Federal Register / Vol. 83, No. 122 / Monday, June 25, 2018 / Notices 29589 

47For purpose only of waiving the operative 

delay, the Commission has considered the proposed 

rule’s impact on efficiency, competition, and capital 

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

48 15 U.S.C. 78s(b)(2)(B). 49 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 82881 

(March 15, 2018), 83 FR 12449. 

4Amendment No. 1 replaced and superseded the 

original rule filing in its entirety. Amendment 

No. 1 is available at https://www.sec.gov/comments/ 

sr-cboebzx-2018-019/cboebzx2018019-3551361- 

162325.pdf. Amendment No. 1 was subsequently 

replaced and superseded in its entirety by 

Amendment No. 2. See note 7, infra. 

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

protections are substantially similar to 

protections offered on Phlx. Therefore, 

the Commission designates the 

proposed rule change operative upon 

filing.47

At any time within 60 days of the 

filing of such proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) of the Act 48 to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–ISE–2018–55 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–ISE–2018–55. This file 

number should be included on the 

subject line if e-mail 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 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. 

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–ISE–2018–55, and should 

be submitted on or before July 16, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.49

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–13505 Filed 6–22–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83463] 

Draft 2018–2022 Strategic Plan for 

Securities and Exchange Commission 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Request for comment. 

SUMMARY: The Securities and Exchange 

Commission (SEC) is providing notice 

that it is seeking comments on its draft 

2018–2022 Strategic Plan. The draft 

Strategic Plan includes a draft of the 

SEC’s mission, vision, values, strategic 

goals, and planned initiatives. 

DATES: Comments should be received on 

or before July 25, 2018. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

Electronic Comments 

Send an email to 

PerformancePlanning@sec.gov. 

Paper Comments 

Send paper comments to Nicole 

Puccio, Branch Chief, Securities and 

Exchange Commission, 100 F Street NE, 

Washington, DC 20549–2521. 

FOR FURTHER INFORMATION CONTACT: 

Nicole Puccio, Branch Chief, Office of 

Financial Management, at (202) 551– 

6638, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–2521. 

SUPPLEMENTARY INFORMATION: The draft 

strategic plan is available at the 

Commission’s website at https://

www.sec.gov/files/sec-strategic-plan2018-2022.pdf or by contacting Nicole 

Puccio, Branch Chief, Office of 

Financial Management, at (202) 551– 

6638, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–2521. 

By the Commission. 

Dated: June 19, 2018. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–13484 Filed 6–22–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83467; File No. SR– 

CboeBZX–2018–019] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove a Proposed 

Rule Change, as Modified by 

Amendment No. 2 Thereto, To List and 

Trade Shares of Eighteen ADRPLUS 

Funds of the Precidian ETFs Trust 

Under Rule 14.11(i), Managed Fund 

Shares 

June 19, 2018. 

I. Introduction 

On March 5, 2018, Cboe BZX 

Exchange, Inc. filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

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

eighteen ADRPLUS Funds (‘‘Funds’’) of 

the Precidian ETFs Trust (‘‘Trust’’). The 

proposed rule change was published for 

comment in the Federal Register on 

March 21, 2018.3 On April 25, 2018, the 

Exchange filed Amendment No. 1 to the 

proposed rule change,4 and the 

Commission, pursuant to Section 

19(b)(2) of the Act,5 designated a longer 


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29590 Federal Register / Vol. 83, No. 122 / Monday, June 25, 2018 / Notices 

6See Securities Exchange Act Release No. 83102 

(April 25, 2018), 83 FR 19126 (May 1, 2018). The 

Commission designated June 19, 2018, as the date 

by which the Commission would either approve or 

disapprove, or institute proceedings to determine 

whether to disapprove, the proposed rule change. 

7 In Amendment No. 2, which amends the 

proposed rule change and replaces and supersedes 

Amendment No. 1 in its entirety, the Exchange: (1) 

Specified that the Funds’ investments in derivatives 

would be limited to over-the-counter (‘‘OTC’’) 

currency swaps; (2) corrected references to 

Exchange rules; (3) deleted a representation that the 

Funds may not meet the requirement in Exchange 

Rule 14.11(i)(4)(C)(iv)(b) that 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); (4) represented that the Funds’ 

investments in cash equivalents would be limited 

to the cash equivalents listed in Exchange Rule 

14.11(i)(4)(C)(iii); (5) represented that the Trust 

would comply with the surveillance requirements 

for Managed Fund Shares under Exchange Rule 

14.11(i); (6) represented that each Fund expects to 

invest in excess of 95% of its net assets in the 

Unhedged ADRs (as defined herein), and that each 

Fund expects that the gross notional value of the 

Currency Hedge (as defined herein) would be equal 

to the value of the Unhedged ADRs, which would 

be approximately 50% of the weight of the portfolio 

(including gross notional exposures); (7) 

represented that the Exchange will suspend trading 

and commence delisting proceedings for a Fund if 

the Unhedged ADR held by the Fund has been 

suspended from trading or delisted by the 

Unhedged ADR’s listing exchange; (8) represented 

that the Exchange or FINRA, on behalf of the 

Exchange, is able to access, as needed, trade 

information for certain fixed income instruments 

reported to TRACE; (9) deleted repetitive 

information and information irrelevant to this 

proposal; and (10) made other clarifications, 

corrections, and technical and conforming changes. 

Amendment No. 2 is available at: https://

www.sec.gov/comments/sr-cboebzx-2018-019/cboeb

zx2018019-3665011-162423.pdf. Because 

Amendment No. 2 to the proposed rule change does 

not materially alter the substance of the proposed 

rule change or raise unique or novel regulatory 

issues, Amendment No. 2 is not subject to notice 

and comment. 

8 15 U.S.C. 78s(b)(2)(B). 

9The Exchange represents that the Trust is 

registered with the Commission as an open-end 

management investment company and has filed a 

registration statement on behalf of the Funds on 

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

Commission. See Registration Statement on Form 

N–1A for the Trust, filed with the Commission on 

June 14, 2017 (File Nos. 333–171987 and 811– 

22524). The descriptions of the Funds and the 

Shares contained herein are based, in part, on 

information in the Registration Statement. 

10The Exchange represents that 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. 32622 

(May 2, 2017) (File No. 812–14584). 

11According to the Exchange, the Adviser is not 

a registered broker-dealer and is not affiliated with 

a broker-dealer. In addition, Adviser personnel who 

make decisions regarding a 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 a brokerdealer, or (b) any new adviser or sub-adviser is a 

registered broker-dealer or becomes affiliated with 

a broker-dealer, it will implement and maintain 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. 

12Additional information regarding the Funds, 

the Trust, and the Shares, including investment 

strategies, risks, creation and redemption 

procedures, fees, portfolio holdings disclosure 

policies, calculation of net asset value (‘‘NAV’’), 

distributions, and taxes, among other things, can be 

found in Amendment No. 2 to the proposed rule 

change and the Registration Statement, as 

applicable. See supra notes 7 and 9, respectively. 

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.6

On May 17, 2018, the Exchange filed 

Amendment No. 2 to the proposed rule 

change.7 The Commission has received 

no comment letters on the proposed rule 

change, as modified by Amendment 

No. 2 thereto. This order institutes 

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

the Act 8 to determine whether to 

approve or disapprove the proposed 

rule change, as modified by Amendment 

No. 2 thereto. 

II. Description of the Proposed Rule 

Change 

The Exchange proposes to list and 

trade Shares of eighteen different series 

of the Trust under Rule 14.11(i), which 

governs the listing and trading of 

Managed Fund Shares on the Exchange. 

Specifically, the Exchange proposes to 

list Shares of Anheuser-Busch InBev 

SA/NV ADRPLUS Fund, AstraZeneca 

PLC ADRPLUS Fund, Banco Santander, 

S.A. ADRPLUS Fund, BP P.L.C. 

ADRPLUS Fund, British American 

Tobacco p.l.c. ADRPLUS Fund, Diageo 

plc ADRPLUS Fund, GlaxoSmithKline 

plc ADRPLUS Fund, HSBC Holdings Plc 

ADRPLUS Fund, Mitsubishi UFJ 

Financial Group, Inc. ADRPLUS Fund, 

Novartis AG ADRPLUS Fund, Novo 

Nordisk A/S (B Shares) ADRPLUS 

Fund, Royal Dutch Shell plc (Class A) 

ADRPLUS Fund, Royal Dutch Shell plc 

(Class B) ADRPLUS Fund, Sanofi 

ADRPLUS Fund, SAP AG ADRPLUS 

Fund, Total S.A. ADRPLUS Fund, 

Toyota Motor Corporation ADRPLUS 

Fund, and Vodafone Group Plc 

ADRPLUS Fund. The Funds are a series 

of, and the Shares will be offered by, the 

Trust, which was organized as a 

Delaware statutory trust on August 27, 

2010.9 Precidian Funds LLC 

(‘‘Adviser’’) 10 will serve as the 

investment adviser to the Funds.11 The 

Exchange has made the following 

representations and statements in 

describing the Funds and their 

investment strategies.12

A. Exchange’s Description of the 

ADRPLUS Funds 

Each Fund seeks to provide 

investment results that correspond 

generally, before fees and expenses, to 

the price and yield performance of a 

particular American Depositary Receipt, 

hedged against fluctuations in the 

exchange rate between the U.S. dollar 

and the local currency of the foreign 

security underlying the American 

Depositary Receipt (‘‘Local Currency’’). 

The following chart lists the underlying 

company and the Local Currency for 

each of the Funds. 

Fund name Underlying company Local currency 

Anheuser-Busch InBev SA/NV ADRPLUS Fund ....................................................... Anheuser-Busch InBev SA/NV ................ Euro. 

AstraZeneca PLC ADRPLUS Fund ............................................................................ AstraZeneca PLC .................................... British pound. 

Banco Santander, S.A. ADRPLUS Fund ................................................................... Banco Santander, S.A ............................. Euro. 

BP P.L.C. ADRPLUS Fund ........................................................................................ BP p.l.c .................................................... British pound. 

British American Tobacco p.l.c. ADRPLUS Fund ...................................................... British American Tobacco p.l.c ............... British pound. 

Diageo plc ADRPLUS Fund ....................................................................................... Diageo plc ............................................... British pound. 

GlaxoSmithKline plc ADRPLUS Fund ........................................................................ GlaxoSmithKline plc ................................ British pound. 

HSBC Holdings Plc ADRPLUS Fund ......................................................................... HSBC Holdings Plc ................................. British pound. 

Mitsubishi UFJ Financial Group, Inc. ADRPLUS Fund .............................................. Mitsubishi UFJ Financial Group, Inc ....... Japanese yen. 

Novartis AG ADRPLUS Fund ..................................................................................... Novartis AG ............................................. Swiss franc. 

Novo Nordisk A/S (B Shares) ADRPLUS Fund ......................................................... Novo Nordisk A/S (B Shares) ................. Danish krone. 

Royal Dutch Shell plc (Class A) ADRPLUS Fund ..................................................... Royal Dutch Shell plc (Class A) .............. Euro. 

Royal Dutch Shell plc (Class B) ADRPLUS Fund ..................................................... Royal Dutch Shell plc (Class B) .............. British pound. 

Sanofi ADRPLUS Fund .............................................................................................. Sanofi ...................................................... Euro. 

SAP AG ADRPLUS Fund ........................................................................................... SAP AG ................................................... Euro. 


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13The Exchange states that for purposes of this 

filing and consistent with Rule 14.11(i)(4)(C)(iii), 

cash equivalents are short-term instruments with 

maturities of less than three months, that include 

only the following: (i) U.S. Government securities, 

including bills, notes, and bonds differing as to 

maturity and rates of interest, which are either 

issued or guaranteed by the U.S. Treasury or by U.S. 

Government agencies or instrumentalities; (ii) 

certificates of deposit issued against funds 

deposited in a bank or savings and loan association; 

(iii) bankers acceptances, which are short-term 

credit instruments used to finance commercial 

transactions; (iv) repurchase agreements and reverse 

repurchase agreements; (v) bank time deposits, 

which are monies kept on deposit with banks or 

savings and loan associations for a stated period of 

time at a fixed rate of interest; (vi) commercial 

paper, which are short-term unsecured promissory 

notes; and (vii) money market funds. 

14The Exchange states that the Funds will not 

meet: (i) The requirement under Exchange Rule 

14.11(i)(4)(C)(i)(a)(3) that the most heavily weighted 

component stock shall not exceed 30% of the equity 

weight of the portfolio; and (ii) the requirement 

under Exchange Rule 14.11(i)(4)(C)(i)(a)(4) that the 

equity portion of the portfolio shall include a 

minimum of 13 component stocks. 

15The Exchange states that the Funds may not 

meet the requirement under Exchange Rule 

14.11(i)(4)(C)(v) that the aggregate gross notional 

value of OTC derivatives shall not exceed 20% of 

the weight of the portfolio (including gross notional 

exposures). 

16 17 CFR 240.10A–3. 

17See Exchange Rules 14.11(i)(4)(A)(ii) and 

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

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

19See Exchange Rule 14.11(i)(4)(B)(iii). 

20See Exchange Rule 14.11(i)(4)(B)(iv). The 

Exchange will also halt trading in a Fund where 

there has been a regulatory trading halt declared in 

the associated Unhedged ADR until trading in the 

Unhedged ADR resumes. 

21See Exchange Rule 14.11(i)(6). 

22See Exchange Rule 14.11(i)(7). 

23See Exchange Rule 14.11(i)(2)(C). 

24See Exchange Rule 14.11(i)(4)(A)(i). 

25The Exchange represents that each Fund 

expects to invest in excess of 95% of its net assets 

in the Unhedged ADRs, and each Fund expects that 

the gross notional value of the Currency Hedge 

would be equal to the value of the Unhedged ADRs, 

which would be approximately 50% of the weight 

of the portfolio (including gross notional 

exposures). 

Fund name Underlying company Local currency 

Total S.A. ADRPLUS Fund ........................................................................................ Total S.A .................................................. Euro. 

Toyota Motor Corporation ADRPLUS Fund ............................................................... Toyota Motor Corporation ....................... Japanese yen. 

Vodafone Group Plc ADRPLUS Fund ........................................................................ Vodafone Group Plc ................................ British pound. 

Each of the Funds will hold only: (i) 

Shares of an American Depositary 

Receipt (‘‘Unhedged ADR’’) listed on a 

U.S. national securities exchange; (ii) 

OTC currency swaps that hedge against 

fluctuations in the exchange rate 

(‘‘Exchange Rate’’) between the U.S. 

dollar and the Local Currency 

(‘‘Currency Hedge’’); and (iii) cash and 

cash equivalents.13

The Exchange states that the Funds 

will provide investors with the 

opportunity to easily eliminate currency 

exposure that they may not even realize 

exists with Unhedged ADRs without 

having to transact in the currency 

derivatives market. The Exchange 

believes that this confers a significant 

benefit to investors and the broader 

marketplace by adding transparency and 

simplifying the process of eliminating 

risk from an investor’s portfolio. As 

further described below in the section 

entitled Policy Discussion, the Exchange 

believes that the policy concerns 

underlying the listing rules which the 

Funds would or may not meet, 

specifically Rules 14.11(i)(4)(C)(i)(a)(3)– 

(4) 14 and 14.11(i)(4)(C)(v),15 are 

mitigated by the structure, holdings, and 

purpose of the Funds. 

The Trust is required to comply with 

Rule 10A–3 under the Act 16 for the 

initial and continued listing of the 

Shares of each Fund. In addition, the 

Exchange represents that the Shares of 

each Fund will meet and be subject to 

all other requirements of the Generic 

Listing Rules, as defined below, 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 

NAV will be made available to all 

market participants at the same time,17

intraday indicative value,18 suspension 

of trading or removal,19 trading halts,20

disclosure,21 firewalls,22 and 

surveillance.23 Further, at least 100,000 

Shares of each Fund will be outstanding 

upon the commencement of trading.24

The Exchange also provides that all 

statements and representations made in 

the 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 the filing will constitute 

continued listing requirements for the 

Funds. The Exchange states that the 

Trust, on behalf of the Funds, has 

represented to the Exchange that it will 

advise the Exchange of any failure by a 

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 a 

Fund or the Shares are not in 

compliance with the applicable listing 

requirements, the Exchange will 

commence delisting procedures under 

Exchange Rule 14.12. 

B. Exchange’s Policy Discussion 

The Exchange believes that, while the 

Funds do not meet the Generic Listing 

Standards, in particular Rules 

14.11(i)(4)(C)(i)(a)(3) and (4) and 

14.11(i)(4)(C)(v), the policy issues that 

those rules are intended to address are 

otherwise mitigated by the structure, 

holdings, and purpose of the Funds.25

The Exchange believes that Rule 

14.11(i)(4)(C)(i)(a)(3) is intended to 

ensure that no single equity security 

constitutes too concentrated of a 

position in a series of Managed Fund 

Shares, and Rule 14.11(i)(4)(C)(i)(a)(4) is 

similarly intended to diversify the 

holdings of a series of Managed Fund 

Shares. The Exchange believes that 

these policy concerns are mitigated 

because: (i) The Unhedged ADR will 

meet the market cap and liquidity 

requirements of Rules 

14.11(i)(4)(C)(i)(a)(1) and (2); and (ii) the 

intended function of the Funds is to 

eliminate currency exposure risk for a 

single security, which means that the 

Funds are necessarily concentrated. The 

Exchange represents that the creation 

and redemption mechanism will 

provide a near frictionless arbitrage 

opportunity that would minimize the 

risk of manipulation of either the 

Unhedged ADR or the applicable Fund 

and, thus, mitigate the manipulation 

concerns that Rules 

14.11(i)(4)(C)(i)(a)(3) and (4) were 

intended to address. 

The Exchange also believes that the 

policy issues that Rule 14.11(i)(4)(C)(v) 

is intended to address are also mitigated 

by the way that the Funds would use 

OTC currency swaps. According to the 

Exchange, the rule is intended to 

mitigate concerns around the 

manipulability of a particular 

underlying reference asset or derivatives 

contract and to minimize counterparty 

risk. While the Currency Hedge 

positions taken by the Currency Hedged 

ADRs would not meet the Generic 

Listing Standards related to OTC 


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26 15 U.S.C. 78s(b)(2)(B). 

27 Id. 

28 15 U.S.C. 78f(b)(5). 

29Section 19(b)(2) of the Act, as amended by the 

Securities Act Amendments of 1975, Public Law 

94–29 (June 4, 1975), grants the Commission 

flexibility to determine what type of proceeding— 

either oral or notice and opportunity for written 

comments—is appropriate for consideration of a 

particular proposal by a self-regulatory 

organization. See Securities Act Amendments of 

1975, Senate Comm. on Banking, Housing & Urban 

Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 

(1975). 

30See supra note 7. 

derivatives holdings, the Exchange 

believes that the policy concerns about 

limiting exposure to potentially 

manipulable underlying reference assets 

that the Generic Listing Standards are 

intended to address are otherwise 

mitigated by the liquidity in the 

underlying spot currency market that 

prevents manipulation of the reference 

prices used by the Currency Hedge. 

Further, the Exchange states that the 

Funds will attempt to limit counterparty 

risk in OTC currency swaps by: (i) 

Entering into such contracts only with 

counterparties the Advisor believes are 

creditworthy; (ii) limiting a Fund’s 

exposure to each counterparty; and (iii) 

monitoring the creditworthiness of each 

counterparty and the Fund’s exposure to 

each counterparty on an ongoing basis. 

The Exchange believes that counterparty 

risk associated with OTC currency 

swaps is further mitigated because the 

currency swaps are settled on a daily 

basis and, thus, the counterparty risk for 

any particular swap is limited in two 

ways—first, that the counterparty credit 

exposure is always limited to a 24 hour 

period and second, that the exposure of 

the swap is only to the movement in the 

currencies over that same 24 hour 

period. 

III. Proceedings To Determine Whether 

To Approve or Disapprove SR– 

CboeBZX–2018–019 and Grounds for 

Disapproval Under Consideration 

The Commission is instituting 

proceedings pursuant to Section 

19(b)(2)(B) of the Act 26 to determine 

whether the proposed rule change, as 

modified by Amendment No. 2, should 

be approved or disapproved. Institution 

of such proceedings is appropriate at 

this time in view of the legal and policy 

issues raised by the proposed rule 

change. Institution of proceedings does 

not indicate that the Commission has 

reached any conclusions with respect to 

any of the issues involved. Rather, as 

described below, the Commission seeks 

and encourages interested persons to 

provide comments on the proposed rule 

change. 

Pursuant to Section 19(b)(2)(B) of the 

Act,27 the Commission is providing 

notice of the grounds for disapproval 

under consideration. The Commission is 

instituting proceedings to allow for 

additional analysis of the proposed rule 

change’s consistency with Section 

6(b)(5) of the Act, 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,’’ and ‘‘to protect investors and the 

public interest.’’ 28

IV. Procedure: Request for Written 

Comments 

The Commission requests that 

interested persons provide written 

submissions of their views, data, and 

arguments with respect to the issues 

identified above, as well as any other 

concerns they may have with the 

proposal. In particular, the Commission 

invites the written views of interested 

persons concerning whether the 

proposal is consistent with Section 

6(b)(5) or any other provision of the Act, 

or the rules and regulations thereunder. 

Although there do not appear to be any 

issues relevant to approval or 

disapproval that would be facilitated by 

an oral presentation of views, data, and 

arguments, the Commission will 

consider, pursuant to Rule 19b–4, any 

request for an opportunity to make an 

oral presentation.29

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

proposal should be approved or 

disapproved by July 16, 2018. Any 

person who wishes to file a rebuttal to 

any other person’s submission must file 

that rebuttal by July 30, 2018. The 

Commission asks that commenters 

address the sufficiency of the 

Exchange’s statements in support of the 

proposal, which are set forth in 

Amendment No. 2 to the proposed rule 

change,30 in addition to any other 

comments they may wish to submit 

about the proposed rule change. 

The Commission notes that the 

Exchange proposes to list and trade, 

pursuant to its Rule 14.11(i), Managed 

Fund Shares of Funds that would invest 

in shares of a single Unhedged ADR, 

along with a Currency Hedge and cash 

and cash equivalents. A proposal to list 

and trade Managed Fund Shares hat are 

designed to reflect, generally, the price 

and performance of a single equity 

security, hedged against fluctuations in 

a given exchange rate, is novel. 

Accordingly, the Commission 

specifically seeks comment on whether 

it is appropriate to permit the listing 

and trading of shares of an exchangetraded fund with underlying holdings 

concentrated in a single (or a few 

unique) equity securities. What impact, 

if any, would such shares have on the 

market for the underlying equity 

security (or securities)? What impact, if 

any, would such shares have on the 

equity markets more generally, 

especially if funds investing in a single 

equity security proliferate? Are the 

listing and trading of such shares 

consistent with the requirements of 

Section 6(b)(5) of the Act, which, among 

other things, requires that the rules of an 

exchange be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, and, in general, to 

protect investors and the public 

interest? 

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– 

CboeBZX–2018–019 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 

Numbers SR–CboeBZX–2018–019. 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 these 

filings 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 


amozie on DSK3GDR082PROD with NOTICES1
Federal Register / Vol. 83, No. 122 / Monday, June 25, 2018 / Notices 29593 

31 17 CFR 200.30–3(a)(57). 

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

2 17 CFR 240.19b–4. 

3Recently, the Exchange added a shell structure 

to its Rulebook with the purpose of improving 

efficiency and readability and to align its rules 

closer to those of its five sister exchanges: Nasdaq 

BX, Inc.; Nasdaq PHLX LLC; Nasdaq ISE, LLC; 

Nasdaq GEMX, LLC; and Nasdaq MRX, LLC 

(together with Nasdaq, the ‘‘Affiliated Exchanges’’). 

See Securities Exchange Act Release No. 82175 

(November 29, 2017), 82 FR 57494 (December 5, 

2017) (SR–NASDAQ–2017–125). 

4 In addition to the above, the Exchange proposes 

to delete language that exists presently in Rule 

7034(b) (‘‘Connectivity to Third Party Services’’) 

and Rule 7051(b) (‘‘Direct Circuit Connection to 

Third Party Services’’) that each refer to expired 

waivers of fees for connections to third party 

services that were applicable ‘‘through April 30, 

2017.’’ 

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

6 15 U.S.C. 78f(b)(5). 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR– 

CboeBZX–2018–019 and should be 

submitted on or before July 16, 2018. 

Rebuttal comments should be submitted 

by July 30, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.31

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–13508 Filed 6–22–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83466; File No. SR– 

NASDAQ–2018–045] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Relocate 

the Exchange’s Rules Pertaining to CoLocation and Direct Connectivity 

June 19, 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 June 5, 

2018, The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’ or ‘‘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 proposes to relocate the 

Exchange’s rules pertaining to colocation and direct connectivity, which 

are presently at Rules 7034 and 7051, to 

Sections 1 and 2, respectively, under a 

new General 8 (‘‘Connectivity’’) heading 

within the Exchange’s new rulebook 

shell, entitled ‘‘General Equity and 

Options Rules.’’ 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://nasdaq.cchwallstreet.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 aspects 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 relocate its 

rules governing co-location and direct 

connectivity services, which presently 

comprise Rules 7034 and 7051, 

respectively. The Exchange proposes to 

establish, within its new rulebook 

shell,3 a new General 8 heading, entitled 

‘‘Connectivity,’’ to renumber Rule 7034 

as Section 1 thereunder, and to 

renumber Rule 7051 as Section 2 

thereunder. The Exchange furthermore 

proposes to amend Equity Rules 7007, 

7015, 7025, and 7030, and Options 

Rules, Chapter XV to update cross 

references therein to Rules 7034 and 

7051.4 The Exchange also proposes to 

update internal cross-references in the 

renumbered Rules. 

The Exchange considers it appropriate 

to relocate these Rules to better organize 

its Rulebook. The other Affiliated 

Exchanges intend to propose similar 

reorganizations of their co-location and 

direct connectivity rules so that these 

rules will be harmonized among all of 

the Affiliated Exchanges. 

The relocation of the co-location and 

direct connectivity rules is part of the 

Exchange’s continued effort to promote 

efficiency and conformity of its 

processes with those of its Affiliated 

Exchanges. The Exchange believes that 

moving the co-location and direct 

connectivity rules to their new location 

will facilitate the use of the Rulebook by 

Members of the Exchange who are 

members of other Affiliated Exchanges. 

Moreover, the proposed changes are of 

a non-substantive nature and will not 

amend the relocated rules other than to 

update their numbers and make 

conforming cross-reference changes. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,5 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,6

in particular, in that it is 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, by 

improving the way its Rulebook is 

organized, providing ease of reference in 

locating co-location and direct 

connectivity rules, and harmonizing the 

Exchange’s Rules with those of the other 

Affiliated Exchanges. As previously 

stated, the proposed Rule relocation is 

non-substantive. 

The Exchange also believes that it is 

just and equitable and consistent with 

the protection of investors and the 

interest of the public to remove expired 

waiver language from the Exchange’s 

Rules. 

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 intermarket or intramarket competition that is not necessary 

or appropriate in furtherance of the 

purposes of the Act. The proposed 

changes do not impose a burden on 

competition because, as previously 

stated, they (i) are of a non-substantive 

nature, (ii) are intended to harmonize 

the Exchange’s rules with those of its 

Affiliated Exchanges, and (iii) are 

intended to organize the Rulebook in a 

way that it will ease the Members’ 

navigation and reading of the rules 

across the Affiliated Exchanges. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 


amozie on DSK3GDR082PROD with NOTICES1