Document ID: SEC-2018-0195-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2018-01-31T05:00Z

[Federal Register Volume 83, Number 21 (Wednesday, January 31, 2018)]
[Notices]
[Pages 4528-4530]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-01818]

[[Page 4528]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82587; File No. SR-NYSEArca-2018-05]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change Relating to the 
Guggenheim Ultra Short Duration ETF and the Guggenheim Total Return 
Bond ETF

January 25, 2018.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on January 16, 2018, 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 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 changes to certain representations 
made in the respective proposed rule changes previously filed with the 
Commission pursuant to Rule 19b-4 relating to the Guggenheim Ultra 
Short Duration ETF and the Guggenheim Total Return Bond ETF (each a 
``Fund'' and, collectively, the ``Funds''). Shares of the Funds are 
currently listed and traded on the Exchange under NYSE Arca Rule 8.600-
E. The proposed rule change is available on the Exchange's website 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 the listing and trading on the Exchange 
of shares (``Shares'') of the Funds, under NYSE Arca Rule 8.600-E 
(formerly NYSE Arca Equities Rule 8.600), which governs the listing and 
trading of Managed Fund Shares.\4\ The Funds' Shares are currently 
listed and traded on the Exchange under NYSE Arca Rule 8.600-E.\5\
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    \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 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.
    \5\ The Commission previously approved the listing and trading 
of the Shares of the Guggenheim Ultra Short Duration ETF (formerly, 
Guggenheim Enhanced Short Duration ETF and, prior to that, 
Guggenheim Enhanced Ultra-Short Bond ETF). See Securities Exchange 
Act Release Nos. 64550 (May 26, 2011), 76 FR 32005 (June 2, 2011) 
(SR-NYSEArca-2011-11) (Order Granting Approval of Proposed Rule 
Change Relating to the Listing and Trading of the Guggenheim 
Enhanced Core Bond ETF and Guggenheim Enhanced Ultra-Short Bond ETF) 
(``First Short Duration Order''); 64224 (April 7, 2011), 76 FR 20401 
(April 12, 2011) (SR-NYSEArca-2011-11) (Notice of Proposed Rule 
Change Relating to the Listing and Trading of the Guggenheim 
Enhanced Core Bond ETF and Guggenheim Enhanced Ultra-Short Bond ETF) 
(``First Short Duration Notice,'' and, together with the First Short 
Duration Order, ``First Short Duration Releases''); 74814 (April 27, 
2015), 80 FR 24986 (May 1, 2015) (SR-NYSEArca-2014-107) (Notice of 
Filing of Amendment Nos. 2 and 3 and Order Granting Accelerated 
Approval of a Proposed Rule Change to Reflect Changes to the Means 
of Achieving the Investment Objective Applicable to the Guggenheim 
Enhanced Short Duration ETF) (``Second Short Duration Order''); 
73512 (November 3, 2014), 79 FR 66442 (November 7, 2014) (SR-
NYSEArca-2014-107) (Notice of Filing of Proposed Rule Change, as 
Modified by Amendment No. 1 Thereto, to Reflect Changes to the Means 
of Achieving the Investment Objective Applicable to the Guggenheim 
Enhanced Short Duration ETF) (``Second Short Duration Notice'' and, 
together with the Second Short Duration Order and the First Short 
Duration Releases, the ``Short Duration Releases''). The Commission 
previously approved the listing and trading of the Shares of the 
Guggenheim Total Return Bond ETF in Securities Exchange Act Release 
No. 76719 (December 21, 2015), 80 FR 80859 (December 28, 2015) (SR-
NYSEArca-2015-73) (Notice of Filing of Amendment Nos. 3, 4, 5, and 6 
and Order Granting Accelerated Approval of a Proposed Rule Change, 
as Modified by Amendment Nos. 1, 3, 4, 5 and 6, to List and Trade of 
Shares of the Guggenheim Total Return Bond ETF under NYSE Arca 
Equities Rule 8.600) (``Total Return Order''). See also Securities 
Exchange Act Release No. 75930 (September 16, 2015), 80 FR 57251 
(September 22, 2015) (Notice of Filing of Proposed Rule Change, as 
Modified by Amendment No. 1, Relating to Listing and Trading Shares 
of the Guggenheim Total Return Bond ETF under NYSE Arca Equities 
Rule 8.600) (``Total Return Notice'' and, together with the Total 
Return Order and Amendment Nos. 1, 3, 4, 5 and 6 to the Total Return 
Notice, the ``Total Return Releases'').
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    The Shares of the Guggenheim Ultra Short Duration ETF are offered 
by Claymore Exchange-Traded Fund Trust and Shares of the Guggenheim 
Total Return Bond ETF are offered by Claymore Exchange-Traded Fund 
Trust 2 (together with the Claymore Exchange-Traded Fund Trust, the 
``Claymore Trusts''). PowerShares Actively Managed Exchange-Traded Fund 
Trust has filed a combined prospectus and proxy statement (the ``Proxy 
Statement'') with the Commission on Form N-14 describing a ``Plan of 
Reorganization'' pursuant to which, following approval of the Funds' 
shareholders, all or substantially all of the assets and substantially 
all of the liabilities of each Fund would be transferred to a 
corresponding, newly-formed fund of the PowerShares Actively Managed 
Exchange-Traded Fund Trust, described below. According to the Proxy 
Statement, the investment objective of each Fund will be the same 
following implementation of the Plan of Reorganization 
(``Reorganization'').\6\ Following shareholder approval and closing of 
the Reorganization, investors will receive an identical number of 
shares of beneficial interest of the corresponding PowerShares fund in 
an amount equal in value to the net asset value of the Shares of the 
Funds of the Claymore Trusts immediately prior to the Reorganization 
(and cash with respect to any fractional shares held, if any).
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    \6\ See registration statement on Form N-14 under the Securities 
Act of 1933 (15 U.S.C. 77a) (``1933 Act''), dated November 21, 2017 
(File No. 333-221699).
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    In this proposed rule change, the Exchange proposes to reflect 
changes to certain representations made in the respective proposed rule 
changes previously filed with the Commission pursuant to Rule 19b-4 
relating to the Funds, as described above,\7\ which changes would be 
implemented as a result of the Plan of Reorganization.\8\
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    \7\ See note 5, supra.
    \8\ The Guggenheim Ultra Short Duration ETF's investment 
adviser, Guggenheim Funds Investment Advisors, LLC, and the 
Guggenheim Total Return Bond ETF's investment adviser, Guggenheim 
Partners Investment Management, LLC, represent that each will manage 
each respective Fund in the manner described in the applicable 
proposed rule change(s) for such Fund as referenced in note 5, 
supra, and the changes described herein will not be implemented 
until this proposed rule change is operative.

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[[Page 4529]]

Guggenheim Ultra Short Duration ETF \9\
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    \9\ On October 20, 2017 the PowerShares Actively Managed 
Exchange-Traded Fund Trust filed with the Commission a pre-effective 
amendment to its registration statement on Form N-1A under the 1933 
Act and under the 1940 Act relating to the Funds [sic] (File Nos. 
333-147622 and 811-22148) relating to the PowerShares Ultra Short 
Duration Portfolio and the PowerShares Total Return Bond Portfolio. 
The October 20, 2017 filing is intended to create a new entity to 
serve as the vehicle into which the Funds will be reorganized 
through the Plan of Reorganization contained in the Proxy Statement. 
In addition, the Commission has issued an order granting certain 
exemptive relief to the PowerShares Actively Managed Exchange-Traded 
Fund Trust under the 1940 Act. See Investment Company Act Release 
No. 28171 (February 27, 2008) (File No. 812-13386), as amended by 
Investment Company Release No. 28467 (October 27, 2008) (File No. 
812-13491).
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    The First Short Duration Notice stated the name of the Fund as 
Guggenheim Enhanced Ultra-Short Bond ETF, which name was later changed 
to Guggenheim Enhanced Short Duration ETF and then to Guggenheim Ultra 
Short Duration ETF. Following the Reorganization, the name of the Fund 
will be PowerShares Ultra Short Duration Portfolio.
    The Second Short Duration Notice stated that the Fund's trust is 
Claymore Exchange-Traded Fund Trust and the Fund's investment adviser 
is Guggenheim Funds Investment Advisors, LLC. Following the 
Reorganization, the Fund's trust will be PowerShares Actively Managed 
Exchange-Traded Fund Trust, and the Fund's investment adviser and sub-
adviser will be Invesco PowerShares Capital Management LLC and Invesco 
Advisers, Inc., respectively.\10\
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    \10\ Invesco PowerShares Capital Management LLC and Invesco 
Advisers, Inc. each is not registered as a broker-dealer but is 
affiliated with a broker-dealer. Each such entity has implemented 
and will maintain a fire wall with respect to its affiliated broker-
dealer regarding access to information concerning the composition 
and/or changes to a Fund's portfolio. In the event (a) Invesco 
PowerShares Capital Management LLC or Invesco Advisers, Inc. becomes 
registered as a broker-dealer or newly affiliated with a broker-
dealer, or (b) any new adviser or sub-adviser becomes registered as 
a broker-dealer or newly affiliated with a broker-dealer, it will 
implement and maintain a fire wall with respect to its relevant 
personnel or such broker-dealer affiliate regarding access to 
information concerning the composition and/or changes to a Fund's 
portfolio, and will be subject to procedures designed to prevent the 
use and dissemination of material non-public information regarding 
such portfolio. In addition, personnel who make decisions on a 
Fund's portfolio composition must be subject to procedures designed 
to prevent the use and dissemination of material nonpublic 
information regarding a Fund's portfolio.
     An investment adviser to an open-end fund is required to be 
registered under the Investment Advisers Act of 1940 (the ``Advisers 
Act''). As a result, with respect to PowerShares Ultra Short 
Duration Portfolio and PowerShares Total Return Bond Portfolio, 
Invesco PowerShares Capital Management LLC and Invesco Advisers, 
Inc., as adviser and sub-adviser, respectively, and their related 
personnel, are subject to the provisions of Rule 204A-1 under the 
Advisers Act relating to codes of ethics. This Rule requires 
investment advisers to adopt a code of ethics that reflects the 
fiduciary nature of the relationship to clients as well as 
compliance with other applicable securities laws. Accordingly, 
procedures designed to prevent the communication and misuse of non-
public information by an investment adviser must be consistent with 
Rule 204A-1 under the Advisers Act. In addition, Rule 206(4)-7 under 
the Advisers Act makes it unlawful for an investment adviser to 
provide investment advice to clients unless such investment adviser 
has (i) adopted and implemented written policies and procedures 
reasonably designed to prevent violation, by the investment adviser 
and its supervised persons, of the Advisers Act and the Commission 
rules adopted thereunder; (ii) implemented, at a minimum, an annual 
review regarding the adequacy of the policies and procedures 
established pursuant to subparagraph (i) above and the effectiveness 
of their implementation; and (iii) designated an individual (who is 
a supervised person) responsible for administering the policies and 
procedures adopted under subparagraph (i) above.
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    The First Short Duration Notice stated that the Fund's distributor 
is Claymore Securities, Inc. Following the Reorganization, the Fund's 
distributor will be Invesco Distributors, Inc.
    The First Short Duration Notice stated the Fund is considered non-
diversified under the 1940 Act; \11\ the Trust changed this 
representation in an amendment to the Trust's registration statement to 
state that the Fund is considered a diversified fund.\12\ Following the 
Reorganization, the Fund's registration statement will state that the 
Fund will be considered non-diversified under the 1940 Act.
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    \11\ The diversification standard is set forth in Section 
5(b)(1) of the 1940 Act (15 U.S.C. 80e). The Commission has 
previously approved listing and trading of issues of Managed Fund 
Shares that are classified as non-diversified investment companies 
under the 1940 Act. See, e.g., Securities Exchange Act Release No. 
74338 (February 20, 2015), 80 FR 10556 (February 26, 2015) (SR-
NYSEArca-2014-143) (order approving proposed rule change relating to 
the listing and trading of shares of the SPDR DoubleLine Total 
Return Tactical ETF under NYSE Arca Equities Rule 8.600).
    \12\ See footnote 15 to the Second Short Duration Order.
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Guggenheim Total Return Bond ETF
    The Total Return Releases stated the name of the Fund as Guggenheim 
Total Return Bond ETF. Following the Reorganization, the Fund's name 
will be PowerShares Total Return Bond Portfolio.
    The Total Return Releases stated that the Fund's trust is Claymore 
Exchange-Traded Fund Trust 2, and the Fund's investment adviser is 
Guggenheim Partners Investment Management, LLC. Following the 
Reorganization, the Fund's trust will be PowerShares Actively Managed 
Exchange-Traded Fund Trust, and the Fund's investment adviser will be 
Invesco PowerShares Capital Management LLC. The Total Return Releases 
did not specify that the Fund will have a sub-adviser. Following the 
Reorganization, the Fund will have a sub-adviser, namely, Invesco 
Advisers, Inc.\13\ The First [sic] Total Return Notice stated that the 
Fund's distributor is Guggenheim Funds Distributors, LLC. Following the 
Reorganization, the Fund's distributor will be Invesco Distributors, 
Inc.
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    \13\ See note 10, supra.
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    The investment objective of each Fund will remain unchanged. Except 
for the changes noted above, all other representations made in the 
Short Duration Releases and the Total Return Releases, respectively, 
remain unchanged.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5)\14\ 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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    \14\ 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, and is designed 
to promote just and equitable principles of trade and to protect 
investors and the public interest.
    PowerShares Actively Managed Exchange-Traded Fund Trust has filed 
the Proxy Statement describing the Reorganization pursuant to which, 
following approval of the Funds' shareholders, all assets of each Fund 
would be transferred to a corresponding fund of the PowerShares 
Actively Managed Exchange-Traded Fund Trust. This filing proposes to 
reflect organizational and administrative changes that would be 
implemented as a result of the Reorganization, including changes to the 
Funds' names, the trust entity issuing shares of the Funds, the adviser 
and sub-adviser to the Funds and the distributor for the Funds. In 
addition, following the Reorganization, the PowerShares Ultra Short 
Duration Portfolio's registration statement will state that it will be 
considered non-diversified under the 1940 Act. As noted above, Invesco 
PowerShares Capital Management LLC and Invesco Advisers, Inc. each is 
not registered as a broker-dealer but is affiliated with a broker-
dealer. Each such entity has implemented and will maintain a fire wall 
with respect to its affiliated broker-dealer regarding access to 
information concerning the composition and/or

[[Page 4530]]

changes to a Fund's portfolio. In the event (a) Invesco PowerShares 
Capital Management LLC or Invesco Advisers, Inc. becomes registered as 
a broker-dealer or newly affiliated with a broker-dealer, or (b) any 
new adviser or sub-adviser becomes registered as a broker-dealer or 
newly affiliated with a broker-dealer, it will implement and maintain a 
fire wall with respect to its relevant personnel or such broker-dealer 
affiliate regarding access to information concerning the composition 
and/or changes to the portfolio, and will be subject to procedures 
designed to prevent the use and dissemination of material non-public 
information regarding such portfolio. According to the Proxy Statement, 
the investment objective of each Fund will be the same following 
implementation of the Reorganization. Except for the changes noted in 
this proposed rule change, all other representations made in the Short 
Duration Releases and the Total Return Releases, respectively, remain 
unchanged. The Exchange believes these changes will not adversely 
impact investors or Exchange trading.

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 enhance competition and benefit of [sic] 
investors and the marketplace by permitting continued listing and 
trading of Shares of the Funds following implementation of the changes 
described above that would follow the Reorganization, which changes are 
non-substantive and would not impact the respective investment 
objective of each Fund.

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 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 prior to 
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 \15\ and Rule 19b-4(f)(6) 
thereunder.\16\
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 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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    The Exchange has asked the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. The Commission notes that the proposal would allow the Exchange 
to reflect organizational and administrative changes to the Funds that 
would be implemented as a result of the Reorganization, including 
changes to the Funds' names, the trust entity issuing shares of the 
Funds, the adviser and sub-adviser to the Funds, and the distributor 
for the Funds. In addition, following the Reorganization, the 
PowerShares Ultra Short Duration Portfolio's registration statement 
will state that it will be considered non-diversified under the 1940 
Act. The Commission further notes that the Exchange represents that the 
investment objective of each Fund will remain the same, and, except for 
the changes noted in this proposed rule change, all other 
representations made in the Short Duration Releases and the Total 
Return Releases remain unchanged. The Commission believes that the 
proposal raises no new or novel regulatory issues and waiver of the 30-
day operative delay is consistent with the protection of investors and 
the public interest. The Commission hereby waives the 30-day operative 
delay and designates the proposed rule change to be operative upon 
filing.\17\
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    \17\ For purposes only of waiving the 30-day operative delay, 
the Commission has also 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 
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-NYSEArca-2018-05 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-2018-05. 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-NYSEArca-2018-05 and should be submitted 
on or before February 21, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-01818 Filed 1-30-18; 8:45 am]
 BILLING CODE 8011-01-P