Document ID: SEC-2016-0378-0001
Agency: sec
Document Type: Notice
Title: Orders: Limited Exemptions to Eaton Vance ETMF Trust, Eaton Vance NextShares Trust II, et al.
Posted Date: 2016-03-02T05:00Z

[Federal Register Volume 81, Number 41 (Wednesday, March 2, 2016)]
[Notices]
[Pages 10939-10943]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-04527]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77240; File No. TP 15-06]

Order Granting Limited Exemptions From Exchange Act Section 
11(d), Exchange Act Rules 10b-10, 10b-17, and 11d1-2, and Rules 101 and 
102 of Regulation M to Eaton Vance ETMF Trust, Eaton Vance NextShares 
Trust II, Eaton Vance Balanced NextShares, and Other Exchange-Traded 
Managed Funds Pursuant to Exchange Act Section 36, Exchange Act Rules 
10b-10(f) and 10b-17(b)(2), and Rules 101(d) and 102(e) of Regulation M

February 25, 2016.
    By letter dated February 25, 2016 (the ``Letter''), as supplemented 
by conversations with the staff of the Division of Trading and Markets, 
counsel for Eaton Vance ETMF Trust and Eaton Vance NextShares Trust II 
(each a ``Trust''), on behalf of each Trust, Eaton Vance Balanced 
NextShares, Eaton Vance Global Dividend Income NextShares, Eaton Vance 
Growth NextShares, Eaton Vance Large-Cap Value NextShares, Eaton Vance 
Richard Bernstein All Asset Strategy NextShares, Eaton Vance Richard 
Bernstein Equity Strategy NextShares, Eaton Vance Small-Cap NextShares, 
Eaton Vance Stock NextShares, Parametric Emerging Markets NextShares, 
Parametric International Equity NextShares, Eaton Vance Bond 
NextShares, Eaton Vance 5-to-15 Year Laddered Municipal Income 
NextShares, Eaton Vance Floating-Rate & High Income NextShares, Eaton 
Vance Global Macro Absolute Return NextShares, Eaton Vance Government 
Obligations NextShares, Eaton Vance High Income Opportunities 
NextShares, Eaton Vance High Yield Municipal Income NextShares, Eaton 
Vance National Municipal Income NextShares, and any future exchange-
traded managed funds operating under the same representations and 
adhering to the same conditions as set forth in this Order (each a 
``Fund'' and, collectively, the ``Funds''), any national securities 
exchange or national securities association on or through which shares 
issued by the Funds (``Shares'') may subsequently trade (``Exchange''), 
and persons or entities engaging in transactions in Shares 
(collectively, the ``Requestors'') requested exemptions, or 
interpretive or no-action relief, from Section 11(d)(1) of the 
Securities Exchange Act of 1934, as amended (``Exchange Act''), Rules 
10b-10, 10b-17, and 11d1-2 thereunder, and Rules 101 and 102 of 
Regulation M, in connection with secondary market transactions in 
Shares and the creation or redemption of aggregations of Shares.
    Shares of each Fund will be issued by a Trust, and each Trust will 
be registered with the Commission under the Investment Company Act of 
1940, as amended (``1940 Act''), as an open-end management investment 
company. The Funds will be listed on an Exchange and will also be 
actively managed by an investment adviser registered under the 
Investment Advisers Act of 1940, but may be sub-advised by other 
investment advisers. The Funds are not actively managed exchange traded 
funds (``ETFs'') but will be structured similarly to actively managed 
ETFs. Specifically, the Funds will be investment companies that issue 
shares that trade individually on an Exchange but can be purchased from 
and redeemed with the issuing investment company through authorized 
participants only in large aggregations. The principal difference 
between the Funds and ETFs is that, unlike with the trading in ETF 
shares, the trading price of Shares will be directly linked to the 
relevant Fund's end-of-day net asset value (``NAV''). In connection 
with this ``NAV-Based Trading,'' all bids, offers, and execution prices 
will be expressed as a market-determined premium or discount (e.g., 
+$0.01, -$0.02) to that day's NAV. For each trade, the premium or 
discount to NAV (which may be zero) is locked in at trade execution and 
the final transaction price (i.e., NAV plus or minus the market-
determined premium/discount to NAV) is determined at the end of the day 
when the relevant Fund's NAV is computed. Because all transaction 
prices are based on an end-of-day NAV, the Funds will not need to 
disclose portfolio holdings on a daily basis in order to maintain a 
close relationship between Share trading prices and NAV, as is 
currently the case with actively managed ETFs.
    In the present exemptive request, the Requestors are seeking relief 
for 18 ``Initial ETMFs,'' the named Funds above, with a variety of 
investment objectives. The Requestors are also seeking relief for 
future, unidentified Funds that will be structured in the same way, 
operating under the same representations and adhering to the same 
conditions as described in this Order but may have other investment 
objectives.
    The Requestors represent, among other things, the following:
     Shares of the Funds will be issued by the Trusts which are 
open-end management investment companies that are registered with the 
Commission; \1\
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    \1\ See Investment Company Act Rel. No. 31361 (Dec. 2, 2014).
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     The Trusts will continuously redeem aggregations of Shares 
at net asset value (``NAV'') and the Shares should routinely trade at 
tight bid-ask spreads and narrow premiums and discounts to NAV;
     Shares of the Funds will be listed and traded on an 
Exchange;
     The Exchange or other market information provider will 
disseminate every 15 minutes throughout the trading day through the 
NASDAQ OMX Global Index Data Service the intraday indicative value 
(``IIV'') of Shares; \2\
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    \2\ As explained in the Letter, unlike for ETFs, which arrange 
for IIVs to be disseminated every 15 seconds, IIVs for the Funds 
will not provide pricing signals for market intermediaries or other 
buyers and sellers of Shares seeking to estimate the difference 
between the value of the Funds' portfolios and the price at which 
Shares are currently trading. In NAV-Based Trading, the secondary 
market premium/discount that applies to an ETMF is always fully 
transparent and does not depend on dissemination of IIVs.
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     The methodology for calculating the NAV will be fully 
disclosed in the prospectus and any modifications to the methodology 
used to calculate NAV will be fully disclosed to current and 
prospective investors prior to implementation;
     The trading price of Shares will be directly linked to the 
relevant Fund's end-of-day NAV in that all bids, offers, and execution 
prices will be expressed as a market-determined premium or discount 
(e.g., +$0.01, -$0.02) to that day's NAV;
     For each trade, the premium or discount to NAV is locked 
in at trade execution and the final transaction price is determined at 
the end of the day when the relevant Fund's NAV is computed;
     Because all transaction prices are based on an end-of-day 
NAV, the Funds will not need to disclose portfolio holdings on a daily 
basis in order to maintain a close relationship between Share trading 
prices and NAV;
     Competition among market makers seeking to earn reliable, 
low-risk profits should enable the Shares to routinely trade at tight 
bid-ask spreads and narrow premiums/discounts to NAV;

[[Page 10940]]

     The Consolidated Tape will report intraday execution 
prices and quotes for Funds using a ``proxy'' price format, however, 
the listing Exchange will separately report real-time execution prices 
and quotes to member firms and providers of market data services in the 
``NAV-$0.01/NAV+$0.01'' (or similar) display format, and otherwise seek 
to ensure that representations of intraday bids, offers and execution 
prices for Funds that are made available to the investing public follow 
the same display format;
     At the start of each trading day, the price will re-set to 
the ``proxy'' price to the NAV;
     On any business day, any market maker in the Funds can 
earn profits by entering into transactions with the relevant Fund to 
purchase (or redeem) the number of Creation Units corresponding to the 
net amount of Shares the market maker has sold (or purchased) that day 
in the secondary market, buying (or selling) the equivalent quantities 
of basket instruments and selling any sub-Creation Unit Share inventory 
in market transactions prior to the market close;
     A market maker's profit will equal the aggregate net 
premium (or discount) versus NAV at which the Shares are sold (or 
bought) plus the aggregate net discount (or premium) versus market-
closing prices at which basket instruments are bought (or sold), less 
the transaction fee that applies; and
     No intraday hedging is necessary to manage the market 
maker's risk position, and any required overnight hedging can be 
limited to amounts readily addressable on a macro basis by the Funds 
maintaining relatively small Creation Unit sizes.

Regulation M

    While redeemable securities issued by an open-end management 
investment company are excepted from the provisions of Rule 101 and 102 
of Regulation M, the Requestors may not rely upon that exception for 
the Shares.\3\
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    \3\ The Funds operate under exemptions from the definitions of 
``open-end company'' under Section 5(a)(1) of the 1940 Act and 
``redeemable security'' under Section 2(a)(32) of the 1940 Act. The 
Funds and their securities do not meet those definitions.
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Rule 101 of Regulation M

    Generally, Rule 101 of Regulation M is an anti-manipulation rule 
that, subject to certain exceptions, prohibits any ``distribution 
participant'' and its ``affiliated purchasers'' from bidding for, 
purchasing, or attempting to induce any person to bid for or purchase 
any security which is the subject of a distribution until after the 
applicable restricted period, except as specifically permitted in the 
rule. Rule 100 of Regulation M defines ``distribution'' to mean any 
offering of securities that is distinguished from ordinary trading 
transactions by the magnitude of the offering and the presence of 
special selling efforts and selling methods. The provisions of Rule 101 
of Regulation M apply to underwriters, prospective underwriters, 
brokers, dealers, and other persons who have agreed to participate or 
are participating in a distribution of securities. The Shares are in a 
continuous distribution and, as such, the restricted period in which 
distribution participants and their affiliated purchasers are 
prohibited from bidding for, purchasing, or attempting to induce others 
to bid for or purchase extends indefinitely.
    Based on the representations and facts presented in the Letter, 
particularly that the Trusts are registered open-end management 
investment companies that will continuously redeem at the NAV Creation 
Units of Shares of the Funds, and that, for each trade, the premium or 
discount to NAV is locked in at trade execution and the final 
transaction price is determined at the end of the day when the relevant 
Fund's NAV is computed, and that the Shares should routinely trade at 
tight bid/ask spreads and narrow premiums and discounts to NAV, the 
Commission finds that it is appropriate in the public interest, and 
consistent with the protection of investors, to grant the Trusts an 
exemption from Rule 101 of Regulation M, pursuant to paragraph (d) of 
Rule 101 of Regulation M with respect to transactions in the Funds as 
described in the Letter, thus permitting persons who may be deemed to 
be participating in a distribution of Shares of the Funds to bid for or 
purchase such Shares during their participation in such 
distribution.\4\
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    \4\ Additionally, we confirm the interpretation that a 
redemption of Creation Units of Shares of the Funds and the receipt 
of securities in exchange by a participant in a distribution of 
Shares of the Funds would not constitute an ``attempt to induce any 
person to bid for or purchase, a covered security during the 
applicable restricted period'' within the meaning of Rule 101 of 
Regulation M and therefore would not violate that rule.
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Rule 102 of Regulation M

    Rule 102 of Regulation M prohibits issuers, selling security 
holders, and any affiliated purchaser of such person from bidding for, 
purchasing, or attempting to induce any person to bid for or purchase a 
covered security during the applicable restricted period in connection 
with a distribution of securities effected by or on behalf of an issuer 
or selling security holder.
    Based on the representations and facts presented in the Letter, 
particularly that the Trusts are registered open-end management 
investment companies that will redeem at the NAV Creation Units of 
Shares of the Funds, and that for each trade, the premium or discount 
to NAV is locked in at trade execution and the final transaction price 
is determined at the end of the day when the relevant Fund's NAV is 
computed, and that the Shares should routinely trade at tight bid/ask 
spreads and narrow premiums and discounts to NAV the Commission finds 
that it is appropriate in the public interest, and consistent with the 
protection of investors, to grant the Trusts an exemption from Rule 102 
of Regulation M, pursuant to paragraph (e) of Rule 102 of Regulation M 
with respect to transactions in the Funds as described in the Letter, 
thus permitting the Funds to redeem Shares of the Funds during the 
continuous offering of such Shares.

Rule 10b-17

    Rule10b-17, with certain exceptions, requires an issuer of a class 
of publicly traded securities to give notice of certain specified 
actions (for example, a dividend distribution) relating to such class 
of securities in accordance with Rule 10b-17(b). Based on the 
representations and facts in the Letter, in particular that the 
concerns that the Commission raised in adopting Rule 10b-17 generally 
will not be implicated if exemptive relief, subject to the conditions 
below, is granted to the Trusts because market participants will 
receive timely notification of the existence and timing of a pending 
distribution,\5\ we find that it is appropriate in the public interest, 
and consistent with the protection of investors, to grant the Trusts a 
conditional exemption from Rule 10b-17.
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    \5\ We also note that timely compliance with Rule 10b-
17(b)(1)(v)(a) and (b) would be impractical in light of the nature 
of the Funds. This is because it is not possible for the Funds to 
accurately project ten days in advance what dividend, if any, would 
be paid on a particular record date.
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Exchange Act Section 11(d)(1) and Rule 11d1-2 Thereunder

    Section 11(d)(1) of the Exchange Act prohibits a broker-dealer from 
effecting any transactions in connection with which he directly or 
indirectly extends or maintains credit or arranges for the extension or 
maintenance of credit to or for a customer on any security, other than 
an exempted security, which was part of a new issue in the distribution

[[Page 10941]]

of which the broker-dealer participated as a member of a selling 
syndicate or group within thirty days prior to such transaction. Fund 
shares are distributed in a continuous manner, and broker-dealers 
selling such securities are therefore participating in the 
``distribution'' of a new issue for purposes of Section 11(d)(1).\6\
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    \6\ See, e.g., Extension of Credit by Broker-Dealers on 
Investment Company Shares, Exchange Act Release No. 21,577 (Dec. 18, 
1984), 49 FR 50172 (Dec. 27, 1984).
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    You requested relief from Section 11(d)(1) and Rule 11d1-2 
thereunder with respect to certain transactions in Fund shares effected 
by broker-dealers. You note that each Trust is an open-end management 
investment company under the Investment Company Act of 1940, which 
intends to introduce 18 series, each of which would operate as an 
exchange-traded managed fund (``ETMF''). Furthermore, each Trust will 
issue and redeem Shares in specified aggregations of Shares, called 
Creation Units. Each Trust has filed a registration statement on Form 
N-1A and their Shares will be listed on an Exchange. Each Trust will be 
overseen by a board of trustees which will maintain the composition 
requirements of Section 10 of the 1940 Act. Each ETMF will adopt 
fundamental policies consistent with the 1940 Act and be classified as 
``diversified'' or ``non-diversified'' under the 1940 Act. Each ETMF 
intends to maintain the required level of diversification, and 
otherwise conduct its operations, so as to meet the regulated 
investment company (``RIC'') diversification requirements of the 
Internal Revenue Code of 1986, as amended.\7\
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    \7\ Section 851(b)(3) of the Internal Revenue Code, of 1986, 26 
U.S.C. 851(b)(3), as amended, states in relevant part that a 
corporation is a regulated investment company only if:
    At the close of each quarter of the taxable year--
    (A) at least 50 percent of the value of its total assets is 
represented by--
    (i) cash and cash items (including receivables), Government 
securities and securities of other regulated investment companies, 
and
    (ii) other securities for purposes of this calculation limited, 
except and to the extent provided in subsection (e) [Investment 
companies furnishing capital to development corporations], in 
respect of any one issuer to an amount not greater in value than 5 
percent of the value of the total assets of the taxpayer and to not 
more than 10 percent of the outstanding voting securities of such 
issuer, and
    (B) not more than 25 percent of the value of its total assets is 
invested in--
    (i) the securities (other than Government securities or the 
securities of other regulated investment companies) of any one 
issuer,
    (ii) the securities (other than the securities of other 
regulated investment companies) of two or more issuers which the 
taxpayer controls and which are determined, under regulations 
prescribed by the Secretary, to be engaged in the same or similar 
trades or businesses or related trades or businesses, or
    (iii) the securities of one or more qualified publicly traded 
partnerships. . . .
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    You also note that each Trust will issue and redeem Shares of ETMFs 
in Creation Units through a broker-dealer registered under the Exchange 
Act acting on an agency basis and serving as each ETMF's ``principal 
underwriter'' as defined in Section 2(a)(29) of the 1940 Act. The 
number of Shares constituting a Creation Unit will be set by the 
Adviser. The Trust expects a Creation Unit to consist of a specified 
number of Shares between 5,000 and 50,000 Shares.
    On the basis of your representations and the facts presented in 
your request, the Commission finds that it is appropriate and in the 
public interest and consistent with the protection of investors to 
grant to broker-dealers (other than the Fund's distributor) that do not 
create or redeem Shares but engage in transactions in Shares 
exclusively in the secondary market a conditional exemption under 
Section 11(d)(1) of the Exchange Act permitting them to extend or 
maintain or arrange for the extension or maintenance of credit on 
Shares in connection with such secondary market transactions. In this 
regard, we note in particular your representation, and we require as a 
conditions of this exemption, that no broker-dealer, directly or 
indirectly, (1) receives from the Sponsor, any Fund, or any affiliate 
of such entities, any payment, compensation or other economic incentive 
to promote or sell Shares (other than non-cash compensation permitted 
under NASD Rule 2830(l)(5)(A), (B) or (C) (including any successor or 
replacement FINRA rule to NASD Conduct Rule 2830), or (2) receives from 
the fund complex \8\ any payment, compensation or other economic 
incentive to promote or sell Shares to persons outside of the fund 
complex, other than non-cash compensation permitted under NASD Rule 
2830(l)(5)(A), (B), or (C).\9\ Additionally, we note your 
representation, and require as a condition of this exemption, that such 
broker-dealers do not extend, maintain or arrange for the extension or 
maintenance of credit to or for a customer on the Shares before thirty 
days have elapsed from the date that the Shares initially commenced 
trading (except to the extent that such extension, maintenance or 
arranging of credit is otherwise permitted pursuant to Rule 11d1-1). 
Furthermore, we note that you request relief from Section 11(d)(1) on 
behalf of ETMFs that will hold twenty or more Portfolio Positions, with 
no one Portfolio Position constituting 25% or more of the total value 
of the ETMF, and we require this as a condition of this exemption and 
the exemption that follows.
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    \8\ For purposes of this order, the term ``fund complex'' means 
the issuer of Fund shares, any other issuer of exchange-traded fund 
shares that holds itself out to investors as a related company for 
purposes of investment or investor services, any investment adviser, 
distributor, sponsor, depositor, or trustee (in the case of a unit 
investment trust) of any such issuer or any ``affiliated person'' 
(as defined in the Investment Company Act) of any such issuer or any 
such investment adviser, distributor, sponsor, depositor or trustee.
    \9\ We note that a broker-dealer other than an Authorized 
Participant that receives some or all of the upfront selling 
commission from an Authorized Participant would not satisfy this 
condition and could not, accordingly, rely on the relief granted 
above.
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    In addition, on the basis of your representations and the facts 
presented, the Commission finds that it is appropriate and in the 
public interest and consistent with the protection of investors to 
grant an exemption under Section 11(d)(1) of the Exchange Act to 
broker-dealers (other than the Fund's distributor) permitting them to 
treat Shares, for the purposes of Rule 11d1-2 under the Exchange 
Act,\10\ as ``securities issued by a registered . . . unit investment 
trust as defined in the Investment Company Act of 1940'' and thereby 
extend or maintain or arrange for the extension or maintenance of 
credit on Shares that have been owned by the persons to whom credit is 
provided for more than 30 days, in reliance on the exemption contained 
in the rule.
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    \10\ 17 CFR 240.11d1-2.
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    Moreover, in view of the substantial similarities between the Funds 
and exchange traded funds and the nature of the assets held in the 
Funds, the Commission finds that it is appropriate and in the public 
interest and consistent with the protection of investors to grant an 
exemption under Section 11(d)(1) of the Exchange Act to an Authorized 
Participant that extends credit or maintains or arranges for the 
extension or maintenance of credit on Shares in reliance on the class 
exemption granted in the Letter re: Derivative Products Committee of 
the Securities Industry Association (November 21, 2005) (``Class Relief 
Letter''), provided that the Authorized Participant satisfies 
conditions 1 and 2 set forth in the Class Relief Letter.\11\
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    \11\ For purposes of this order, the Shares would be shares of a 
Qualifying ETF, as defined in the Class Relief Letter, and the fund 
complex would be a ``fund complex,'' as defined in the Class Relief 
Letter. Conditions 1 and 2 of the Class Relief Letter are that: (1) 
Neither the Authorized Participant, nor any natural person 
associated with such Authorized Participant, directly or indirectly 
(including through any affiliate of such Authority Participant), 
receives from the fund complex any payment, compensation or other 
economic incentive to promote or sell the shares of the exchange-
traded fund to persons outside the fund complex, other than non-cash 
compensation permitted under NASD Rule 2830(l)(5)(A), (B), or (C); 
and (2) the Authorized Participant does not extend, maintain or 
arrange for the extension or maintenance of credit to or for a 
customer on shares of the exchange-traded fund before thirty days 
have passed from the date that the ETF's shares initially commence 
trading (except to the extent that such extension, maintenance or 
arranging of credit is otherwise permitted pursuant to Exchange Act 
Rule 11d1-1). ``Authorized Participant'' has the same meaning in 
this order as in the Class Relief Letter.

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[[Page 10942]]

Exchange Act Rule 10b-10

    You request relief from Rule 10b-10 on behalf of ETMFs that will 
hold twenty or more Portfolio Positions, with no one Portfolio Position 
constituting 25% or more of the total value of the ETMF. These ETMFs 
will disclose their holdings in full at least once quarterly, with a 
lag of not more than 60 days, in compliance with the relevant Fund's 
requirements applicable to open-end investment companies. Rule 10b-10 
requires a broker or dealer effecting a transaction in a security for a 
customer to give or send written notification to such customer 
disclosing the information specified in paragraph (a) of Rule 10b-10, 
including the identity, price and number of shares or units (or 
principal amount) of the security purchased or sold. Each Trust has 
requested exemptive relief from application of Rule 10b-10 with respect 
to the creation (i.e., issuance) or redemption of Shares (all of which 
are in Creation Unit size aggregations). Neither Trust requested 
exemptive or interpretive relief from Rule 10b-10 in connection with 
purchases and sales of Shares in the secondary market.
    The ETMF proposes that broker-dealers acting for their customers in 
either depositing Deposit Instruments \12\ in exchange for Creation 
Units or redeeming Shares in Creation Unit size aggregations for 
Redemption Instruments \13\ be permitted to provide such customers with 
a statement of the number of Creation Units created or redeemed without 
providing a statement of the identity, number and price of shares of 
individual Deposit Instruments included in the Basket tendered to the 
Trust for purposes of creation of Creation Units, or the identity, 
number and price of shares of Redemption Instruments to be delivered by 
the Trust to the redeeming holder. Your request notes that you expect a 
Creation Unit will consist of at least 5,000 Shares. The composition of 
the Deposit Instruments required to be tendered to the Trust for 
creation purposes and of the Redemption Instruments to be delivered on 
redemption will be disseminated on each business day and will be 
applicable to requests for creations or redemption, as the case may be, 
on that day. This information will be made available to requesting 
broker-dealers or other persons through the NSCC. Each Trust 
anticipates that any institution or broker-dealer engaging in creation 
or redemption transactions would have done so only with knowledge of 
the composition of the applicable Deposit Instruments or the Redemption 
Instruments to be received on redemption, so that specific information 
on the Deposit Instruments or the Redemption Instruments to be received 
on redemption in the Rule 10b-10 notification would be redundant.
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    \12\ ``Deposit Instruments'' means the instruments specified by 
the ETMF for making a purchase of Creation Units of the ETMF.
    \13\ ``Redemption Instruments'' means the instruments that 
shareholders redeeming Creation Units will receive as specified by 
the ETMF for meeting a redemption.
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    One the basis of your representations and the facts presented, the 
Commission finds that it is appropriate and in the public interest and 
consistent with the protection of investors to grant a limited 
exemption from Rule 10b-10 to broker-dealers with respect to their 
confirmation of creation and redemption transactions such that broker-
dealers may omit from the confirmation the identity, price, and number 
of shares of each of the Deposit Instruments or Redemption Instruments 
tendered or received by the customer in the transaction subject to the 
following conditions:
    (1) Confirmation statements of creation and redemption transactions 
in Shares will contain all of the information specified in paragraph 
(a) of Rule 10b-10 other than identity, price, and number of shares of 
each of the Deposit Instruments or Redemption Instruments tendered or 
received by the customer in the transaction;
    (2) Any confirmation statement of a creation or redemption 
transaction in Shares that omits the identity, price, or number of 
shares of component securities will contain a statement that such 
omitted information will be provided to the customer upon request; and
    (3) All such requests will be fulfilled in a timely manner in 
accordance with paragraph (c) of Rule 10b-10.

Conclusion

    It is hereby ordered, pursuant to Rule 101(d) of Regulation M, that 
the Trusts are exempt from the requirements of Rules 101 with respect 
to transactions in the Shares of the Funds as described in the Letter, 
thus permitting persons who may be deemed to be participating in a 
distribution of Shares of the Funds to bid for or purchase such Shares 
during their participation in such distribution as described in the 
Letter.
    It is further ordered, pursuant to Rule 102(e) of Regulation M, 
that the Trusts are exempt from the requirements of Rule 102 with 
respect to transaction in the Shares of the Funds as described in the 
Letter, thus permitting the Funds to redeem Shares of the Funds during 
the continuous offering of such Shares as described in the Letter.
    It is further ordered, pursuant to Rule 10b-17(b)(2), that the 
Trusts, subject to the conditions contained in this order, are exempt 
from the requirements of Rule 10b-17 with respect to transactions in 
the Shares of the Funds as described in the Letter.
    This exemption from Rule 10b-17 is subject to the following 
conditions:
     The Trusts will comply with Rule 10b-17 except for Rule 
10b-17(b)(1)(v)(a) and (b); and
     The Trusts will provide the information required by Rule 
10b-17(b)(1)(v)(a) and (b) to the Exchange as soon as practicable 
before trading begins on the ex-dividend date, but in no event later 
than the time when the Exchange last accepts information relating to 
distributions on the day before the ex-dividend date.
    It is further ordered, pursuant to Section 11(d)(1) of the Exchange 
Act and Rule 11d1-2 thereunder, based on the representations and facts 
presented in the Letter and subject to the conditions discussed above 
and below, that broker-dealers (other than the a Fund's distributor) 
may extend or maintain or arrange for the extension or maintenance of 
credit on Shares in connection with secondary market transactions; that 
broker-dealers (other than the Fund's distributor) may treat Shares, 
for the purposes of Rule 11d1-2 under the Exchange Act, as ``securities 
issued by a registered . . . unit investment trust as defined in the 
Investment Company Act of 1940'' and thereby extend or maintain or 
arrange for the extension or maintenance of credit on Shares that have 
been owned by the persons to whom credit is provided for more than 30 
days, in reliance on the exemption contained in the rule; and that an 
Authorized Participant that extends credit or maintains or arranges for 
the extension or maintenance of credit on Shares may rely on the class 
exemption granted in the Class Relief Letter, provided that the 
Authorized Participant satisfies

[[Page 10943]]

conditions 1 and 2 set forth in the Class Relief Letter.
    It is further ordered, pursuant to Rule 10b-10(f) of the Exchange 
Act, based on the representations and facts presented in the Letter and 
subject to the conditions discussed above and below, that broker-
dealers may omit from the confirmation of statements of creation and 
redemption transactions the identity, price, and number of shares of 
each of the Deposit Instruments or Redemption Instruments tendered or 
received by the customer.
    This exemptive relief is subject to modification or revocation at 
any time the Commission determines that such action is necessary or 
appropriate in furtherance of the purposes of the Exchange Act. Persons 
relying upon this exemptive relief shall discontinue transactions 
involving the Shares of the Fund, pending presentation of the facts for 
the Commission's consideration, in the event that any material change 
occurs with respect to any of the facts or representations made by the 
Requestors. In addition, persons relying on this exemption are directed 
to the anti-fraud and anti-manipulation provisions of the Exchange Act, 
particularly Sections 9(a) and 10(b), and Rule 10b-5 thereunder. 
Responsibility for compliance with these and any other applicable 
provisions of the federal securities laws must rest with the persons 
relying on these exemptions. This order should not be considered a view 
with respect to any other question that the proposed transactions may 
raise, including, but not limited to the adequacy of the disclosure 
concerning, and the applicability of other federal or state laws to, 
the proposed transactions.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(6), (9), (32), and (62).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-04527 Filed 3-1-16; 8:45 am]
 BILLING CODE 8011-01-P