7066 Federal Register / Vol. 80, No. 26 / Monday, February 9, 2015 / Notices 

10 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities Exchange Act Release No. 73895 

(December 19, 2014), 79 FR 78125 (‘‘Notice’’). 

5See Registration Statement on Form N–1A for 

the Trust, dated September 3, 2014 (File Nos. 333– 

179904 and 811–22649). See also Investment 

Company Act Release No. 29571 (January 24, 2011) 

(File No. 812–13601). 6BFA is an indirect wholly owned subsidiary of 

BlackRock, Inc. 7See Notice, supra note 4, at 78126. 8See id.; see also BATS Rule 14.11(i)(7). The 

Exchange also represents that in the event that (a) 

the Adviser becomes registered as a broker-dealer 

or newly affiliated with another broker-dealer, or (b) 

any new adviser or sub-adviser is a registered 

broker-dealer or becomes affiliated with a brokerdealer, it will implement a fire wall with respect to 

its relevant personnel or such broker-dealer 

affiliate, as applicable, regarding access to 

information concerning the composition and/or 

changes to the portfolio, and will be subject to 

procedures designed to prevent the use and 

dissemination of material non-public information 

regarding such portfolio. 

9The Commission notes that additional 

information regarding the Trust, the Fund, and the 

Shares, investment strategies, risks, net asset value 

(‘‘NAV’’) calculation, creation and redemption 

procedures, fees and expenses, portfolio holdings 

disclosure policies, distributions, and taxes, among 

other information, is included in the Notice and 

Registration Statement. See supra notes 4 and 5, 

respectively. 

10The Exchange states that effective duration is 

a measure of the Fund’s price sensitivity to changes 

in yields or interest rates. See Notice, supra note 4, 

79 FR at 78126, n.11. 11The term ‘‘under normal circumstances’’ 

includes, but is not limited to, the absence of 

adverse market, economic, political, or other 

conditions, including extreme volatility or trading 

halts in the financial markets; operational issues 

causing dissemination of inaccurate market 

information; or force majeure type events such as 

systems failure, natural or man-made disaster, act 

of God, armed conflict, act of terrorism, riot, or 

labor disruption, or any similar intervening 

circumstance. 

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– 

BOX–2015–07 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–BOX–2015–07. 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 Web site (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 Web site 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 such 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–BOX– 

2015–07, and should be submitted on or 

before March 2, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–02503 Filed 2–6–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74193; File No. SR–BATS– 

2014–054] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Order Approving a 

Proposed Rule Change To List and 

Trade Shares of the iShares Short 

Maturity Municipal Bond ETF of the 

iShares U.S. ETF Trust Under Rule 

14.11(i) of BATS Exchange, Inc. 

February 3, 2015. 

I. Introduction 

On December 12, 2014, BATS 

Exchange, Inc. (the ‘‘Exchange’’ or 

‘‘BATS’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’), 

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

Securities Exchange Act of 1934 (‘‘Act’’ 

or ‘‘Exchange Act’’) 2 and Rule 19b–4 

thereunder,3 a proposed rule change to 

list and trade shares (‘‘Shares’’) of the 

iShares Short Maturity Municipal Bond 

ETF (the ‘‘Fund’’) under BATS Rule 

14.11(i). The proposed rule change was 

published for comment in the Federal 

Register on December 29, 2014.4 The 

Commission received no comments on 

the proposed rule change. This order 

approves the proposed rule change. 

II. Description of the Proposal 

The Exchange proposes to list and 

trade the Shares under BATS Rule 

14.11(i), which governs the listing and 

trading of Managed Fund Shares on the 

Exchange. The Exchange deems the 

Shares to be equity securities, thus 

rendering trading in the Shares subject 

to the Exchange’s existing rules 

governing the trading of equity 

securities. 

The Shares will be offered by the 

iShares U.S. ETF Trust (the ‘‘Trust’’), a 

Delaware statutory trust. The Trust is 

registered with the Commission as an 

open-end investment company and has 

filed a registration statement on behalf 

of the Fund on Form N–1A 

(‘‘Registration Statement’’) with the 

Commission.5 BlackRock Fund Advisors 

is the investment adviser (‘‘BFA’’ or 

‘‘Adviser’’) to the Fund.6 State Street 

Bank and Trust Company is the 

administrator, custodian, and transfer 

agent for the Trust. BlackRock 

Investments, LLC serves as the 

distributor for the Trust. The Exchange 

represents that the Adviser is not a 

registered broker-dealer, but is affiliated 

with multiple broker-dealers and has 

implemented fire walls with respect to 

such broker-dealers regarding access to 

information concerning the composition 

and/or changes to the Fund’s portfolio.7

The Exchange further represents that 

Adviser personnel who make decisions 

regarding the Fund’s portfolio are 

subject to procedures designed to 

prevent the use and dissemination of 

material nonpublic information 

regarding the Fund’s portfolio.8

The Exchange has made the following 

representations and statements 

regarding the Fund.9 The Fund will seek 

to maximize tax-free current income. 

Generally, the Fund’s effective 

duration 10 will be 1.2 years or less, and 

it is not expected to exceed 1.5 years. 

To achieve its objective, the Fund will 

invest, under normal circumstances,11

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Federal Register / Vol. 80, No. 26 / Monday, February 9, 2015 / Notices 7067 

12 ‘‘Municipal Securities’’ are fixed and floating 

rate securities issued in the U.S. by U.S. states and 

territories, municipalities and other political 

subdivisions, agencies, authorities, and 

instrumentalities of states and multi-state agencies 

and authorities and will include only the following 

instruments: General obligation bonds, limited 

obligation bonds (or revenue bonds), private 

activity bonds, municipal notes, municipal 

commercial paper, tender option bonds, variable 

rate demand obligations, municipal lease 

obligations, stripped securities, structured 

securities, when issued securities, and zero coupon 

securities. The Fund may also invest in exchangelisted and non-exchange-listed investment 

companies that invest in Municipal Securities. The 

Exchange represents that structured securities, 

when combined with its ‘‘Other Investments’’ will 

not exceed 20% of the Fund’s net assets. See 

Notice, supra note 4, 79 FR at 78127, n.21. 

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). 

15 15 U.S.C. 78k–1(a)(1)(C)(iii). 

16See Notice, supra note 4, 79 FR at 78130. 

17The Disclosed Portfolio will include, as 

applicable, the names, quantity, percentage 

weighting and market value of securities and other 

assets held by the Fund and the characteristics of 

such assets. The Web site and information will be 

publicly available at no charge. Under accounting 

procedures to be followed by the Fund, trades made 

on the prior business day (‘‘T’’) will be booked and 

reflected in NAV on the current business day 

(‘‘T+1’’). Accordingly, the Fund 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. 

18The Exchange represents that several major 

market data vendors display and/or make widely 

available Intraday Indicative Values published via 

the CTA or other data feeds. See id. at 78129, n.36. 

19See id. at 78130. 

20See supra note 7 and accompanying text. 

at least 80% of its net assets in 

Municipal Securities 12 that pay interest 

that is exempt from U.S. federal income 

taxes and the federal alternative 

minimum tax (the ‘‘AMT’’), along with 

short-term instruments and repurchase 

and reverse repurchase agreements for 

Municipal Securities. Under normal 

circumstances, less than 20% of the 

Fund’s net assets may be invested in 

‘‘Other Investments,’’ namely: Interest 

rate futures contracts and Municipal 

Securities that pay interest that is 

subject to the AMT. 

III. Discussion and Commission 

Findings 

After careful review, the Commission 

finds that the Exchange’s proposal to list 

and trade the Shares is consistent with 

the Exchange Act and the rules and 

regulations thereunder applicable to a 

national securities exchange.13 In 

particular, the Commission finds that 

the proposed rule change is consistent 

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

Act,14 which requires, among other 

things, that the Exchange’s rules be 

designed to promote just and equitable 

principles of trade, 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 Commission also finds that the 

proposal to list and trade the Shares on 

the Exchange is consistent with Section 

11A(a)(1)(C)(iii) of the Exchange Act,15

which sets forth Congress’ finding that 

it is in the public interest and 

appropriate for the protection of 

investors and the maintenance of fair 

and orderly markets to assure the 

availability to brokers, dealers and 

investors of information with respect to 

quotations for and transactions in 

securities. Quotation and last-sale 

information for the Shares will be 

available on the facilities of the 

Consolidated Tape Association 

(‘‘CTA’’). Information regarding market 

price and volume of the Shares will be 

continually available on a real-time 

basis throughout the day on brokers’ 

computer screens and other electronic 

services. The previous day’s closing 

price and trading volume information 

for the Shares will be published daily in 

the financial section of newspapers. The 

Web site for the Fund will include a 

form of the prospectus for the Fund and 

additional data relating to NAV and 

other applicable quantitative 

information. 

According to the Exchange, intraday, 

executable price quotations on assets 

held by the Fund are available from 

major broker-dealer firms, and for 

exchange-traded assets, such intraday 

information is available directly from 

the applicable listing exchange.16 All 

such intraday price information is 

available through subscription services, 

such as Bloomberg, Thomson Reuters 

and International Data Corporation, 

which can be accessed by authorized 

participants and other investors. Pricing 

information for repurchase agreements 

and securities not listed on an exchange 

or national securities market will be 

available from major broker-dealer firms 

and/or subscription services, such as 

Bloomberg, Thomson Reuters and 

International Data Corporation. 

Quotation and last-sale information for 

the underlying exchange-listed 

investment companies will be available 

through CTA. Price information relating 

to all other securities held by the Fund 

will be available from major market data 

vendors. 

On each business day, before 

commencement of trading in Shares 

during Regular Trading Hours on the 

Exchange, the Fund will disclose on its 

Web site the identities and quantities of 

the portfolio of securities and other 

assets (the ‘‘Disclosed Portfolio’’) held 

by the Fund that will form the basis for 

the Fund’s calculation of NAV at the 

end of the business day.17 In addition, 

for the Fund, an estimated value, 

defined in BATS Rule 14.11(i)(3)(C) as 

the ‘‘Intraday Indicative Value,’’ that 

reflects an estimated intraday value of 

the Fund’s portfolio, will be 

disseminated. The Intraday Indicative 

Value will be based upon the current 

value for the components of the 

Disclosed Portfolio and will be updated 

and widely disseminated by one or 

more major market data vendors at least 

every 15 seconds during the Exchange’s 

Regular Trading Hours.18

The Commission also believes that the 

proposal to list and trade the Shares is 

reasonably designed to promote fair 

disclosure of information that may be 

necessary to price the Shares 

appropriately and to prevent trading 

when a reasonable degree of 

transparency cannot be assured. The 

Commission notes that the Exchange 

will obtain a representation from the 

issuer of the Shares that the NAV per 

Share will be calculated daily and that 

the NAV and the Disclosed Portfolio 

will be made available to all market 

participants at the same time.19 The 

Exchange will halt trading in the Shares 

under the conditions specified in BATS 

Rule 11.18. Trading may be halted 

because of market conditions or for 

reasons that, in the view of the 

Exchange, make trading in the Shares 

inadvisable. These may include: (1) The 

extent to which trading is not occurring 

in the securities and/or the financial 

instruments composing the Disclosed 

Portfolio of the Fund; or (2) whether 

other unusual conditions or 

circumstances detrimental to the 

maintenance of a fair and orderly 

market are present. Trading in the 

Shares also will be subject to Rule 

14.11(i)(4)(B)(iv), which sets forth 

circumstances under which Shares of 

the Fund may be halted. The Exchange 

prohibits the distribution of material 

non-public information by its 

employees. The Exchange represents 

that the Adviser is not a registered 

broker-dealer, but is affiliated with 

multiple broker-dealers and has 

implemented fire walls with respect to 

such broker-dealers regarding access to 

information concerning the composition 

and/or changes to the Fund’s 

portfolio.20 The Exchange further 

represents that Adviser personnel who 

make decisions regarding the Fund’s 

portfolio are subject to procedures 

designed to prevent the use and 

dissemination of material nonpublic 

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7068 Federal Register / Vol. 80, No. 26 / Monday, February 9, 2015 / Notices 

21See Notice, supra note 4, 79 FR at 78131. 

22For a list of the current members of ISG, see 

www.isgportal.org. The Exchange notes that not all 

components of the Disclosed Portfolio for the Fund 

may trade on markets that are members of ISG or 

with which the Exchange has in place a 

comprehensive surveillance sharing agreement. 

23The Pre-Opening Session is from 8:00 a.m. to 

9:30 a.m. Eastern Time. 

24The After Hours Trading Session is from 4:00 

p.m. to 5:00 p.m. Eastern Time. 

25See 17 CFR 240.10A–3. 

26 15 U.S.C. 78f(b)(5). 

27 15 U.S.C. 78s(b)(2). 

28 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

information regarding the Fund’s 

portfolio.21 In addition, the Commission 

notes that, consistent with BATS Rule 

14.11(i)(4)(B)(ii)(b), the Reporting 

Authority, as defined in BATS Rule 

14.11(i)(3)(D), must implement and 

maintain, or be subject to, procedures 

designed to prevent the use and 

dissemination of material, non-public 

information regarding the actual 

components of the portfolio. The 

Exchange may obtain information 

regarding trading in the Shares and the 

underlying shares in exchange traded 

equity securities via the Intermarket 

Surveillance Group (‘‘ISG’’), from other 

exchanges that are members or affiliates 

of the ISG, or with which the Exchange 

has entered into a comprehensive 

surveillance sharing agreement.22 In 

addition, the Exchange is able to access, 

as needed, trade information for certain 

fixed income instruments reported to 

FINRA’s Trade Reporting and 

Compliance Engine. 

In support of this proposal, the 

Exchange has made the following 

representations: 

(1) The Shares will be subject to 

BATS Rule 14.11(i), which sets forth the 

initial and continued listing criteria 

applicable to Managed Fund Shares. 

(2) The Exchange has appropriate 

rules to facilitate transactions in the 

Shares during all trading sessions. 

(3) Trading of the Shares through the 

Exchange will be subject to the 

Exchange’s surveillance procedures for 

derivative products, including Managed 

Fund Shares, and that these procedures 

are adequate to properly monitor the 

trading of the Shares on the Exchange 

during all trading sessions and to deter 

and detect violations of Exchange rules 

and the applicable federal securities 

laws. 

(4) Prior to the commencement of 

trading, the Exchange will inform its 

members in an Information Circular of 

the special characteristics and risks 

associated with trading the Shares. 

Specifically, the Information Circular 

will discuss the following: (a) The 

procedures for purchases and 

redemptions of Shares in Creation Units 

(and that Shares are not individually 

redeemable); (b) BATS Rule 3.7, which 

imposes suitability obligations on 

Exchange members with respect to 

recommending transactions in the 

Shares to customers; (c) how 

information regarding the Intraday 

Indicative Value is disseminated; (d) the 

risks involved in trading the Shares 

during the Pre-Opening 23 and After 

Hours Trading Sessions 24 when an 

updated Intraday Indicative Value will 

not be calculated or publicly 

disseminated; (e) the requirement that 

members deliver a prospectus to 

investors purchasing newly issued 

Shares prior to or concurrently with the 

confirmation of a transaction; and (f) 

trading information. 

(5) For initial and/or continued 

listing, the Fund must be in compliance 

with Rule 10A–3 under the Act.25

(6) The Fund may hold up to an 

aggregate amount of 15% of its net 

assets in illiquid assets (calculated at 

the time of investment), as deemed 

illiquid by the Adviser under the 1940 

Act. 

(7) The Fund’s exposure to reverse 

repurchase agreements will be covered 

by liquid assets having a value equal to 

or greater than such commitments. 

(8) Structured securities, when 

combined with those instruments held 

as part of the Other Investments 

described above, will not exceed 20% of 

the Fund’s net assets. 

(9) As it relates to exchange traded 

investment companies, the Fund will 

only invest in investment companies 

that trade on markets that are a member 

of the ISG or with which the Exchange 

has in place a comprehensive 

surveillance sharing agreement. 

(10) To the extent that the Fund 

invests in futures contracts, the Fund 

will only invest in futures contracts that 

are traded on an exchange that is a 

member of the ISG or with which the 

Exchange has in place a comprehensive 

surveillance sharing agreement. 

(11) A minimum of 100,000 Shares 

will be outstanding at the 

commencement of trading on the 

Exchange. 

This approval order is based on all of 

the Exchange’s representations, 

including those set forth above and in 

the Notice. For the foregoing reasons, 

the Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act 26 and the rules and 

regulations thereunder applicable to a 

national securities exchange. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Exchange Act,27

that the proposed rule change (SR– 

BATS–2014–054) is hereby approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–02501 Filed 2–6–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74197; File No. SR–Phlx– 

2015–11] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Add New 

Rule 1016 To Authorize the Exchange 

To Share Phlx XL ParticipantDesignated Risk Settings in Phlx XL 

February 3, 2015. 

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 January 

28, 2015, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘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 the Substance 

of the Proposed Rule Change 

The Exchange proposes to add new 

Rule 1016 to authorize the Exchange to 

share any Phlx XL participantdesignated risk settings in Phlx XL, the 

Exchange’s trading system, with the 

clearing member that clears transactions 

on behalf of the Phlx XL participant. 

The text of the proposed rule change 

is below; proposed new language is 

italicized; proposed deletions are in 

brackets. 

NASDAQ OMX PHLX Rules 

Options Rules 

* * * * * 

[Rule 1016. Reserved.] 

Rule 1016. Exchange Sharing of 

Phlx XL Participant-Designated 

Risk Settings 

The Exchange may share any Phlx XL 

participant-designated risk settings in 

mstockstill on DSK4VPTVN1PROD with NOTICES