77066 Federal Register / Vol. 79, No. 246 / Tuesday, December 23, 2014 / Notices 

18The Exchange also proposes to retitle the U.S. 

Exchange Holdings COI as the ‘‘Third’’ Amended 

and Restated Certificate of Incorporation of U.S. 

Exchange Holdings, and update the effective date 

thereof. 

19 In approving the proposed rule changes, the 

Commission has considered their impact on 

efficiency, competition, and capital formation. See 

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

20 15 U.S.C. 78s(b)(1). 

21See Notice, supra note 5 at 67227. 

22See id. at 67228. 

23Although prior to the Transactions Deutsche 

Bo ̈rse’s interest in U.S. Exchange Holdings was held 

solely through its 100% indirect ownership in 

Eurex Frankfurt, upon consummation of the 

transactions it will instead directly own Eurex 

Frankfurt and will hold a direct 15% interest in 

U.S. Exchange Holdings. The remaining 85% 

interest in U.S. Exchange Holdings will continue to 

be directly held by Eurex Frankfurt. 

24See id. 

25See id. 

26See e.g., Securities Exchange Act Release No. 

70050 (July 26, 2013), 78 FR 46622 (August 1, 2013) 

(approving the application for registration as a 

national securities exchange of Topaz Exchange, 

LLC). 

27See id. 

28See Notice, supra note 5, at 67218. 

29The Commission notes that, as amended, the 

provision in ISE Gemini’s LLC Agreement 

governing distributions will be consistent with 

similar provisions the Commission has previously 

approved for other self-regulatory organizations. 

See, e.g., Securities Exchange Act Release No. 

68341 (December 3, 2012), 77 FR 73065 (December 

7, 2012) (approving the application for registration 

as a national securities exchange of Miami 

International Securities Exchange, LLC). 

30 15 U.S.C. 78f(b)(2). 

31 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

effective closing date of the applicable 

step in the Transactions. The Exchange 

also proposes to add language in Article 

THIRTEENTH specifying that the Trust 

Agreement may be amended, restated, 

or replaced from time to time and 

remove references to EDGA Exchange 

and EDGX Exchange from the definition 

of ‘‘Controlled National Securities 

Exchange’’ in Article TENTH.18

III. Discussion and Commission 

Findings 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of the 

Act and rules and regulations 

thereunder applicable to a national 

securities exchange.19 Specifically, the 

Commission finds that the proposal is 

consistent with section 6(b)(1) of the 

Act,20 which requires that an exchange 

be organized and have the capacity to be 

able to carry out the purposes of the Act 

and to comply, and to enforce 

compliance by its members and persons 

associated with its members, with the 

provisions of the Act, the rules and 

regulations thereunder, and the rules of 

the Exchange. 

The Exchange represents that it will 

continue to operate and regulate its 

market and members in the same 

manner following the Transactions as it 

operates today.21 The Exchange further 

states that the proposed rule change will 

facilitate an ownership structure that 

will continue to provide the 

Commission with appropriate oversight 

tools to allow the Commission to 

enforce the provisions of the Act with 

respect to the Exchange and its direct 

and indirect Non-U.S. Upstream 

Owners, including each of their 

directors, officers, employees, and 

agents, to the extent they are involved 

in the activities of the Exchange.22 The 

Commission notes that as a result of the 

Transactions, the Swiss companies will 

no longer be indirect, upstream owners 

of the Exchange, but that the upstream 

ownership of the Exchange otherwise 

remains substantially the same.23 The 

Commission also notes that the 

Exchange has represented that it is not 

proposing any changes to the 

Exchange’s operational or trading 

structure in connection with the 

Transactions.24 The Exchange further 

stated that no changes will be made to 

other aspects of the Exchange’s 

corporate governance documents that 

were previously approved by the 

Commission.25

The Commission believes that the 

proposed changes related to the 

Transactions will not impact provisions 

of the Exchange’s, or its upstream 

owners, corporate governance 

documents that were designed to enable 

the ISE Gemini to operate in a manner 

that complies with the federal securities 

laws, and were intended to assist the 

ISE Gemini in fulfilling its selfregulatory obligations and administering 

and complying with the requirements of 

the Act.26 The Commission also believes 

that the proposed rule change will allow 

the Commission to continue to exercise 

its plenary regulatory authority over the 

Exchange and continue to provide the 

Commission and the Exchange with 

access to necessary information that will 

allow the Exchange to comply, and 

enforce compliance, with the Act. As 

the Exchanges notes, the proposed 

administrative amendments will 

continue to preserve the independence 

of the Exchange’s self-regulatory 

functions and ensure that it will be able 

to obtain any information it needs in 

order to address fraudulent and 

manipulative acts in its marketplace and 

carry out its regulatory responsibilities 

under the Act.27

The Commission also believes that the 

proposed amendments to the ISE 

Gemini LLC Agreement related to 

distributions are consistent with the 

Act. The Commission notes, as 

discussed above, that the Exchange 

states that the proposed changes will 

not impact the current practice of 

distributions from the Exchange to ISE 

Holdings, and would continue to ensure 

that any distributions by the Exchange 

to ISE Holdings, and subsequently to its 

indirect upstream owners, would not be 

made in violation of the Exchange’s 

legal and regulatory responsibilities or 

with Regulatory Funds.28 The 

Commission believes that the proposed 

rule change is designed to facilitate the 

ability of ISE Gemini to fulfill its 

regulatory obligations under the Act and 

will help ensure the independence of its 

regulatory function from its market 

operations and other commercial 

interests.29

IV. Conclusion 

It is therefore ordered, pursuant to 

section 19(b)(2) of the Act 30 that the 

proposed rule change (SR–ISEGemini– 

2014–24), as modified by Amendment 

No. 1, be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.31

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–29964 Filed 12–22–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73860; File No. SR–ISE– 

2014–44] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Order Granting Approval of 

Proposed Rule Change, as Modified by 

Amendment No. 1 Thereto, Relating to 

a Corporate Transaction Involving Its 

Indirect Parent 

December 17, 2014. 

I. Introduction 

On October 22, 2014, the International 

Securities Exchange, LLC (the 

‘‘Exchange’’ or the ‘‘ISE’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

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

of 1934 (‘‘Act’’),2 and Rule 19b–4 

thereunder,3 a proposed rule change to 

make certain amendments to its 

corporate governance documents and 

those of certain of its upstream owners, 

in order to effectuate changes to its 

indirect, non-U.S. upstream ownership 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 79, No. 246 / Tuesday, December 23, 2014 / Notices 77067 

4The amendments also update certain of the 

corporate governance documents to reflect prior 

transactions. 5See Securities Exchange Act Release No. 73530 

(November 5, 2014), 79 FR 67224 (‘‘Notice’’). 6For a more detailed description of the 

anticipated steps to effectuate the Transactions, see 

Notice, supra note 5, at 67225. 7Each of Deutsche Bo ̈rse, Eurex Frankfurt, Eurex 

Zu ̈rich, and EGD is referred to as a ‘‘Non-U.S. 

Upstream Owner’’ and collectively as the ‘‘Non-U.S. 

Upstream Owners.’’ 8Upon consummation of the Transactions, all of 

the common stock of ISE Holdings will continue to 

be held by U.S. Exchange Holdings. See Notice, 

supra note 5, at 67225. 

9According to the Exchange, the Transactions 

will not result in any additional person or entity 

acquiring direct or indirect ownership in the 

Exchange. See Notice, supra note 5, at 67225. 10The Exchange also proposes to retitle the COD 

as the ‘‘Amended and Restated’’ Certificate of 

Designations of Series A Preferred Stock of ISE 

Holdings. 

11The Exchange also proposes to retitle the COI 

as the ‘‘Second’’ Amended and Restated Certificate 

of Incorporation of ISE Holdings and update the 

date thereof. 

12The Exchange will maintain the total number 

of authorized ISE Holdings Preferred Stock at 

100,000 shares. 

13EDGA and EDGX previously were Controlled 

National Securities Exchanges, but ceased to be so 

as a result of a business combination whereby 

BATS Global Markets, Inc. became the ultimate 

parent company for each. See Securities Exchange 

Act Release No. 71449 (January 30, 2014), 79 FR 

6961 (February 5, 2014) (SR–EDGA–2014–34; SR– 

EDGX–2014–43). See also Notice, supra note 5, at 

67226 n.22. 

14The Exchange also proposes to retitle the Trust 

Agreement as the ‘‘Third’’ Amended and Restated 

Trust Agreement and update the date thereof. 

structure (the ‘‘Transactions’’) 4 and to 

amend the Second Amended and 

Restated Limited Liability Company 

Agreement of ISE (‘‘ISE LLC 

Agreement’’) with respect to 

distributions of its assets. On October 

31, 2014, the Exchange filed 

Amendment No. 1 to the proposed rule 

change. The proposed rule change, as 

modified by Amendment No. 1, was 

published for comment in the Federal 

Register on November 12, 2014.5 The 

Commission received no comments on 

the proposed rule change. This order 

approves the proposed rule change, as 

modified by Amendment No. 1. 

II. Description of the Proposed Rule 

Change 

The Exchange proposes to make 

certain changes to its indirect, non-U.S. 

upstream ownership structure.6

Currently, the Exchange is a wholly 

owned subsidiary of International 

Securities Exchange Holdings, Inc. (‘‘ISE 

Holdings’’). ISE Holdings, in turn, is a 

wholly owned subsidiary of U.S. 

Exchange Holdings, Inc. (‘‘U.S. 

Exchange Holdings’’), which is wholly 

owned by Eurex Frankfurt AG (‘‘Eurex 

Frankfurt’’). Eurex Frankfurt is a wholly 

owned subsidiary of a Swiss stock 

corporation, Eurex Zu ̈rich AG (‘‘Eurex 

Zu ̈rich’’), which, in turn, is jointly 

owned by Deutsche Bo ̈rse AG 

(‘‘Deutsche Bo ̈rse’’) and Eurex Global 

Derivatives AG (‘‘EGD,’’ and together 

with Eurex Zu ̈rich, the ‘‘Swiss 

companies’’). EGD is a wholly-owned, 

direct subsidiary of Deutsche Bo ̈rse.7

As a result of the Transactions, the 

Swiss companies will cease to be NonU.S. Upstream Owners of the Exchange, 

as Deutsche Bo ̈rse will become the sole, 

direct owner of Eurex Frankfurt, which 

will directly own 85% of U.S. Exchange 

Holdings. Deutsche Bo ̈rse will directly 

own the remaining 15% of U.S. 

Exchange Holdings. Also in connection 

with the Transactions, the Series A 

Preferred Stock of ISE Holdings (‘‘ISE 

Holdings Preferred’’) will be converted 

to shares of ISE Holdings common stock 

(the ‘‘Conversion’’).8 Upon 

consummation of the Transactions, U.S. 

Exchange Holdings will remain the sole, 

direct owner of ISE Holdings, which, in 

turn, will also remain the sole, direct 

owner of the Exchange.9 In order to 

consummate the Transactions, 

including the Conversion, the Exchange 

proposes to amend certain of its, and its 

upstream owners’, corporate governance 

documents as described below. 

A. Certificate of Designations of Series 

A Preferred Stock of ISE Holdings 

The Exchange proposes to amend and 

restate the Certificate of Designations of 

Series A Preferred Stock of ISE Holdings 

(the ‘‘COD’’). In particular, the Exchange 

proposes to amend Section 6(b) of the 

COD, which currently provides that the 

ISE Holdings Preferred is not 

convertible, to state that each share of 

ISE Holdings Preferred may, at the 

option of the holder thereof, be 

converted into one fully paid and nonassessable share of ISE Holdings 

common stock (‘‘ISE Holdings 

Common’’) on the date on which such 

holder delivers a duly executed notice 

of conversion to ISE Holdings 

substantially in the form of a new 

Annex A attached to the COD.10

B. Amended and Restated Certificate of 

Incorporation of ISE Holding 

The Exchange proposes to amend and 

restate the Amended and Restated 

Certificate of Incorporation of ISE 

Holdings (the ‘‘COI’’) by increasing the 

number of authorized shares of ISE 

Holdings Common from 1,000 shares to 

101,000 shares in order to account for 

the increase in the authorized number of 

ISE Holdings Common that will result 

from the Conversion.11 As such, the 

total number of authorized ISE Holdings 

Common and ISE Holdings Preferred 

will increase from 101,000 shares to 

201,000 shares.12

C. Trust Agreement 

The Exchange proposes to amend and 

restate the Second Amended and 

Restated Trust Agreement (the ‘‘Trust 

Agreement’’) that exists among ISE 

Holdings, U.S. Exchange Holdings, and 

the Trustees (as defined therein) in 

connection with the Transactions. 

Specifically, the Exchange proposes to: 

(i) Update the recitals of the Trust 

Agreement with respect to the 

Transactions; (ii) remove references to 

the Swiss companies from the definition 

of ‘‘Affected Affiliate’’ in Section 1.1 of 

the Trust Agreement; (iii) remove 

outdated references to EDGA Exchange, 

Inc. (‘‘EDGA’’) and EDGX Exchange, Inc. 

(‘‘EDGX’’) from the definition of 

‘‘Controlled National Securities 

Exchange’’ in Section 1.1 and update 

the recitals of the Trust Agreement 

accordingly; 13 and (iv) remove EGD’s 

address from the notices provision in 

Section 8.8 of the Trust Agreement.14

D. Certain Resolutions and Agreements 

The Exchange proposes to delete 

certain corporate resolutions and 

agreements that were previously 

adopted by the Swiss companies that 

will cease to be indirect, upstream 

owners of ISE after the Transactions. In 

particular, each of the Non-U.S. 

Upstream Owners previously adopted 

resolutions, which were approved by 

the Commission, to incorporate 

measures regarding ownership, 

jurisdiction, books and records, and 

other issues related to their control of 

the Exchange, with respect to the NonU.S. Upstream Owners, as well as its 

board members, officers, employees, 

and agents (as applicable), to the extent 

that they are involved in the activities 

of the Exchange. In addition to these 

resolutions, the Swiss companies 

previously entered into an ‘‘Agreement 

and Consent,’’ in which EGD agreed to 

provide certain information related to 

the activities of the Exchange, including 

books and records of EGD related to the 

activities of the Exchange, to the 

Commission, through Eurex Zu ̈rich. As 

the Swiss companies will cease to be 

Non-U.S. Upstream Owners of the 

Exchange following the consummation 

of the Transactions, the Exchange 

proposes to delete the resolutions of 

these entities, as referenced above, along 

with the Agreement and Consent, such 

that they will no longer be rules of the 

Exchange as of a date in December 2014 

that corresponds to the effective closing 

mstockstill on DSK4VPTVN1PROD with NOTICES

77068 Federal Register / Vol. 79, No. 246 / Tuesday, December 23, 2014 / Notices 

15The Exchange also proposes to delete similar 

resolutions of entities that had previously been 

Non-U.S. Upstream Owners of the Exchange, but 

whose status as such has since ceased. See SR–ISE– 

2014–44 Exhibit 5G, as modified by Amendment 

No. 1, proposing to delete in its entirety the ‘‘Form 

of Swiss Parent Association Resolutions.’’ 

16The Exchange also proposes to renumber 

existing Section 3.3 of the ISE LLC Agreement to 

Section 3.4. In addition, the Exchange proposes to 

retitle the ISE LLC Agreement as the ‘‘Third’’ 

Amended and Restated Limited Liability Company 

Agreement, update the date thereof, update the 

table of contents, update the name of the 

Exchange’s President and Chief Executive Officer 

and update the address of the Registered Agent in 

Section 1.5. 

17The Exchange also proposes to retitle the U.S. 

Exchange Holdings COI as the ‘‘Third’’ Amended 

and Restated Certificate of Incorporation of U.S. 

Exchange Holdings, and update the effective date 

thereof. 

18 In approving the proposed rule changes, the 

Commission has considered their impact on 

efficiency, competition, and capital formation. See 

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

19 15 U.S.C. 78s(b)(1). 

20See Notice, supra note 5 at 67227. 

21See id. at 67228. 

22Although prior to the Transactions Deutsche 

Bo ̈rse’s interest in U.S. Exchange Holdings was held 

solely through its 100% indirect ownership in 

Eurex Frankfurt, upon consummation of the 

transactions it will instead directly own Eurex 

Frankfurt and will hold a direct 15% interest in 

U.S. Exchange Holdings. The remaining 85% 

interest in U.S. Exchange Holdings will continue to 

be directly held by Eurex Frankfurt. 

23See id. 24See id. 25See e.g., Securities Exchange Act Release Nos. 

56955 (December 13, 2007), 72 FR 71979 (December 

19, 2007) (SR–ISE–2007–101); and 53705 (April 21, 

2006), 71 FR 25260 (April 28, 2006) (SR–ISE–2006– 

04). 

26See id. 

date of the applicable step in the 

Transactions.15

E. ISE LLC Agreement 

In addition to the changes described 

above, the Exchange proposes to amend 

and restate the ISE LLC Agreement by 

adding a new Section 3.3 to the ISE LLC 

Agreement that would provide that, 

notwithstanding any provision to the 

contrary contained in the ISE LLC 

Agreement, (i) the Exchange would not 

be required to make a distribution to ISE 

Holdings if such distribution would 

violate the Delaware Limited Liability 

Company Act, any other applicable law, 

or is otherwise required to fulfill the 

regulatory functions or responsibilities 

of the Exchange, and (ii) Regulatory 

Funds will not be used for nonregulatory purposes, but rather shall be 

used to fund the legal, regulatory, and 

surveillance operations of the Exchange 

and the Exchange will not make any 

distribution to ISE Holdings using 

Regulatory Funds. For purposes of 

proposed Section 3.3, the Exchange 

proposes to define the term ‘‘Regulatory 

Funds’’ as fees, fines or penalties 

derived from the regulatory operations 

of the Exchange, provided that 

Regulatory Funds does not include 

revenues derived from listing fees, 

market data revenues, transaction 

revenues or any other aspect of the 

commercial operations of the Exchange 

or a facility of the Exchange, even if a 

portion of such revenues are used to pay 

costs associated with the regulatory 

operations of the Exchange.16

U.S. Exchange Holdings Certificate of 

Incorporation 

Lastly, the Exchange proposes to 

make several administrative 

amendments to the Second Amended 

and Restated Certificate of Incorporation 

of U.S. Exchange Holdings (‘‘U.S. 

Exchange Holdings COI’’) to update 

references therein to the Trust 

Agreement. Specifically, Article 

THIRTEENTH of the U.S. Exchange 

Holdings COI contains outdated 

references to (i) the ‘‘Amended and 

Restated’’ Trust Agreement, which is 

currently the ‘‘Second Amended and 

Restated’’ Trust Agreement and will 

become the ‘‘Third Amended and 

Restated’’ Trust Agreement; and (ii) the 

effective date of the Trust Agreement, 

which will be changed to a date in 

December 2014 that corresponds to the 

effective closing date of the applicable 

step in the Transactions. The Exchange 

also proposes to add language in Article 

THIRTEENTH specifying that the Trust 

Agreement may be amended, restated, 

or replaced from time to time and 

remove references to EDGA Exchange 

and EDGX Exchange from the definition 

of ‘‘Controlled National Securities 

Exchange’’ in Article TENTH.17

III. Discussion and Commission 

Findings 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of the 

Act and rules and regulations 

thereunder applicable to a national 

securities exchange.18 Specifically, the 

Commission finds that the proposal is 

consistent with Section 6(b)(1) of the 

Act,19 which requires that an exchange 

be organized and have the capacity to be 

able to carry out the purposes of the Act 

and to comply, and to enforce 

compliance by its members and persons 

associated with its members, with the 

provisions of the Act, the rules and 

regulations thereunder, and the rules of 

the Exchange. 

The Exchange represents that it will 

continue to operate and regulate its 

market and members in the same 

manner following the Transactions as it 

operates today.20 The Exchange further 

states that the proposed rule change will 

facilitate an ownership structure that 

will continue to provide the 

Commission with appropriate oversight 

tools to allow the Commission to 

enforce the provisions of the Act with 

respect to the Exchange and its direct 

and indirect Non-U.S. Upstream 

Owners, including each of their 

directors, officers, employees, and 

agents, to the extent they are involved 

in the activities of the Exchange.21 The 

Commission notes that as a result of the 

Transactions, the Swiss companies will 

no longer be indirect, upstream owners 

of the Exchange, but that the upstream 

ownership of the Exchange otherwise 

remains substantially the same.22 The 

Commission also notes that the 

Exchange has represented that it is not 

proposing any changes to the 

Exchange’s operational or trading 

structure in connection with the 

Transactions.23 The Exchange further 

stated that no changes will be made to 

other aspects of the Exchange’s 

corporate governance documents that 

were previously approved by the 

Commission.24

The Commission believes that the 

proposed changes related to the 

Transactions will not impact provisions 

of the Exchange’s, or its upstream 

owners, corporate governance 

documents that were designed to enable 

the ISE to operate in a manner that 

complies with the federal securities 

laws, and were intended to assist the 

ISE in fulfilling its self-regulatory 

obligations and administering and 

complying with the requirements of the 

Act.25 The Commission also believes 

that the proposed rule change will allow 

the Commission to continue to exercise 

its plenary regulatory authority over the 

Exchange and continue to provide the 

Commission and the Exchange with 

access to necessary information that will 

allow the Exchange to comply, and 

enforce compliance, with the Act. As 

the Exchanges notes, the proposed 

administrative amendments will 

continue to preserve the independence 

of the Exchange’s self-regulatory 

functions and ensure that it will be able 

to obtain any information it needs in 

order to address fraudulent and 

manipulative acts in its marketplace and 

carry out its regulatory responsibilities 

under the Act.26

The Commission also believes that the 

proposed amendments to the ISE LLC 

Agreement related to distributions are 

consistent with the Act. The 

Commission notes that the Exchange 

states that these provisions will ensure 

any distributions by the Exchange to ISE 

Holdings, and subsequently to its 

indirect upstream owners, would not be 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 79, No. 246 / Tuesday, December 23, 2014 / Notices 77069 

27See Notice, supra note 5, at 67227 n.30 and 

accompanying text. 

28The Commission notes that, as amended, the 

provision in ISE’s LLC Agreement governing 

distributions will be consistent with similar 

provisions the Commission has previously 

approved for other self-regulatory organizations. 

See, e.g., Securities Exchange Act Release Nos. 

70050 (July 26, 2013), 78 FR 46622 (August 1, 2013) 

(approving the application for registration as a 

national securities exchange of Topaz Exchange, 

LLC); and 68341 (December 3, 2012), 77 FR 73065 

(December 7, 2012) (approving the application for 

registration as a national securities exchange of 

Miami International Securities Exchange, LLC). 

29 15 U.S.C. 78f(b)(2). 

30 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4On June 24, 2014, the Trust filed an amendment 

to its registration statement on Form N–1A under 

the Securities Act of 1933 (15 U.S.C. 77a) (‘‘1933 

Act’’) and the Investment Company Act of 1940 

(‘‘1940 Act’’) (15 U.S.C. 80a–1) (File Nos. 333– 

92935 and 811–09729) (the ‘‘Registration 

Statement’’). The description of the operation of the 

Trust and the Funds herein is based, in part, on the 

Registration Statement. The Commission has issued 

an order granting certain exemptive relief to the 

Trust under the 1940 Act. See Investment Company 

Act Release No. 27608 (December 21, 2006) (File 

No. 812–13208) (‘‘Exemptive Order’’). 

5The Funds were initially listed on the American 

Stock Exchange, Inc. (‘‘Amex’’) (now NYSE MKT) 

on October 4, 2007 pursuant to the generic listing 

criteria of Amex Rule 1000A. On October 6, 2008, 

the listings transferred from the Amex to NYSE 

Arca, which changes were effected pursuant to 

NYSE Arca Equities Rule 5.2(j)(3), Commentary .02. 

6The Commission previously has approved a 

proposed rule change relating to listing and trading 

on the Exchange of Units based on municipal bond 

indexes. See Securities Exchange Act Release No. 

67985 (October 4, 2012), 77 FR 61804 (October 11, 

2012) (SR–NYSEArca–2012–92) (order approving 

proposed rule change relating to the listing and 

trading of iShares 2018 S&P AMT-Free Municipal 

Series and iShares 2019 S&P AMT-Free Municipal 

Series under NYSE Arca Equities Rule 5.2(j)(3), 

Commentary .02). The Commission also has issued 

a notice of filing and immediate effectiveness of a 

proposed rule change relating to listing and trading 

on the Exchange of the iShares Taxable Municipal 

Bond Fund. See Securities Exchange Act Release 

No. 63176 (October 25, 2010), 75 FR 66815 (October 

29, 2010) (SR–NYSEArca–2010–94). The 

Commission has approved two actively managed 

funds of the PIMCO ETF Trust that hold municipal 

bonds. See Securities Exchange Act Release No. 

60981 (November 10, 2009), 74 FR 59594 

(November 18, 2009) (SR–NYSEArca–2009–79) 

(order approving listing and trading of PIMCO 

Short-Term Municipal Bond Strategy Fund and 

PIMCO Intermediate Municipal Bond Strategy 

Fund, among others). 

7An investment adviser to an open-end fund is 

required to be registered under the Investment 

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

result, the Adviser and its related personnel are 

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

Advisers Act relating to codes of ethics. This Rule 

requires investment advisers to adopt a code of 

ethics that reflects the fiduciary nature of the 

relationship to clients as well as compliance with 

other applicable securities laws. Accordingly, 

procedures designed to prevent the communication 

and misuse of non-public information by an 

investment adviser must be consistent with Rule 

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

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

for an investment adviser to provide investment 

advice to clients unless such investment adviser has 

(i) adopted and implemented written policies and 

procedures reasonably designed to prevent 

violation, by the investment adviser and its 

supervised persons, of the Advisers Act and the 

Commission rules adopted thereunder; (ii) 

implemented, at a minimum, an annual review 

regarding the adequacy of the policies and 

procedures established pursuant to subparagraph (i) 

above and the effectiveness of their 

implementation; and (iii) designated an individual 

(who is a supervised person) responsible for 

administering the policies and procedures adopted 

under subparagraph (i) above. 

made in violation of the Exchange’s 

legal and regulatory responsibilities or 

with Regulatory Funds.27 The 

Commission believes that the proposed 

rule change is designed to facilitate the 

ability of ISE to fulfill its regulatory 

obligations under the Act and will help 

ensure the independence of its 

regulatory function from its market 

operations and other commercial 

interests.28

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act 29 that the 

proposed rule change (SR–ISE–2014– 

44), as modified by Amendment No. 1, 

be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.30

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–29972 Filed 12–22–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73857; File No. SR– 

NYSEArca–2014–139] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change Relating to Shares of the 

iShares California AMT-Free Muni 

Bond ETF and iShares New York AMTFree Muni Bond ETF 

December 17, 2014. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that, on December 

3, 2014, NYSE Arca, Inc. (the 

‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which have been 

prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes a rule change 

relating to shares of the following series 

of Investment Company Units that are 

currently listed and traded on the 

Exchange under NYSE Arca Equities 

Rule 5.2(j)(3): iShares California AMTFree Muni Bond ETF and iShares New 

York AMT-Free Muni Bond ETF. The 

text of the proposed rule change is 

available on the Exchange’s Web site at 

www.nyse.com, at the principal office of 

the Exchange, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange currently lists and 

trades shares (‘‘Shares’’) of the iShares 

California AMT-Free Muni Bond ETF 

(‘‘CA Fund’’) and iShares New York 

AMT-Free Muni Bond ETF (‘‘NY Fund’’ 

and, together with the CA Fund, the 

‘‘Funds’’) 4 under NYSE Arca Equities 

Rule 5.2(j)(3), Commentary .02, which 

governs the listing and trading of 

Investment Company Units (‘‘Units’’) 

based on fixed income securities 

indexes.5 The Funds are series of the 

iShares Trust (‘‘Trust’’).6

Blackrock Fund Advisors is the 

investment adviser (‘‘BFA’’ or 

‘‘Adviser’’) for the Funds.7 Blackrock 

Investments, LLC. is the Funds’ 

distributor (‘‘Distributor’’). State Street 

Bank and Trust Company is the 

administrator, custodian and fund 

accounting and transfer agent for each 

Fund. 

Changes to Indexes Underlying the 

Funds 

The index currently underlying the 

CA Fund is the S&P California AMTFree Muni Bond Index (‘‘CA Index’’) 

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