Document ID: SEC-2018-0820-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Cboe BZX Exchange, Inc.
Posted Date: 2018-05-29T04:00Z

[Federal Register Volume 83, Number 103 (Tuesday, May 29, 2018)]
[Notices]
[Pages 24541-24543]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-11356]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83302; File No. SR-CboeBZX-2018-034]

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Relating 
to the Listing and Trading of the iShares Gold Strategy ETF, a Series 
of the iShares U.S. ETF Trust

May 22, 2018.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on May 9, 2018, Cboe BZX Exchange, Inc. (``Exchange'' or ``BZX'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Exchange has designated this 
proposal as a ``non-controversial'' proposed rule change pursuant to 
Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6)(iii) \4\ 
thereunder, which renders it effective upon filing with the Commission. 
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\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to amend a representation made in a 
rule change previously approved by the Commission relating to the 
listing and trading of the iShares Gold Strategy ETF (the ``Fund''), a 
series of the iShares U.S. ETF Trust (the ``Trust'').
    The text of the proposed rule change is available at the Exchange's 
website at www.markets.cboe.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant parts of such 
statements.

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

1. Purpose
    The shares of the Fund (the ``Shares'') were approved for listing 
and trading on the Exchange under Exchange Rule 14.11(i), which governs 
the listing and trading of Managed Fund Shares.\5\ The Shares have not 
yet commenced trading on the Exchange. The Fund is a series of the 
Trust, which was established as a Delaware statutory trust on June 21, 
2011. BlackRock Fund Advisors (the ``Adviser'') will serve as the 
investment adviser to the Fund. The Trust is registered with the 
Commission as an open-end management investment company and has filed a 
registration statement on behalf of the Fund on Form N-1A 
(``Registration Statement'') with the Commission.\6\
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    \5\ See Securities Exchange Act Release No. 83014 (April 9, 
2018), 83 FR 16150 (April 13, 2018) (SR-CboeBZX-2017-023) (the 
``Approval Order'').
    \6\ See Registration Statement on Form N-1A for the Trust, filed 
with the Commission on November 1, 2017 (File Nos. 333-179904 and 
811-22649). The descriptions of the Fund and the Shares contained 
herein are based, in part, on information in the Registration 
Statement. The Commission has issued an order granting certain 
exemptive relief to the Adviser and open-end management companies 
advised by the Adviser under the Investment Company Act of 1940 (15 
U.S.C. 80a-1). See Investment Company Act Release No. 29571 (January 
24, 2011) (File No. 812-13601).

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[[Page 24542]]

    The Exchange proposes to amend the Approval Order in order to make 
clear that the representation that limits Fund holdings in the 
Subsidiary \7\ to 25% of the Fund's total assets (the ``25% 
Limitation'') was made to indicate that the Fund will comply with Sub-
Chapter M of the Internal Revenue Code of 1986, as amended (the 
``Internal Revenue Code''), and as such, the 25% Limitation was 
intended to be measured on a quarterly basis. Specifically, the 
Exchange is proposing to change the sentence that reads:
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    \7\ The ``Subsidiary'' is a wholly owned subsidiary of the Fund 
that is organized in the Cayman Islands and has the same investment 
objective as the Fund.

References below to the holdings of the Fund, including any 
restrictions thereon that are described within this proposal, are 
inclusive of the direct holdings of the Fund as well as the indirect 
holdings of the Fund through the Subsidiary, which may constitute up 
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to 25% of the total assets of the Fund.

    The Exchange is proposing to replace that sentence with the 
following:

References below to the holdings of the Fund, including any 
restrictions thereon that are described within this proposal, are 
inclusive of the direct holdings of the Fund as well as the indirect 
holdings of the Fund through the Subsidiary, which, in compliance 
with Sub-Chapter M of the Internal Revenue Code of 1986, as amended, 
may constitute up to 25% of the total assets of the Fund, as 
determined at the end of each of the Fund's fiscal quarters.

    The Exchange believes that this proposed change is a non-
controversial change because it is only to clarify that the 25% 
Limitation is measured on a quarterly basis in compliance with Sub-
Chapter M of the Internal Revenue Code. This proposed change regarding 
the 25% Limitation is the only change covered by this proposal, and all 
other representations in the Approval Order, including both initial 
listing requirements and Continued Listing Representations,\8\ remain 
true and will apply on a continuous basis, as applicable, consistent 
with Exchange Rule 14.11.
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    \8\ As defined in Rule 14.11(a), the term ``Continued Listing 
Representations'' means any of the statements or representations 
regarding the index composition, the description of the portfolio or 
reference assets, limitations on portfolio holdings or reference 
assets, dissemination and availability of index, reference asset, 
and intraday indicative values (as applicable), or the applicability 
of Exchange listing rules specified in any filing to list a series 
of securities under Rule 14.11.
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2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section 
6(b) of the Act \9\ in general and Section 6(b)(5) of the Act \10\ in 
particular in that it is 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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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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    As described above, all of the Continued Listing Representations 
which formed the basis for the Commission in approving the Approval 
Order remain true and will continue to constitute listing requirements 
for the Fund with the exception of the single representation that the 
Exchange is proposing to make clearer. This proposed change will only 
make clear the basis for and timing of the calculation of the 25% 
Limitation and is not proposing to make any substantive changes to the 
types or amounts of any particular instrument that the Fund can hold. 
As such, the Exchange believes that the proposal is 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 a national market system, 
and, in general, to protect investors and the public interest.

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 that 
making clear the timing of the calculation of and the basis for the 25% 
Limitation will have no impact on competition.

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

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

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

    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, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6) thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of 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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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \13\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \14\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has requested that the Commission waive the 30-day operative delay so 
that the proposed rule change may become operative upon filing. The 
Commission notes that waiver of the 30-day operative delay will allow 
the Fund to immediately operate under the certainty of the application 
of the 25% Limitation proposed in this proposal and provide the same 
clarity to investors. The Commission does not believe that there is any 
reason for delay when the proposal is only designed to make clear that 
the 25% Limitation will be measured on a quarterly basis and is 
designed to comply with Sub-Chapter M of the Internal Revenue Code. 
Accordingly, the Commission believes that waiver of the 30-day 
operative delay is consistent with the protection of investors and the 
public interest and hereby waives the operative delay and designates 
the proposed rule change operative upon filing.\15\
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    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \15\ For purposes only of waiving the 30-day operative delay, 
the Commission also has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such 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.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule

[[Page 24543]]

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 [email protected]. Please include 
File Number SR-CboeBZX-2018-034 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-CboeBZX-2018-034. 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 website (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 website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-CboeBZX-2018-034, and should be 
submitted on or before June 19, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2018-11356 Filed 5-25-18; 8:45 am]
 BILLING CODE 8011-01-P