s closing price and trading volume 

information for the Shares will be 

published daily in the financial section 

of newspapers. 

Quotation and last sale information 

for the Shares are available via the 

Consolidate Tape Association (‘‘CTA’’) 

high speed line. Price information 

regarding municipal bonds is available 

from major market data vendors and 

third party pricing services. Trade price 

and other information relating to 

municipal bonds is available through 

the Municipal Securities Rulemaking 

Board’s Electronic Municipal Market 

Access (‘‘EMMA’’) system. 

Trading Rules 

The Exchange deems the Shares of 

each Fund to be equity securities, thus 

rendering trading in the Shares subject 

to the Exchange’s existing rules 

governing the trading of equity 

securities. Shares trade on the NYSE 

Arca Marketplace from 4:00 a.m. to 8:00 

p.m., Eastern time in accordance with 

NYSE Arca Rule 7.34–E (Early, Core, 

and Late Trading Sessions). The 

Exchange has appropriate rules to 

facilitate transactions in the Shares 

during all trading sessions. As provided 

in NYSE Arca Rule 7.6–E, Commentary 

.03, the minimum price variation 

(‘‘MPV’’) for quoting and entry of orders 

in equity securities traded on the NYSE 

Arca Marketplace is $0.01, with the 

exception of securities that are priced 

less than $1.00 for which the MPV for 

order entry is $0.0001. 

With the exception of Commentary 

.02(a)(2) to Rule 5.2(j)(3), The [sic] 

Shares of the Funds conform to the 

initial and continued listing criteria 

under NYSE Arca Rules 5.2–E(j)(3) and 

5.5–E(g)(2), respectively. The Exchange 

represents that the Funds are in 

compliance with Rule 10A–3 23 under 

the Act, as provided by NYSE Arca Rule 

5.3–E. The Exchange has obtained a 

representation from the issuer of the 

Shares that the NAV per Share of each 

Fund is calculated daily and that the 

NAV per Share will be made available 

to all market participants at the same 

time. 

All statements and representations 

made in this filing regarding (a) the 

description of the portfolio, or (b) 

limitations on portfolio holdings or 

reference assets shall constitute 

continued listing requirements for 

listing the Shares of the Funds on the 

Exchange. 

The issuer has represented to the 

Exchange that it will advise the 

Exchange of any failure by the Funds 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 Fund is not in 

compliance with the applicable listing 

requirements, the Exchange will 

commence delisting procedures under 

NYSE Arca Rule 5.5–E(m). 

Trading Halts 

The Exchange will halt trading in the 

Shares if the circuit breaker parameters 

of NYSE Arca Rule 7.12–E have been 

reached. In exercising its discretion to 

halt or suspend trading in the Shares, 

the Exchange may consider factors such 

as the extent to which trading in the 

underlying securities is not occurring or 

whether other unusual conditions or 

circumstances detrimental to the 

maintenance of a fair and orderly 

market are present, in addition to other 

factors that may be relevant. If the IIV 

(as defined in Commentary .01 to Rule 

5.2–E(j)(3)) or the value of an Index is 

not being disseminated as required, the 

Exchange may halt trading during the 

day in which the interruption to the 

dissemination of the IIV or the Index 

value occurs. If the interruption to the 

dissemination of the IIV or the Index 

value persists past the trading day in 

which it occurred, the Exchange will 

halt trading. 

Surveillance 

The Exchange represents that trading 

in the Shares of each Fund will be 

subject to the existing trading 

surveillances, administered by the 

Financial Industry Regulatory Authority 


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24FINRA conducts cross-market surveillances on 

behalf of the Exchange pursuant to a regulatory 

services agreement. The Exchange is responsible for 

FINRA’s performance under this regulatory services 

agreement. 

25The Commission has previously approved a 

proposed rule change relating to the listing and 

trading on the Exchange of a series of Units based 

on a municipal bond index that did not satisfy 

Commentary .02(a)(2) of Rule 5.2–E(j)(3) provided 

that such municipal bond index contained at least 

500 component securities on a continuous basis. 

See Securities Exchange Act Release No. 79767 

(January 10, 2017), 82 FR 4950 (January 17, 2017) 

(SR–NYSEArca–2016–62) (order approving 

proposed rule change relating to the listing and 

trading of the PowerShares Build America Bond 

Portfolio). The total dollar amount of issues in the 

index underlying the PowerShares Build America 

Bond Portfolio was approximately 

$281,589,346,769 and the average dollar amount 

outstanding of issues in the index was 

approximately $27,808,547. Those metrics are 

comparable to the metrics of the indices underlying 

the Funds. 

26 17 CFR 240.10A–3. 

27See note 21, supra. 

(‘‘FINRA’’) on behalf of the Exchange, or 

by regulatory staff of the Exchange, 

which are designed to detect violations 

of Exchange rules and applicable federal 

securities laws. The Exchange 

represents that these procedures are 

adequate to properly monitor Exchange 

trading of the Shares of each Fund in all 

trading sessions and to deter and detect 

violations of Exchange rules and federal 

securities laws applicable to trading on 

the Exchange.24

The surveillances referred to above 

generally focus on detecting securities 

trading outside their normal patterns, 

which could be indicative of 

manipulative or other violative activity. 

When such situations are detected, 

surveillance analysis follows and 

investigations are opened, where 

appropriate, to review the behavior of 

all relevant parties for all relevant 

trading violations. 

The Exchange or FINRA, on behalf of 

the Exchange, or both, will 

communicate as needed regarding 

trading in the Shares with other markets 

and other entities that are members of 

the Intermarket Surveillance Group 

(‘‘ISG’’), and the Exchange or FINRA, on 

behalf of the Exchange, or both, may 

obtain trading information regarding 

trading in the Shares from such markets 

and other entities. In addition, the 

Exchange may obtain information 

regarding trading in the Shares 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, FINRA, on behalf of the 

Exchange, is able to access, as needed, 

trade information for certain fixed 

income securities held by a Fund 

reported to FINRA’s Trade Reporting 

and Compliance Engine (‘‘TRACE’’). 

FINRA also can access data obtained 

from the Municipal Securities 

Rulemaking Board (‘‘MSRB’’) relating to 

municipal bond trading activity for 

surveillance purposes in connection 

with trading in the Shares. 

Information Bulletin 

Prior to any implementation of 

changes to the Municipal Bond Index 

methodologies as described above, the 

Exchange would inform its ETP Holders 

in an Information Bulletin (‘‘Bulletin’’) 

of the special characteristics and risks 

associated with trading the Shares. 

Specifically, the Bulletin would discuss 

the following: (1) The procedures for 

purchases and redemptions of Shares in 

Creation Unit aggregations (and that 

Shares are not individually redeemable); 

(2) NYSE Arca Rule 9.2–E(a), which 

imposes a duty of due diligence on its 

ETP Holders to learn the essential facts 

relating to every customer prior to 

trading the Shares; (3) the risks involved 

in trading the Shares during the 

Opening and Late Trading Sessions 

when an updated IIV will not be 

calculated or publicly disseminated; (4) 

how information regarding the IIV is 

disseminated; (5) the requirement that 

ETP Holders deliver a prospectus to 

investors purchasing newly issued 

Shares prior to or concurrently with the 

confirmation of a transaction; (6) trading 

information; and (7) changes to the 

Indexes. 

In addition, the Bulletin would 

reference that each Fund is subject to 

various fees and expenses described in 

the Registration Statement. The Bulletin 

would discuss any exemptive, noaction, and interpretive relief granted by 

the Commission from any rules under 

the Act. The Bulletin would also 

disclose that the NAV for the Shares is 

calculated after 4:00 p.m., Eastern time 

each trading day. 

Based on the characteristics of each 

Index as described above, the Exchange 

believes it is appropriate to facilitate the 

listing and trading of the Funds. Each 

Index satisfies all of the generic listing 

requirements for Units based on a fixed 

income index, except for the minimum 

principal amount outstanding 

requirement of Commentary .02(a)(2) to 

Rule 5.2–E(j)(3). 

A fundamental purpose behind the 

minimum principal amount outstanding 

requirement is to ensure that component 

securities of an index are sufficiently 

liquid such that the potential for index 

manipulation is reduced. Each Index 

will be well-diversified to protect 

against index manipulation. On a 

continuous basis, each Index will 

contain at least 500 component 

securities. In addition, at least 90% of 

the weight of the CA Index will consist 

of securities that have an outstanding 

par value of at least $15 million and 

were issued as part of a transaction of 

at least $100 million; and at least 90% 

of the weight of the NY Index will 

consist of securities that have an 

outstanding par value of at least $5 

million and were issued as part of a 

transaction of at least $20 million. At 

each monthly rebalancing, no one issuer 

can represent more than 25% of the 

weight of the applicable Index, and the 

aggregate weight of those issuers 

representing at least 5% of such Index 

cannot exceed 50% of the weight of the 

applicable Index.25 The Exchange 

believes that this significant 

diversification and the lack of 

concentration among constituent 

securities provide a strong degree of 

protection against Index manipulation. 

In addition, the Exchange represents 

that: (1) Except for Commentary 

.02(a)(2) to Rule 5.2–E(j)(3), each Index 

will satisfy all of the generic listing 

standards under Rule 5.2–E(j)(3); (2) the 

continued listing standards under Rules 

5.2–E(j)(3) (except for Commentary 

.02(a)(2)) and 5.5–E(g)(2) applicable to 

Units will apply to the Shares of each 

Fund; and (3) the issuer of each Fund 

is required to comply with Rule 10A– 

3 26 under the Act for the initial and 

continued listing of the Shares of each 

Fund. 

In addition, the Exchange represents 

that the Shares of each Fund will 

comply with all other requirements 

applicable to Units including, but not 

limited to, requirements relating to the 

dissemination of key information such 

as the value of the underlying Index and 

the applicable rules governing the 

trading of equity securities, trading 

hours, trading halts, surveillance, 

information barriers and the Information 

Bulletin to ETP Holders, as set forth in 

Exchange rules applicable to Units and 

prior Commission orders approving the 

generic listing rules applicable to the 

listing and trading of Units.27

The current value of each Index is 

widely disseminated by one or more 

major market data vendors at least once 

per day, as required by NYSE Arca Rule 

5.2–E(j)(3), Commentary .02(b)(ii). The 

IIV for Shares of each Fund is 

disseminated by one or more major 

market data vendors, updated at least 

every 15 seconds during the Exchange’s 

Core Trading Session, as required by 

NYSE Arca Rule 5.2–E(j)(3), 

Commentary .02(c). In addition, the 

portfolio of securities held by each Fund 

is disclosed daily on each Fund’s 


daltland on DSKBBV9HB2PROD with NOTICES
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28See NYSE Arca Rule 5.3–E(i)(1)(i)(P). 

29 15 U.S.C. 78f(b)(5). 

website. Further, the website for each 

Fund will contain the applicable fund’s 

prospectus and additional data relating 

to net asset value (‘‘NAV’’) and other 

applicable quantitative information. The 

Exchange has obtained a representation 

from each Fund issuer that the 

applicable NAV per Share will be 

calculated daily and will be made 

available to all market participants at 

the same time. The Indexes are not 

maintained by a broker-dealer. 

The Exchange notes that each of the 

Funds has been listed on the Exchange 

or on the American Stock Exchange, Inc. 

(now NYSE American LLC) for over ten 

years and that, during such time, the 

Exchange has not become aware of any 

potential manipulation of the Indexes. 

Further, the Exchange’s existing rules 

require that the Funds notify the 

Exchange of any material change to the 

methodology used to determine the 

composition of each Index.28 Therefore, 

if the methodology of an Index was 

changed in a manner that would 

materially alter its existing composition, 

the Exchange would have advance 

notice and would evaluate such Index, 

as modified, to determine whether it 

was sufficiently broad-based and well 

diversified. 

2. Statutory Basis 

The basis under the Act for this 

proposed rule change is the requirement 

under Section 6(b)(5) 29 that an 

exchange have rules that are designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to remove 

impediments to, and perfect the 

mechanism of a free and open market 

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 in NYSE Arca Rule 5.2– 

E(j)(3). The Exchange represents that 

trading in the Shares will be subject to 

the existing trading surveillances, 

administered by FINRA on behalf of the 

Exchange, which are designed to detect 

violations of Exchange rules and 

applicable federal securities laws. The 

Exchange represents that these 

procedures are adequate to properly 

monitor Exchange trading of the Shares 

in all trading sessions and to deter and 

detect violations of Exchange rules and 

applicable federal securities laws. 

FINRA, on behalf of the Exchange, will 

communicate as needed regarding 

trading in the Shares with other markets 

that are members of the ISG or with 

which the Exchange has in place a 

comprehensive surveillance sharing 

agreement. FINRA also can access data 

obtained from the MSRB relating to 

municipal bond trading activity for 

surveillance purposes in connection 

with trading in the Shares. FINRA, on 

behalf of the Exchange, is able to access, 

as needed, trade information for certain 

fixed income securities held by a Fund 

reported to FINRA’s TRACE. 

The Index Provider is not a brokerdealer or affiliated with a broker-dealer 

and has implemented procedures 

designed to prevent the use and 

dissemination of material, non-public 

information regarding the Indexes. In 

the event the Index Provider becomes 

registered as a broker-dealer or affiliated 

with a broker-dealer, the Index Provider 

will implement and maintain a ‘‘fire 

wall’’ with respect to its relevant 

personnel or broker-dealer affiliate 

regarding access to information 

concerning changes and adjustments to 

the Indexes. 

The Index values, calculated and 

disseminated at least once daily, as well 

as the components of the Indexes and 

their respective percentage weightings, 

will be available from major market data 

vendors. In addition, the portfolio of 

securities held by the Funds will be 

disclosed on the Funds’ website. The 

IIV for Shares of the Funds will be 

disseminated by one or more major 

market data vendors, updated at least 

every 15 seconds during the Exchange’s 

Core Trading Session. 

Based on the characteristics of each 

Index as described above, the Exchange 

believes it is appropriate to facilitate the 

listing and trading of the Funds. Each 

Index satisfies all of the generic listing 

requirements for Units based on a fixed 

income index, except for the minimum 

principal amount outstanding 

requirement of Commentary .02(a)(2) to 

Rule 5.2–E(j)(3). 

Each Index will be well-diversified to 

protect against index manipulation. On 

a continuous basis, each Index will 

contain at least 500 component 

securities. In addition, at least 90% of 

the weight of the CA Index will consist 

of securities that have an outstanding 

par value of at least $15 million and 

were issued as part of a transaction of 

at least $100 million; and at least 90% 

of the weight of the NY Index will 

consist of securities that have an 

outstanding par value of at least $5 

million and were issued as part of a 

transaction of at least $20 million. At 

each monthly rebalancing, no one issuer 

can represent more than 25% of the 

weight of the applicable Index, and the 

aggregate weight of those issuers 

representing at least 5% of such Index 

cannot exceed 50% of the weight of the 

applicable Index. The Exchange believes 

that this significant diversification and 

the lack of concentration among 

constituent securities provides a strong 

degree of protection against Index 

manipulation. 

The Adviser anticipates that the 

number of CA Index components would 

increase significantly if the 

methodology changes described above 

were implemented in that a reduction in 

the minimum par amount required for 

inclusion in the CA Index would permit 

a larger number of municipal bond 

issues to be eligible for inclusion. In 

addition, the CA Index securities would 

be sufficiently large to deter potential 

manipulation in view of the substantial 

total dollar amount outstanding and the 

average dollar amount outstanding of 

the CA Index issues. 

The Exchange believes that, 

notwithstanding that the NY Index 

would not satisfy the criterion in NYSE 

Arca Rule 5.2–E(j)(3), Commentary 

.02(a)(2), the NY Index would be 

sufficiently broad-based to deter 

potential manipulation. As of December 

29, 2017, the NY Index included 2,404 

component fixed income municipal 

bond securities from 42 distinct 

municipal bond issuers in the State of 

New York. The Adviser anticipates that 

the number of NY Index components 

would increase significantly if the 

methodology changes described above 

were implemented in that a reduction in 

the minimum par amount required for 

inclusion in the NY Index would permit 

a larger number of municipal bond 

issues to be eligible for inclusion. The 

Adviser represents that reducing the 

required par amount outstanding both 

allows for more diversity of issuers in 

an Index and would significantly 

expand the universe of municipal 

securities that a Fund could purchase, 

and are a better representation of the 

securities that issuers bring to the 

municipal bond market in California 

and New York. In addition, the NY 

Index securities would be sufficiently 

large to deter potential manipulation in 

view of the substantial total dollar 

amount outstanding and the average 

dollar amount outstanding of NY Index 

issues. 

On a continuous basis, each Index 

will (i) contain at least 500 component 

securities and (ii) comply with the 

parameters described under the heading 

‘‘Requirements for the CA Index and NY 

Index’’ set forth above. The requirement 

that no one issuer can represent more 

than 25% of the weight of the applicable 


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30 17 CFR 240.10A–3. 

31See note 21, supra. 

32See note 8, supra. 

33See Securities Exchange Act Release No. 72464 

(June 25, 2014), 79 FR 37373 (July 1, 2014) (SR– 

NYSEArca–2014–45). 

34See notes 8 and 14, supra. 

35See note 14, supra. 

Index, and individual issuers that 

represent at least 5% of the weight of 

the applicable Index cannot account for 

more than 50% of the weight of such 

Index in the aggregate will help assure 

that Index constituents are not unduly 

concentrated among a relatively small 

number of individual issuers. In 

addition, the Exchange represents that: 

(1) Except for Commentary .02(a)(2) to 

Rule 5.2–E(j)(3), each Index currently 

satisfies all of the generic listing 

standards under Rule 5.2–E(j)(3); (2) the 

continued listing standards under Rules 

5.2–E(j)(3) (except for Commentary 

.02(a)(2)) and 5.5–E(g)(2) applicable to 

Units will apply to the Shares of each 

Fund; and (3) the issuer of each Fund 

is required to comply with Rule 10A– 

3 30 under the Act for the initial and 

continued listing of the Shares of each 

Fund. In addition, the Exchange 

represents that the Shares of each Fund 

will comply with all other requirements 

applicable to Units including, but not 

limited to, requirements relating to the 

dissemination of key information such 

as the value of each Index, IIV, the 

applicable rules governing the trading of 

equity securities, trading hours, trading 

halts, surveillance, information barriers 

and the Information Bulletin to ETP 

Holders, as set forth in Exchange rules 

applicable to Units and prior 

Commission orders approving the 

generic listing rules applicable to the 

listing and trading of Units.31

The current value of each Index is 

widely disseminated by one or more 

major market data vendors at least once 

per day, as required by NYSE Arca Rule 

5.2–E(j)(3), Commentary .02(b)(ii). The 

IIV for Shares of each Fund is 

disseminated by one or more major 

market data vendors, updated at least 

every 15 seconds during the Exchange’s 

Core Trading Session, as required by 

NYSE Arca Rule 5.2–E(j)(3), 

Commentary .02(c). In addition, the 

portfolio of securities held by each Fund 

is disclosed daily on each Fund’s 

website. Further, the website for each 

Fund will contain the applicable Fund’s 

prospectus and additional data relating 

to NAV and other applicable 

quantitative information. 

In support of its proposed rule 

change, the Exchange notes that the 

Commission has previously approved a 

rule change to facilitate the listing and 

trading of series of Units based on an 

index of municipal bond securities that 

did not otherwise meet the generic 

listing requirements of NYSE Arca Rule 

5.2–E(j)(3). As noted above, the 

Commission has approved listing and 

trading of Shares of the Funds, in 

addition to ten other series of Units 

based on municipal bond indexes 

notwithstanding the fact that the indices 

on which they are based do not meet the 

requirements of Commentary .02(a)(2) to 

Rule 5.2–E(j)(3).32 Each of the indices on 

which the Funds and other series of 

Units are based meet all other 

requirements of such rule. In its order 

approving continued listing and trading 

of Shares of the Funds and the other 

series of Units, the Commission stated 

that, based on the Exchange’s 

representations, the Commission 

believes that the indexes underlying 

such funds are sufficiently designed to 

deter potential manipulation. In 

addition, the Commission previously 

approved the listing and trading of the 

PowerShares Insured California 

Municipal Bond Portfolio, PowerShares 

Insured National Municipal Bond 

Portfolio and the PowerShares Insured 

New York Municipal Bond Portfolio, 

notwithstanding the fact that the index 

underlying each fund did not satisfy the 

criteria of Commentary .02(a)(2) to Rule 

5.2–E(j)(3).33 In finding such proposal to 

be consistent with the Act and the rules 

regulations thereunder, the Commission 

noted that each underlying index was 

sufficiently broad-based to deter 

potential manipulation. The Exchange 

believes that each of the CA Index and 

NY Index shares comparable 

characteristics to the series of Units that 

are the subject of the Commission’s 

order approving listing and trading of 

Shares of the Funds and ten other series 

of Units,34 and the Commission’s order 

approving listing and trading of shares 

of the PowerShares Municipal Bond 

Funds.35 The Exchange, therefore, 

believes, the CA Index and NY Index are 

sufficiently broad-based to deter 

potential manipulation. 

The proposed rule change is designed 

to promote just and equitable principles 

of trade and to protect investors and the 

public interest. In addition, a large 

amount of information is publicly 

available regarding the Funds and the 

Shares, thereby promoting market 

transparency. The Funds’ portfolio 

holdings will be disclosed on the Funds’ 

website daily after the close of trading 

on the Exchange and prior to the 

opening of trading on the Exchange the 

following day. Moreover, the IIV will be 

widely disseminated by one or more 

major market data vendors at least every 

15 seconds during the Exchange’s Core 

Trading Session. The current value of 

the Index will be disseminated by one 

or more major market data vendors at 

least once per day. Information 

regarding market price and trading 

volume of the Shares will be continually 

available on a real-time basis throughout 

the day on brokers’ computer screens 

and other electronic services, and 

quotation and last sale information will 

be available via the CTA high-speed 

line. The website for the Funds will 

include the prospectus for the Funds 

and additional data relating to NAV and 

other applicable quantitative 

information. Moreover, prior to the 

commencement of trading, the Exchange 

will inform its ETP Holders in an 

Information Bulletin of the special 

characteristics and risks associated with 

trading the Shares. If the Exchange 

becomes aware that the NAV is not 

being 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. 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. Trading also 

may be halted because of market 

conditions or for reasons that, in the 

view of the Exchange, make trading in 

the Shares inadvisable. If the IIV or the 

Index values are not being disseminated 

as required, the Exchange may halt 

trading during the day in which the 

interruption to the dissemination of the 

applicable IIV or an Index value occurs. 

If the interruption to the dissemination 

of the applicable IIV or an Index value 

persists past the trading day in which it 

occurred, the Exchange will halt 

trading. Trading in Shares of the Funds 

will be halted if the circuit breaker 

parameters in NYSE Arca’s Rule 7.12– 

E have been reached or because of 

market conditions or for reasons that, in 

the view of the Exchange, make trading 

in the Shares inadvisable. In addition, 

investors will have ready access to 

information regarding the IIV, and 

quotation and last sale information for 

the Shares. 

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 additional types of exchange-traded 

products based on municipal bond 

indexes that will enhance competition 

among market participants, to the 

benefit of investors and the marketplace. 

The Exchange has in place surveillance 

procedures relating to trading in the 


daltland on DSKBBV9HB2PROD with NOTICES
27050 Federal Register / Vol. 83, No. 112 / Monday, June 11, 2018 / Notices 

36 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Notice of Filing of Proposed Rule Change 

Adopting Maximum Fees Member Organizations 

may Charge in Connection with the Distribution of 

Investment Company Shareholder Reports Pursuant 

to Any Electronic Delivery Rules Adopted by the 

Securities and Exchange Commission, Securities 

Exchange Act Release No. 78589 (August 16, 2016), 

81 FR 56717 (August 22, 2016) (SR–NYSE–2016– 

55). 

4Notice of Designation of a Longer Period for 

Commission Action on Proposed Rule Change 

Adopting Maximum Fees Member Organizations 

May Charge in Connection with the Distribution of 

Investment Company Shareholder Reports Pursuant 

to Any Electronic Delivery Rules Adopted by the 

Securities and Exchange Commission, Securities 

Exchange Act Release No. 79051 (October 5, 2016), 

81 FR 70449 (October 12, 2016). 

5Order Granting Approval of Proposed Rule 

Change Adopting Maximum Fees Member 

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, investors will 

have ready access to information 

regarding the IIV and quotation and last 

sale information for the Shares. Trade 

price and other information relating to 

municipal bonds is available through 

the MSRB’s EMMA system. 

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 will 

facilitate the continued listing and 

trading of exchange-traded products that 

hold municipal securities and that will 

enhance competition among market 

participants, to the benefit of investors 

and the marketplace. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or up to 90 days (i) as the 

Commission may designate if it finds 

such longer period to be appropriate 

and publishes its reasons for so finding 

or (ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

the proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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– 

NYSEArca–2018–38 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–2018–38. 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–2018–38 and 

should be submitted on or before July 2, 

2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.36

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–12430 Filed 6–8–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Securities Exchange Act of 1934; Release 

No. 83378/June 5, 2018] 

Order Affirming Action by Delegated 

Authority Approving SR–NYSE–2016– 

55 and Discontinuing Stay 

In the Matter of the New York Stock 

Exchange LLC 

For an Order Granting the Approval of 

Proposed Rule Change Adopting 

Maximum Fees Member 

Organizations May Charge in 

Connection with the Distribution of 

Investment Company Shareholder 

Reports Pursuant to Any Electronic 

Delivery Rules Adopted by the 

Securities and Exchange Commission 

I. 

On August 15, 2016, the New York 

Stock Exchange LLC (’’NYSE’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Exchange 

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

proposed rule change to adopt 

maximum fees NYSE member 

organizations may charge in connection 

with the distribution of investment 

company shareholder reports pursuant 

to any ‘‘notice and access’’ electronic 

delivery rules adopted by the 

Commission. The proposed rule change 

was published for comment in the 

Federal Register on August 22, 2016.3

The Commission received fourteen 

comment letters on the proposal. On 

October 5, 2016, the Commission 

extended the time period for 

Commission action on the proposal to 

November 20, 2016.4

On November 18, 2016, the Division 

of Trading and Markets took action, 

pursuant to delegated authority, 17 CFR 

200.30–3(a)(12), approving the proposed 

rule change (‘‘Approval Order’’).5


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