46228 Federal Register / Vol. 83, No. 177 / Wednesday, September 12, 2018 / Notices 

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

2 17 CFR 240.19b–4. 

investors with a broader choice of 

shareholder services. Applicants assert 

that the proposed closed-end 

investment company multiple class 

structure does not raise the concerns 

underlying section 18 of the Act to any 

greater degree than open-end 

investment companies’ multiple class 

structures that are permitted by rule 

18f–3 under the Act. Applicants state 

that each Fund will comply with the 

provisions of rule 18f–3 as if it were an 

open-end investment company. 

Early Withdrawal Charges 

1. Section 23(c) of the Act provides, 

in relevant part, that no registered 

closed-end investment company shall 

purchase securities of which it is the 

issuer, except: (a) On a securities 

exchange or other open market; (b) 

pursuant to tenders, after reasonable 

opportunity to submit tenders given to 

all holders of securities of the class to 

be purchased; or (c) under other 

circumstances as the Commission may 

permit by rules and regulations or 

orders for the protection of investors. 

2. Rule 23c–3 under the Act permits 

an ‘‘interval fund’’ to make repurchase 

offers of between five and twenty-five 

percent of its outstanding shares at net 

asset value at periodic intervals 

pursuant to a fundamental policy of the 

interval fund. Rule 23c–3(b)(1) under 

the Act permits an interval fund to 

deduct from repurchase proceeds only a 

repurchase fee, not to exceed two 

percent of the proceeds, that is paid to 

the interval fund and is reasonably 

intended to compensate the fund for 

expenses directly related to the 

repurchase. 

3. Section 23(c)(3) provides that the 

Commission may issue an order that 

would permit a closed-end investment 

company to repurchase its shares in 

circumstances in which the repurchase 

is made in a manner or on a basis that 

does not unfairly discriminate against 

any holders of the class or classes of 

securities to be purchased. 

4. Applicants request relief under 

section 6(c), discussed above, and 

section 23(c)(3) from rule 23c–3 to the 

extent necessary for the Funds to 

impose EWCs on shares of the Funds 

submitted for repurchase that have been 

held for less than a specified period. 

5. Applicants state that the EWCs they 

intend to impose are functionally 

similar to CDSLs imposed by open-end 

investment companies under rule 6c–10 

under the Act. Rule 6c–10 permits openend investment companies to impose 

CDSLs, subject to certain conditions. 

Applicants note that rule 6c–10 is 

grounded in policy considerations 

supporting the employment of CDSLs 

where there are adequate safeguards for 

the investor and state that the same 

policy considerations support 

imposition of EWCs in the interval fund 

context. In addition, applicants state 

that EWCs may be necessary for the 

distributor to recover distribution costs. 

Applicants represent that any EWC 

imposed by the Funds will comply with 

rule 6c–10 under the Act as if the rule 

were applicable to closed-end 

investment companies. The Funds will 

disclose EWCs in accordance with the 

requirements of Form N–1A concerning 

CDSLs. 

Asset-Based Distribution and/or Service 

Fees 

1. Section 17(d) of the Act and rule 

17d–1 under the Act prohibit an 

affiliated person of a registered 

investment company, or an affiliated 

person of such person, acting as 

principal, from participating in or 

effecting any transaction in connection 

with any joint enterprise or joint 

arrangement in which the investment 

company participates unless the 

Commission issues an order permitting 

the transaction. In reviewing 

applications submitted under section 

17(d) and rule 17d–1, the Commission 

considers whether the participation of 

the investment company in a joint 

enterprise or joint arrangement is 

consistent with the provisions, policies 

and purposes of the Act, and the extent 

to which the participation is on a basis 

different from or less advantageous than 

that of other participants. 

2. Rule 17d–3 under the Act provides 

an exemption from section 17(d) and 

rule 17d–1 to permit open-end 

investment companies to enter into 

distribution arrangements pursuant to 

rule 12b–1 under the Act. Applicants 

request an order under section 17(d) and 

rule 17d–1 under the Act to the extent 

necessary to permit the Fund to impose 

asset-based distribution and/or service 

fees. Applicants have agreed to comply 

with rules 12b–1 and 17d–3 as if those 

rules applied to closed-end investment 

companies, which they believe will 

resolve any concerns that might arise in 

connection with a Fund financing the 

distribution of its shares through assetbased distribution fees. 

3. For the reasons stated above, 

applicants submit that the exemptions 

requested under section 6(c) are 

necessary and appropriate in the public 

interest and are consistent with the 

protection of investors and the purposes 

fairly intended by the policy and 

provisions of the Act. Applicants further 

submit that the relief requested 

pursuant to section 23(c)(3) will be 

consistent with the protection of 

investors and will insure that applicants 

do not unfairly discriminate against any 

holders of the class of securities to be 

purchased. Finally, applicants state that 

the Funds’ imposition of asset-based 

distribution and/or service fees is 

consistent with the provisions, policies 

and purposes of the Act and does not 

involve participation on a basis different 

from or less advantageous than that of 

other participants. 

Applicants’ Condition 

Applicants agree that any order 

granting the requested relief will be 

subject to the following condition: 

Each Fund relying on the order will 

comply with the provisions of rules 6c– 

10, 12b–1, 17d–3, 18f–3, 22d–1, and, 

where applicable, 11a–3 under the Act, 

as amended from time to time, as if 

those rules applied to closed-end 

management investment companies, 

and will comply with the FINRA Sales 

Charge Rule, as amended from time to 

time, as if that rule applied to all closedend management investment 

companies. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–19765 Filed 9–11–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84049; File No. SR– 

NYSEArca–2018–38] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of 

Amendment No. 1 and Order 

Approving on an Accelerated Basis a 

Proposed Rule Change, as Modified by 

Amendment No. 1, Relating to the 

Continued Listing Criteria Applicable 

to the Shares of the iShares California 

AMT Free Muni Bond ETF and iShares 

New York AMT-Free Muni Bond ETF 

September 6, 2018. 

I. Introduction 

On May 21, 2018, NYSE Arca, Inc. 

(‘‘Exchange’’ or ‘‘NYSE Arca’’) 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 modify the continued listing 

criteria applicable to the shares 

(‘‘Shares’’) of the iShares California 


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Federal Register / Vol. 83, No. 177 / Wednesday, September 12, 2018 / Notices 46229 

3See Securities Exchange Act Release No. 83381 

(June 5, 2018), 83 FR 27042 (‘‘Notice’’). 

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

5See Securities Exchange Act Release No. 83694, 

83 FR 36641 (July 30, 2018). The Commission 

designated September 9, 2018, as the date by which 

the Commission shall approve or disapprove, or 

institute proceedings to determine whether to 

disapprove, the proposed rule change. 

6 In Amendment No. 1, the Exchange (1) 

eliminated an issuer concentration requirement 

from the proposed continued listing criteria 

applicable to the Shares, (2) deleted the condition 

that would have required a change to the index 

methodology before the proposed continued listing 

criteria would apply, (3) modified its justification 

as to why the proposed rule change is consistent 

with the Act, and (4) made other technical changes. 

Amendment No. 1 is available on the Commission’s 

website at: https://www.sec.gov/comments/srnysearca-2018-38/srnysearca201838-4307304- 

173215.pdf. 

7Additional information regarding the Shares, 

Funds, and their underlying indexes is available in 

Amendment No. 1, supra note 6. 

8With 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, exchangetraded U.S. Treasury futures, and municipal money 

market funds, as well as municipal bond securities 

not included in the CA Index, but which the 

Adviser believes will help the CA Fund track the 

CA Index. 

9With 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, exchangetraded U.S. Treasury futures, and municipal money 

market funds, as well as municipal bond securities 

not included in the NY Index, but which the 

Adviser believes will help the NY Fund track the 

NY Index. 

10See Securities Exchange Act Release No. 82295 

(December 12, 2017), 82 FR 60056 (December 18, 

2017) (File No. SR–NYSEArca–2017–56) (‘‘Listing 

Approval Order’’). 

11See NYSE Arca Rule 5.2–E(j)(3). 

12See Amendment No. 1, supra note 6. 

13 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

14 15 U.S.C. 78f(b)(5). 

15See Listing Approval Order, supra note 10 

(approving the listing and trading of shares of the 

VanEck Vectors—AMT-Free Long Municipal Index 

and VanEck Vectors—High Yield Municipal Index 

ETFs, among other funds). 

AMT-Free Muni Bond ETF (‘‘CA Fund’’) 

and iShares New York AMT-Free Muni 

Bond ETF (‘‘NY Fund’’ and, together 

with the CA Fund, ‘‘Funds’’). The 

proposed rule change was published for 

comment in the Federal Register on 

June 11, 2018.3 On July 24, 2018, 

pursuant to Section 19(b)(2) of the Act,4

the Commission designated a longer 

period within which to approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether to 

disapprove the proposed rule change.5

On September 5, 2018, the Exchange 

filed Amendment No. 1 to the proposed 

rule change,6 which superseded the 

proposed rule change as originally filed. 

The Commission received no comment 

letters on the proposed rule change. The 

Commission is publishing this notice to 

solicit comments on Amendment No. 1 

from interested persons, and is 

approving the proposed rule change, as 

modified by Amendment No. 1, on an 

accelerated basis. 

II. Description of the Proposed Rule 

Change 7

Blackrock Fund Advisors (‘‘Adviser’’) 

is the investment adviser for the Funds. 

Under normal market conditions, the 

CA Fund invests at least 90% of its 

assets in the component securities of the 

S&P California AMT-Free Muni Bond 

Index (‘‘CA Index’’), which measures 

the performance of the investment-grade 

segment of the California municipal 

bond market.8 Similarly, under normal 

market conditions, the NY Fund invests 

at least 90% of its assets in the 

component securities of the S&P New 

York AMT-Free Muni Bond Index (‘‘NY 

Index’’ and, together with CA Index, 

‘‘Indexes’’), which measures the 

performance of the investment-grade 

segment of the New York municipal 

bond market.9

Currently, the Exchange lists and 

trades the Shares under NYSE Arca Rule 

5.2–E(j)(3), which governs the listing 

and trading of Investment Company 

Units, and pursuant to an order 

approving the Exchange’s proposal to 

list and trade the Shares.10 The 

representations made by the Exchange 

in support of that proposed rule change 

constitute continued listing 

requirements for the Shares.11 The 

Exchange, with this filing, now 

proposes to amend the continued listing 

requirements applicable to the Shares. 

Currently, for the Exchange to list and 

trade shares of the CA Fund, each bond 

in the CA Index must: (1) Be a 

constituent of an offering where the 

original offering amount of the 

constituent bonds in the aggregate was 

at least $100 million; (2) have a total 

minimum par amount of $25 million; 

and (3) maintain a total minimum par 

amount greater than or equal to $25 

million as of the next rebalancing date. 

Further, the CA Index must include at 

least 500 component securities. 

The Exchange proposes to amend the 

continued listing requirements for the 

shares of the CA Fund such that: (1) At 

least 90% of the weight of the CA Index 

must 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 

(2) the CA Index must contain at least 

500 component securities. 

Currently, for the Exchange to list and 

trade shares of the NY Fund, each bond 

in the NY Index must: (1) Be a 

constituent of an offering where the 

original offering amount of the 

constituent bonds in the aggregate was 

at least $100 million; (2) have a 

minimum total par amount of $25 

million; and (3) maintain a minimum 

total par amount greater than or equal to 

$25 million as of the next rebalancing 

date. Further, the NY Index must 

include at least 500 component 

securities. 

The Exchange proposes to amend the 

continued listing requirements for the 

shares of the NY Fund such that: (1) At 

least 90% of the weight of the NY Index 

must 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; and 

(2) the NY Index must contain at least 

500 component securities. 

The Exchange represents that, except 

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

Rule 5.2–E(j)(3), the CA Index and NY 

Index each will continue to satisfy all of 

the requirements under NYSE Arca Rule 

5.2–E(j)(3).12

III. Discussion and Commission 

Findings 

After careful review, the Commission 

finds that the proposed rule change, as 

modified by Amendment No. 1, is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to a national 

securities exchange.13 In particular, the 

Commission finds that the proposal is 

consistent with Section 6(b)(5) of the 

Act,14 which requires, among other 

things, that the rules of a national 

securities exchange be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. The proposed minimum 

outstanding par value and transaction 

size requirements for constituents of the 

Indexes are consistent with those 

approved by the Commission for similar 

products.15 Moreover, there is no 

change to the current continued listing 

criterion that each Index includes at 

least 500 component securities. Further, 

the Exchange represents that the CA 

Index and NY Index each will continue 

to satisfy all of the requirements under 

NYSE Arca Rule 5.2–E(j)(3) except for 

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


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46230 Federal Register / Vol. 83, No. 177 / Wednesday, September 12, 2018 / Notices 

16See supra note 12 and accompanying text. 

17 15 U.S.C. 78s(b)(2). 

18 15 U.S.C. 78f(b)(2). 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

Rule 5.2–E(j)(3).16 The Commission 

notes that the Exchange proposes no 

other changes to the Funds. 

Accordingly, the Commission believes 

that the proposed continued listing 

requirements are adequately designed to 

help deter manipulation of the Shares. 

For the foregoing reasons, the 

Commission finds that the proposed 

rule change, as modified by Amendment 

No. 1, is consistent with Sections 6(b)(5) 

and 11A of the Act and the rules and 

regulations thereunder applicable to a 

national securities exchange. 

IV. Solicitation of Comments on 

Amendment No. 1 

Interested persons are invited to 

submit written data, views, and 

arguments concerning Amendment No. 

1. 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 this 

filing will also 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 

October 3, 2018. 

V. Accelerated Approval of Proposed 

Rule Change, as Modified by 

Amendment No. 1 

The Commission finds good cause to 

approve the proposed rule change, as 

modified by Amendment No. 1, prior to 

the 30th day after the date of 

publication of notice of Amendment No. 

1 in the Federal Register. Amendment 

No. 1 supplements the proposal by, 

among other things, eliminating an 

issuer concentration requirement from 

the proposed continued listing criteria 

applicable to the Shares and deleting 

the condition that would require a 

change to the index methodology before 

the proposed continued listing criteria 

would apply. The changes and 

additional information in Amendment 

No. 1 raise no novel issues and assist 

the Commission in finding that the 

proposal is consistent with the Act. 

Accordingly, the Commission finds 

good cause, pursuant to Section 19(b)(2) 

of the Exchange Act,17 to approve the 

proposed rule change, as modified by 

Amendment No. 1, on an accelerated 

basis. 

VI. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,18 that the 

proposed rule change (SR–NYSEArca– 

2018–38), as modified by Amendment 

No. 1 thereto, be, and hereby is, 

approved on an accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–19772 Filed 9–11–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84045; File No. SR–CBOE– 

2018–062] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing of a 

Proposed Rule Change To Amend Rule 

6.2, Interpretation and Policy .01 

Concerning Strategy Orders 

September 6, 2018. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on August 

24, 2018, Cboe Exchange, Inc. 

(‘‘Exchange’’ or ‘‘Cboe Options’’) 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 Exchange. 

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 

Cboe Options proposes a rule change 

to amend and clarify the definition of a 

strategy order, clarify other definitions 

related to the modified HOSS 

procedure, and permit the entry of 

orders that offset imbalances after the 

strategy order cut-off time. 

(additions are italicized; deletions are 

[bracketed]) 

* * * * * 

Rules of Cboe Exchange, Inc. 

* * * * * 

Rule 6.2. Hybrid Opening (and 

Sometimes Closing) System (‘‘HOSS’’) 

(a)–(h) No change. 

. . . Interpretations and Policies: 

.01 Modified Opening Procedure 

for Series Used to Calculate the 

Exercise[/] or Final Settlement Value[s] 

of Expiring Volatility Index[es] 

Derivatives. 

(a) Definitions. For purposes of this 

Interpretation and Policy .01, the 

following terms have the meanings 

below: 

Volatility Index Derivatives 

The term ‘‘volatility index 

derivatives’’ means volatility index 

options listed for trading on the 

Exchange (as determined under Rule 

24.9(a)(5) and (6)), (security) futures 


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