Federal Register / Vol. 79, No. 234 / Friday, December 5, 2014 / Notices 72223 

14 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. 72937 

(Aug. 27, 2014), 79 FR 52385 (‘‘Notice’’). 

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

5See Securities Exchange Act Release No. 73364, 

79 FR 62988 (Oct. 21, 2014). The Commission 

determined that it was appropriate to designate a 

longer period within which to take action on the 

proposed rule change so that it has sufficient time 

to consider the proposed rule change. Accordingly, 

the Commission designated December 2, 2014 as 

the date by which it should approve, disapprove, 

or institute proceedings to determine whether to 

disapprove the proposed rule change. 

6 15 U.S.C. 78s(b)(2)(B). 

7A Managed Fund Share is a security that 

represents an interest in an investment company 

registered under the Investment Company Act of 

1940 (15 U.S.C. 80a–1) (‘‘1940 Act’’) organized as 

an open-end investment company or similar entity 

that invests in a portfolio of securities selected by 

its investment adviser consistent with its 

investment objectives and policies. In contrast, an 

open-end investment company that issues 

Investment Company Units, listed and traded on 

the Exchange under NYSE Arca Equities Rule 

5.2(j)(3), seeks to provide investment results that 

correspond generally to the price and yield 

performance of a specific foreign or domestic stock 

index, fixed income securities index or combination 

thereof. 

8Additional information regarding the Shares and 

the Funds, including investment strategy, risks, 

creation and redemption procedures, portfolio 

holdings, and investment restrictions, is included 

in the Notice, supra note 3. 

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– 

NASDAQ–2014–118 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–NASDAQ–2014–118. 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 

offices 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– 

NASDAQ–2014–118, and should be 

submitted on or before December 26, 

2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Kevin M. O’ Neill, 

Deputy Secretary. 

[FR Doc. 2014–28534 Filed 12–4–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73706; File No. SR– 

NYSEArca–2014–89] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove Proposed Rule 

Change Relating To Listing and 

Trading of Shares of Eight PIMCO 

Exchange-Traded Funds 

December 1, 2014. 

I. Introduction 

On August 15, 2014, NYSE Arca, Inc. 

(‘‘NYSEArca’’ or ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Act’’ or 

‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

list and trade shares of the following 

eight PIMCO exchange-traded funds, 

pursuant to NYSE Arca Equities Rule 

8.600: PIMCO StocksPLUS® Absolute 

Return Exchange-Traded Fund 

(‘‘StocksPLUS AR Fund’’), PIMCO Small 

Cap StocksPLUS® AR Strategy 

Exchange-Traded Fund (‘‘Small Cap 

StocksPLUS AR Fund’’), PIMCO 

Fundamental IndexPLUS® AR 

Exchange-Traded Fund (‘‘Fundamental 

IndexPLUS Fund’’), PIMCO Small 

Company Fundamental IndexPLUS® AR 

Strategy Exchange-Traded Fund (‘‘Small 

Company Fundamental IndexPLUS 

Fund’’), PIMCO EM Fundamental 

IndexPLUS® AR Strategy ExchangeTraded Fund (‘‘EM Fundamental 

IndexPLUS Fund’’), PIMCO 

International Fundamental IndexPLUS®

AR Strategy Exchange-Traded Fund 

(‘‘International Fundamental 

IndexPLUS Fund’’), PIMCO EM 

StocksPLUS® AR Strategy ExchangeTraded Fund (‘‘EM StocksPLUS Fund’’), 

and PIMCO International StocksPLUS®

AR Strategy Exchange-Traded Fund 

(Unhedged) (‘‘International StocksPLUS 

Fund’’) (each a ‘‘Fund’’ and collectively 

the ‘‘Funds.’’). The proposed rule 

change was published for comment in 

the Federal Register on September 3, 

2014.3 The Commission received no 

comments on the proposal. On October 

15, 2014, pursuant to Section 19(b)(2) of 

the Act,4 the Commission designated a 

longer period within which to either 

approve the proposed rule change, 

disapprove the proposed rule change, or 

institute proceedings to determine 

whether to disapprove the proposed 

rule change.5 This order institutes 

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

the Act 6 to determine whether to 

approve or disapprove the proposed 

rule change. 

II. Description of the Proposal 

The Exchange proposes to list and 

trade shares (‘‘Shares’’) of the Funds 

under NYSE Arca Equities Rule 8.600, 

which governs the listing and trading of 

Managed Fund Shares.7

A. Characteristics and Holdings of the 

Funds 8

1. Investment Objective and Principal 

Holdings 

Each Fund would seek total return 

that exceeds the total return of its equity 

securities index benchmark, and under 

normal circumstances would seek to 

achieve its investment objective by 

investing in derivatives overlying its 

benchmark and a portfolio of Fixed 

Income Instruments (defined below), 

which would be managed using an 

absolute return approach. Typically, the 

Funds would use derivative instruments 

as a substitute for taking a position in 


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72224 Federal Register / Vol. 79, No. 234 / Friday, December 5, 2014 / Notices 

9The Exchange states that derivatives may be 

purchased with a small fraction of the assets that 

would be needed to purchase the benchmark index 

securities directly, so that the remainder of the 

Funds’ assets may be invested in Fixed Income 

Instruments. Accordingly, the Funds generally 

would not invest directly in benchmark index 

component stocks, but the Exchange states that the 

Funds may invest in stocks and exchange-traded 

funds. 

10The Exchange states that such investments will 

constitute only up to 20% of a Fund’s total assets. 

11The Exchange states that such investments will 

constitute only up to 20% of a Fund’s total assets. 

12According to the Exchange, all investment 

guidelines and limitations will apply to a Fund’s 

aggregate investment exposure to a particular type 

of investment that is the subject of the guideline or 

limitation, whether such exposure is obtained 

through direct holdings or through derivative 

instruments. See Notice, supra note 3, at 52387. 

13 15 U.S.C. 78s(b)(2)(B). 

14 Id. 

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

the underlying asset 9 or as part of a 

strategy designed to reduce exposure to 

other risks. The Funds may also use 

derivative instruments to enhance 

returns. 

The Exchange states that ‘‘Fixed 

Income Instruments’’ may include: 

Securities issued or guaranteed by the 

U.S. Government, its agencies, or 

government-sponsored enterprises 

(‘‘U.S. Government Securities’’); 

corporate debt securities of U.S. and 

non-U.S. issuers, including convertible 

securities and corporate commercial 

paper; mortgage-backed and other assetbacked securities; inflation-indexed 

bonds issued both by governments and 

corporations; structured notes, 

including hybrid or ‘‘indexed’’ 

securities, and event-linked bonds; 10

bank capital and trust preferred 

securities; loan participations and 

assignments; 11 delayed funding loans 

and revolving credit facilities; bank 

certificates of deposit, fixed time 

deposits and bankers’ acceptances; 

repurchase agreements on Fixed Income 

Instruments and reverse repurchase 

agreements on Fixed Income 

Instruments; debt securities issued by 

states or local governments and their 

agencies, authorities and other 

government-sponsored enterprises; 

obligations of non-U.S. governments or 

their subdivisions, agencies, and 

government-sponsored enterprises; and 

obligations of international agencies or 

supranational entities. The Exchange 

also states that derivative instruments 

may include the following: Forwards; 

exchange-traded and over-the-counter 

(‘‘OTC’’) options contracts; exchangetraded futures contracts; exchangetraded and OTC swap agreements; 

exchange-traded and OTC options on 

futures contracts; and OTC options on 

swap agreements.12

2. Other Investments 

The Funds may invest in securities 

and instruments that are economically 

tied to foreign (non-U.S.) countries. The 

Funds may invest in securities 

denominated in foreign (non-U.S.) 

currencies and in U.S. dollardenominated securities of foreign (nonU.S.) issuers, subject to applicable 

limitations set forth in the Notice. With 

respect to the Funds’ absolute return 

investments, each Fund will normally 

limit its foreign currency exposure (from 

non-U.S. dollar-denominated securities 

or currencies) to 20% of its total assets. 

With respect to the Funds’ absolute 

return investments, each Fund may 

invest up to 25% of its total assets in 

securities and instruments that are 

economically tied to emerging market 

countries. 

The Funds may engage in foreign 

currency transactions on a spot (cash) 

basis or forward basis, and they may 

invest in foreign currency futures 

contracts and options contracts. The 

Funds may enter into these contracts to 

hedge against foreign exchange risk, to 

increase exposure to a foreign currency, 

or to shift exposure to foreign currency 

fluctuations from one currency to 

another. Suitable hedging transactions 

may not be available in all 

circumstances and there can be no 

assurance that the Funds will engage in 

such transactions at any given time or 

from time to time. 

The Funds may, without limitation, 

seek to obtain market exposure to the 

securities in which they primarily 

invest by entering into a series of 

purchase and sale contracts. The Funds 

may purchase or sell securities on a 

when-issued, delayed delivery or 

forward commitment basis and may 

engage in short sales. 

3. Additional Investment Limits 

According to the Exchange, each of 

the Funds may invest up to 10% of its 

total assets in preferred stocks, 

convertible securities, and other equityrelated securities. Each Fund may invest 

up to 20% of its total assets in: (i) 

Variable and floating rate securities that 

are not Fixed Income Instruments; (ii) 

floaters and inverse floaters that are not 

Fixed Income Instruments; (iii) trade 

claims, privately placed and 

unregistered securities, exchange-traded 

and OTC-traded structured products, 

including credit-linked securities and 

commodity-linked notes; (iv) Brady 

Bonds; and (v) bank loans. 

Each Fund may, with up to 20% of its 

total assets, enter into repurchase 

agreements on instruments other than 

Fixed Income Instruments. Each Fund 

may also, with up to 20% of its total 

assets, enter into reverse repurchase 

agreements on instruments other than 

Fixed Income Instruments, subject to 

the Fund’s limitations on borrowings. 

Each Fund may invest up to 20% of 

its total assets in ‘‘high yield securities’’ 

or unrated securities determined by 

PIMCO to be of comparable quality 

(except that within such limitation, the 

Fund may invest in mortgage-related 

securities rated below B). 

Each Fund may invest up to 20% of 

its assets in mortgage-related and other 

asset-backed securities, although this 

20% limitation does not apply to 

securities issued or guaranteed by 

Federal agencies and/or U.S. 

government sponsored 

instrumentalities. 

III. Proceedings To Determine Whether 

To Approve or Disapprove the 

Proposed Rule Change and Grounds for 

Disapproval Under Consideration 

The Commission is instituting 

proceedings pursuant to Section 

19(b)(2)(B) of the Act 13 to determine 

whether the proposed rule change 

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, as discussed 

below. 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 comment on the proposed rule 

change. 

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

Act,14 the Commission is providing 

notice of the grounds for disapproval 

under consideration. The Commission is 

instituting proceedings to allow for 

additional analysis of, and input from 

commenters with respect to, the 

proposed rule change’s consistency with 

Section 6(b)(5) of the Exchange 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.’’ 15

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 concerns 

identified above, as well as any other 

concerns they may have with the 

proposal. In particular, the Commission 


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Federal Register / Vol. 79, No. 234 / Friday, December 5, 2014 / Notices 72225 

16Section 19(b)(2) of the Act, as amended by the 

Securities Act Amendments of 1975, Pub. L. 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). 

17 17 CFR 200.30–3(a)(57). 

1 12 U.S.C. 5465(e)(1). 

2 17 CFR 240.19b–4(n)(1)(i). 

3See Securities Exchange Act Release No. 73343 

(October 14, 2014), 79 FR 62684 (October 20, 2014) 

(SR–OCC–2014–805). 

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

2 17 CFR 240.19b–4. 

invites the written views of interested 

persons concerning (1) the transparency 

and liquidity of the markets for the 

assets in which each Fund would be 

permitted to invest a substantial portion 

of its portfolio and (2) the expected 

effectiveness and efficiency of arbitrage 

with respect to the market price of the 

Funds’ shares and the value of the 

underlying portfolio assets, given the 

transparency and liquidity of the 

markets for those underlying assets. 

Although there do not appear to be 

any issues relevant to approval or 

disapproval which 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.16

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

proposal should be approved or 

disapproved by December 26, 2014. Any 

person who wishes to file a rebuttal to 

any other person’s submission must file 

that rebuttal by January 9, 2015. 

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–2014–89 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–NYSEArca–2014–89. 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 

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 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR– 

NYSEArca–2014–89 and should be 

submitted on or before December 26, 

2014. Rebuttal comments should be 

submitted by January 9, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–28547 Filed 12–4–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73710; File No. SR–OCC– 

2014–805] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Notice 

of Withdrawal of an Advance Notice 

Concerning Enhancements to the Risk 

Management Framework Applied to the 

Clearance of Confirmed Trades 

Executed in Extended and Overnight 

Trading Sessions 

December 1, 2014. 

On September 17, 2014, The Options 

Clearing Corporation (‘‘OCC’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

to Section 806(e)(1) of the Payment, 

Clearing, and Settlement Supervision 

Act of 2010 (‘‘Clearing Supervision 

Act’’) 1 and Rule 19b–4(n)(1)(i),2 an 

advance notice concerning 

enhancements to the risk management 

framework applied to the clearance of 

confirmed trades executed in extended 

and overnight trading sessions. Notice 

of the advance notice was published in 

the Federal Register on October 20, 

2014.3 The Commission did not receive 

any comments in response to the 

advance notice. 

On October 28, 2014, OCC filed a 

withdrawal of its advance notice (SR– 

OCC–2014–805) from consideration by 

the Commission. The Commission is 

hereby publishing notice of the 

withdrawal. 

By the Commission. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–28544 Filed 12–4–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73708; File No. SR–MSRB– 

2014–08] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Notice of Filing of a Proposed 

Rule Change Consisting of Proposed 

Amendments to MSRB Rules G–1, on 

Separately Identifiable Department or 

Division of a Bank; G–2, on Standards 

of Professional Qualification; G–3, on 

Professional Qualification 

Requirements; and D–13, on Municipal 

Advisory Activities 

December 1, 2014. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on November 

18, 2014, the Municipal Securities 

Rulemaking Board (the ‘‘MSRB’’ or 

‘‘Board’’) filed with the Securities and 

Exchange Commission (the ‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the MSRB. 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 MSRB filed with the Commission 

a proposed rule change consisting of 

proposed amendments to MSRB Rules 

G–1, on separately identifiable 

department or division of a bank; G–2, 

on standards of professional 

qualification; G–3, on professional 

qualification requirements; and D–13, 

on municipal advisory activities (the 

‘‘proposed rule change’’). The MSRB is 


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