Federal Register / Vol. 83, No. 154 / Thursday, August 9, 2018 / Notices 39485 

5 15 U.S.C. 78s(b)(3)(A)(iii). 

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

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

the Commission written notice of its intent to file 

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. 

7 17 CFR 240.19b–4(f)(6). 

8 17 CFR 240.19b–4(f)(6)(iii). 

9For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 10 17 CFR 200.30–3(a)(12). 

Exchange’s proposal to define the terms 

‘‘in-the-money’’ and ‘‘out-of-the-money’’ 

options does not unduly burden 

competition, rather it adds greater 

transparency to the Rulebook. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

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)(iii) of the Act 5 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.6

A proposed rule change filed under 

Rule 19b–4(f)(6) 7 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),8 the Commission 

may designate a shorter time if such 

action is consistent with the protection 

of investors and the public interest. The 

Exchange requests that the Commission 

waive the 30-day operative delay so that 

the proposal may become operative 

immediately upon filing. The Exchange 

represents that immediately defining the 

terms ‘‘in-the-money’’ and ‘‘out-of-themoney’’ options within its Rulebook 

would provide greater transparency to 

its Participants. For the same reason, the 

Commission believes that waiving 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.9

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or 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– 

BX–2018–035 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–BX–2018–035. 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–BX–2018–035 and should 

be submitted on or before August 30, 

2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–17005 Filed 8–8–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

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 206(4)–3, SEC File No. 270–218, OMB 

Control No. 3235–0242 

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’’) has submitted to the 

Office of Management and Budget a 

request for approval of extension of the 

previously approved collection of 

information discussed below. 

Rule 206(4)–3 (17 CFR 275.206(4)–3) 

under the Investment Advisers Act of 

1940, which is entitled ‘‘Cash Payments 

for Client Solicitations,’’ provides 

restrictions on cash payments for client 

solicitations. The rule requires that an 

adviser pay all solicitors’ fees pursuant 

to a written agreement. When an adviser 

will provide only impersonal advisory 

services to the prospective client, the 

rule imposes no disclosure 

requirements. When the solicitor is 

affiliated with the adviser and the 

adviser will provide individualized 

advisory services to the prospective 

client, the solicitor must, at the time of 

the solicitation or referral, indicate to 

the prospective client that he is 

affiliated with the adviser. When the 

solicitor is not affiliated with the 

adviser and the adviser will provide 

individualized advisory services to the 

prospective client, the solicitor must, at 

the time of the solicitation or referral, 

provide the prospective client with a 

copy of the adviser’s brochure and a 

disclosure document containing 

information specified in rule 206(4)–3. 

Amendments to rule 206(4)–3, adopted 


sradovich on DSK3GMQ082PROD with NOTICES
39486 Federal Register / Vol. 83, No. 154 / Thursday, August 9, 2018 / Notices 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 83152 

(May 2, 2018), 83 FR 20892. 4See Securities Exchange Act Release No. 83479, 

83 FR 29838 (June 26, 2018). The Commission 

designated August 6, 2018 as the date by which the 

Commission shall approve the proposed rule 

change, disapprove the proposed rule change, or 

institute proceedings to determine whether to 

approve or disapprove the proposed rule change. 

5 15 U.S.C. 78s(b)(2)(B). 

6The Index value, calculated and disseminated at 

least once daily, as well as the components of the 

Index and their percentage weighting, will be 

available from major market data vendors. 

7 ‘‘ABS’’ means fixed and floating rate debt 

securities secured by non-mortgage assets. 

8 ‘‘CMBS’’ means fixed rate debt securities 

secured by first mortgages on commercial real 

estate. 

9A collateral group describes the assets 

(receivables) that are held by the special purpose 

vehicle (‘‘SPV’’) issuing the ABS securities. The 

collateral group provides the source of payment for 

the SPV’s liabilities (i.e., ABS securities). Typically, 

an SPV will include assets greater than its liabilities 

as a form of credit enhancement. 

in 2010 in connection with rule 206(4)– 

5, specify that solicitation activities 

involving a government entity, as 

defined in rule 206(4)–5, are subject to 

the additional limitations of rule 

206(4)–5. The information rule 206(4)– 

3 requires is necessary to inform 

advisory clients about the nature of the 

solicitor’s financial interest in the 

recommendation so the prospective 

clients may consider the solicitor’s 

potential bias, and to protect clients 

against solicitation activities being 

carried out in a manner inconsistent 

with the adviser’s fiduciary duty to 

clients. Rule 206(4)–3 is applicable to 

all Commission registered investment 

advisers. The Commission believes that 

approximately 4,395 of these advisers 

have cash referral fee arrangements. The 

rule requires approximately 7.04 burden 

hours per year per adviser and results in 

a total of approximately 30,941 total 

burden hours (7.04 × 4,395) for all 

advisers. 

The disclosure requirements of rule 

206(4)–3 do not require recordkeeping 

or record retention. The collections of 

information requirements under the 

rules are mandatory. Information subject 

to the disclosure requirements of rule 

206(4)–3 is not submitted to the 

Commission. The disclosures pursuant 

to the rule are not kept confidential. 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. 

The public may view the background 

documentation for this information 

collection at the following website, 

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 

send an email to: PRA_Mailbox@

sec.gov. Comments must be submitted to 

OMB within 30 days of this notice. 

Dated: August 3, 2018. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–17000 Filed 8–8–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83775; File No. SR– 

CboeBZX–2018–018] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove a Proposed 

Rule Change To List and Trade Shares 

of the Principal Morley Short Duration 

Index ETF Under Rule 14.11(c)(4) 

August 3, 2018. 

I. Introduction 

On April 23, 2018, Cboe BZX 

Exchange, Inc. (‘‘Exchange’’ or ‘‘BZX’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to list and trade shares 

(‘‘Shares’’) of the Principal Morley Short 

Duration Index ETF (‘‘Fund’’). The 

proposed rule change was published for 

comment in the Federal Register on 

May 8, 2018.3 On June 20, 2018, the 

Commission designated a longer period 

within which to approve the proposed 

rule change, disapprove the proposed 

rule change, or institute proceedings to 

determine whether to approve or 

disapprove the proposed rule change.4

The Commission has received no 

comment letters on the proposed rule 

change. This order institutes 

proceedings under Section 19(b)(2)(B) of 

the Act 5 to determine whether to 

approve or disapprove the proposed 

rule change. 

II. Description of the Proposed Rule 

Change 

The Exchange proposes to list and 

trade the Shares pursuant to BZX Rule 

14.11(c)(4), which governs the listing 

and trading of index fund shares based 

on fixed income securities indexes. The 

Fund would seek to provide investment 

results that replicate, before expenses, 

the performance of The ICE BofA 

Merrill Lynch Low Duration U.S. ABS & 

CMBS Equal Par Index (‘‘Index’’).6

A. The Exchange’s Description of the 

Index 

The Index is designed to provide 

exposure to investment-grade 

securitized products issued in the U.S., 

including ABS 7 and CMBS.8

To qualify for inclusion in the Index, 

eligible securities must be a component 

of The ICE BofA Merrill Lynch US ABS 

& CMBS Index (‘‘Feeder Index’’). Such 

securities are then selected and 

weighted based upon the Index 

methodology discussed below. 

1. The Feeder Index’s Methodology 

In order to be included in the Feeder 

Index, a security (whether ABS or 

CMBS) must meet the following criteria 

(‘‘Basic Criteria’’): 

• Be rated investment-grade (based on 

an average of Moody’s, S&P Global, and 

Fitch); 

• have a term of at least one year 

remaining until final stated maturity; 

and have at least one month to the last 

expected cash flow; and 

• inverse floating rate, interest only, 

and principal only securities are 

excluded. 

In addition to the Basic Criteria, an 

ABS must meet the following criteria: 

• Must issue a fixed or floating rate 

coupon; 

• must have an original deal size for 

the collateral group 9 of at least $250 

million; 

• must have a current outstanding 

deal size for the collateral group greater 

than or equal to 10% of the original deal 

size; and 

• a minimum current outstanding 

tranche size of $50 million for senior 

tranches and $10 million current 

amount outstanding for mezzanine and 

subordinated tranches. 

In addition to the Basic Criteria, a 

CMBS (which may include U.S. agency 

CMBS) must also meet the following 

criteria: 

• Must issue a fixed coupon 

schedule; 

• must have an original deal size for 

the collateral group of at least $250 

million; 

• must have a current outstanding 

deal size for the collateral group that is 

greater than or equal to 10% of the 

original deal size; and 


sradovich on DSK3GMQ082PROD with NOTICES