Federal Register / Vol. 79, No. 248 / Monday, December 29, 2014 / Notices 78125 

21 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Commission approved BATS Rule 14.11(i) 

in Securities Exchange Act Release No. 65225 

(August 30, 2011), 76 FR 55148 (September 6, 2011) 

(SR–BATS–2011–018). 

4See Registration Statement on Form N–1A for 

the Trust, dated September 3, 2014 (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 Trust under the 

Investment Company Act of 1940 (15 U.S.C. 80a– 

1) (‘‘1940 Act’’) (the ‘‘Exemptive Order’’). See 

Investment Company Act Release No. 29571 

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

5BFA is an indirect wholly owned subsidiary of 

BlackRock, Inc. 

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 

Continued 

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.. 

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– 

EDGX–2014–34 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–EDGX–2014–34. 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 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; 

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–EDGX– 

2014–34, and should be submitted on or 

before January 20, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Brent J. Fields, 

Secretary. 

[FR Doc. 2014–30274 Filed 12–24–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73895; File No. SR–BATS– 

2014–054] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Notice of Filing of a 

Proposed Rule Change To List and 

Trade Shares of the iShares Short 

Maturity Municipal Bond ETF of the 

iShares U.S. ETF Trust Under Rule 

14.11(i) of BATS Exchange, Inc. 

December 19, 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 December 

12, 2014, BATS Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BATS’’) 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 the Substance 

of the Proposed Rule Change 

The Exchange filed a proposal to list 

and trade shares of the iShares Short 

Maturity Municipal Bond ETF (the 

‘‘Fund’’) of the iShares U.S. ETF Trust 

(the ‘‘Trust’’) under BATS 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 Web site 

at http://www.batstrading.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 BATS Rule 

14.11(i), which governs the listing and 

trading of Managed Fund Shares on the 

Exchange.3 The Fund will be an actively 

managed fund. The Shares will be 

offered by the Trust, which was 

established as a Delaware statutory trust 

on June 21, 2011. The Trust is registered 

with the Commission as an open-end 

investment company and has filed a 

registration statement on behalf of the 

Fund on Form N–1A (‘‘Registration 

Statement’’) with the Commission.4

Description of the Shares and the Fund 

BlackRock Fund Advisors is the 

investment adviser (‘‘BFA’’ or 

‘‘Adviser’’) to the Fund.5 State Street 

Bank and Trust Company is the 

administrator, custodian, and transfer 

agent (‘‘Administrator,’’ ‘‘Custodian,’’ 

and ‘‘Transfer Agent,’’ respectively) for 

the Trust. BlackRock Investments, LLC 

serves as the distributor (‘‘Distributor’’) 

for the Trust. 

BATS 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, Rule 


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78126 Federal Register / Vol. 79, No. 248 / Monday, December 29, 2014 / Notices 

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. 

7The term ‘‘under normal circumstances’’ 

includes, but is not limited to, the absence of 

adverse market, economic, political, or other 

conditions, including extreme volatility or trading 

halts in the financial markets; operational issues 

causing dissemination of inaccurate market 

information; or force majeure type events such as 

systems failure, natural or man-made disaster, act 

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

labor disruption, or any similar intervening 

circumstance. 

8The diversification standard is set forth in 

section 5(b)(1) of the 1940 Act. 

9See Form N–1A, Item 9. The Commission has 

taken the position that a fund is concentrated if it 

invests in more than 25% of the value of its total 

assets in any one industry. See, e.g., Investment 

Company Act Release No. 9011 (October 30, 1975), 

40 FR 54241 (November 21, 1975). 

10According to the Adviser, BFA may determine 

that unrated securities are of ‘‘equivalent quality’’ 

based on such credit quality factors that it deems 

appropriate, which may include among other 

things, performing an analysis similar, to the extent 

possible, to that performed by a nationally 

recognized statistical ratings organization when 

rating similar securities and issuers. In making such 

a determination, BFA may consider internal 

analyses and risk ratings, third party research and 

analysis, and other sources of information, as 

deemed appropriate by the Adviser. 

11Effective duration is a measure of the Fund’s 

price sensitivity to changes in yields or interest 

rates. 

12 General obligation bonds are obligations 

involving the credit of an issuer possessing taxing 

power and are payable from such issuer’s general 

revenues and not from any particular source. 

13Limited obligation bonds are payable only from 

the revenues derived from a particular facility or 

class of facilities or, in some cases, from the 

proceeds of a special excise or other specific 

revenue source, and also include industrial 

development bonds issued pursuant to former U.S. 

federal tax law. Industrial development bonds 

generally are also revenue bonds and thus are not 

payable from the issuer’s general revenues. The 

credit and quality of industrial development bonds 

are usually related to the credit of the corporate 

user of the facilities. Payment of interest on and 

repayment of principal of such bonds is the 

responsibility of the corporate user (and/or any 

guarantor). 

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. Rule 14.11(i)(7) is similar to 

BATS Rule 14.11(b)(5)(A)(i), however, 

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. 

iShares Short Maturity Municipal Bond 

ETF 

According to the Registration 

Statement, the Fund will seek to 

maximize tax-free current income. To 

achieve its objective, the Fund will 

invest, under normal circumstances,7 at 

least 80% of its net assets in Municipal 

Securities, as defined below, such that 

the interest on each bond is exempt 

from U.S. federal income taxes and the 

federal alternative minimum tax (the 

‘‘AMT’’), along with Short-Term 

Instruments and Repurchase 

Agreements, as both terms are defined 

below. The Fund is not a money market 

fund and does not seek to maintain a 

stable net asset value of $1.00 per share. 

The Fund will be classified as a 

‘‘diversified’’ investment company 

under the 1940 Act.8

The Fund will not purchase the 

securities of issuers conducting their 

principal business activity in the same 

industry if, immediately after the 

purchase and as a result thereof, the 

value of the Fund’s investments in that 

industry would equal or exceed 25% of 

the current value of the Fund’s total 

assets, provided that this restriction 

does not limit the Fund’s: (i) 

Investments in securities of other 

investment companies, (ii) investments 

in securities issued or guaranteed by the 

U.S. government, its agencies or 

instrumentalities, (iii) investments in 

securities of state, territory, possession 

or municipal governments and their 

authorities, agencies, instrumentalities 

or political subdivisions or (iv) 

investments in repurchase agreements 

collateralized by any such obligations.9

The Fund intends to qualify each year 

as a regulated investment company (a 

‘‘RIC’’) under subchapter M of the 

Internal Revenue Code of 1986, as 

amended. The Fund will invest its 

assets, and otherwise conduct its 

operations, in a manner that is intended 

to satisfy the qualifying income, 

diversification and distribution 

requirements necessary to establish and 

maintain RIC qualification under 

subchapter M. 

Principal Holdings—Municipal 

Securities 

To achieve its objective, the Fund will 

invest, under normal circumstances, in 

U.S.-dollar denominated investmentgrade short-term fixed- and floating-rate 

municipal bonds, municipal notes and 

variable rate demand obligations, as 

well as money market instruments and 

registered investment companies. 

Investment-grade securities are rated a 

minimum of BBB- or higher by Standard 

& Poor’s Ratings Services and/or Fitch, 

or Baa3 or higher by Moody’s, or if 

unrated, determined by the Adviser to 

be of equivalent quality.10 Generally, the 

Fund’s effective duration will be 1.2 

years or less, as calculated by the 

management team, and it is not 

expected to exceed 1.5 years.11

Municipal securities (‘‘Municipal 

Securities’’) are fixed and floating rate 

securities issued in the U.S. by U.S. 

states and territories, municipalities and 

other political subdivisions, agencies, 

authorities, and instrumentalities of 

states and multi-state agencies and 

authorities and will include only the 

following instruments: General 

obligation bonds,12 limited obligation 

bonds (or revenue bonds),13 private 


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14Private activity bonds are bonds issued by or 

on behalf of public authorities to obtain funds to 

provide privately operated housing facilities, 

airport, mass transit or port facilities, sewage 

disposal, solid waste disposal or hazardous waste 

treatment or disposal facilities, and certain local 

facilities for water supply, gas, or electricity. Other 

types of private activity bonds, the proceeds of 

which are used for the construction, equipment, 

repair or improvement of privately operated 

industrial or commercial facilities, may constitute 

municipal securities, although the current U.S. 

federal tax laws place substantial limitations on the 

size of such issues. 

15Municipal notes are shorter-term municipal 

debt obligations that may provide interim financing 

in anticipation of tax collection, receipt of grants, 

bond sales, or revenue receipts. 16Municipal commercial paper is generally 

unsecured debt that is issued to meet short-term 

financing needs. 17Tender option bonds are synthetic floating-rate 

or variable-rate securities issued when long-term 

bonds are purchased in the primary or secondary 

market and then deposited into a trust. Custodial 

receipts are then issued to investors, such as the 

Fund, evidencing ownership interests in the trust. 18 VRDOs are tax-exempt obligations that contain 

a floating or variable interest rate adjustment 

formula and a right of demand on the part of the 

holder thereof to receive payment of the unpaid 

principal balance plus accrued interest upon a short 

notice period not to exceed seven days. 19Municipal lease obligations include certificates 

of participation issued by government authorities or 

entities to finance the acquisition or construction of 

equipment, land, and/or facilities. 

20Stripped securities are created when an issuer 

separates the interest and principal components of 

an instrument and sells them as separate securities. 

In general, one security is entitled to receive the 

interest payments on the underlying assets and the 

other to receive the principal payments. 

21Structured securities are privately negotiated 

debt obligations where the principal and/or interest 

is determined by reference to the performance of an 

underlying investment, index, or reference 

obligation, and may be issued by governmental 

agencies. While structured securities are part of the 

principal holdings of the Fund, the Issuer 

represents that such securities, when combined 

with those instruments held as part of the other 

portfolio holdings described below, will not exceed 

20% of the Fund’s net assets. 

22The Fund may purchase or sell securities that 

it is entitled to receive on a when issued or delayed 

delivery basis as well as through a forward 

commitment. 

23Zero coupon securities are securities that are 

sold at a discount to par value and do not pay 

interest during the life of the security. The discount 

approximates the total amount of interest the 

security will accrue and compound over the period 

until maturity at a rate of interest reflecting the 

market rate of the security at the time of issuance. 

Upon maturity, the holder of a zero coupon security 

is entitled to receive the par value of the security. 

24The Fund currently anticipates investing in 

only registered open-end investment companies, 

including mutual funds and the open-end 

investment company funds described in BATS Rule 

14.11. The Fund may invest in the securities of 

other investment companies to the extent permitted 

by law. 

25The Fund’s exposure to reverse repurchase 

agreements will be covered by liquid assets having 

a value equal to or greater than such commitments. 

The use of reverse repurchase agreements is a form 

of leverage because the proceeds derived from 

reverse repurchase agreements may be invested in 

additional securities. As further stated below, the 

Fund’s investments will be consistent with its 

investment objective and will not be used to 

achieve leveraged returns. 

26The Fund may invest in Short-Term 

Instruments, including money market instruments, 

on an ongoing basis to provide liquidity or for other 

reasons. Money market instruments are generally 

short-term investments that include only the 

following: (i) Shares of money market funds 

(including those advised by BFA or otherwise 

affiliated with BFA); (ii) obligations issued or 

guaranteed by the U.S. government, its agencies or 

instrumentalities (including government-sponsored 

enterprises); (iii) negotiable certificates of deposit 

(‘‘CDs’’), bankers’ acceptances, fixed-time deposits 

and other obligations of U.S. and non-U.S. banks 

(including non-U.S. branches) and similar 

institutions; (iv) commercial paper, including assetbacked commercial paper; (v) non-convertible 

corporate debt securities (e.g., bonds and 

debentures) with remaining maturities at the date 

of purchase of not more than 397 days and that 

satisfy the rating requirements set forth in Rule 2a– 

7 under the 1940 Act; and (vi) short-term U.S. 

dollar-denominated obligations of non-U.S. banks 

(including U.S. branches) that, in the opinion of 

BFA, are of comparable quality to obligations of 

U.S. banks which may be purchased by the Fund. 

All money market securities acquired by the Fund 

will be rated investment grade. The Fund does not 

intend to invest in any unrated money market 

securities. However, it may do so, to a limited 

extent, such as where a rated money market 

security becomes unrated, if such money market 

security is determined by the Adviser to be of 

comparable quality. BFA may determine that 

unrated securities are of comparable quality based 

on such credit quality factors that it deems 

appropriate, which may include, among other 

things, performing an analysis similar, to the extent 

possible, to that performed by a nationally 

recognized statistical rating organization rating 

similar securities and issuers. 

27See supra note 24. 

28 26 U.S.C. 851. 

29Futures will be exchange traded and 

collateralized. 

30 In reaching liquidity decisions, the Adviser 

may consider factors including: the frequency of 

trades and quotes for the security; the number of 

dealers wishing to purchase or sell the security and 

the number of other potential purchasers; dealer 

undertakings to make a market in the security; the 

nature of the security and the nature of the 

marketplace trades (e.g., the time needed to dispose 

of the security, the method of soliciting offers, and 

the mechanics of transfer); any legal or contractual 

restrictions on the ability to transfer the security or 

asset; significant developments involving the issuer 

or counterparty specifically (e.g., default, 

bankruptcy, etc.) or the securities markets generally; 

and settlement practices, registration procedures, 

limitations on currency conversion or repatriation, 

and transfer limitations (for foreign securities or 

other assets). 

31The Commission has stated that long-standing 

Commission guidelines have required open-end 

funds to hold no more than 15% of their net assets 

in illiquid securities and other illiquid assets. See 

Investment Company Act Release No. 28193 (March 

Continued 

activity bonds,14 municipal notes,15

municipal commercial paper,16 tender 

option bonds,17 variable rate demand 

obligations (‘‘VRDOs’’),18 municipal 

lease obligations,19 stripped securities,20

structured securities,21 when issued 

securities,22 zero coupon securities,23

and exchange traded and non-exchange 

traded investment companies (including 

investment companies advised by BFA 

or its affiliates) that invest in such 

Municipal Securities.24

The Fund may also enter into 

repurchase and reverse repurchase 

agreements for Municipal Securities 

(collectively, ‘‘Repurchase 

Agreements’’). Repurchase Agreements 

involve the sale of securities with an 

agreement to repurchase the securities 

at an agreed-upon price, date and 

interest payment and have the 

characteristics of borrowing as part of 

the Fund’s principal holdings.25 As 

discussed above, the Fund may also 

invest in short-term instruments 

(‘‘Short-Term Instruments’’) 26 as part of 

its principal holdings, which includes 

exchange traded and non-exchange 

traded investment companies (including 

investment companies advised by BFA 

or its affiliates) that invest in money 

market instruments.27

In the absence of normal 

circumstances, the Fund may 

temporarily depart from its normal 

investment process, provided that such 

departure is, in the opinion of the 

Adviser, consistent with the Fund’s 

investment objective and in the best 

interest of the Fund. For example, the 

Fund may hold a higher than normal 

proportion of its assets in cash in 

response to adverse market, economic or 

political conditions. 

The Fund intends to qualify each year 

as a regulated investment company (a 

‘‘RIC’’) under subchapter M of the 

Internal Revenue Code of 1986, as 

amended.28 The Fund will invest its 

assets, and otherwise conduct its 

operations, in a manner that is intended 

to satisfy the qualifying income, 

diversification and distribution 

requirements necessary to establish and 

maintain RIC qualification under 

subchapter M. 

Other Portfolio Holdings 

The Fund may also, to a limited 

extent (under normal circumstances, 

less than 20% of the Fund’s net assets), 

engage in transactions in interest rate 

futures contracts for hedging 

purposes.29 The Fund’s investments 

will be consistent with its investment 

objective and will not be used to 

achieve leveraged returns (i.e. two times 

or three times the Fund’s benchmark, as 

described in the Registration Statement). 

The Fund may also invest up to 20% 

of its net assets in Municipal Securities 

that pay interest that is subject to the 

AMT. 

Investment Restrictions 

The Fund may hold up to an aggregate 

amount of 15% of its net assets in 

illiquid assets (calculated at the time of 

investment), as deemed illiquid by the 

Adviser 30 under the 1940 Act.31 The 


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78128 Federal Register / Vol. 79, No. 248 / Monday, December 29, 2014 / Notices 

11, 2008), 73 FR 14618 (March 18, 2008), footnote 

34. See also, Investment Company Act Release No. 

5847 (October 21, 1969), 35 FR 19989 (December 

31, 1970) (Statement Regarding ‘‘Restricted 

Securities’’); Investment Company Act Release No. 

18612 (March 12, 1992), 57 FR 9828 (March 20, 

1992) (Revisions of Guidelines to Form N–1A). A 

fund’s portfolio security is illiquid if it cannot be 

disposed of in the ordinary course of business 

within seven days at approximately the value 

ascribed to it by the fund. See Investment Company 

Act Release No. 14983 (March 12, 1986), 51 FR 

9773 (March 21, 1986) (adopting amendments to 

Rule 2a–7 under the 1940 Act); Investment 

Company Act Release No. 17452 (April 23, 1990), 

55 FR 17933 (April 30, 1990) (adopting Rule 144A 

under the Securities Act of 1933). 

32A ‘‘significant event’’ is an event that, in the 

judgment of BFA, is likely to cause a material 

change to the closing market price of the asset or 

liability held by the Fund. 

Fund will monitor its portfolio liquidity 

on an ongoing basis to determine 

whether, in light of current 

circumstances, an adequate level of 

liquidity is being maintained, and will 

consider taking appropriate steps in 

order to maintain adequate liquidity if, 

through a change in values, net assets, 

or other circumstances, more than 15% 

of the Fund’s net assets are held in 

illiquid assets. Illiquid assets include 

securities subject to contractual or other 

restrictions on resale and other 

instruments that lack readily available 

markets as determined in accordance 

with Commission staff guidance. 

Net Asset Value 

According to the Registration 

Statement, the net asset value (‘‘NAV’’) 

of the Fund will be calculated each 

business day as of the close of regular 

trading on the New York Stock 

Exchange (‘‘NYSE’’), generally 4:00 p.m. 

Eastern Time (the ‘‘NAV Calculation 

Time’’), on each day that the NYSE is 

open for trading, based on prices at the 

NAV Calculation Time. NAV per Share 

is calculated by dividing the Fund’s net 

assets by the number of Shares 

outstanding. 

According to the Registration 

Statement, unless otherwise described 

below, the Fund values Municipal 

Securities using prices provided directly 

from one or more broker-dealers, market 

makers, or independent third-party 

pricing services which may use matrix 

pricing and valuation models, as well as 

recent market transactions for the same 

or similar assets, to derive values. 

Exchange traded investment 

companies will be valued at market 

closing price or, if no closing price is 

available, at the last traded price on the 

primary exchange on which they are 

traded. Price information for such 

securities will be taken from the 

exchange where the security is 

primarily traded. Investment companies 

not listed on an exchange are valued at 

their net asset value. 

Futures contracts will be valued at 

their last sale price or settle price as of 

the close of the applicable exchange. 

Repurchase Agreements will generally 

be valued at par. In certain 

circumstances, Short-Term Instruments 

may be valued on the basis of amortized 

cost. 

According to the Registration 

Statement, generally, trading in money 

market instruments, and certain 

Municipal Securities is substantially 

completed each day at various times 

prior to the close of business on the 

Exchange. Additionally, trading in 

certain derivatives is substantially 

completed each day at various times 

prior to the close of business on the 

Exchange. The values of such securities 

and derivatives used in computing the 

NAV of the Fund are determined at such 

times. 

According to the Registration 

Statement, when market quotations are 

not readily available or are believed by 

BFA to be unreliable, the Fund’s 

investments are valued at fair value. 

Fair value determinations are made by 

BFA in accordance with policies and 

procedures approved by the Trust’s 

board of trustees and in accordance with 

the 1940 Act. BFA may conclude that a 

market quotation is not readily available 

or is unreliable if a security or other 

asset or liability is thinly traded, or 

where there is a significant event 32

subsequent to the most recent market 

quotation. 

According to the Registration 

Statement, fair value represents a good 

faith approximation of the value of an 

asset or liability. The fair value of an 

asset or liability held by the Fund is the 

amount the Fund might reasonably 

expect to receive from the current sale 

of that asset or the cost to extinguish 

that liability in an arm’s-length 

transaction. Valuing the Fund’s 

investments using fair value pricing will 

result in prices that may differ from 

current valuations and that may not be 

the prices at which those investments 

could have been sold during the period 

in which the particular fair values were 

used. 

The Shares 

The Fund will issue and redeem 

Shares on a continuous basis at the NAV 

per Share only in large blocks of a 

specified number of Shares or multiples 

thereof (‘‘Creation Units’’) in 

transactions with authorized 

participants who have entered into 

agreements with the Distributor. The 

Fund currently anticipates that a 

Creation Unit will consist of 50,000 

Shares, though this number may change 

from time to time, including prior to 

listing of the Fund. The exact number of 

Shares that will constitute a Creation 

Unit will be disclosed in the 

Registration Statement of the Fund. 

Once created, Shares of the Fund trade 

on the secondary market in amounts 

less than a Creation Unit. 

The consideration for purchase of 

Creation Units of the Fund generally 

will consist of the in-kind deposit of a 

designated portfolio of securities 

(including any portion of such securities 

for which cash may be substituted) (i.e., 

the ‘‘Deposit Securities’’), and the ‘‘Cash 

Component’’ computed as described 

below. Together, the Deposit Securities 

and the Cash Component constitute the 

‘‘Fund Deposit,’’ which represents the 

minimum initial and subsequent 

investment amount for a Creation Unit 

of the Fund. 

The portfolio of securities required for 

purchase of a Creation Unit may not be 

identical to the portfolio of securities 

the Fund will deliver upon redemption 

of Shares. The Deposit Securities and 

Fund Securities (as defined below), as 

the case may be, in connection with a 

purchase or redemption of a Creation 

Unit, generally will correspond pro rata 

to the securities held by the Fund. 

The Cash Component will be an 

amount equal to the difference between 

the NAV of the Shares (per Creation 

Unit) and the ‘‘Deposit Amount,’’ which 

will be an amount equal to the market 

value of the Deposit Securities, and 

serve to compensate for any differences 

between the NAV per Creation Unit and 

the Deposit Amount. The Fund 

generally offers Creation Units partially 

for cash. BFA will make available 

through the National Securities Clearing 

Corporation (‘‘NSCC’’) on each business 

day, prior to the opening of business on 

the Exchange, the list of names and the 

required number or par value of each 

Deposit Security and the amount of the 

Cash Component to be included in the 

current Fund Deposit (based on 

information as of the end of the 

previous business day) for the Fund. 

The identity and number or par value 

of the Deposit Securities may change 

pursuant to changes in the composition 

of the Fund’s portfolio as rebalancing 

adjustments and corporate action events 

occur from time to time. The 

composition of the Deposit Securities 

may also change in response to 

adjustments to the weighting or 

composition of the holdings of the 

Fund. 


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33The Adviser represents that, to the extent the 

Trust permits or requires a ‘‘cash in lieu’’ amount, 

such transactions will be effected in the same 

manner or in an equitable manner for all authorized 

participants. 

34The Bid/Ask Price of the Fund will be 

determined using the highest bid and the lowest 

offer on the Exchange as of the time of calculation 

of the Fund’s NAV. The records relating to Bid/Ask 

Prices will be retained by the Fund or its service 

providers. 

35Under accounting procedures to be followed by 

the Fund, trades made on the prior business day 

(‘‘T’’) will be booked and reflected in NAV on the 

current business day (‘‘T+1’’). Accordingly, the 

Fund will be able to disclose at the beginning of the 

business day the portfolio that will form the basis 

for the NAV calculation at the end of the business 

day. 

36Currently, it is the Exchange’s understanding 

that several major market data vendors display and/ 

or make widely available Intraday Indicative Values 

published via the Consolidated Tape Association 

(‘‘CTA’’) or other data feeds. 

The Fund reserves the right to permit 

or require the substitution of a ‘‘cash in 

lieu’’ amount to be added to the Cash 

Component to replace any Deposit 

Security that may not be available in 

sufficient quantity for delivery or that 

may not be eligible for transfer through 

the Depository Trust Company (‘‘DTC’’) 

or the clearing process through the 

NSCC.33

Except as noted below, all creation 

orders must be placed for one or more 

Creation Units and must be received by 

the Distributor in proper form no later 

than 4:00 p.m., Eastern Time, in each 

case on the date such order is placed in 

order for creation of Creation Units to be 

effected based on the NAV of Shares of 

the Fund as next determined on such 

date after receipt of the order in proper 

form. Orders requesting substitution of 

a ‘‘cash in lieu’’ amount generally must 

be received by the Distributor no later 

than 2:00 p.m., Eastern Time on the 

Settlement Date. The ‘‘Settlement Date’’ 

is generally the third business day after 

the transmittal date. On days when the 

Exchange or the bond markets close 

earlier than normal, the Fund may 

require orders to create or to redeem 

Creation Units to be placed earlier in the 

day. 

Fund Deposits must be delivered 

through the Federal Reserve System (for 

cash and government securities), 

through DTC (for corporate and 

municipal securities), or through a 

central depository account, such as with 

Euroclear or DTC, maintained by State 

Street or a sub-custodian (a ‘‘Central 

Depository Account’’) by an authorized 

participant. Any portion of a Fund 

Deposit that may not be delivered 

through the Federal Reserve System or 

DTC must be delivered through a 

Central Depository Account. The Fund 

Deposit transfer must be ordered by the 

authorized participant in a timely 

fashion so as to ensure the delivery of 

the requisite number of Deposit 

Securities to the account of the Fund by 

no later than 3:00 p.m., Eastern Time, 

on the Settlement Date. 

A standard creation transaction fee 

will be imposed to offset the transfer 

and other transaction costs associated 

with the issuance of Creation Units. 

Shares of the Fund may be redeemed 

only in Creation Units at their NAV next 

determined after receipt of a redemption 

request in proper form by the 

Distributor and only on a business day. 

BFA will make available through the 

NSCC, prior to the opening of business 

on the Exchange on each business day, 

the designated portfolio of securities 

(including any portion of such securities 

for which cash may be substituted) that 

will be applicable (subject to possible 

amendment or correction) to 

redemption requests received in proper 

form on that day (‘‘Fund Securities’’). 

Fund Securities received on redemption 

may not be identical to Deposit 

Securities that are applicable to 

creations of Creation Units. 

Unless cash redemptions are available 

or specified for the Fund, the 

redemption proceeds for a Creation Unit 

generally will consist of a specified 

amount of cash, Fund Securities, plus 

additional cash in an amount equal to 

the difference between the NAV of the 

Shares being redeemed, as next 

determined after the receipt of a request 

in proper form, and the value of the 

specified amount of cash and Fund 

Securities, less a redemption transaction 

fee. The Fund generally redeems 

Creation Units partially for cash. 

A standard redemption transaction fee 

will be imposed to offset transfer and 

other transaction costs that may be 

incurred by the Fund. 

Redemption requests for Creation 

Units of the Fund must be submitted to 

the Distributor by or through an 

authorized participant no later than 4:00 

p.m. Eastern Time on any business day, 

in order to receive that day’s NAV. The 

authorized participant must transmit the 

request for redemption in the form 

required by the Fund to the Distributor 

in accordance with procedures set forth 

in the authorized participant agreement. 

Additional information regarding the 

Shares and the Fund, including 

investment strategies, risks, creation and 

redemption procedures, fees and 

expenses, portfolio holdings disclosure 

policies, distributions, taxes and reports 

to be distributed to beneficial owners of 

the Shares can be found in the 

Registration Statement or on the Web 

site for the Fund (www.iShares.com), as 

applicable. 

Availability of Information 

The Fund’s Web site, which will be 

publicly available prior to the public 

offering of Shares, will include a form 

of the prospectus for the Fund that may 

be downloaded. The Web site will 

include additional quantitative 

information updated on a daily basis, 

including, for the Fund: (1) The prior 

business day’s NAV and the market 

closing price or mid-point of the bid/ask 

spread at the time of calculation of such 

NAV (the ‘‘Bid/Ask Price’’),34 and a 

calculation of the premium or discount 

of the market closing price or Bid/Ask 

Price against the NAV; and (2) data in 

chart format displaying the frequency 

distribution of discounts and premiums 

of the daily Bid/Ask Price against the 

NAV, within appropriate ranges, for 

each of the four previous calendar 

quarters. Daily trading volume 

information will be available in the 

financial section of newspapers, through 

subscription services such as 

Bloomberg, Thomson Reuters, and 

International Data Corporation, which 

can be accessed by authorized 

participants and other investors, as well 

as through other electronic services, 

including major public Web sites. On 

each business day, before 

commencement of trading in Shares 

during Regular Trading Hours on the 

Exchange, the Fund will disclose on its 

Web site the identities and quantities of 

the portfolio of securities and other 

assets (the ‘‘Disclosed Portfolio’’) held 

by the Fund that will form the basis for 

the Fund’s calculation of NAV at the 

end of the business day.35 The Disclosed 

Portfolio will include, as applicable, the 

names, quantity, percentage weighting 

and market value of securities and other 

assets held by the Fund and the 

characteristics of such assets. The Web 

site and information will be publicly 

available at no charge. 

In addition, for the Fund, an 

estimated value, defined in BATS Rule 

14.11(i)(3)(C) as the ‘‘Intraday Indicative 

Value,’’ that reflects an estimated 

intraday value of the Fund’s portfolio, 

will be disseminated. Moreover, the 

Intraday Indicative Value will be based 

upon the current value for the 

components of the Disclosed Portfolio 

and will be updated and widely 

disseminated by one or more major 

market data vendors at least every 15 

seconds during the Exchange’s Regular 

Trading Hours.36

The dissemination of the Intraday 

Indicative Value, together with the 

Disclosed Portfolio, will allow investors 

to determine the value of the underlying 

portfolio of the Fund on a daily basis 


tkelley on DSK3SPTVN1PROD with NOTICES
78130 Federal Register / Vol. 79, No. 248 / Monday, December 29, 2014 / Notices 

37See 17 CFR 240.10A–3. 

38For a list of the current members of ISG, see 

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

components of the Disclosed Portfolio for the Fund 

may trade on markets that are members of ISG or 

with which the Exchange has in place a 

comprehensive surveillance sharing agreement. 

39The Pre-Opening Session is from 8:00 a.m. to 

9:30 a.m. Eastern Time. 

40The After Hours Trading Session is from 4:00 

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

and provide a close estimate of that 

value throughout the trading day. 

Intraday, executable price quotations 

on assets held by the Fund are available 

from major broker-dealer firms and for 

exchange-traded assets, including 

investment companies, such intraday 

information is available directly from 

the applicable listing exchange. All such 

intraday price information is available 

through subscription services, such as 

Bloomberg, Thomson Reuters and 

International Data Corporation, which 

can be accessed by authorized 

participants and other investors. Pricing 

information for Repurchase Agreements 

and securities not listed on an exchange 

or national securities market will be 

available from major broker-dealer firms 

and/or subscription services, such as 

Bloomberg, Thomson Reuters and 

International Data Corporation. 

Information regarding market price 

and volume of the Shares will be 

continually available on a real-time 

basis throughout the day on brokers’ 

computer screens and other electronic 

services. The previous day’s closing 

price and trading volume information 

for the Shares will be published daily in 

the financial section of newspapers. 

Quotation and last sale information for 

the Shares will be available on the 

facilities of the CTA. Price information 

relating to all other securities held by 

the Fund will be available from major 

market data vendors. Quotations and 

last sale information for the underlying 

exchange traded investment companies 

will be available through CTA. 

Initial and Continued Listing 

The Shares will be subject to BATS 

Rule 14.11(i), which sets forth the initial 

and continued listing criteria applicable 

to Managed Fund Shares. The Exchange 

represents that, for initial and/or 

continued listing, the Fund must be in 

compliance with Rule 10A–3 under the 

Act.37 A minimum of 100,000 Shares 

will be outstanding at the 

commencement of trading on the 

Exchange. The Exchange will obtain a 

representation from the issuer of the 

Shares that the NAV per Share will be 

calculated daily and that the NAV and 

the Disclosed Portfolio will be made 

available to all market participants at 

the same time. 

Trading Halts 

With respect to trading halts, the 

Exchange may consider all relevant 

factors in exercising its discretion to 

halt or suspend trading in the Shares of 

the Fund. The Exchange will halt 

trading in the Shares under the 

conditions specified in BATS Rule 

11.18. Trading may be halted because of 

market conditions or for reasons that, in 

the view of the Exchange, make trading 

in the Shares inadvisable. These may 

include: (1) The extent to which trading 

is not occurring in the securities and/or 

the financial instruments composing the 

Disclosed Portfolio of the Fund; or (2) 

whether other unusual conditions or 

circumstances detrimental to the 

maintenance of a fair and orderly 

market are present. Trading in the 

Shares also will be subject to Rule 

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

circumstances under which Shares of 

the Fund may be halted. 

Trading Rules 

The Exchange deems the Shares to be 

equity securities, thus rendering trading 

in the Shares subject to the Exchange’s 

existing rules governing the trading of 

equity securities. BATS will allow 

trading in the Shares from 8:00 a.m. 

until 5:00 p.m. Eastern Time. The 

Exchange has appropriate rules to 

facilitate transactions in the Shares 

during all trading sessions. As provided 

in BATS Rule 11.11(a), the minimum 

price variation for quoting and entry of 

orders in Managed Fund Shares traded 

on the Exchange is $0.01, with the 

exception of securities that are priced 

less than $1.00, for which the minimum 

price variation for order entry is 

$0.0001. 

Surveillance 

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. 

Trading of the Shares through the 

Exchange will be subject to the 

Exchange’s surveillance procedures for 

derivative products, including Managed 

Fund Shares. The Exchange may obtain 

information regarding trading in the 

Shares and the underlying shares in 

exchange traded equity securities via 

the ISG, from other exchanges that are 

members or affiliates of the ISG, or with 

which the Exchange has entered into a 

comprehensive surveillance sharing 

agreement.38 In addition, the Exchange 

is able to access, as needed, trade 

information for certain fixed income 

instruments reported to FINRA’s Trade 

Reporting and Compliance Engine 

(‘‘TRACE’’). 

As it relates to exchange traded 

investment companies, the Fund will 

only invest in investment companies 

that trade on markets that are a member 

of the ISG or with which the Exchange 

has in place a comprehensive 

surveillance sharing agreement. To the 

extent that the Fund invests in futures 

contracts, the Fund will only invest in 

futures contracts that are traded on an 

exchange that is a member of the ISG or 

with which the Exchange has in place 

a comprehensive surveillance sharing 

agreement. 

The Exchange prohibits the 

distribution of material non-public 

information by its employees. 

Information Circular 

Prior to the commencement of 

trading, the Exchange will inform its 

members in an Information Circular of 

the special characteristics and risks 

associated with trading the Shares. 

Specifically, the Information Circular 

will discuss the following: (1) The 

procedures for purchases and 

redemptions of Shares in Creation Units 

(and that Shares are not individually 

redeemable); (2) BATS Rule 3.7, which 

imposes suitability obligations on 

Exchange members with respect to 

recommending transactions in the 

Shares to customers; (3) how 

information regarding the Intraday 

Indicative Value is disseminated; (4) the 

risks involved in trading the Shares 

during the Pre-Opening 39 and After 

Hours Trading Sessions 40 when an 

updated Intraday Indicative Value will 

not be calculated or publicly 

disseminated; (5) the requirement that 

members deliver a prospectus to 

investors purchasing newly issued 

Shares prior to or concurrently with the 

confirmation of a transaction; and (6) 

trading information. 

In addition, the Information Circular 

will advise members, prior to the 

commencement of trading, of the 

prospectus delivery requirements 

applicable to the Fund. Members 

purchasing Shares from the Fund for 

resale to investors will deliver a 

prospectus to such investors. The 

Information Circular will also discuss 

any exemptive, no-action, and 

interpretive relief granted by the 

Commission from any rules under the 

Act. 

In addition, the Information Circular 

will reference that the Fund is subject 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 248 / Monday, December 29, 2014 / Notices 78131 

41 15 U.S.C. 78f. 

42 15 U.S.C. 78f(b)(5). 

43See supra note 7. 

44See supra note 29. 

45The Commission has stated that long-standing 

Commission guidelines have required open-end 

funds to hold no more than 15% of their net assets 

in illiquid securities and other illiquid assets. See 

Investment Company Act Release No. 28193 (March 

11, 2008), 73 FR 14618 (March 18, 2008), footnote 

34. See also, Investment Company Act Release No. 

5847 (October 21, 1969), 35 FR 19989 (December 

31, 1970) (Statement Regarding ‘‘Restricted 

Securities’’); Investment Company Act Release No. 

18612 (March 12, 1992), 57 FR 9828 (March 20, 

1992) (Revisions of Guidelines to Form N–1A). A 

fund’s portfolio security is illiquid if it cannot be 

disposed of in the ordinary course of business 

within seven days at approximately the value 

ascribed to it by the fund. See Investment Company 

Act Release No. 14983 (March 12, 1986), 51 FR 

9773 (March 21, 1986) (adopting amendments to 

Rule 2a–7 under the 1940 Act); Investment 

Company Act Release No. 17452 (April 23, 1990), 

55 FR 17933 (April 30, 1990) (adopting Rule 144A 

under the Securities Act of 1933). 

46The Bid/Ask Price of the Fund will be 

determined using the highest bid and the lowest 

offer on the Exchange as of the time of calculation 

of the Fund’s NAV. The records relating to Bid/Ask 

Prices will be retained by the Fund or its service 

providers. 

to various fees and expenses described 

in the Registration Statement. The 

Information Circular will also disclose 

the trading hours of the Shares of the 

Fund and the applicable NAV 

Calculation Time for the Shares. The 

Information Circular will disclose that 

information about the Shares of the 

Fund will be publicly available on the 

Fund’s Web site. In addition, the 

Information Circular will reference that 

the Trust is subject to various fees and 

expenses described in the Fund’s 

Registration Statement. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with section 6(b) 

of the Act 41 in general and section 

6(b)(5) of the Act 42 in particular in that 

it 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. 

The Exchange believes that the 

proposed rule change is designed to 

prevent fraudulent and manipulative 

acts and practices in that the Shares will 

be listed and traded on the Exchange 

pursuant to the initial and continued 

listing criteria in BATS Rule 14.11(i). 

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. BATS 

Rule 14.11(i)(7) provides that, if the 

investment adviser to the investment 

company issuing Managed Fund Shares 

is affiliated with a broker-dealer, such 

investment adviser shall erect a ‘‘fire 

wall’’ between the investment adviser 

and the broker-dealer with respect to 

access to information concerning the 

composition and/or changes to such 

investment company portfolio. The 

Adviser is not a registered broker-dealer, 

but is affiliated with multiple brokerdealers and has implemented ‘‘fire 

walls’’ with respect to such brokerdealers 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. The 

Exchange may obtain information 

regarding trading in the Shares and the 

underlying shares in exchange traded 

equity securities via the ISG, from other 

exchanges that are members or affiliates 

of the ISG, or with which the Exchange 

has entered into a comprehensive 

surveillance sharing agreement. In 

addition, the Exchange is able to access, 

as needed, trade information for certain 

fixed income instruments reported to 

TRACE. 

According to the Registration 

Statement, the Fund will invest, under 

normal circumstances,43 at least 80% of 

its net assets in Municipal Securities, 

Short-Term Instruments, and 

Repurchase Agreements. Additionally, 

the Fund may hold up to an aggregate 

amount of 15% of its net assets in 

illiquid assets (calculated at the time of 

investment), as deemed illiquid by the 

Adviser 44 under the 1940 Act.45 The 

Fund will monitor its portfolio liquidity 

on an ongoing basis to determine 

whether, in light of current 

circumstances, an adequate level of 

liquidity is being maintained, and will 

consider taking appropriate steps in 

order to maintain adequate liquidity if, 

through a change in values, net assets, 

or other circumstances, more than 15% 

of the Fund’s net assets are held in 

illiquid assets. Illiquid assets include 

securities subject to contractual or other 

restrictions on resale and other 

instruments that lack readily available 

markets as determined in accordance 

with Commission staff guidance. 

The proposed rule change is designed 

to promote just and equitable principles 

of trade and to protect investors and the 

public interest in that the Exchange will 

obtain a representation from the issuer 

of the Shares that the NAV per Share 

will be calculated daily and that the 

NAV and the Disclosed Portfolio will be 

made available to all market 

participants at the same time. In 

addition, a large amount of information 

is publicly available regarding the Fund 

and the Shares, thereby promoting 

market transparency. Moreover, the 

Intraday Indicative Value will be 

disseminated by one or more major 

market data vendors at least every 15 

seconds during Regular Trading Hours. 

On each business day, before 

commencement of trading in Shares 

during Regular Trading Hours, the Fund 

will disclose on its Web site the 

Disclosed Portfolio that will form the 

basis for the Fund’s calculation of NAV 

at the end of the business day. Pricing 

information will include additional 

quantitative information updated on a 

daily basis, including, for the Fund: (1) 

The prior business day’s NAV and the 

market closing price or mid-point of the 

bid/ask spread at the time of calculation 

of such NAV (the ‘‘Bid/Ask Price’’),46

and a calculation of the premium or 

discount of the market closing price or 

Bid/Ask Price against the NAV; and (2) 

data in chart format displaying the 

frequency distribution of discounts and 

premiums of the daily Bid/Ask Price 

against the NAV, within appropriate 

ranges, for each of the four previous 

calendar quarters. Additionally, 

information regarding market price and 

trading of the Shares will be continually 

available on a real-time basis throughout 

the day on brokers’ computer screens 

and other electronic services, and 

quotation and last sale information for 

the Shares will be available on the 

facilities of the CTA. The Web site for 

the Fund will include a form of the 

prospectus for the Fund and additional 

data relating to NAV and other 

applicable quantitative information. 

Trading in Shares of the Fund will be 

halted under the conditions specified in 

BATS Rule 11.18. Trading may also be 

halted because of market conditions or 

for reasons that, in the view of the 

Exchange, make trading in the Shares 

inadvisable. Finally, trading in the 

Shares will be subject to BATS Rule 

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

circumstances under which Shares may 

be halted. In addition, as noted above, 

investors will have ready access to 

information regarding the Fund’s 

holdings, the Intraday Indicative Value, 

the Disclosed Portfolio, and quotation 

and last sale information for the Shares. 


tkelley on DSK3SPTVN1PROD with NOTICES
78132 Federal Register / Vol. 79, No. 248 / Monday, December 29, 2014 / Notices 

47 17 CFR 200.30–3(a)(12). 

Intraday, executable price quotations 

on assets held by the Fund are available 

from major broker-dealer firms and for 

exchange-traded assets, including 

investment companies, such intraday 

information is available directly from 

the applicable listing exchange. All such 

intraday price information is available 

through subscription services, such as 

Bloomberg, Thomson Reuters and 

International Data Corporation, which 

can be accessed by authorized 

participants and other investors. 

The proposed rule change is designed 

to perfect the mechanism of a free and 

open market and, in general, to protect 

investors and the public interest in that 

it will facilitate the listing and trading 

of an additional type of activelymanaged exchange traded product that 

will enhance competition among market 

participants, to the benefit of investors 

and the marketplace. As noted above, 

the Exchange has in place surveillance 

procedures relating to trading in the 

Shares and may obtain information via 

ISG, from other exchanges that are 

members of ISG, or with which the 

Exchange has entered into a 

comprehensive surveillance sharing 

agreement. In addition, the Exchange is 

able to access, as needed, trade 

information for certain fixed income 

instruments reported to TRACE. As 

noted above, investors will also have 

ready access to information regarding 

the Fund’s holdings, the Intraday 

Indicative Value, the Disclosed 

Portfolio, and quotation and last sale 

information for the Shares. 

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 will 

facilitate the listing and trading of an 

additional actively-managed exchangetraded product that will enhance 

competition among market participants, 

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 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– 

BATS–2014–054 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–BATS–2014–054. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–BATS– 

2014–054, and should be submitted on 

or before January 20, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.47

Brent J. Fields, 

Secretary. 

[FR Doc. 2014–30276 Filed 12–24–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[File No. 500–1] 

In the Matter of American Heritage 

International Inc.; Order of Suspension 

of Trading 

December 16, 2014. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of American 

Heritage International Inc. (‘‘American 

Heritage’’) because of concerns 

regarding potentially manipulative 

activity related to American Heritage 

common stock. American Heritage is a 

Nevada corporation with its principal 

place of business located in Las Vegas, 

Nevada. Its stock is quoted on OTC Link 

(previously ‘‘Pink Sheets’’) operated by 

OTC Markets Group Inc., and on OTC 

Bulletin Board under the ticker symbol: 

AHII. 

The Commission is of the opinion that 

the public interest and the protection of 

investors require a suspension of trading 

in the securities of the above-listed 

company. 

Therefore, it is ordered, pursuant to 

Section 12(k) of the Securities Exchange 

Act of 1934, that trading in the 

securities of the above-listed company is 

suspended for the period from 9:30 a.m. 

EST, on December 16, 2014 through 

11:59 p.m. EST, on December 30, 2014. 

By the Commission. 

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2014–30348 Filed 12–23–14; 11:15 am] 

BILLING CODE 8011–01–P 


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