Document ID: SEC-2015-1433-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2015-08-27T04:00Z

[Federal Register Volume 80, Number 166 (Thursday, August 27, 2015)]
[Notices]
[Pages 52075-52079]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-21207]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75750; File No. SR-NYSEArca-2015-72]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Relating to the Use 
of Derivative Instruments by the SPDR Blackstone/GSO Senior Loan ETF

August 21, 2015.
    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 August 11, 2015, 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 Items 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to reflect a change to the means of achieving 
the investment objective applicable to the SPDR Blackstone/GSO Senior 
Loan ETF (the ``Fund'') relating to its use of derivative instruments. 
Shares of the Fund are currently listed and traded on the Exchange 
under NYSE Arca Equities Rule 8.600 (``Managed Fund Shares''). 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.

[[Page 52076]]

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Commission has approved listing and trading on the Exchange of 
shares (``Shares'') of the Fund under NYSE Arca Equities Rule 8.600, 
which governs the listing and trading of Managed Fund Shares on the 
Exchange.\4\ The Shares are offered by SSgA Active ETF Trust 
(``Trust''), which is organized as a Massachusetts business trust and 
is registered with the Commission as an open-end management investment 
company. SSgA Funds Management, Inc. (``Adviser'') serves as the 
investment adviser to the Fund. GSO/Blackstone Debt Funds Management 
LLC serves as sub-adviser (``Sub-Adviser'') to the Blackstone/GSO 
Senior Loan Portfolio (``Portfolio'') and the Fund, subject to 
supervision by the Adviser and the Trust's Board of Trustees 
(``Board''). State Street Global Markets, LLC is the principal 
underwriter and distributor of the Fund's Shares, and State Street Bank 
and Trust Company (``Custodian'') serves as administrator, custodian, 
and transfer agent for the Fund.\5\
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    \4\ The Commission originally approved the listing and trading 
of the Shares on the Exchange on March 27, 2013. See Securities 
Exchange Act Release No. 69244 (March 27, 2013), 78 FR 19766 (April 
2, 2013) (SR-NYSEArca-2013-08) (``Prior Order''). See also 
Securities Exchange Act Release No. 68862 (February 2, 2013), 78 FR 
10233 (February 13, 2013) (SR-NYSEArca-2013-08) (``Prior Notice'' 
and, together with the Prior Order, the ``Prior Release'').
    \5\ The Trust is registered under the Investment Company Act of 
1940 (15 U.S.C. 80a-1) (``1940 Act''). On April 1, 2011, the Trust 
filed with the Commission Form N-1A under the Securities Act of 1933 
(15 U.S.C. 77a), and under the 1940 Act relating to the Fund (File 
Nos. 333-173276 and 811-22524) (``Registration Statement''). The 
description of the operation of the Trust and the Fund herein is 
based, in part, on the Registration Statement. In addition, the 
Commission has issued an order granting certain exemptive relief to 
the Trust under the 1940 Act. See Investment Company Act Release No. 
29524 (December 13, 2010) (File No. 812-13487) (``Exemptive 
Order'').
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    Shares of the Fund are currently listed and traded on the 
Exchange.\6\ In this proposed rule change, the Exchange proposes to 
change the description of the Fund's use of derivative instruments, as 
described below.
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    \6\ The Adviser represents that the Adviser and the Sub-Adviser 
have managed and will continue to manage the Fund in the manner 
described in the Prior Release, and will not implement the changes 
described herein until the instant proposed rule change is 
operative.
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    On December 6, 2012, the staff of the Commission's Division of 
Investment Management (``Division'') issued a no-action letter (``No-
Action Letter'') relating to the use of derivatives by actively-managed 
exchange-traded funds (``ETFs'').\7\ The No-Action Letter noted that, 
in March of 2010, the Commission announced in a press release that the 
staff was conducting a review to evaluate the use of derivatives by 
mutual funds, ETFs, and other investment companies and that, pending 
completion of this review, the staff would defer consideration of 
exemptive requests under the 1940 Act relating to, among others, 
actively-managed ETFs that would make significant investments in 
derivatives.
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    \7\ See No-Action Letter dated December 6, 2012 from Elizabeth 
G. Osterman, Associate Director, Office of Exemptive Applications, 
Division of Investment Management.
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    The No-Action Letter stated that the Division staff will no longer 
defer consideration of exemptive requests under the 1940 Act relating 
to actively-managed ETFs that make use of derivatives provided that 
they include representations to address some of the concerns expressed 
in the Commission's March 2010 press release. These representations 
are: (i) That the ETF's board periodically will review and approve the 
ETF's use of derivatives and how the ETF's investment adviser assesses 
and manages risk with respect to the ETF's use of derivatives; and (ii) 
that the ETF's disclosure of its use of derivatives in its offering 
documents and periodic reports is consistent with relevant Commission 
and staff guidance (together, the ``No-Action Letter 
Representations''). The No-Action Letter stated that the Division would 
not recommend enforcement action to the Commission under sections 
2(a)(32), 5(a)(1), 17(a), 22(d), and 22(e) of the 1940 Act, or rule 
22c-1 under the 1940 Act if actively-managed ETFs operating in reliance 
on specified orders (which include the Trust's Exemptive Order \8\) 
invest in options contracts, futures contracts or swap agreements 
provided that they comply with the No-Action Letter Representations.\9\
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    \8\ See supra note 5.
    \9\ The Adviser acknowledges that for the Fund to rely on the 
No-Action Letter, the Fund must comply with the No-Action Letter 
Representations. In this regard, (i) the Board of Trustees of the 
Trust will periodically review and approve the Portfolio's use of 
derivatives and how the Adviser assesses and manages risk with 
respect to the Portfolio's use of derivatives and (ii) the Fund's 
disclosure of its use of derivatives in its offering documents and 
periodic reports will be consistent with relevant Commission and 
staff guidance.
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    The Prior Release included the following representation: ``The 
Portfolio will not invest in options contracts, futures contracts or 
swap agreements'' (the ``Derivatives Representation''). In view of the 
No-Action Letter, the Exchange is proposing to delete the Derivatives 
Representation. The Exchange now proposes that, to pursue the Fund's 
investment objective, the Fund be permitted to invest in options, 
futures, and swaps (``Derivative Instruments''), as described below.
    Going forward, the Portfolio may buy and sell exchange-listed and 
over-the-counter (``OTC'') swaps based on total return senior loan and 
credit default indices; futures contracts and options on futures 
contracts based on senior loan and credit default indices; and 
exchange-listed and OTC options on senior loan and credit default 
indices.
    The Portfolio will only enter into futures contracts and exchange-
traded options on futures contracts that are traded on a national 
futures exchange that is regulated by the Commodities Futures Trading 
Commission (``CFTC'') and that is a member of the Intermarket 
Surveillance Group (``ISG'').\10\ Other exchange-traded options 
contracts in which the Portfolio invests will be traded on a national 
securities exchange. The Fund may use such index futures contracts and 
related options on futures contracts, other options contracts, and 
exchange-listed and OTC swaps for bona fide hedging; attempting to 
offset changes in the value of securities held or expected to be 
acquired or be disposed of; attempting to gain exposure to a particular 
market, index or instrument; or other risk management purposes.
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    \10\ To the extent the Portfolio invests in futures, options on 
futures or other instruments subject to regulation by the CFTC, it 
will do so in reliance on and in compliance with CFTC regulations in 
effect from time to time and in accordance with the Fund's policies. 
The Trust, on behalf of certain of its series, has filed a notice of 
eligibility for exclusion from the definition of the term 
``commodity pool operator'' in accordance with CFTC Regulation 4.5. 
Therefore, neither the Trust nor the Fund is deemed to be a 
``commodity pool'' or ``commodity pool operator'' with respect to 
the Fund under the Commodity Exchange Act (``CEA''), and they are 
not subject to registration or regulation as such under the CEA. In 
addition, as of the date of this filing, the Adviser is not deemed 
to be a ``commodity pool operator'' or ``commodity trading adviser'' 
with respect to the advisory services it provides to the Fund. The 
CFTC recently adopted amendments to CFTC Regulation 4.5 and has 
proposed additional regulatory requirements that may affect the 
extent to which the Portfolio invests in instruments that are 
subject to regulation by the CFTC and impose additional regulatory 
obligations on the Fund and the Adviser. The Fund reserves the right 
to engage in transactions involving futures and options thereon to 
the extent allowed by CFTC regulations in effect from time to time 
and in accordance with the Fund's policies.
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    Under normal market conditions, no more than 20% of the value of 
the Fund's net assets will be invested in Derivative Instruments.\11\
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    \11\ The Portfolio will limit its direct investments in futures 
to the extent necessary for the Adviser to claim the exclusion from 
regulation as a ``commodity pool operator'' with respect to the Fund 
under Rule 4.5 promulgated by the CFTC, as such rule may be amended 
from time to time. Under Rule 4.5 as currently in effect, the 
Portfolio will limit its trading activity in futures and options on 
futures (excluding activity for ``bona fide hedging purposes,'' as 
defined by the CFTC) such that it will meet one of the following 
tests: (i) Aggregate initial margin and premiums required to 
establish its futures and options on futures will not exceed 5% of 
the liquidation value of the Fund's portfolio, after taking into 
account unrealized profits and losses on such positions; or (ii) 
aggregate net notional value of its futures and options on futures 
will not exceed 100% of the liquidation value of the Fund's 
portfolio, after taking into account unrealized profits and losses 
on such positions.

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[[Page 52077]]

    The Prior Release stated that the Portfolio's investments would be 
consistent with the Portfolio's investment objective and would not be 
used to enhance leverage. In view of the Exchange's proposal to permit 
the Fund to use Derivative Instruments, the Portfolio's investments in 
Derivative Instruments could potentially be used to enhance leverage. 
However, the Portfolio's investments in Derivative Instruments will be 
consistent with the Portfolio's investment objective and will not be 
used to seek to achieve a multiple or inverse multiple of an index.
    Investments in Derivative Instruments will be made in accordance 
with the 1940 Act and consistent with the Fund's investment objective 
and policies. The Fund will comply with the regulatory requirements of 
the Commission to maintain assets as ``cover,'' maintain segregated 
accounts, and/or make margin payments when it takes positions in 
Derivative Instruments involving obligations to third parties (i.e., 
instruments other than purchase options). If the applicable guidelines 
prescribed under the 1940 Act so require, the Fund will earmark or set 
aside cash, U.S. government securities, high grade liquid debt 
securities and/or other liquid assets permitted by the Commission in a 
segregated custodial account in the amount prescribed.\12\
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    \12\ With respect to guidance under the 1940 Act, see 15 U.S.C. 
80a-18; Investment Company Act Release No. 10666 (April 18, 1979), 
44 FR 25128 (April 27, 1979); Dreyfus Strategic Investing, 
Commission No-Action Letter (June 22, 1987); Merrill Lynch Asset 
Management, L.P., Commission No-Action Letter (July 2, 1996).
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    The Fund will include appropriate risk disclosure in its offering 
documents, including leveraging risk. Leveraging risk is the risk that 
certain transactions of the Fund, including the Fund's use of 
Derivative Instruments, may give rise to leverage, causing the Fund to 
be more volatile than if it had not been leveraged.\13\
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    \13\ To mitigate leveraging risk, the Fund will segregate or 
``earmark'' liquid assets or otherwise cover the transactions that 
may give rise to such risk.
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    Based on the above, the Exchange seeks this modification regarding 
the Fund's use of Derivative Instruments. The Adviser represents that 
there is no change to the Fund's investment objective. The Adviser and 
the Sub-Adviser believe that the ability to invest in Derivative 
Instruments will provide the Adviser and Sub-Adviser with additional 
flexibility to meet the Fund's investment objective.
    The Fund will continue to comply with all initial and continued 
listing requirements under NYSE Arca Equities Rule 8.600.
    Except for the changes noted herein, all other facts presented and 
representations made in the Prior Release remain unchanged.
    The changes described herein will be effective upon (i) the 
effectiveness of an amendment to the Trust's Registration Statement 
disclosing the Fund's intended use of Derivative Instruments and (ii) 
when this proposed rule change has become operative. The Adviser 
represents that the Adviser and Sub-Adviser have managed and will 
continue to manage the Fund in the manner described in the Prior 
Release, and will not implement the changes described herein until this 
proposed rule change is operative.
Impact on Arbitrage Mechanism
    The Adviser believes there will be minimal, if any, impact to the 
arbitrage mechanism as a result of the use of Derivative Instruments. 
Market makers and participants should be able to value derivatives as 
long as the positions are disclosed with relevant information. The 
Adviser believes that the price at which Shares trade will continue to 
be disciplined by arbitrage opportunities created by the ability to 
purchase or redeem Creation Units (as defined in the Prior Release at 
their net asset value (``NAV''), which should ensure that Shares will 
not trade at a material discount or premium in relation to their NAV.
    The Adviser does not believe there will be any significant impacts 
to the settlement or operational aspects of the Fund's arbitrage 
mechanism due to the use of derivatives. Certain derivatives may not be 
eligible for in-kind transfer, and such derivatives will be substituted 
with a ``cash in lieu'' amount when the Fund processes purchases or 
redemptions of Creation Units (as defined in the Prior Release) in-
kind.
Valuation for Purposes of Calculating Net Asset Value
    As stated in the Prior Release, the NAV per Share for the Fund will 
be computed by dividing the value of the net assets of the Fund (i.e., 
the value of its total assets less total liabilities) by the total 
number of Shares outstanding, rounded to the nearest cent. Expenses and 
fees, including the management fees, are accrued daily and taken into 
account for purposes of determining NAV. The NAV per Share for the Fund 
is calculated by the Custodian and determined as of the close of the 
regular trading session on the New York Stock Exchange (``NYSE'') 
(ordinarily 4:00 p.m., E.T.) on each day that the NYSE is open.
    U.S. exchange-traded options will be valued at the closing price 
determined by the applicable exchange. The Fund will generally value 
exchange-traded futures at the settlement price determined by the 
applicable exchange. Exchange-traded swaps generally will be valued by 
pricing services. Non exchange-traded derivatives (i.e., OTC options 
and OTC swaps) will normally be valued on the basis of quotes obtained 
from brokers and dealers or third party pricing services using data 
reflecting the earlier closing of the principal markets for those 
assets. Prices obtained from independent pricing services use 
information provided by market makers or estimates of market values 
obtained from yield data relating to investments or securities with 
similar characteristics. Exchange-traded options, futures and options 
on futures will generally be valued at the settlement price determined 
by the applicable exchange. Derivatives for which market quotes are 
readily available will be valued at market value.
Availability of Information
    As described in the Prior Release, on each business day, before 
commencement of trading in Shares in the Core Trading Session on the 
Exchange, the Fund discloses on its Web site the Disclosed Portfolio as 
defined in NYSE Arca Equities Rule 8.600(c)(2) that will form the basis 
for the Fund's calculation of NAV at the end of the business day. See 
``Disclosed Portfolio'' below.
    Pricing information for Derivative Instruments traded OTC (i.e., 
OTC options and OTC swaps) will be available from major broker-dealer 
firms, subscription services, and/or pricing services and, in addition, 
for exchange-traded Derivative Instruments, from the exchanges on which 
they are traded.
    Intra-day and closing price information regarding exchange traded 
swaps, options (including options on futures) and futures will be 
available from the exchange on which such instruments are traded. 
Quotation and last sale information for exchange-traded options cleared 
via the Options

[[Page 52078]]

Clearing Corporation is available from the Options Price Reporting 
Authority.
Disclosed Portfolio
    The Fund's disclosure of derivative positions in the Disclosed 
Portfolio will include information that market participants can use to 
value these positions intraday. On a daily basis, the Fund will 
disclose on the Fund's Web site the following information regarding 
each portfolio holding, as applicable to the type of holding: Ticker 
symbol, CUSIP number or other identifier, if any; a description of the 
holding (including the type of holding, such as type of swap); the 
identity of the security or other asset or instrument underlying the 
holding, if any; for options, the option strike price; quantity held 
(as measured by, for example, par value, notional value or number of 
shares, contracts or units); maturity date, if any; coupon rate, if 
any; effective date, if any; market value of the holding; and the 
percentage weighting of the holding in the Fund's portfolio.
Surveillance
    The Exchange represents that trading in the Shares will be subject 
to the existing trading surveillances, administered by the Financial 
Industry Regulatory Authority (``FINRA'') on behalf of the Exchange, 
which are designed to detect violations of Exchange rules and 
applicable federal securities laws.\14\ The Exchange represents that 
these procedures are adequate to properly monitor Exchange trading of 
the Shares in all trading sessions and to deter and detect violations 
of Exchange rules and federal securities laws applicable to trading on 
the Exchange.
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    \14\ FINRA surveils trading on the Exchange pursuant to a 
regulatory services agreement. The Exchange is responsible for 
FINRA's performance under this regulatory services agreement.
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    The surveillances referred to above generally focus on detecting 
securities trading outside their normal patterns, which could be 
indicative of manipulative or other violative activity. When such 
situations are detected, surveillance analysis follows and 
investigations are opened, where appropriate, to review the behavior of 
all relevant parties for all relevant trading violations.
    FINRA, on behalf of the Exchange, will communicate as needed 
regarding trading in the Shares, exchange-traded options, exchange-
traded futures and exchange-traded options on futures with other 
markets and other entities that are members of the ISG, and FINRA, on 
behalf of the Exchange, may obtain trading information regarding 
trading in the Shares, exchange-traded options, exchange-traded futures 
and exchange-traded options on futures from such markets and other 
entities. In addition, the Exchange may obtain information regarding 
trading in the Shares, exchange-traded options, exchange-traded futures 
and exchange-traded options on futures, from markets and other entities 
that are members of ISG or with which the Exchange has in place a 
comprehensive surveillance sharing agreement.\15\
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    \15\ For 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.
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    All futures contracts, exchange-traded options on futures 
contracts, and other exchange-traded options contracts in which the 
Portfolio invests will be traded on markets that are members of ISG.
    In addition, the Exchange also has a general policy prohibiting the 
distribution of material, non-public information by its employees.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under section 6(b)(5) \16\ that an exchange have rules that 
are designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to remove 
impediments to, and perfect the mechanism of a free and open market 
and, in general, to protect investors and the public interest.
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    \16\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change is designed to 
prevent fraudulent and manipulative acts and practices in that, under 
normal market conditions, no more than 20% of the value of the Fund's 
net assets will be invested in Derivative Instruments. The Fund's 
investments in Derivative Instruments will be consistent with the 
Fund's investment objective and will not be used to seek to achieve a 
multiple or inverse multiple of an index. Investments in Derivative 
Instruments will be made in accordance with the 1940 Act and consistent 
with the Fund's investment objective and policies. The Fund will comply 
with the regulatory requirements of the Commission to maintain assets 
as ``cover,'' maintain segregated accounts, and/or make margin payments 
when it takes positions in Derivative Instruments involving obligations 
to third parties (i.e., instruments other than purchase options). If 
the applicable guidelines prescribed under the 1940 Act so require, the 
Fund will earmark or set aside cash, U.S. government securities, high 
grade liquid debt securities and/or other liquid assets permitted by 
the Commission in a segregated custodial account in the amount 
prescribed. Moreover, the Fund will include appropriate risk disclosure 
in its offering documents, including leveraging risk.
    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 Fund's disclosure of positions in Derivative Instruments in 
the Disclosed Portfolio will include information that market 
participants can use to value these positions intraday. On a daily 
basis, the Fund will disclose on the Fund's Web site specific 
information regarding each portfolio holding, as applicable to the type 
of holding. The Fund may use futures contracts and related options for 
bona fide hedging; attempting to offset changes in the value of 
securities held or expected to be acquired or be disposed of; 
attempting to gain exposure to a particular market, index or 
instrument; or other risk management purposes. In addition, such 
proposed change will provide the Adviser and Sub-Adviser with 
additional flexibility in meeting the Fund's investment objective. The 
Adviser does not believe there will be any significant impacts to the 
settlement or operational aspects of the Fund's arbitrage mechanism due 
to the use of derivatives. In addition, the Commission has previously 
approved the use of derivatives similar to those proposed herein by 
issues of Managed Fund Shares traded on the Exchange.\17\ Consistent 
with the Prior Release, NAV will continue to be calculated daily and 
the NAV and Disclosed Portfolio (as defined in NYSE Arca Equities Rule 
8.600(c)(2)) will be made available to all market participants at the 
same time.
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    \17\ See, e.g., Securities Exchange Act Release Nos. 73081 
(September 11, 2014), 79 FR 55859 (September 17, 2014) (SR-NYSEArca-
2014-20) (order approving listing and trading on the Exchange of 
shares of the Reality Shares DIVS ETF under NYSE Arca Equities Rule 
8.600); 72882 (August 20, 2014), 79 FR 50964 (August 26, 2014) (SR-
NYSEArca-2014-58) (order approving listing and trading on the 
Exchange of shares of the PIMCO Short-Term Exchange-Traded Fund and 
the PIMCO Municipal Bond Exchange-Traded Fund under NYSE Arca 
Equities Rule 8.600).
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    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 actively-managed exchange-traded product that will enhance 
competition among market participants, to the benefit of investors and 
the marketplace.

[[Page 52079]]

As noted, the additional flexibility to be afforded to the Adviser and 
Sub-Adviser by permitting the Fund to invest in Derivative Instruments 
under the proposed rule change is intended to enhance the Adviser's and 
Sub-Adviser's ability to meet the Fund's investment objective. FINRA, 
on behalf of the Exchange, will communicate as needed regarding trading 
in the Shares, exchange-traded options, exchange-traded futures and 
exchange-traded options on futures with other markets and other 
entities that are members of the ISG, and FINRA, on behalf of the 
Exchange, may obtain trading information regarding trading in the 
Shares, exchange-traded options, exchange-traded futures and exchange-
traded options on futures from such markets and other entities. In 
addition, the Exchange may obtain information regarding trading in the 
Shares, exchange-traded options, exchange-traded futures and exchange-
traded options on futures from markets and other entities that are 
members of ISG or with which the Exchange has in place a comprehensive 
surveillance sharing agreement. In addition, as indicated in the Prior 
Release, investors will have ready access to information regarding the 
Fund's holdings, the Portfolio Indicative Value (as defined in NYSE 
Arca Equities Rule 8.600(d)(2)(A)), the Disclosed Portfolio, and 
quotation and last sale information for the Shares. Consistent with the 
No-Action Letter, (i) the Board of Trustees of the Trust will 
periodically review and approve the Fund's use of derivatives and how 
the Adviser assesses and manages risk with respect to the Fund's use of 
derivatives and (ii) the Fund's disclosure of its use of derivatives in 
its offering documents and periodic reports will be consistent with 
relevant Commission and staff guidance.

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 purposes of the Act. The Exchange believes the 
proposed rule change will permit the Adviser and Sub-Adviser additional 
flexibility in achieving the Fund's investment objective, thereby 
offering investors additional investment options. The proposed rule 
change will allow the Fund to use Derivative Instruments as a more 
efficient substitute for taking a position in the underlying asset and/
or as part of a strategy designed to reduce exposure to risks (such as 
interest rate), enhance liquidity or to enhance investment returns. The 
proposed change, therefore, will provide additional flexibility to the 
Adviser and Sub-Adviser to seek the Fund's investment objective and 
will enhance the Fund's ability to compete with other actively managed 
exchange-traded funds and mutual funds.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, if consistent with 
the protection of investors and the public interest, the proposed rule 
change has become effective pursuant to section 19(b)(3)(A) of the Act 
\18\ and Rule 19b-4(f)(6) thereunder.\19\
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    \18\ 15 U.S.C. 78s(b)(3)(A).
    \19\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may temporarily suspend this rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act. If the Commission takes such 
action, the Commission shall institute proceedings to determine whether 
the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2015-72 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2015-72. 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 this filing will also be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEArca-2015-72 and should 
be submitted on or before September 17, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-21207 Filed 8-26-15; 8:45 am]
 BILLING CODE 8011-01-P