1438 Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Notices 

64See id. at 9. 

65See id. at 10. 

66See id. at 10. 

67See id. at 20. 

68See id. The Commission notes that certain 

proposals for the listing and trading of exchangetraded products include a representation that the 

exchange will ‘‘surveil’’ for compliance with the 

continued listing requirements. See, e.g., Securities 

Exchange Act Release No. 77499 (Apr. 1, 2016), 81 

FR 20428, 20432 (Apr. 7, 2016) (SR–BATS–2016– 

04). In the context of this representation, it is the 

Commission’s view that ‘‘monitor’’ and ‘‘surveil’’ 

both mean ongoing oversight of compliance with 

the continued listing requirements. Therefore, the 

Commission does not view ‘‘monitor’’ as a more or 

less stringent obligation than ‘‘surveil’’ with respect 

to the continued listing requirements. 

69 15 U.S.C. 78f(b)(5). 

70 15 U.S.C. 78s(b)(2). 

71 Id. 

72 17 CFR 200.30–3(a)(12). 

(8) The Trust’s investment and operating 

restrictions provide that the Trust will invest 

in and hold a minimum of 90% of its total 

net assets in physical gold and silver bullion 

in ‘‘London Good Delivery’’ bar form, and 

hold no more than 10% of the total net assets 

of the Trust, at the discretion of the Manager, 

in: (i) Physical gold and silver bullion (in 

London Good Delivery bar form or 

otherwise); (ii) gold or silver coins; (iii) debt 

obligations of or guaranteed by a 

Government; (iv) money market mutual 

funds; (v) interest-bearing accounts; (vi) cash; 

and (vii) cash equivalents, except during the 

60-day period following the closing of 

additional offerings or prior to the 

distribution of the assets of the Trust.64

(9) According to the Manager, the value of 

gold bullion is currently approximately 2⁄3, 

and the value of silver bullion is currently 

approximately 1⁄3, of CFCL’s net assets. It is 

the intention of the Trust, subject to the 

discretion of the Manager, to maintain a ratio 

of the value of net assets in gold bullion to 

the value of net assets in silver bullion at 

approximately 2⁄3 to 1⁄3. It does not expect 

that its investment in either gold bullion or 

silver bullion would be less than 15% to 20% 

of its net assets on a long-term basis. 

However, changes in the relative prices of 

gold and silver bullion, redemptions or other 

events beyond the control of the Manager 

could cause the relative investments in gold 

and silver bullion to vary from these 

percentages.65

(10) According to the Manager, the Trust 

will not invest in gold or silver certificates 

(other than legacy gold and silver certificates 

previously held by CFCL which historically 

represent less than 1% of CFCL’s assets, and 

which will be sold for cash as soon as 

practicable following the completion of the 

Arrangement) or other financial instruments 

that represent gold or silver or that may be 

exchanged for gold or silver, and will not 

purchase, sell, or hold derivatives.66

(11) All statements and representations 

made in this filing regarding (a) The 

description of the portfolio holdings or 

reference assets, (b) limitations on portfolio 

holdings or reference assets, and (c) the 

applicability of Exchange listing rules 

specified in this rule filing shall constitute 

continued listing requirements for listing the 

Units on the Exchange.67

(12) The Manager has represented to the 

Exchange that it will advise the Exchange of 

any failure by the Trust to comply with the 

continued listing requirements, and, 

pursuant to its obligations under Section 

19(g)(1) of the Act, the Exchange will monitor 

for compliance with the continued listing 

requirements. If the Trust is not in 

compliance with the applicable listing 

requirements, the Exchange will commence 

delisting procedures under NYSE Arca Rule 

5.5–E(m).68

(13) A minimum of 100,000 Units will be 

required to be outstanding at the start of 

trading. 

This approval order is based on all of the 

Exchange’s representations—including those 

set forth above and in Amendment No. 2— 

and the Exchange’s description of the Trust. 

For the foregoing reasons, the Commission 

finds that the proposed rule change, as 

modified by Amendment No. 2, is consistent 

with Section 6(b)(5) of the Act 69 and the 

rules and regulations thereunder applicable 

to a national securities exchange. 

IV. Solicitation of Comments on Amendment 

No. 2 to the Proposed Rule Change 

Interested persons are invited to submit 

written data, views, and arguments 

concerning Amendment No. 2 to the 

proposed rule change. 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–2017–131 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–2017–131. 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–2017– 

131 and should be submitted on or before 

February 1, 2018 

V. Accelerated Approval of Proposed Rule 

Change, as Modified by Amendment No. 2 

The Commission finds good cause to 

approve the proposed rule change, as 

modified by Amendment No. 2, prior to the 

30th day after the date of publication of 

notice of Amendment No. 2 in the Federal 

Register. Amendment No. 2 supplements the 

proposal by providing additional information 

regarding, among other things: (1) The Trust’s 

primary holdings in gold and silver bullion 

and the other assets that would comprise the 

remaining holdings of the Trust; (2) the 

ability of the Exchange to obtain information 

regarding trading in gold and silver futures 

from markets trading such futures that are 

members of ISG or with which the Exchange 

has in place a CSSA, including COMEX; (3) 

the calculation and dissemination of NAV 

and IIV for the Units; and (3) updates with 

respect to the Arrangement. These changes 

assisted the Commission in evaluating the 

Units’ susceptibility to manipulation, and in 

determining that the listing and trading of the 

Units is consistent with the protection of 

investors and the public interest. 

Accordingly, the Commission finds good 

cause, pursuant to Section 19(b)(2) of the 

Act,70 to approve the proposed rule change, 

as modified by Amendment No. 2, on an 

accelerated basis. 

VI. Conclusion 

It is therefore ordered, pursuant to Section 

19(b)(2) of the Act,71 that the proposed rule 

change (SR–NYSEArca–2017–131), as 

modified by Amendment No. 2, be, and it 

hereby is, approved on an accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.72

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–00307 Filed 1–10–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82444; File No. SR– 

CboeBZX–2017–023] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing of 

a Proposed Rule Change To List and 

Trade Shares of the iShares Gold 

Exposure ETF, a Series of the iShares 

U.S. ETF Trust, Under Exchange Rule 

14.11(i), Managed Fund Shares 

January 5, 2018. 

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

Securities Exchange Act of 1934 (the 


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Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Notices 1439 

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

2 17 CFR 240.19b–4. 

3The Commission originally approved Exchange 

Rule 14.11(i) in Securities Exchange Act Release 

No. 65225 (August 30, 2011), 76 FR 55148 

(September 6, 2011) (SR–BATS–2011–018) and 

subsequently approved generic listing standards for 

Managed Fund Shares under Exchange Rule 

14.11(i)(4)(C) in Securities Exchange Act Release 

No. 78396 (July 22, 2016), 81 FR 49698 (July 28, 

2016) (SR–BATS–2015–100) (‘‘Generic Listing 

Rules’’). 

4See Registration Statement on Form N–1A for 

the Trust, filed with the Commission on November 

1, 2017 (File Nos. 333–179904 and 811–22649). The 

descriptions of the Fund and the Shares contained 

herein are based, in part, on information in the 

Registration Statement. The Commission has issued 

an order granting certain exemptive relief to the 

Adviser and open-end management companies 

advised by the Adviser under the Investment 

Company Act of 1940 (15 U.S.C. 80a–1). See 

Investment Company Act Release No. 29571 

(January 24, 2011) (File No. 812–13601). 

5As defined in Section 1a(11) of the Commodity 

Exchange Act. 

6An investment adviser to an open-end fund is 

required to be registered under the Investment 

Advisers Act of 1940 (the ‘‘Advisers Act’’). As a 

result, the Adviser and its related personnel are 

subject to the provisions of Rule 204A–1 under the 

Advisers Act relating to codes of ethics. This Rule 

requires investment advisers to adopt a code of 

ethics that reflects the fiduciary nature of the 

relationship to clients as well as compliance with 

other applicable securities laws. Accordingly, 

procedures designed to prevent the communication 

and misuse of non-public information by an 

investment adviser must be consistent with Rule 

204A–1 under the Advisers Act. In addition, Rule 

206(4)–7 under the Advisers Act makes it unlawful 

for an investment adviser to provide investment 

advice to clients unless such investment adviser has 

(i) adopted and implemented written policies and 

procedures reasonably designed to prevent 

violation, by the investment adviser and its 

supervised persons, of the Advisers Act and the 

Commission rules adopted thereunder; (ii) 

implemented, at a minimum, an annual review 

regarding the adequacy of the policies and 

procedures established pursuant to subparagraph (i) 

above and the effectiveness of their 

implementation; and (iii) designated an individual 

(who is a supervised person) responsible for 

administering the policies and procedures adopted 

under subparagraph (i) above. 

7Exchange Rule 14.11(i)(4)(C)(iv)(b) provides that 

‘‘the aggregate gross notional value of listed 

derivatives based on any five or fewer underlying 

reference assets shall not exceed 65% of the weight 

Continued 

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

notice is hereby given that on December 

21, 2017, Cboe BZX Exchange, Inc. 

(‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

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 

The Exchange filed a proposal to list 

and trade shares of the iShares Gold 

Exposure ETF (the ‘‘Fund’’), a series of 

the iShares U.S. ETF Trust (the 

‘‘Trust’’), under Exchange Rule 14.11(i) 

(‘‘Managed Fund Shares’’). The shares of 

the Fund are referred to herein as the 

‘‘Shares.’’ 

The text of the proposed rule change 

is available at the Exchange’s website at 

www.markets.cboe.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 

Exchange 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 these 

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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to list and 

trade the Shares under Exchange Rule 

14.11(i), which governs the listing and 

trading of Managed Fund Shares on the 

Exchange.3 The Fund is a series of, and 

the Shares will be offered by, the Trust, 

which was established as a Delaware 

statutory trust on June 21, 2011. 

BlackRock Fund Advisors (the 

‘‘Adviser’’) will serve as the investment 

adviser to the Fund. The Trust is 

registered with the Commission as an 

open-end management investment 

company and has filed a registration 

statement on behalf of the Fund on 

Form N–1A (‘‘Registration Statement’’) 

with the Commission.4

As a result of the instruments that 

will be indirectly held by the Fund, the 

Adviser, which is a member of the 

National Futures Association (‘‘NFA’’), 

will register as a commodity pool 

operator 5 with respect to the Fund. If 

the Fund retains any sub-adviser in the 

future, such sub-adviser will register as 

a commodity pool operator or 

commodity trading adviser, if required 

by Commodity Futures Trading 

Commission (‘‘CFTC’’) regulations. The 

Fund will be subject to regulation by the 

CFTC and NFA and applicable 

disclosure, reporting and recordkeeping 

rules imposed upon commodity pools. 

Exchange Rule 14.11(i)(7) provides 

that, if the investment adviser to the 

investment company issuing Managed 

Fund Shares is affiliated with a brokerdealer, such investment adviser shall 

erect a ‘‘fire wall’’ between the 

investment adviser and the brokerdealer with respect to access to 

information concerning the composition 

and/or changes to such investment 

company portfolio.6 In addition, 

Exchange Rule 14.11(i)(7) further 

requires that personnel who make 

decisions on the investment company’s 

portfolio composition must be subject to 

procedures designed to prevent the use 

and dissemination of material 

nonpublic information regarding the 

applicable investment company 

portfolio. Exchange Rule 14.11(i)(7) is 

similar to Exchange Rule 

14.11(b)(5)(A)(i) (which applies to 

index-based funds); however, Exchange 

Rule 14.11(i)(7) in connection with the 

establishment of a ‘‘fire wall’’ between 

the investment adviser and the brokerdealer reflects the applicable open-end 

fund’s portfolio, not an underlying 

benchmark index, as is the case with 

index-based funds. 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. In addition, 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. 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 broker-dealer, 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 nonpublic information regarding such 

portfolio. 

The Fund intends to qualify each year 

as a regulated investment company 

under Subchapter M of the Internal 

Revenue Code of 1986, as amended. 

The Exchange submits this proposal 

in order to allow the Fund to hold listed 

derivatives (i.e., Listed Gold Derivatives, 

as defined below) in a manner that does 

not comply with Exchange Rule 

14.11(i)(4)(C)(iv)(b).7 Otherwise, the 


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of the portfolio (including gross notional 

exposures), and the aggregate gross notional value 

of listed derivatives based on any single underlying 

reference asset shall not exceed 30% of the weight 

of the portfolio (including gross notional 

exposures).’’ 

8 Gold Futures held by the Fund will primarily be 

front month COMEX gold futures contracts (GC). 

9For purposes of this proposal, the term ‘‘listed 

derivatives’’ will be consistent with its use in 

Exchange Rule 14.11(i)(4)(C)(iv), which provides 

that listed derivatives include listed futures, 

options, and swaps on commodities, currencies and 

financial instruments (e.g., stocks, fixed income, 

interest rates, and volatility) or a basket or index of 

any of the foregoing. 

10As defined in Exchange Rule 11.8(e)(1)(A), ETP 

means any security listed pursuant to Exchange 

Rule 14.11. 

11As defined in Exchange Rule 14.11(i)(3)(E), the 

term ‘‘Normal Market Conditions’’ includes, but is 

not limited to, the absence of trading halts in the 

applicable financial markets generally; operational 

issues causing dissemination of inaccurate market 

information or system failures; or force majeure 

type events such as natural or man-made disaster, 

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

labor disruption, or any similar intervening 

circumstance. 

12The aggregate gross notional value of the 

Fund’s holdings in OTC Gold Derivatives will not 

exceed 20% of the weight of the portfolio 

(including gross notional exposures) in compliance 

with Exchange Rule 14.11(i)(4)(C)(v). 

13The Fund’s holdings in Gold ETPs will comply 

with the requirements of Exchange Rule 

14.11(i)(4)(C)(i)(a). 

14The Fund will hold Fixed Income Investments 

(which includes cash and cash equivalents) in order 

to collateralize its derivatives positions and such 

holdings will comply with Exchange Rules 

14.11(i)(4)(C)(ii) and (iii). 

15See Exchange Rules 14.11(i)(4)(A)(ii) and 

14.11(i)(4)(B)(ii). 

16See Exchange Rule 14.11(i)(4)(B)(i). 

17See Exchange Rule 14.11(i)(4)(B)(iii). 

18See Exchange Rule 14.11(i)(4)(B)(iv). 

19See Exchange Rule 14.11(i)(6). 

20See Exchange Rule 14.11(i)(7). 

21See Exchange Rule 14.11(i)(4)(A)(i). 

Fund will comply with all other listing 

requirements on an initial and 

continued listing basis under Exchange 

Rule 14.11(i) for Managed Fund Shares. 

iShares Gold Exposure ETF 

The Fund will seek to provide 

exposure, on a total return basis, to the 

price performance of gold. The Fund 

will seek to achieve its investment 

objective by investing primarily in a 

combination of (i) exchange-traded gold 

futures contracts (‘‘Gold Futures’’) 8 and 

other listed derivatives 9 that correlate to 

the investment returns of physical gold 

(such other listed derivatives together 

with Gold Futures, ‘‘Listed Gold 

Derivatives’’), based on the notional 

value of such derivative instruments; (ii) 

over-the-counter (‘‘OTC’’) derivatives 

that correlate to the investment returns 

of physical gold (‘‘OTC Gold 

Derivatives’’), based on the notional 

value of such derivative instruments; 

and (iii) exchange-traded products 

(‘‘ETPs’’) 10 backed by or linked to 

physical gold (‘‘Gold ETPs,’’ and 

collectively with Listed Gold 

Derivatives and OTC Gold Derivatives, 

the ‘‘Gold Investments’’). In seeking 

total return, the Fund will additionally 

aim to generate interest income and 

capital appreciation through a cash 

management strategy consisting 

primarily of cash and cash equivalents, 

including repurchase agreements and 

money market instruments, investments 

in government obligations, including 

U.S. government and agency securities, 

treasury inflation-protected securities, 

and sovereign debt obligations of nonU.S. countries, and investment-grade 

fixed-income securities, including 

corporate bonds (collectively, ‘‘Fixed 

Income Investments’’). The Fund will be 

an actively managed exchange-traded 

fund and will not seek to replicate the 

performance of a specified index. 

The Fund’s investment strategy 

related to the Gold Investments will 

seek to maximize correlation with the 

Bloomberg Composite Gold Index (the 

‘‘Bloomberg Benchmark’’), which is 

comprised of exchange-traded gold 

futures contracts and one or more ETPs 

backed by or linked to physical gold. 

The Bloomberg Benchmark is designed 

to track the price performance of gold. 

Although the Fund generally holds, 

among other instruments, the same 

futures contracts under the same futures 

rolling schedule, and the same ETPs 

backed by or linked to physical gold, as 

those included in the Bloomberg 

Benchmark, the Fund is not obligated to 

invest in any such futures contracts or 

ETPs included in, and does not seek to 

track the performance of, the Bloomberg 

Benchmark. 

The Fund expects to seek to gain 

exposure to Gold Investments by 

investing through a wholly-owned 

subsidiary organized in the Cayman 

Islands (the ‘‘Subsidiary’’). The 

Subsidiary is advised by the Adviser. 

Unlike the Fund, the Subsidiary is not 

an investment company registered 

under the Investment Company Act of 

1940. The Subsidiary has the same 

investment objective as the Fund. 

References below to the holdings of the 

Fund are inclusive of the direct 

holdings of the Fund as well as the 

indirect holdings of the Fund through 

the Subsidiary. 

In order to achieve its investment 

objective, under Normal Market 

Conditions,11 the aggregate gross 

notional value of Listed Gold 

Derivatives is generally not expected to 

exceed 75%, but may, in certain 

circumstances, approach 100%, of the 

Fund (including gross notional values). 

As noted above, Exchange Rule 

14.11(i)(4)(C)(iv) prevents the Fund 

from holding listed derivatives based on 

any five or fewer underlying reference 

assets in excess of 65% of the weight of 

the portfolio (including gross notional 

exposures) and from holding listed 

derivatives based on any single 

underlying reference asset in excess of 

30% of the weight of its portfolio 

(including gross notional exposures). 

The Exchange is proposing to allow the 

Fund to hold up to 100% of the weight 

of its portfolio (including gross notional 

exposures) in listed derivatives based on 

a single underlying reference asset 

through its investment in Listed Gold 

Derivatives. Allowing the Fund to hold 

a greater portion of its portfolio in 

Listed Gold Derivatives would mitigate 

the Fund’s dependency on holding OTC 

derivative instruments, which would 

reduce the Fund’s operational burden 

by allowing the Fund to primarily use 

listed futures contracts and other listed 

derivatives to achieve its investment 

objective and would also reduce 

counter-party risk associated with 

holding OTC instruments. 

Under Normal Market Conditions, the 

Fund generally will primarily hold 

Listed Gold Derivatives, including Gold 

Futures, OTC Gold Derivatives,12 Gold 

ETPs,13 and/or Fixed Income 

Investments.14 The Exchange represents 

that, except for the 65% and 30% 

limitations in Exchange Rule 

14.11(i)(4)(C)(iv)(b), the Fund’s 

proposed investments will satisfy, on an 

initial and continued listing basis, all of 

the Generic Listing Rules and all other 

applicable requirements for Managed 

Fund Shares under Exchange Rule 

14.11(i). The Trust is required to comply 

with Rule 10A–3 under the Act for the 

initial and continued listing of the 

Shares of the Fund. In addition, the 

Exchange represents that the Shares of 

the Fund will meet and be subject to all 

other requirements of the Generic 

Listing Rules and other applicable 

continued listing requirements for 

Managed Fund Shares under Exchange 

Rule 14.11(i), including those 

requirements regarding the Disclosed 

Portfolio (as defined in the Exchange 

rules) and the requirement that the 

Disclosed Portfolio and the net asset 

value (‘‘NAV’’) will be made available to 

all market participants at the same 

time,15 intraday indicative value,16

suspension of trading or removal,17

trading halts,18 disclosure,19 and 

firewalls.20 Further, at least 100,000 

Shares will be outstanding upon the 

commencement of trading.21 Moreover, 

at least 90% of the weight of the Fund 

in Listed Gold Derivatives will trade on 

markets that are a member of 


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22For a list of the current members and affiliate 

members of ISG, see www.isgportal.com. 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. 

23 15 U.S.C. 78f. 

24 15 U.S.C. 78f(b)(5). 

25 In September and October of 2017, the average 

daily COMEX gold futures contract volume was 

340,000 and 292,000 for front month contracts, 

respectively. This equates to an average daily traded 

notional value of approximately $37.5 billion and 

$44.9 billion, respectively. 

26See note 22, supra. 

Intermarket Surveillance Group (‘‘ISG’’) 

or affiliated with a member of ISG or 

with which the Exchange has in place 

a comprehensive surveillance sharing 

agreement.22 All statements and 

representations made in this filing 

regarding the description of the 

portfolio or reference assets, limitations 

on portfolio holdings or reference assets, 

dissemination and availability of 

reference assets and intraday indicative 

values, and the applicability of 

Exchange listing rules specified in this 

filing shall constitute continued listing 

requirements for the Fund. The Trust, 

on behalf of the Fund, has represented 

to the Exchange that it will advise the 

Exchange of any failure by the Fund or 

the Shares to comply with the 

continued listing requirements, and, 

pursuant to its obligations under 

Section 19(g)(1) of the Act, the Exchange 

will surveil for compliance with the 

continued listing requirements. If the 

Fund or the Shares are not in 

compliance with the applicable listing 

requirements, the Exchange will 

commence delisting procedures under 

Exchange Rule 14.12. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with Section 6(b) 

of the Act 23 in general and Section 

6(b)(5) of the Act 24 in particular because 

the Exchange believes that the proposed 

rule change is 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 given that the Shares 

will meet each of the initial and 

continued listing criteria in Exchange 

Rule 14.11(i) with the exception of 

Exchange Rule 14.11(i)(4)(C)(iv)(b), 

which requires that the aggregate gross 

notional value of listed derivatives 

based on any five or fewer underlying 

reference assets shall not exceed 65% of 

the weight of the portfolio (including 

gross notional exposures), and the 

aggregate gross notional value of listed 

derivatives based on any single 

underlying reference asset shall not 

exceed 30% of the weight of the 

portfolio (including gross notional 

exposures). The Exchange believes that 

the liquidity in the Listed Gold 

Derivatives markets mitigates the 

concerns that Exchange Rule 

14.11(i)(4)(C)(iv)(b) is intended to 

address and that such liquidity would 

prevent the Shares from being 

susceptible to manipulation.25 Further, 

allowing the Fund to hold a greater 

portion of its portfolio in Listed Gold 

Derivatives would mitigate the Fund’s 

dependency on holding OTC 

instruments, which would reduce the 

Fund’s operational burden by allowing 

the Fund to primarily use listed futures 

contracts and other listed derivatives to 

achieve its investment objective and 

would also reduce counter-party risk 

associated with holding OTC 

instruments. The Exchange believes that 

its surveillance 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. At 

least 90% of the weight of the Fund in 

Listed Gold Derivatives will trade on 

markets that are a member of ISG or 

affiliated with a member of ISG or with 

which the Exchange has in place a 

comprehensive surveillance sharing 

agreement. The Exchange may obtain 

information regarding trading in the 

Shares and at least 90% of the weight 

of the Fund invested in Listed Gold 

Derivatives via the ISG from other 

exchanges who are members or affiliates 

of the ISG or with which the Exchange 

has entered into a comprehensive 

surveillance sharing agreement.26 The 

Exchange further notes that the Fund 

will meet and be subject to all other 

requirements of the Generic Listing 

Rules and other applicable continued 

listing requirements for Managed Fund 

Shares under Exchange Rule 14.11(i), 

including those requirements regarding 

the Disclosed Portfolio and the 

requirement that the Disclosed Portfolio 

and the NAV will be made available to 

all market participants at the same time, 

intraday indicative value, suspension of 

trading or removal, trading halts, 

disclosure, and firewalls. Further, at 

least 100,000 Shares will be outstanding 

upon the commencement of trading. 

For the above reasons, the Exchange 

believes that the proposed rule change 

is consistent with the requirements of 

Section 6(b)(5) of the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purpose of the Act. The Exchange 

notes that the proposed rule change 

rather will facilitate the listing and 

trading of an additional activelymanaged exchange-traded fund that will 

enhance competition among both 

market participants and listing venues, 

to the benefit of investors and the 

marketplace. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

The Exchange has neither solicited 

nor received written comments on the 

proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the Exchange consents, the Commission 

will: (a) By order approve or disapprove 

such proposed rule change, or (b) 

institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposal 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 No. SR– 

CboeBZX–2017–023 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 No. 

SR–CboeBZX–2017–023. This file 

number should be included on the 


srobinson on DSK9F5VC42PROD with NOTICES
1442 Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Notices 

27 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. 

4The term ‘‘marketable’’ is defined in Rule 

1.1E(u) to mean for a Limit Order, an order than can 

be immediately executed or routed. 

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 No. 

SR–CboeBZX–2017–023 and should be 

submitted on or before February 1, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–00303 Filed 1–10–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82447; File No. SR– 

NYSEAMER–2017–40] 

Self-Regulatory Organizations; NYSE 

American LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Rule 7.31E 

Relating to Mid-Point Liquidity Orders 

and the MTS Modifier and Rule 7.36E 

To Add a Definition of ‘‘Aggressing 

Order’’ 

January 5, 2018. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on December 

22, 2017, NYSE American LLC 

(‘‘Exchange’’ or ‘‘NYSE American’’) 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 selfregulatory 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 amend 

Rule 7.31E relating to Mid-Point 

Liquidity Orders and the MTS Modifier 

and Rule 7.36E to add a definition of 

‘‘Aggressing Order.’’ 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 Exchange proposes to amend 

Rule 7.31E (Orders and Modifiers) 

relating to Mid-Point Liquidity (‘‘MPL’’) 

Orders and the MTS Modifier and Rule 

7.36E (Order Ranking and Display) to 

add a definition of ‘‘Aggressing Order.’’ 

For MPL Orders, the Exchange proposes 

to amend the price at which a 

marketable MPL Order would trade 

when there are resting orders priced 

better than the midpoint. The Exchange 

also proposes to amend how resting 

orders with an MTS Modifier would 

trade in specified circumstances. 

Background 

As provided for in current Rule 

7.31E(d)(3)(C), on arrival, an MPL Order 

to buy (sell) that is eligible to trade will 

trade with resting orders to sell (buy) 

with a working price at or below (above) 

the midpoint of the PBBO (i.e., priced 

better than the midpoint of the PBBO). 

The rule further provides that resting 

MPL Orders to buy (sell) will trade at 

the midpoint of the PBBO against all 

incoming orders to sell (buy) priced at 

or below (above) the midpoint of the 

PBBO (i.e., priced better than the 

midpoint of the PBBO). 

Current Rule 7.31E(i)(3) describes the 

MTS Modifier, including how a resting 

order with an MTS Modifier will trade. 

Current Rule 7.31E(i)(3)(E)(i) provides 

that if a sell (buy) order does not meet 

the MTS of the resting order to buy (sell) 

with an MTS Modifier, that sell (buy) 

order will not trade with and may trade 

through such order with an MTS 

Modifier. Current Rule 7.31E(i)(3)(E)(ii) 

provides that if a resting sell (buy) order 

did not meet the MTS of a same-priced 

resting order to buy (sell) with an MTS 

Modifier, a subsequently arriving sell 

(buy) order that meets the MTS will 

trade ahead of the resting sell (buy) 

order. Finally, current Rule 

7.31E(i)(3)(E)(iii) provides that a resting 

order to buy (sell) with an MTS 

Modifier will not be eligible to trade if 

sell (buy) order(s) ranked Priority 2— 

Display Orders are displayed on the 

Exchange Book at a price lower (higher) 

than the working price of such MTS 

Order. Similarly, Rule 7.46E(f)(5)(I) 

(Tick Size Pilot Plan) provides that for 

Pilot Securities in Test Group Three, a 

resting order to buy (sell) with an MTS 

Modifier will not be eligible to trade if 

sell (buy) order(s) ranked Priority 2— 

Display Orders are displayed on the 

Exchange Book at a price equal to or 

lower (higher) than the working price of 

such MTS Order. 

Proposed Definition of ‘‘Aggressing 

Order’’ 

The Exchange proposes to amend 

Rule 7.36E to add a definition that 

would be used for purposes of Rule 7E. 

Proposed Rule 7.36E(a)(5) would define 

the term ‘‘Aggressing Order’’ to mean a 

buy (sell) order that is or becomes 

marketable against sell (buy) interest on 

the Exchange Book.4 This term would 

therefore refer to orders that are 

marketable against other orders on the 

Exchange Book, such as incoming 

orders and orders that have returned 

unexecuted after routing. 

This term would also be applicable to 

resting orders that become marketable 

due to one or more events. For the most 

part, resting orders will have already 

traded with contra-side orders against 


srobinson on DSK9F5VC42PROD with NOTICES