Document ID: SEC-2017-1604-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2017-09-28T04:00Z

[Federal Register Volume 82, Number 187 (Thursday, September 28, 2017)]
[Notices]
[Pages 45329-45330]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-20752]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81682; File No. SR-NYSEArca-2017-103]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Reflect Certain 
Changes Applicable to IQ Municipal Insured ETF, IQ Municipal 
Intermediate ETF, and IQ Municipal Short Duration ETF

September 22, 2017.

    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 September 13, 2017, NYSE Arca, Inc. (``Exchange'' or ``NYSE 
Arca'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 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 (1) to reflect a change in the name of the IQ 
Municipal Insured ETF, IQ Municipal Intermediate ETF, and IQ Municipal 
Short Duration ETF (each a ``Fund'' and, collectively, the ``Funds''), 
and (2) to reflect a change in the dollar-weighted average duration to 
be maintained by the IQ Municipal Insured ETF and IQ Municipal 
Intermediate ETF. Shares of the Funds have been approved by the 
Securities and Exchange Commission (the ``Commission'') for listing and 
trading on the Exchange under NYSE Arca Rule 8.600-E. 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Commission has approved a proposed rule change relating to 
listing and trading on the Exchange of shares (``Shares'') of the Funds 
under NYSE Arca Rule 8.600-E,\3\ which governs the listing and trading 
of Managed Fund Shares.\4\ The Shares will be offered by the IndexIQ 
Active ETF Trust (the ``Trust''), which is registered with the 
Commission as an open-end management investment company. Each Fund is a 
series of the Trust. Shares of the Funds have been approved by the 
Commission for listing and trading on the Exchange under NYSE Arca Rule 
8.600-E. The Funds' Shares have not commenced trading on the Exchange.
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    \3\ See Securities Exchange Act Release Nos. 80584 (May 3, 
2017), 82 FR 21573 (May 9, 2017) (SR-NYSEArca-2017-44) (notice of 
filing of proposed rule change to list and trade shares of the IQ 
Municipal Insured ETF; IQ Municipal Short Duration ETF; and IQ 
Municipal Intermediate ETF under NYSE Arca Equities Rule 8.600) 
(``Prior Notice''); 80885 (June 8, 2017), 82 FR 27302 (June 14, 
2017) (SR-NYSEArca-2017-44) (order approving proposed rule change to 
list and trade shares of the IQ Municipal Insured ETF, IQ Municipal 
Short Duration ETF, and IQ Municipal Intermediate ETF under NYSE 
Arca Equities Rule 8.600) (Prior Order, and, together with the Prior 
Notice, the ``Prior Release''). All terms referenced but not defined 
herein are defined in the Prior Release.
    \4\ A Managed Fund Share is a security that represents an 
interest in an investment company registered under the Investment 
Company Act of 1940 (15 U.S.C. 80a-1) (``1940 Act'') organized as an 
open-end investment company or similar entity that invests in a 
portfolio of securities selected by its investment adviser 
consistent with its investment objectives and policies. In contrast, 
an open-end investment company that issues Investment Company Units, 
listed and traded on the Exchange under NYSE Arca Equities Rule 5.2-
E(j)(3), seeks to provide investment results that correspond 
generally to the price and yield performance of a specific foreign 
or domestic stock index, fixed income securities index or 
combination thereof.
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    On June 27, 2017, the name of the IQ Municipal Insured ETF was 
changed to IQ MacKay Shields Municipal Insured ETF, the name of the IQ 
Municipal Intermediate ETF was changed to IQ MacKay Shields Municipal 
Intermediate ETF, and the name of the IQ Municipal Short Duration ETF 
was changed to IQ MacKay Shields Municipal Short Duration ETF. This 
proposed rule change proposes to reflect these changes.
    The Prior Release stated that the IQ Municipal Insured ETF 
generally will maintain a dollar-weighted average duration within plus 
or minus two years of the dollar-weighted average duration of the S&P 
Municipal Bond Insured Index. The Fund proposes to change this 
representation to state that the Fund generally will maintain a dollar-
weighted average modified duration of 3 to15 years.
    In addition, the Prior Release stated that the IQ Municipal 
Intermediate ETF generally will maintain a dollar-weighted average 
duration within plus or minus two years of the dollar-weighted average 
duration of the S&P Municipal Bond Intermediate Index. The Fund 
proposes to change this representation to state that the Fund generally 
will maintain a dollar-weighted average modified duration of three to 
ten years.\5\
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    \5\ The Exchange notes that the Commission has approved the 
listing and trading of other issues of Managed Fund Shares that have 
a duration range comparable to those proposed for the Funds. See, 
e.g., Securities Exchange Act Release Nos. 79293 (November 10, 
2016), 81 FR 81189 (November 17, 2016)(SR-NYSEArca-2016-107) (order 
approving listing and trading of shares of Cumberland Municipal Bond 
ETF under NYSE Arca Equities Rule 8.600, which states that ``At 
least 80% of the weight of the Fund's assets will be in Municipal 
Bonds with a modified duration of 15 years or less''); 71617 
(February 26, 2014), 79 FR 12257 (March 4, 2014) (SR-NYSEArca-2013-
135) (Order Granting Approval of Proposed Rule Change to List and 
Trade Shares of db-X Ultra-Short Duration Fund and db-X Managed 
Municipal Bond Fund under NYSE Arca Equities Rule 8.600, which 
states that ``[a]lthough the [db-X Managed Municipal Bond Fund] may 
adjust duration of its holdings over a wider range, it generally 
intends to keep it between five and nine years''); 77522 (April 5, 
2016), 81 FR 21420 (April 11, 2016) (SR-NYSEArca-2015-125) (order 
approving proposed rule change to list and trade shares of the 
Riverfront Dynamic Unconstrained Income ETF and Riverfront Dynamic 
Core Income ETF under NYSE Arca Equities Rule 8.600, which states 
that ``the Sub-Adviser intends to manage the [Riverfront Dynamic 
Unconstrained Income ETF's] portfolio so that it has an average 
duration of between two and ten years, under normal 
circumstances'').

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[[Page 45330]]

    The Adviser represents that the proposal to change representations 
regarding duration, as described above, is consistent with each 
applicable Fund's respective investment objective, and will further 
assist the Adviser and Subadviser to achieve such investment objective. 
Except for the changes noted above, all other representations made in 
the Prior Release remain unchanged.\6\ The Funds will comply with all 
initial and continued listing requirements under NYSE Arca Equities 
Rule 8.600-E.
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    \6\ See note 3, supra.
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    The Adviser represents that the investment objective of the Funds 
is not changing.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \7\ 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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    \7\ 15 U.S.C. 78f(b)(5).
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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. The names of the Funds have been changed to include 
the name of the Subadviser (MacKay Shields LLC). The Exchange believes 
that the change to the representations regarding the dollar-weighted 
average modified duration of the applicable Funds will not adversely 
impact investors or Exchange trading and will provide such Funds with 
additional flexibility in managing the Funds' investments based on the 
Adviser's and Subadviser's assessment of market conditions impacting 
the Funds' investments.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purpose of the Act. The Exchange believes the 
proposed rule change will provide the Adviser and Subadviser with 
additional flexibility in managing the applicable Funds' investments 
based on the Adviser's and Subadviser's assessment of market conditions 
impacting the Funds' investments and will not impose a burden on 
competition. In addition, the Funds' name changes as described above 
raise no competitive issues.

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, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the 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.
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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 
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-2017-103 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-2017-103. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEArca-2017-103 and should 
be submitted on or before October 19, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-20752 Filed 9-27-17; 8:45 am]
BILLING CODE 8011-01-P