91822 Federal Register / Vol. 89, No. 224 / Wednesday, November 20, 2024 / Notices 

44 17 CFR 200.30–3(a)(12). 

1See Precidian ETFs Trust, et al., Investment 

Company Act Release No. 33440 (April 8, 2019) 

(notice) and Investment Company Act Release No. 

33477 (May. 20, 2019) (order). Except as specifically 

noted in the application for the Amended Order, all 

representations and conditions contained in the 

application first submitted with the Commission 

(File No. 812–14405), as amended and restated, and 

filed with the Commission on April 4, 2019 (the 

‘‘First Application’’), remain applicable to the 

operation of the Funds and will apply to any Funds 

relying on the Amended Order. 

2The relief granted under section 12(d)(1)(J) of 

the Act for an exemption from sections 12(d)(1)(A) 

and 12(d)(1)(B) of the Act (the ‘‘Section 12(d)(1) 

Relief’’), and relief under sections 6(c) and 17(b) of 

the Act for an exemption from sections 17(a)(1) and 

17(a)(2) of the Act relating to the Section 12(d)(1) 

Relief, expired on January 19, 2022. See Fund of 

Funds Arrangements, Investment Company Act Rel. 

No. 10871 (Oct. 7, 2020), at III. 

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 (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

NYSE–2024–72 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–NYSE–2024–72. 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 (https://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 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–NYSE–2024–72 and should be 

submitted on or before December 11, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.44

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–27016 Filed 11–19–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

35386; 812–15179–01] 

Precidian ETF Trust II, et al. 

November 14, 2024. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of an application to 

amend a prior order for exemptive 

relief. 

Summary of Application: Applicants 

request an order (‘‘Amended Order’’) 

that would amend a prior order to 

permit a Fund to use Creation Baskets 

(as defined below) that include 

instruments that are not included, or 

that are included with different 

weightings, in the Fund’s Pro Rata 

Basket (as defined below). 

Applicants: Precidian ETF Trust II 

(‘‘Trust’’), Precidian Funds LLC, and 

Foreside Fund Services, LLC 

(collectively, the ‘‘Applicants’’). 

Filing Dates: The application was 

filed on November 24, 2020, and 

amended on January 14, 2022, March 

28, 2022, September 2, 2022, December 

13, 2023, April 15, 2024, and November 

8, 2024. 

Hearing or Notification of Hearing: An 

order granting the requested relief will 

be issued unless the Commission orders 

a hearing. Interested persons may 

request a hearing by emailing the 

Commission’s Secretary at SecretarysOffice@sec.gov and serving Applicants 

with a copy of the request by email, if 

an email address is listed for the 

relevant Applicant below, or personally 

or by mail, if a physical address is listed 

for the relevant Applicant below. 

Hearing requests should be received by 

the Commission by 5:30 p.m. on 

December 9, 2024 and should be 

accompanied by proof of service on the 

Applicants in the form of an affidavit, 

or, for lawyers, a certificate of service. 

Pursuant to rule 0–5 under the 

Investment Company Act of 1940 

(‘‘Act’’), hearing requests should state 

the nature of the writer’s interest, any 

facts bearing upon the desirability of a 

hearing on the matter, the reason for the 

request, and the issues contested. 

Persons who wish to be notified of a 

hearing may request notification by 

emailing to the Commission’s Secretary. 

ADDRESSES: 

The Commission: Secretarys-Office@

sec.gov. 

Applicants: john.mcguire@

morganlewis.com. 

FOR FURTHER INFORMATION CONTACT: Kris 

Easter Guidroz, Senior Counsel; Trace 

Rakestraw, Senior Special Counsel, at 

(202) 551–6825 (Division of Investment 

Management, Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: For 

Applicants’ representations, legal 

analysis, and conditions, please refer to 

Applicants’ sixth amended and restated 

application, dated November 8, 2024, 

which may be obtained via the 

Commission’s website by searching for 

the file number at the top of this 

document, or for an Applicant using the 

Company name search field on the 

SEC’s EDGAR system. The SEC’s 

EDGAR system may be searched at 

https://www.sec.gov/edgar/searchedgar/ 

legacy/companysearch.html. You may 

also call the SEC’s Public Reference 

Room at (202) 551–8090. 

I. Introduction 

1. On May 20, 2019, the Commission 

issued an order 1 under section 6(c) of 

the Act for an exemption from sections 

2(a)(32), 5(a)(1), and 22(d) of the Act 

and rule 22c–1 under the Act, under 

sections 6(c) and 17(b) of the Act for an 

exemption from sections 17(a)(1) and 

17(a)(2) of the Act, and under section 

12(d)(1)(J) of the Act for an exemption 

from sections 12(d)(1)(A) and 

12(d)(1)(B) of the Act (the ‘‘Prior 

Order’’).2 The Prior Order permits 

Applicants to operate actively-managed 

exchange-traded funds (‘‘ETFs’’) that are 

not required to disclose their full 

portfolio holdings on a daily basis (each, 

a ‘‘Fund’’). Rather, pursuant to the Prior 

Order, each Fund disseminates a 

‘‘verified intraday indicative value,’’ or 


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Federal Register / Vol. 89, No. 224 / Wednesday, November 20, 2024 / Notices 91823 

3All capitalized terms not otherwise defined in 

this notice have the meanings ascribed to them in 

the First Application. 

4The Funds are not able to operate in reliance on 

rule 6c–11 because they do not disclose their 

portfolio holdings on a daily basis as required by 

the rule. See rule 6c–11(c)(1)(i) (requiring an ETF 

to disclose prominently on its website, publicly 

available and free of charge, the portfolio holdings 

that will form the basis for the Fund’s calculation 

of per share NAV). 

5A Fund’s Optimized Basket will be comprised 

of: (i) portfolio holdings; (ii) other securities that the 

Fund can purchase, including U.S. listed ETFs; and 

(iii) cash and cash equivalents. 

6See Exchange-Traded Funds, Investment 

Company Act Release No. 33646 (Sept. 25, 2019) 

(‘‘ETF Adopting Release’’), at 80–94 (discussion of 

rule 6c–11 requirement for ETF policies and 

procedures concerning basket construction and 

acceptance and heightened policies and procedures 

for custom baskets). 

‘‘VIIV,’’ reflecting the value of its 

portfolio holdings, calculated every 

second throughout the trading day. 

2. Shares of each Fund are purchased 

and redeemed only in Creation Units 

and generally on an in-kind basis. 

Purchasers acquire Creation Units by 

transferring to the Fund Deposit 

Instruments 3 and shareholders 

redeeming their Shares receive from the 

Fund Redemption Instruments (each, a 

‘‘Creation Basket’’). Under the Prior 

Order, the names and quantities of the 

instruments that constitute a Fund’s 

Creation Basket must be a pro rata slice 

of the Fund’s actual portfolio except for 

certain cash substitutions (‘‘Pro Rata 

Basket’’). 

3. Applicants now seek to amend the 

Prior Order to, in effect, give the Funds 

the same flexibility with respect to 

Creation Basket composition as afforded 

to ETFs relying on rule 6c–1 under the 

Act.4 More specifically, Applicants have 

requested that the Funds be allowed to 

use Creation Baskets that include 

instruments that are not included, or are 

included but in different weightings, in 

the Fund’s Pro Rata Basket. As part of 

Applicants’ request, the Funds would 

comply with additional requirements, 

including disclosing additional 

information. 

II. The Application 

A. Applicants’ Proposal 

4. Upon amending the Prior Order, 

each Fund would continue to offer its 

Pro Rata Basket every Business Day but 

could also offer a Creation Basket that 

differs from the Pro Rata Basket to 

provide Authorized Participants the 

option to transact in either basket. Each 

Business Day, before the open of trading 

on the Exchange where the Fund is 

listed, the Fund will publish on its 

website the composition of any Creation 

Basket exchanged with an Authorized 

Participant on the previous Business 

Day that differed from such Business 

Day’s Pro Rata Basket other than solely 

with respect to cash substitutions. 

5. Applicants represent that a Fund 

may determine that it is desirable to use 

Creation Baskets that differ from a Pro 

Rata Basket. For example, a Fund may 

use a Creation Basket that contains one 

or more instruments that are not 

included in its Pro Rata Basket if the 

Adviser or Sub-Adviser seeks to add an 

instrument to the Fund’s portfolio 

without incurring transaction costs 

associated with the purchase of the 

instrument for cash. Similarly, if the 

Adviser or Sub-Adviser decides to sell 

an instrument from a Fund’s portfolio, 

the Fund may include the instrument in 

a Creation Basket with the expectation 

that the Fund will deliver it in-kind 

during a redemption transaction. 

6. The Funds will use the requested 

basket flexibility only in circumstances 

in which Applicants believe there will 

be no harm to the Funds or their 

shareholders and in order to benefit the 

Funds and their shareholders by 

reducing costs, increasing efficiency, 

and improving trading. To ensure that 

there is effective arbitrage on Business 

Days when the Adviser determines a 

Fund should use a Creation Basket that 

differs from its Pro Rata Basket, the 

Adviser will cause the Fund to disclose 

on its website that Business Day, before 

the opening of regular trading on the 

primary listing Exchange of the Fund’s 

Shares: (i) that the Fund is accepting 

Creation Baskets that differ from the Pro 

Rata Basket, (ii) a basket of securities 

and cash that is designed to closely 

track the daily performance of the Fund 

(an ‘‘Optimized Basket’’),5 and (iii) an 

Optimized Basket Overlap metric that 

measures the overlap between the 

Optimized Basket and the Fund’s actual 

portfolio. 

7. For at least the first three years after 

a Fund begins using Creation Baskets 

that differ from its Pro Rata Basket, the 

Adviser will promptly call a meeting of 

the Board, and the Board will promptly 

meet to consider recommendations for 

appropriate remedial measures 

presented by the Adviser, if the tracking 

error of the Optimized Basket exceeds 

1% (i.e., the difference, in percentage 

terms, between the NAV per share of the 

Optimized Basket and that of the actual 

portfolio at the end of a trading day). 

8. Pursuant to condition 6, each Fund 

will maintain and preserve a copy of 

each Optimized Basket published on the 

Fund’s website and a copy of each 

Creation Basket made available. 

9. In addition, pursuant to conditions 

6 and 10, each Fund will comply with 

the recordkeeping requirements of rule 

6c–11 and will adopt and implement 

written policies and procedures that 

govern the construction of Creation 

Baskets as required under rule 6c–11 

except that only Creation Baskets 

different from a Fund’s Pro Rata Basket 

will be treated as a ‘‘custom basket’’ 

under subsections (d)(2)(ii) and (c)(3) of 

rule 6c–11. 

B. Considerations relating to the 

Requested Relief 

10. Applicants represent that the 

ability to use a Creation Basket that 

includes instruments that are not 

included, or are included with different 

weightings, in a Fund’s Pro Rata Basket, 

does not raise any new policy concerns 

about reverse engineering of a Fund’s 

portfolio, self-dealing or overreaching, 

or selective disclosure beyond those 

concerns addressed in connection with 

the Prior Order. Further, the Fund will 

disclose additional information, as 

noted in paragraph 6 above, to ensure 

that there is effective arbitrage on 

Business Days when the Adviser 

determines a Fund should use a 

Creation Basket that differs from its Pro 

Rata Basket. 

11. Reverse Engineering. Applicants 

acknowledge that, by using a Creation 

Basket that includes instruments that 

are not included in a Fund’s Pro Rata 

Basket, or are included in different 

percentages, and by publishing such 

Creation Basket on its website, the Fund 

would provide market participants with 

additional information about which 

instruments it adds or removes from the 

Fund’s portfolio. However, Applicants 

represent that they will operate the 

Funds in a manner designed to 

minimize the risk of reverse engineering 

and, for the reasons set forth in the 

Application, believe successful frontrunning or free-riding is highly unlikely. 

12. Self-Dealing or Overreaching. 

Applicants state their belief that 

Authorized Participants and other 

market participants will not have the 

ability to disadvantage the Funds by 

manipulating or influencing the 

composition of Creation Baskets, 

including those that differ from a Fund’s 

Pro Rata Basket. Like the basket and 

custom basket policies and procedures 

required of ETFs by rule 6c–11, the 

Funds will adopt and implement 

written policies and procedures that 

govern the construction of creation 

baskets and the process that will be 

used for the acceptance of creation 

baskets to safeguard the best interests of 

the Funds and their shareholders.6

13. Selective Disclosure. The Funds 

and each person acting on behalf of the 


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91824 Federal Register / Vol. 89, No. 224 / Wednesday, November 20, 2024 / Notices 

7See supra note 2. 

Funds must continue to comply with 

Regulation Fair Disclosure as if it 

applied to them (except that the 

exemptions provided in rule 

100(b)(2)(iii) therein shall not apply). 

Applicants believe that the creation 

basket flexibility they are seeking does 

not raise any new concerns about 

selective disclosure of material nonpublic information. First, a Fund’s use 

of, or conversations with Authorized 

Participants about, Creation Baskets that 

would result in such disclosure would 

effectively be limited by the Funds’ 

obligation to comply with Regulation 

Fair Disclosure. Second, each Business 

Day before the open of trading on the 

Exchange where a Fund is listed, the 

Fund will publish on its website the 

composition of any basket accepted by 

the Fund on the previous Business Day 

that differed from such Business Day’s 

Pro Rata Basket. 

II. Requested Exemptive Relief 

Applicants believe that the Prior 

Order continues to meet the relevant 

standards for relief pursuant to section 

6(c) of the Act for an exemption from 

sections 2(a)(32), 5(a)(1), and 22(d) of 

the Act and rule 22c–1 under the Act, 

and under sections 6(c) and 17(b) of the 

Act for an exemption from sections 

17(a)(1) and 17(a)(2) of the Act.7

III. Applicants’ Conditions: 

Applicants agree that any Order of the 

Commission granting the requested 

relief will be subject to all of the 

conditions in the Prior Order, except 

condition 2 and condition 6 which are 

replaced with new conditions 2 and 6 

below, as well as new condition 10: 

2. The website for the Trust, which 

will be publicly accessible at no charge, 

will contain, on a per Share basis for 

each Fund, the prior Business Day’s 

NAV and market closing price or Bid/ 

Ask Price of the Shares, a calculation of 

the premium or discount of the market 

closing price or Bid/Ask Price against 

such NAV, and any other information 

regarding premiums and discounts as 

may be required for other ETFs under 

Rule 6c–11 under the 1940 Act. The 

website will also disclose the median 

bid-ask spread for each Fund’s most 

recent fiscal year based on the National 

Best Bid and Offer at the time of 

calculation of NAV (or such other 

spread measurement as may be required 

for other ETFs under Rule 6c–11 under 

the 1940 Act). On each applicable 

Business Day, when accepting orders 

involving a Creation Basket that differs 

from the Fund’s Pro Rata Basket, each 

Fund will publish on its website before 

the opening of regular trading on the 

primary listing Exchange of the Fund’s 

Shares an Optimized Basket and 

Optimized Basket Overlap. 

6. Each Fund will comply with the 

recordkeeping requirements of Rule 6c– 

11 under the Act, except that for 

purposes of this condition, only 

Creation Baskets different from the 

Fund’s Pro Rata Basket will be treated 

as a ‘‘custom basket’’ under Rule 6c– 

11(d)(2)(ii). In addition, each Fund will 

maintain and preserve, for a period of 

not less than five years, in an easily 

accessible place, (i) a copy of any 

Optimized Basket published on the 

Fund’s website for each Business Day; 

and (ii) a copy of each Creation Basket 

made available on a given day. In 

addition, each Fund will maintain and 

preserve, for a period of not less than 

five years, in an easily accessible place, 

all written agreements (or copies 

thereof) between the Fund and each AP 

Representative related to the AP 

Representative’s role as such. 

10. Each Fund will adopt and 

implement written policies and 

procedures that govern the construction 

of Creation Baskets, as required under 

Rule 6c–11(c)(3) under the Act, except 

that for purposes of this condition, any 

Creation Basket different from the 

Fund’s Pro Rata Basket will be treated 

as a ‘‘custom basket.’’ The Fund’s basket 

policies and procedures will be covered 

by the Fund’s compliance program and 

other requirements under Rule 38a–1 

under the Act. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–27015 Filed 11–19–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–451, OMB Control No. 

3235–0509] 

Submission for OMB Review; 

Comment Request; Extension: Rule 

301 of Regulation ATS 

Upon Written Request, Copies Available 

From: 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 

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

Securities and Exchange Commission 

(‘‘Commission’’) has submitted to the 

Office of Management and Budget 

(‘‘OMB’’) a request for approval of 

extension of the previously approved 

collection of information provided for in 

Rule 301 of Regulation ATS (17 CFR 

242.301) under the Securities Exchange 

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

(‘‘Exchange Act’’). 

Regulation ATS provides a regulatory 

structure for alternative trading systems. 

Rule 301 of Regulation ATS contains 

certain record keeping and reporting 

requirements, as well as additional 

obligations that apply only to alternative 

trading systems with significant volume. 

The Rule requires all alternative trading 

systems that wish to comply with 

Regulation ATS to file an initial 

operation report on Form ATS. 

Alternative trading systems are also 

required to supply updates on Form 

ATS to the Commission describing 

material changes to the system, file 

quarterly transaction reports on Form 

ATS–R, and file cessation of operations 

reports on Form ATS. An alternative 

trading system with significant volume 

is required to comply with requirements 

for fair access and systems capacity, 

integrity, and security. 

The Commission staff estimates that 

entities subject to the requirements of 

Rule 301 will spend a total of 

approximately 2,983 hours a year to 

comply with the Rule. 

Regulation ATS requires ATSs to 

preserve any records, for at least three 

years, made in the process of complying 

with the system’s capacity, integrity and 

security requirements. 

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: 

www.reginfo.gov. Find this particular 

information collection by selecting 

‘‘Currently under 30-day Review—Open 

for Public Comments’’ or by using the 

search function. Written comments and 

recommendations for the proposed 

information collection should be sent by 

December 20, 2024 to (i) 

www.reginfo.gov/public/do/PRAMain 

and (ii) Austin Gerig, Director/Chief 

Data Officer, Securities and Exchange 

Commission, c/o Tanya Ruttenberg, 100 

F Street NE, Washington, DC 20549, or 

by sending an email to: PRA_Mailbox@

sec.gov. 

Dated: November 15, 2024. 

Vanessa A. Countryman. 

Secretary. 

[FR Doc. 2024–27119 Filed 11–19–24; 8:45 am] 

BILLING CODE 8011–01–P 


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