Federal Register / Vol. 83, No. 129 / Thursday, July 5, 2018 / Notices 31435 

2The requested relief would apply to direct sales 

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

Funds and redemptions of those shares. Applicants, 

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

for, and the requested relief will not apply to, 

transactions where a Fund could be deemed an 

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

Fund of Funds because an Adviser or an entity 

controlling, controlled by or under common control 

with an Adviser provides investment advisory 

services to that Fund of Funds. 

and investment positions (‘‘Portfolio 

Instruments’’). Each Fund will disclose 

on its website the identities and 

quantities of the Portfolio Instruments 

that will form the basis for the Fund’s 

calculation of NAV at the end of the 

day. 

3. Shares will be purchased and 

redeemed in Creation Units only and 

generally on an in-kind basis, or issued 

in less than Creation Unit size to 

investors participating in a distribution 

reinvestment program. Except where the 

purchase or redemption will include 

cash under the limited circumstances 

specified in the application, purchasers 

will be required to purchase Creation 

Units by depositing specified 

instruments (‘‘Deposit Instruments’’), 

and shareholders redeeming their shares 

will receive specified instruments 

(‘‘Redemption Instruments’’). The 

Deposit Instruments and the 

Redemption Instruments will each 

correspond pro rata to the positions in 

the Fund’s portfolio (including cash 

positions) except as specified in the 

application. 

4. Because shares will not be 

individually redeemable, applicants 

request an exemption from section 

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

that would permit the Funds to register 

as open-end management investment 

companies and issue shares that are 

redeemable in Creation Units only. 

5. Applicants also request an 

exemption from section 22(d) of the Act 

and rule 22c–1 under the Act as 

secondary market trading in shares will 

take place at negotiated prices, not at a 

current offering price described in a 

Fund’s prospectus, and not at a price 

based on NAV. Applicants state that (a) 

secondary market trading in shares does 

not involve a Fund as a party and will 

not result in dilution of an investment 

in shares, and (b) to the extent different 

prices exist during a given trading day, 

or from day to day, such variances occur 

as a result of third-party market forces, 

such as supply and demand. Therefore, 

applicants assert that secondary market 

transactions in shares will not lead to 

discrimination or preferential treatment 

among purchasers. Finally, applicants 

represent that share market prices will 

be disciplined by arbitrage 

opportunities, which should prevent 

shares from trading at a material 

discount or premium from NAV. 

6. With respect to Funds that hold 

non-U.S. Portfolio Instruments and that 

effect creations and redemptions of 

Creation Units in kind, applicants 

request relief from the requirement 

imposed by section 22(e) in order to 

allow such Funds to pay redemption 

proceeds within fifteen calendar days 

following the tender of Creation Units 

for redemption. Applicants assert that 

the requested relief would not be 

inconsistent with the spirit and intent of 

section 22(e) to prevent unreasonable, 

undisclosed or unforeseen delays in the 

actual payment of redemption proceeds. 

7. Applicants request an exemption to 

permit Funds of Funds to acquire Fund 

shares beyond the limits of section 

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

and any principal underwriter for the 

Funds, and/or any broker or dealer 

registered under the Exchange Act, to 

sell shares to Funds of Funds beyond 

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

Act. The application’s terms and 

conditions are designed to, among other 

things, help prevent any potential (i) 

undue influence over a Fund through 

control or voting power, or in 

connection with certain services, 

transactions, and underwritings, (ii) 

excessive layering of fees, and (iii) 

overly complex fund structures, which 

are the concerns underlying the limits 

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

Act. 

8. Applicants request an exemption 

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

Act to permit persons that are affiliated 

persons, or second-tier affiliates, of the 

Funds, solely by virtue of certain 

ownership interests, to effectuate 

purchases and redemptions in-kind. The 

deposit procedures for in-kind 

purchases of Creation Units and the 

redemption procedures for in-kind 

redemptions of Creation Units will be 

the same for all purchases and 

redemptions and Deposit Instruments 

and Redemption Instruments will be 

valued in the same manner as those 

Portfolio Instruments currently held by 

the Funds. Applicants also seek relief 

from the prohibitions on affiliated 

transactions in section 17(a) to permit a 

Fund to sell its shares to and redeem its 

shares from a Fund of Funds, and to 

engage in the accompanying in-kind 

transactions with the Fund of Funds.2

The purchase of Creation Units by a 

Fund of Funds directly from a Fund will 

be accomplished in accordance with the 

policies of the Fund of Funds and will 

be based on the NAVs of the Funds. 

9. Applicants also request relief to 

permit a Feeder Fund to acquire shares 

of another registered investment 

company managed by the Adviser 

having substantially the same 

investment objectives as the Feeder 

Fund (‘‘Master Fund’’) beyond the 

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

permit the Master Fund, and any 

principal underwriter for the Master 

Fund, to sell shares of the Master Fund 

to the Feeder Fund beyond the 

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

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

Commission to exempt any persons or 

transactions from any provision of the 

Act if such exemption is necessary or 

appropriate in the public interest and 

consistent with the protection of 

investors and the purposes fairly 

intended by the policy and provisions of 

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

provides that the Commission may 

exempt any person, security, or 

transaction, or any class or classes of 

persons, securities, or transactions, from 

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

exemption is consistent with the public 

interest and the protection of investors. 

Section 17(b) of the Act authorizes the 

Commission to grant an order 

permitting a transaction otherwise 

prohibited by section 17(a) if it finds 

that (a) the terms of the proposed 

transaction are fair and reasonable and 

do not involve overreaching on the part 

of any person concerned; (b) the 

proposed transaction is consistent with 

the policies of each registered 

investment company involved; and (c) 

the proposed transaction is consistent 

with the general purposes of the Act. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–14364 Filed 7–3–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–349, OMB Control No. 

3235–0395] 

Submission for OMB Review; 

Comment Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

Extension: 

Rule 15g–6 

Notice is hereby given that pursuant 

to the Paperwork Reduction Act of 1995 

(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the 

Securities and Exchange Commission 

(‘‘Commission’’) has submitted to the 


amozie on DSK3GDR082PROD with NOTICES1
31436 Federal Register / Vol. 83, No. 129 / Thursday, July 5, 2018 / Notices 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See proposed Fee Schedule, NYSE FANG+ 

Index (FAANG) Transaction Fees. 

5See id. The term Market Maker, as used herein, 

includes NYSE Arca Options Market Makers and 

Lead Market Makers (or LMMs). 

6See proposed Fee Schedule, Endnote 2 

(providing that ‘‘[t]he Lead Market Maker Rights 

Fee does not apply to options on the NYSE FANG+ 

Index (FAANG)’’). 

7See proposed Fee Schedule, Endnote 8 

(providing that ‘‘[a]ny volume in options on NYSE 

FANG+ (FAANG) would be included in 

calculations to qualify for any volume-based 

incentives currently being offered on the 

Exchange’’). 

Office of Management and Budget 

(‘‘OMB’’) a request for approval of 

extension of the previously approved 

collection of information provided for in 

Rule 15g–6—Account Statements for 

Penny Stock Customers—(17 CFR 

240.15g–6) under the Securities 

Exchange Act of 1934 (15 U.S.C. 78a et 

seq.). 

Rule 15g–6 requires brokers and 

dealers that sell penny stocks to provide 

their customers monthly account 

statements containing information with 

regard to the penny stocks held in 

customer accounts. The purpose of the 

rule is to increase the level of disclosure 

to investors concerning penny stocks 

generally and specific penny stock 

transactions. 

The Commission estimates that 

approximately 195 broker-dealers will 

spend an average of 78 hours annually 

to comply with this rule. Thus, the total 

compliance burden is approximately 

15,210 burden-hours per year. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

under the PRA unless it displays a 

currently valid OMB control number. 

The public may view background 

documentation for this information 

collection at the following website: 

http://www.reginfo.gov. Comments 

should be directed to: (i) Desk Officer 

for the Securities and Exchange 

Commission, Office of Information and 

Regulatory Affairs, Office of 

Management and Budget, Room 10102, 

New Executive Office Building, 

Washington, DC 20503 or by sending an 

email to: Shagufta_Ahmed@

omb.eop.gov; and (ii) Pamela Dyson, 

Director/Chief Information Officer, 

Securities and Exchange Commission, 

c/o Candace Kenner, 100 F Street NE, 

Washington, DC 20549 or by sending an 

email to PRA_Mailbox@sec.gov. 

Comments must be submitted within 30 

days of this notice. 

Dated: June 28, 2018. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–14357 Filed 7–3–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83554; File No. SR– 

NYSEArca–2018–49] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Modify the NYSE Arca 

Options Fee Schedule 

June 28, 2018. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that, on June 27, 

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

or ‘‘NYSE Arca’’) filed with the 

Securities and Exchange Commission 

(the ‘‘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 to modify the 

NYSE Arca Options Fee Schedule (‘‘Fee 

Schedule’’). The Exchange proposes to 

implement the fee change effective June 

27, 2018. The proposed rule 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 purpose of this filing is to modify 

the Fee Schedule, effective 27, 2018, to 

introduce fees for the newly listed 

options on the NYSE FANG+ Index 

(‘‘NYSE FANG+’’), which will trade 

under the symbol FAANG. 

The Exchange proposes that for fee 

purposes transactions in FAANG 

options would not be treated as adding 

or removing liquidity, but rather that all 

transactions, both manual and 

electronic, be charged by account status. 

As proposed, the Exchange would 

charge $0.35 per contract, per side for 

non-Customer and Professional 

Customer NYSE FANG+ transactions, 

whether executed manually or 

electronically.4 However, the Exchange 

would not charge a fee for any FAANG 

transactions (i) on behalf of Customers 

or (ii) by Market Makers with an 

appointment in NYSE FANG+.5 Market 

Makers that do not have an appointment 

in NYSE FANG+ will be subject to the 

same fee of $0.35 per contract, per side 

for non-Customer and Professional 

Customer NYSE FANG+ transactions. 

Further, the Exchange would not 

impose the Lead Market Maker Rights 

Fees upon allocation in options on 

NYSE FANG+.6 The Exchange notes 

that volume in NYSE FANG+ would be 

included in calculations to qualify for 

any volume-based incentives currently 

being offered on the Exchange, 

including (but not limited to) the NonCustomer, Non-Penny Pilot Posting 

Tiers (as applicable) and the Firm and 

Broker Dealer Monthly Fee Cap.7

The Exchange believes the proposed 

fees for NYSE FANG+ would further the 

Exchange’s goal of introducing new 

products to the marketplace by 

encouraging trading in this index, in 

particular by encouraging Market 

Makers to make a market in these 

products, which would in turn, benefit 

market participants. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act, in general, and 

furthers the objectives of Sections 

6(b)(4) and (5) of the Act, in particular, 

because it provides for the equitable 

allocation of reasonable dues, fees, and 


amozie on DSK3GDR082PROD with NOTICES1