[Federal Register Volume 84, Number 102 (Tuesday, May 28, 2019)]
[Notices]
[Pages 24576-24587]
[FR Doc No: 2019-10987]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85903; File No. SR-NYSEArca-2019-33]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change, as Modified by Amendment No. 1, Regarding
Certain Changes to Investments of the First Trust TCW Unconstrained
Plus Bond ETF

May 21, 2019.

    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 May 6, 2019, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. On May
16, 2019, the Exchange filed Amendment No. 1 to the proposed rule
change.\4\ The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
    \4\ As the Exchange states in Item I, Amendment No. 1 replaces
and supersedes the original filing in its entirety.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to certain changes regarding investments of
the First Trust TCW Unconstrained Plus Bond ETF, shares of which are
currently listed and traded on the Exchange under NYSE Arca Rule 8.600-
E (``Managed Fund Shares''). This Amendment No. 1 to SR-NYSEArca-2019-
33 replaces SR-NYSEArca-2019-33 as originally filed and supersedes such
filing in its entirety. The proposed 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 Exchange proposes certain changes, described below under
``Application of Generic Listing Requirements'', regarding investments
of the First Trust TCW Unconstrained Plus Bond ETF (``Fund''), shares
(``Shares'') of which are currently listed and traded on the Exchange
under NYSE Arca Rule 8.600-E, which governs the listing and trading of
Managed Fund Shares \5\ on the Exchange. Shares of the Fund commenced
trading on the Exchange on June 5, 2018 in accordance with the generic
listing standards in Commentary .01 to NYSE Arca Rule 8.600-E.
---------------------------------------------------------------------------

    \5\ 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.
---------------------------------------------------------------------------

    The Shares are offered by First Trust Exchange-Traded Fund VIII
(the ``Trust''), which is registered with the Commission as an open-end
management investment company.\6\ The Fund is a series of the Trust.
---------------------------------------------------------------------------

    \6\ The Trust is registered under the 1940 Act. On May 29, 2018,
the Trust filed with the Commission its registration statement on
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. 333-210186 and
811-23147) (``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 upon which the Trust may rely, granting certain exemptive
relief under the 1940 Act. See Investment Company Act Release No.
30029 (April 10, 2012) (File No. 812-13795).

---------------------------------------------------------------------------

    First Trust Advisors L.P. is the investment adviser (``First
Trust'' or ``Adviser'') to the Fund. TCW Investment Management Company
LLC (``TCW'' or the ``Sub-Adviser''), serves as the Fund's investment
sub-adviser. First Trust Portfolios L.P. is the distributor
(``Distributor'') for the Fund's Shares. The Bank of New York Mellon
acts as the administrator, custodian and transfer agent (``Custodian''
or ``Transfer Agent'') for the Fund.
    Commentary .06 to Rule 8.600-E provides that, if the investment
adviser to the investment company issuing Managed Fund Shares is
affiliated with a broker-dealer, such investment adviser shall erect
and maintain a ``fire wall'' between the investment adviser and the
broker-dealer with respect to access to information concerning the
composition and/or changes to such investment company portfolio.\7\ In
addition, Commentary .06 further requires that personnel who make
decisions on the open-end fund's portfolio composition must be subject
to procedures designed to prevent the use and dissemination of material
nonpublic information regarding the open-end fund's portfolio. The
Adviser and Sub-Adviser are not registered as broker-dealers. The
Adviser is affiliated with First Trust Portfolios L.P., a broker-
dealer, and has implemented and will maintain a fire wall with respect
to its broker-dealer affiliate regarding access to information
concerning the composition and/or changes to the portfolio. The Sub-
Adviser is affiliated with multiple broker-dealers and has implemented
and will maintain a fire wall with respect to its broker-dealer
affiliates regarding access to information concerning the composition
and/or changes to the portfolio. In the event (a) the Adviser or the
Sub-Adviser becomes registered as a broker-dealer or newly affiliated
with a broker-dealer, or (b) any new adviser or sub-adviser is a
registered broker-dealer or becomes affiliated with a broker-dealer, it
will implement and maintain a fire wall with respect to relevant
personnel and any 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.
---------------------------------------------------------------------------

    \7\ 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, the Adviser and Sub-Adviser 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.
---------------------------------------------------------------------------

First Trust TCW Unconstrained Plus Bond ETF
Principal Investments
    According to the Registration Statement, the investment objective
of the Fund is to seek to maximize long-term total return. Under normal
market conditions,\8\ the Fund intends to invest at least 80% of its
net assets (including investment borrowings) in a portfolio of ``Fixed
Income Securities'' (described below).
---------------------------------------------------------------------------

    \8\ The term ``normal market conditions'' is defined in NYSE
Arca Rule 8.600-E(c)(5). On a temporary basis, including for
defensive purposes, during the initial invest-up period (i.e., the
six-week period following the commencement of trading of Shares on
the Exchange) and during periods of high cash inflows or outflows
(i.e., rolling periods of seven calendar days during which inflows
or outflows of cash, in the aggregate, exceed 10% of the Fund's net
assets as of the opening of business on the first day of such
periods), the Fund may depart from its principal investment
strategies; for example, it may hold a higher than normal proportion
of its assets in cash. During such periods, the Fund may not be able
to achieve its investment objective. The Fund may adopt a defensive
strategy when the Adviser and/or the Sub-Adviser believes securities
in which the Fund normally invests have elevated risks due to
market, political or economic factors and in other extraordinary
circumstances.
---------------------------------------------------------------------------

    In managing the Fund's portfolio, TCW intends to employ a flexible
approach that allocates the Fund's investments across a range of global
investment opportunities and actively manage exposure to interest
rates, credit sectors and currencies. TCW seeks to utilize independent,
bottom-up research to identify securities that are undervalued and that
offer a superior risk/return profile. Pursuant to this investment
strategy, the Fund may invest in the following Fixed Income Securities,
which may be represented by derivatives relating to such securities, as
discussed below:
     Securities issued or guaranteed by the U.S. government or
its agencies, instrumentalities or U.S. government-sponsored entities
(``U.S. government securities'');
     Treasury Inflation Protected Securities (``TIPS'');
     The following non-agency, non-government-sponsored entity
(``GSE'') and privately-issued mortgage-related and other asset-backed
securities: Residential mortgage-backed securities (``RMBS''),
commercial mortgage-backed securities (``CMBS''), asset-backed
securities (``ABS''), and collateralized loan obligations (``CLOs''
and, together with such RMBS, CMBS and ABS, ``Private ABS/MBS''); \9\
---------------------------------------------------------------------------

    \9\ For avoidance of doubt, ``Private ABS/MBS'' as referenced
herein are non-agency, non-GSE and privately-issued mortgage-related
and other asset-backed securities as stated in Commentary .01(b)(5)
to NYSE Arca Rule 8.600-E.
---------------------------------------------------------------------------

     Agency RMBS, agency CMBS, and agency ABS;
     Domestic corporate bonds;
     Fixed Income Securities issued by non-U.S. corporations
and non-U.S. governments;
     Bank loans, including first lien senior secured floating
rate bank loans (``Senior Loans''), secured and unsecured loans, second
lien or more junior loans, and bridge loans;
     Fixed income convertible securities;
     Fixed income preferred securities;
     Municipal bonds; and
    The Fund may invest in agency RMBS and CMBS by investing in to-be-
announced transactions (``TBA Transactions'').
    The Fund may hold cash and cash equivalents.\10\ In addition, the
Fund may hold the following short-term instruments with maturities of
three months or more: Certificates of deposit; bankers' acceptances;
repurchase agreements and reverse repurchase agreements; bank time
deposits; and commercial paper.
---------------------------------------------------------------------------

    \10\ For purposes of this filing, cash equivalents are the
short-term instruments with maturities of less than 3 months
enumerated in Commentary .01(c) to Rule 8.600-E.
---------------------------------------------------------------------------

    The Fund may enter into short sales of any securities in which the
Fund may invest.
    The Fund may utilize exchange-listed and over-the-counter (``OTC'')
traded derivatives instruments for duration/yield curve management and/
or hedging purposes, for risk management purposes or as part of its
investment strategies. The Fund will use derivative instruments
primarily to hedge interest rate risk, actively manage interest rate
exposure, hedge foreign currency risk and actively manage foreign
currency exposure. The Fund may also use derivative instruments to
enhance returns, as a substitute for, or to gain exposure to, a
position in an underlying

asset, to reduce transaction costs, to maintain full market exposure,
to manage cash flows or to preserve capital. Derivatives may also be
used to hedge risks associated with the Fund's other portfolio
investments. The Fund will not use derivative instruments to gain
exposure to Private ABS/MBS, and derivative instruments linked to such
securities will be used for hedging purposes only. Derivatives that the
Fund may enter into are the following: futures on interest rates,
currencies, Fixed Income Securities and fixed income indices; exchange-
traded and OTC options on interest rates, currencies, Fixed Income
Securities and fixed income indices; swap agreements on interest rates,
currencies, Fixed Income Securities and fixed income indices; credit
default swaps (``CDX''); and currency forward contracts.
Other Investments
    While the Fund, under normal market conditions, invests at least
80% of its net assets in the Principal Investments described above, the
Fund may invest its remaining assets in the following ``Non-Principal
Investments.''
    The Fund may invest in exchange-traded common stock, exchange-
traded preferred stock, and exchange-traded real estate investment
trusts (``REITs'').
    The Fund may invest in the securities of other investment companies
registered under the 1940 Act, including money market funds, exchange-
traded funds (``ETFs''), open-end funds (other than money market funds
and other ETFs), and U.S. exchange-traded closed-end funds.\11\
---------------------------------------------------------------------------

    \11\ For purposes of this filing, the term ``ETFs'' are
Investment Company Units (as described in NYSE Arca Rule 5.2-
E(j)(3)); Portfolio Depositary Receipts (as described in NYSE Arca
Rule 8.100-E); and Managed Fund Shares (as described in NYSE Arca
Rule 8.600-E). All ETFs will be listed and traded in the U.S. on a
national securities exchange. While the Fund may invest in inverse
ETFs, the Fund will not invest in leveraged (e.g., 2X, -2X, 3X or -
3X) ETFs.
---------------------------------------------------------------------------

    The Fund may hold exchange-traded notes (``ETNs'').\12\
---------------------------------------------------------------------------

    \12\ ETNs are Index-Linked Securities (as described in NYSE Arca
Rule 5.2-E(j)(6)). While the Fund may invest in inverse ETNs, the
Fund will not invest in leveraged or inverse leveraged ETNs (e.g.,
2X or -3X).
---------------------------------------------------------------------------

    The Fund may hold exchange-traded or OTC ``Work Out Securities.''
\13\
---------------------------------------------------------------------------

    \13\ For purposes of this filing, Work Out Securities are U.S.
or foreign equity securities of any type acquired in connection with
restructurings related to issuers of Fixed Income Securities held by
the Fund. Work Out Securities are generally traded OTC, but may be
traded on a U.S. or foreign exchange.
---------------------------------------------------------------------------

    The Fund may hold exchange-traded or OTC equity securities issued
upon conversion of fixed income convertible securities.
Investment Restrictions
    The Fund may not invest more than 2% of its total assets in any one
Fixed Income Security (excluding U.S. government securities and TIPS)
on a per CUSIP basis. The Fund's holdings in derivative instruments for
hedging purposes would be excluded from the determination of compliance
with this 2% limitation. The total gross notional value of the Fund's
holdings in derivative instruments used to gain exposure to a specific
asset is limited to 2% of the Fund's total assets.
    The Fund may invest up to 50% of its total assets in the aggregate
in Private ABS/MBS, provided that the Fund (1) may not invest more than
30% of its total assets in non-agency RMBS; (2) may not invest more
than 25% of its total assets in non-agency CMBS and CLOs; and (3) may
not invest more than 25% of its total assets in non-agency ABS.
    With respect to the Fund's investments in up to 30% of its total
assets in Private ABS/MBS that exceed the 20% of the weight of the
fixed income portion of the Fund's portfolio that may be invested in
Private ABS/MBS under Commentary .01(b)(5) to NYSE Arca Rule 8.600-
E,\14\ the following restrictions will apply:
---------------------------------------------------------------------------

    \14\ Commentary .01(b)(5) to NYSE Arca Rule 8.600-E provides
that non-agency, non-GSE and privately-issued mortgage-related and
other asset-backed securities components of a portfolio shall not
account, in the aggregate, for more than 20% of the weight of the
fixed income portion of the portfolio.
---------------------------------------------------------------------------

     Non-agency RMBS shall have an average loan maturity of 84
months or more;
     Non-agency CMBS and CLOs shall have an average loan
maturity of 60 months or more; and
     Non-agency ABS shall have an average loan maturity of 12
months or more.\15\
---------------------------------------------------------------------------

    \15\ Information relating to average loan maturity for non-
agency RMBS, non-agency CMBS, CLOs and non-agency ABS is widely
available from major market data vendors such as Bloomberg.
---------------------------------------------------------------------------

    The Exchange proposes that up to 25% of the Fund's assets may be
invested in OTC derivatives that are used to reduce currency, interest
rate or credit risk arising from the Fund's investments (that is,
``hedge''). The Fund's investments in OTC derivatives other than OTC
derivatives used to hedge the Fund's portfolio against currency,
interest rate or credit risk will be limited to 20% of the assets in
the Fund's portfolio. For purposes of these percentage limitations on
OTC derivatives, the weight of such OTC derivatives will be calculated
as the aggregate gross notional value of such OTC derivatives.
    The Fund's holdings of bank loans will not exceed 15% of the Fund's
total assets, and the Fund's holdings of bank loans other than Senior
Loans will not exceed 5% of the Fund's total assets.
    The Fund's holdings in fixed income convertible securities and in
equity securities issued upon conversion of such convertible securities
will not exceed 10% of the Fund's total assets.
    The Fund's holdings in Work Out Securities will not exceed 5% of
the Fund's total assets.
    The Fund will not invest in securities or other financial
instruments that have not been described in this proposed rule change.
Other Restrictions
    The Fund's investments, including derivatives, will be consistent
with the Fund's investment objective and will not be used to enhance
leverage (although certain derivatives and other investments may result
in leverage). That is, the Fund's investments will not be used to seek
performance that is the multiple or inverse multiple (e.g., 2X or -3X)
of the Fund's primary broad-based securities benchmark index (as
defined in Form N-1A).\16\
---------------------------------------------------------------------------

    \16\ The Fund's broad-based securities benchmark index will be
identified in a future amendment to the Registration Statement
following the Fund's first full calendar year of performance.
---------------------------------------------------------------------------

Use of Derivatives by the Fund
    The Fund may invest in the types of derivatives described in the
``Principal Investments'' section above for the purposes described in
that section. Investments in derivative instruments will be made in
accordance with the Fund's investment objective and policies.
    To limit the potential risk associated with such transactions, the
Fund will enter into offsetting transactions or segregate or
``earmark'' assets determined to be liquid by the Adviser in accordance
with procedures established by the Trust's Board of Trustees (the
``Board''). In addition, the Fund has included 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 derivatives, may give rise to leverage,
causing the Fund to be more volatile than if it had not been leveraged.
Because the markets for certain assets, or the assets themselves, may
be unavailable or cost prohibitive as compared to derivative
instruments, suitable derivative transactions may be an efficient
alternative for the Fund to obtain the desired asset exposure.

Impact on Arbitrage Mechanism
    The Adviser and the Sub-Adviser believe there will be minimal, if
any, impact to the arbitrage mechanism as a result of the Fund's use of
derivatives and Private ABS/MBS. The Adviser and the Sub-Adviser
understand that market makers and participants should be able to value
derivatives and Private ABS/MBS as long as the positions are disclosed
with relevant information. The Adviser and the Sub-Adviser believe that
the price at which Shares of the Fund trade will continue to be
disciplined by arbitrage opportunities created by the ability to
purchase or redeem Shares of the Fund at their net asset value
(``NAV''), which should ensure that Shares of the Fund will not trade
at a material discount or premium in relation to their NAV.
    The Adviser and Sub-Adviser do 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 and Private
ABS/MBS.
Creation and Redemption of Shares
    The Fund will issue and redeem Shares on a continuous basis at NAV
\17\ only in large blocks of Shares (``Creation Units'') in
transactions with authorized participants, generally including broker-
dealers and large institutional investors (``Authorized
Participants''). Creation Units generally will consist of 50,000
Shares. The size of a Creation Unit is subject to change. As described
in the Registration Statement, the Fund will issue and redeem Creation
Units in exchange for an in-kind portfolio of instruments and/or cash
in lieu of such instruments (the ``Creation Basket'').\18\ In addition,
if there is a difference between the NAV attributable to a Creation
Unit and the market value of the Creation Basket exchanged for the
Creation Unit, the party conveying instruments (which may include cash-
in-lieu amounts) with the lower value will pay to the other an amount
in cash equal to the difference (referred to as the ``Cash
Component''). Creations and redemptions must be made by or through an
Authorized Participant that has executed an agreement that has been
agreed to by the Distributor and the Transfer Agent with respect to
creations and redemptions of Creation Units. All standard orders to
create Creation Units must be received by the Transfer Agent no later
than the closing time of the regular trading session on the NYSE
(ordinarily 4:00 p.m., E.T.) (the ``Closing Time'') in each case on the
date such order is placed in order for the creation of Creation Units
to be effected based on the NAV of Shares as next determined on such
date after receipt of the order in proper form. Shares may be redeemed
only in Creation Units at their NAV next determined after receipt not
later than the Closing Time of a redemption request in proper form by
the Fund through the Transfer Agent and only on a business day. The
Custodian, through the National Securities Clearing Corporation
(``NSCC''), will make available on each business day, prior to the
opening of business of the Exchange, the list of the names and
quantities of the instruments comprising the Creation Basket, as well
as the estimated Cash Component (if any), for that day. The published
Creation Basket will apply until a new Creation Basket is announced on
the following business day prior to commencement of trading in the
Shares.
---------------------------------------------------------------------------

    \17\ The NAV of the Fund's Shares generally will be calculated
once daily Monday through Friday as of the close of regular trading
on the New York Stock Exchange (``NYSE''), generally 4:00 p.m.,
Eastern Time (``E.T.''). NAV per Share will be calculated by
dividing the Fund's net assets by the number of Fund Shares
outstanding.
    \18\ It is expected that the Fund will typically issue and
redeem Creation Units on a cash basis; however, at times, the Fund
may issue and redeem Creation Units on an in-kind (or partially in-
kind) (or partially cash) basis.
---------------------------------------------------------------------------

Application of Generic Listing Requirements
    The Exchange is submitting this proposed rule change because the
portfolio for the Fund will not meet all of the ``generic'' listing
requirements of Commentary .01 to NYSE Arca Rule 8.600-E applicable to
the listing of Managed Fund Shares. The Fund's portfolio will meet all
such requirements except for those set forth in Commentary .01(a)(1),
(a)(2), (b)(1), (b)(4), (b)(5), and (e), as described below.
    The Fund will not comply with the requirements set forth in
Commentary .01(a)(1) \19\ and (a)(2) \20\ to NYSE Arca

Rule 8.600-E with respect to the Fund's investments in equity
securities.\21\ Instead, the Exchange proposes that (i) the Fund's
investments in equity securities will meet the requirements of
Commentary .01(a) with the exception of Commentary .01(a)(1)(C) and
.01(a)(1)(D) (with respect to U.S. Component Stocks) and Commentary
.01(a)(2)(C) and .01(a)(2)(D) (with respect to Non-U.S. Component
Stocks). Any Fund investment in exchange-traded common stocks,
preferred stocks, REITS, ETFs, ETNs, exchange-traded equity securities
issued upon conversion of fixed income convertible securities,
exchange-traded Work Out Securities and U.S. exchange-traded closed-end
funds would provide for enhanced diversification of the Fund's
portfolio and, in any case, would be Non-Principal Investments and
would not exceed 20% of the Fund's net assets in the aggregate. With
respect to any Fund holdings of exchange-traded equity securities
issued upon conversion of fixed income convertible securities and
exchange-traded Work Out Securities, such securities will not exceed
10% and 5%, respectively, of the Fund's total assets. The Adviser and
Sub-Adviser represent that the Fund generally will not actively invest
in equity securities issued upon conversion of fixed income convertible
securities or Work Out Securities, but may, at times, receive a
distribution of such securities in connection with the Fund's holdings
in other securities. Therefore, the Fund's holdings in equity
securities issued upon conversion of fixed income convertible
securities and Work Out Securities generally would not be acquired as
the result of the Fund's voluntary investment decisions. The Adviser
and Sub-Adviser represent that, under these circumstances, application
of the weighting requirements of Commentary .01(a)(1)(C) and Commentary
.01(a)(2)(C) and the minimum number of components requirements of
Commentary .01(a)(1)(D) and Commentary .01(a)(2)(D) would impose an
unnecessary burden on the Fund's ability to hold such equity
securities.
---------------------------------------------------------------------------

    \19\ Commentary .01(a)(1) to NYSE Arca Rule 8.600-E provides
that the component stocks of the equity portion of a portfolio that
are U.S. Component Stocks shall meet the following criteria
initially and on a continuing basis:
    (A) Component stocks (excluding Derivative Securities Products
and Index-Linked Securities) that in the aggregate account for at
least 90% of the equity weight of the portfolio (excluding such
Derivative Securities Products and Index-Linked Securities) each
shall have a minimum market value of at least $75 million;
    (B) Component stocks (excluding Derivative Securities Products
and Index-Linked Securities) that in the aggregate account for at
least 70% of the equity weight of the portfolio (excluding such
Derivative Securities Products and Index-Linked Securities) each
shall have a minimum monthly trading volume of 250,000 shares, or
minimum notional volume traded per month of $25,000,000, averaged
over the last six months;
    (C) The most heavily weighted component stock (excluding
Derivative Securities Products and Index-Linked Securities) shall
not exceed 30% of the equity weight of the portfolio, and, to the
extent applicable, the five most heavily weighted component stocks
(excluding Derivative Securities Products and Index-Linked
Securities) shall not exceed 65% of the equity weight of the
portfolio;
    (D) Where the equity portion of the portfolio does not include
Non-U.S. Component Stocks, the equity portion of the portfolio shall
include a minimum of 13 component stocks; provided, however, that
there shall be no minimum number of component stocks if (i) one or
more series of Derivative Securities Products or Index-Linked
Securities constitute, at least in part, components underlying a
series of Managed Fund Shares, or (ii) one or more series of
Derivative Securities Products or Index-Linked Securities account
for 100% of the equity weight of the portfolio of a series of
Managed Fund Shares;
    (E) Except as provided herein, equity securities in the
portfolio shall be U.S. Component Stocks listed on a national
securities exchange and shall be NMS Stocks as defined in Rule 600
of Regulation NMS under the Securities Exchange Act of 1934; and
    (F) American Depositary Receipts (``ADRs'') in a portfolio may
be exchange-traded or non-exchange-traded. However, no more than 10%
of the equity weight of a portfolio shall consist of non-exchange-
traded ADRs.
    \20\ Commentary .01(a)(2) to NYSE Arca Rule 8.600-E provides
that the component stocks of the equity portion of a portfolio that
are Non-U.S. Component Stocks shall meet the following criteria
initially and on a continuing basis:
    (A) Non-U.S. Component Stocks each shall have a minimum market
value of at least $100 million;
    (B) Non-U.S. Component Stocks each shall have a minimum global
monthly trading volume of 250,000 shares, or minimum global notional
volume traded per month of $25,000,000, averaged over the last six
months;
    (C) The most heavily weighted Non-U.S. Component stock shall not
exceed 25% of the equity weight of the portfolio, and, to the extent
applicable, the five most heavily weighted Non-U.S. Component Stocks
shall not exceed 60% of the equity weight of the portfolio;
    (D) Where the equity portion of the portfolio includes Non-U.S.
Component Stocks, the equity portion of the portfolio shall include
a minimum of 20 component stocks; provided, however, that there
shall be no minimum number of component stocks if (i) one or more
series of Derivative Securities Products or Index-Linked Securities
constitute, at least in part, components underlying a series of
Managed Fund Shares, or (ii) one or more series of Derivative
Securities Products or Index-Linked Securities account for 100% of
the equity weight of the portfolio of a series of Managed Fund
Shares; and
    (E) Each Non-U.S. Component Stock shall be listed and traded on
an exchange that has last-sale reporting.
    \21\ For purposes of these exceptions, investments in equity
securities that are OTC Work Out Securities, OTC equity securities
issued upon conversion of fixed income convertible securities, or
non-exchange-traded securities of other open-end investment
companies (e.g., mutual funds) are excluded and are discussed
further below.
---------------------------------------------------------------------------

    The Fund will not comply with the requirement in Commentary
.01(b)(1) to Rule 8.600-E that components that in the aggregate account
for at least 75% of the fixed income weight of the portfolio each shall
have a minimum original principal amount outstanding of $100 million or
more. Instead, the Exchange proposes that components that in the
aggregate account for at least 50% of the fixed income weight of the
portfolio each shall have a minimum original principal amount
outstanding of $50 million or more. As noted above, the Fund may not
invest more than 2% of its total assets in any one Fixed Income
Security (excluding U.S. government securities and TIPS) on a per CUSIP
basis. In addition, at least 50% of the weight of the Fund's portfolio
would continue to be subject to a substantial minimum (i.e., $50
million) original principal amount outstanding. The Exchange believes
this limitation would provide significant additional diversification to
the Fund's investments in Fixed Income Securities, and reduce concerns
that the Fund's investments in such securities would be readily
susceptible to market manipulation.
    The Fund will not comply with the requirements in Commentary
.01(b)(4) to Rule 8.600-E that component securities that in the
aggregate account for at least 90% of the fixed income weight of the
portfolio meet one of the criteria specified in Commentary .01(b)(4),
because certain Private ABS/MBS cannot satisfy the criteria in
Commentary .01(b)(4).\22\ Instead, the Exchange proposes that the
Fund's investments in Fixed Income Securities other than Private ABS/
MBS will be required to comply with the requirements of Commentary
.01(b)(4). As noted above, the Fund may not invest more than 2% of its
total assets in any one Fixed Income Security (excluding U.S.
government securities and TIPS) on a per CUSIP basis. The Exchange
believes this limitation would provide additional diversification to
the Fund's investments in Private ABS/MBS, and reduce concerns that the
Fund's investment in such securities would be readily susceptible to
market manipulation.
---------------------------------------------------------------------------

    \22\ Commentary .01(b)(4) provides that component securities
that in the aggregate account for at least 90% of the fixed income
weight of the portfolio must be either: (a) From issuers that are
required to file reports pursuant to Sections 13 and 15(d) of the
Act; (b) from issuers that have a worldwide market value of its
outstanding common equity held by non-affiliates of $700 million or
more; (c) from issuers that have outstanding securities that are
notes, bonds debentures, or evidence of indebtedness having a total
remaining principal amount of at least $1 billion; (d) exempted
securities as defined in Section 3(a)(12) of the Act; or (e) from
issuers that are a government of a foreign country or a political
subdivision of a foreign country.
---------------------------------------------------------------------------

    The Exchange notes that the Commission has previously approved the
listing of Managed Fund Shares with similar investment objectives and
strategies without imposing requirements that a certain percentage of
such funds' securities meet one of the criteria set forth in Commentary
.01(b)(4).\23\
---------------------------------------------------------------------------

    \23\ See, e.g., Exchange Act Release Nos. 67894 (September 20,
2012) 77 FR 59227 (September 26, 2012) (SR-BATS-2012-033) (order
approving the listing and trading of shares of the iShares Short
Maturity Bond Fund); 70342 (September 6, 2013), 78 FR 56256
(September 12, 2013) (SR-NYSEArca-2013-71) (order approving the
listing and trading of shares of the SPDR SSgA Ultra Short Term Bond
ETF, SPDR SSgA Conservative Ultra Short Term Bond ETF and SPDR SSgA
Aggressive Ultra Short Term Bond ETF).
---------------------------------------------------------------------------

    The Fund will not comply with the requirement in Commentary
.01(b)(5) to Rule 8.600-E that Private ABS/MBS in the Fund's portfolio
account, in the aggregate, for no more than 20% of the weight of the
fixed income portion of the Fund's portfolio.\24\ Instead, the Exchange
proposes that, in order to enable the portfolio to be more diversified
and provide the Fund with an opportunity to earn higher returns, the
Fund may invest up to 50% of its total assets in the aggregate in
Private ABS/MBS, provided that the Fund (1) may not invest more than
30% of its total assets in non-agency RMBS; (2) may not invest more
than 25% of its total assets in non-agency CMBS and CLOs; and (3) may
not invest more than 25% of its total assets in non-agency ABS.
---------------------------------------------------------------------------

    \24\ See note 14, supra.
---------------------------------------------------------------------------

    With respect to the Fund's investments in up to 30% of its total
assets in Private ABS/MBS that exceed the 20% of the weight of the
fixed income portion of the Fund's portfolio that may be invested in
Private ABS/MBS under Commentary .01(b)(5) to NYSE Arca Rule 8.600-
E,\25\ the following restrictions will apply:
---------------------------------------------------------------------------

    \25\ See note 14, supra.
---------------------------------------------------------------------------

     Non-agency RMBS shall have an average loan maturity of 84
months or more;
     Non-agency CMBS and CLOs shall have an average loan
maturity of 60 months or more; and
     Non-agency ABS shall have an average loan maturity of 12
months or more.
    In addition, as noted above, the Fund may not invest more than 2%
of its total assets in any one Fixed Income Security (excluding U.S.
government securities and TIPS) on a per CUSIP basis.\26\ The

Exchange believes these limitations would provide additional
diversification to the Fund's Private ABS/MBS investments and reduce
concerns that the Fund's investment in such securities would be readily
susceptible to market manipulation.
---------------------------------------------------------------------------

    \26\ As noted above, the Fund's holdings in derivative
instruments for hedging purposes would be excluded from the
determination of compliance with this 2% limitation. The total gross
notional value of the Fund's holdings in derivative instruments used
to gain exposure to a specific asset is limited to 2% of the Fund's
total assets.
---------------------------------------------------------------------------

    The Adviser and Sub-Adviser represent that the RMBS sector can be
an important component of the Fund's investment strategy because of the
potential for attractive risk-adjusted returns relative to other fixed
income sectors and the potential to add significantly to the
diversification in the Fund's portfolio. Similarly, the Private ABS/MBS
sectors also have the potential for attractive risk-adjusted returns
and added portfolio diversification.
    The Fund's portfolio will not comply with the requirements set
forth in Commentary .01(e) to NYSE Arca Rule 8.600-E.\27\ Specifically,
the Fund's investments in OTC derivatives may exceed 20% of Fund
assets, calculated as the aggregate gross notional value of such OTC
derivatives. The Exchange proposes that up to 25% of the Fund's assets
(calculated as the aggregate gross notional value) may be invested in
OTC derivatives that are used to reduce currency, interest rate or
credit risk arising from the Fund's investments (that is, ``hedge'').
The Fund's investments in OTC derivatives other than OTC derivatives
used to hedge the Fund's portfolio against currency, interest rate or
credit risk will be limited to 20% of the assets in the Fund's
portfolio, calculated as the aggregate gross notional value of such OTC
derivatives.
---------------------------------------------------------------------------

    \27\ Commentary .01(e) to NYSE Arca Rule 8.600-E provides that
the portfolio may hold OTC derivatives, including forwards, options
and swaps on commodities, currencies and financial instruments
(e.g., stocks, fixed income, interest rates, and volatility) or a
basket or index of any of the foregoing; however, on both an initial
and continuing basis, no more than 20% of the assets in the
portfolio may be invested in OTC derivatives. For purposes of
calculating this limitation, a portfolio's investment in OTC
derivatives will be calculated as the aggregate gross notional value
of the OTC derivatives.
---------------------------------------------------------------------------

    The Adviser and Sub-Adviser believe that it is important to provide
the Fund with additional flexibility to manage risk associated with its
investments. Depending on market conditions, it may be critical that
the Fund be able to utilize available OTC derivatives for this purpose
to attempt to reduce impact of currency, interest rate or credit
fluctuations on Fund assets. Therefore, the Exchange believes it is
appropriate to apply a limit of up to 25% of the Fund's assets to the
Fund's investments in OTC derivatives (calculated as the aggregate
gross notional value of such OTC derivatives), including forwards,
options and swaps, that are used for hedging purposes, as described
above.\28\
---------------------------------------------------------------------------

    \28\ The Commission has previously approved an exception from
requirements set forth in Commentary .01(e) relating to investments
in OTC derivatives similar to those proposed with respect to the
Fund in Securities Exchange Act Release No. 80657 (May 11, 2017), 82
FR 22702 (May 17, 2017) (SR-NYSEArca-2017-09) (Notice of Filing of
Amendment No. 2 and Order Granting Accelerated Approval of a
Proposed Rule Change, as Modified by Amendment No. 2, Regarding
Investments of the Janus Short Duration Income ETF Listed Under NYSE
Arca Equities Rule 8.600).
---------------------------------------------------------------------------

    As noted above, the Fund may hold equity securities that are Work
Out Securities, which generally are traded OTC (but that may be traded
on a U.S. or foreign exchange), exchange-traded or OTC equity
securities issued upon conversion of fixed income convertible
securities, and non-exchange-traded securities of other open-end
investment company securities (e.g., mutual funds). The Exchange
believes that it is appropriate and in the public interest to approve
listing and trading of Shares of the Fund on the Exchange
notwithstanding that the Fund would not meet the requirements of
Commentary .01(a)(1)(A) through (E) to Rule 8.600-E with respect to the
Fund's investments in non-exchange-traded securities of open-end
investment company securities,\29\ and notwithstanding that the Fund's
holdings of OTC equity securities issued upon conversion of fixed
income convertible securities and OTC Work Out Securities would not
meet the requirements of Commentary .01(a)(1)(A) through (E) and
Commentary .01(a)(2)(A) through (E) to Rule 8.600-E. Investments in
non-exchange-traded securities of open-end investment company
securities will not be principal investments of the Fund.\30\ Such
investments, which may include mutual funds that invest, for example,
principally in fixed income securities, would be utilized to help the
Fund meet its investment objective and to equitize cash in the short
term. With respect to any Fund holdings of OTC equity securities issued
upon conversion of fixed income convertible securities and OTC Work Out
Securities, such securities will not exceed 10% and 5%, respectively,
of the Fund's total assets. The Adviser and Sub-Adviser represent that
the Fund generally will not actively invest in OTC equity securities
issued upon conversion of fixed income convertible securities or OTC
Work Out Securities, but may, at times, receive a distribution of such
securities in connection with the Fund's holdings in other securities.
Therefore, the Fund's holdings in equity securities issued upon
conversion of fixed income convertible securities and Work Out
Securities generally would not be acquired as the result of the Fund's
voluntary investment decisions. With respect to investments in non-
exchange-traded investment company securities, because such securities
have a net asset value based on the value of securities and financial
assets the investment company holds, the Exchange believes it is both
unnecessary and inappropriate to apply to such investment company
securities the criteria in Commentary .01(a)(1).\31\
---------------------------------------------------------------------------

    \29\ Commentary .01 (a) to Rule 8.600-E specifies the equity
securities accommodated by the generic criteria in Commentary
.01(a), namely, U.S. Component Stocks (as described in Rule 5.2-
E(j)(3)); Non-U.S. Component Stocks (as described in Rule 5.2-
E(j)(3)); Derivative Securities Products (i.e., Investment Company
Units and securities described in Section 2 of Rule 8-E); and Index-
Linked Securities that qualify for Exchange listing and trading
under Rule 5.2-E(j)(6).
    \30\ For purposes of this section of the filing, non-exchange-
traded securities of other registered investment companies do not
include money market funds, which are cash equivalents under
Commentary .01(c) to Rule 8.600-E and for which there is no
limitation in the percentage of the portfolio invested in such
securities.
    \31\ The Commission has previously approved proposed rule
changes under Section 19(b) of the Act for series of Managed Fund
Shares that may invest in non-exchange traded investment company
securities. See, e.g., Securities Exchange Act Release No. 78414
(July 26, 2016), 81 FR 50576 (August 1, 2016) (SR-NYSEArca-2016-79)
(order approving listing and trading of shares of the Virtus Japan
Alpha ETF under NYSE Arca Equities Rule 8.600).
---------------------------------------------------------------------------

    The Exchange notes that Commentary .01(a) through (d) to Rule
8.600-E exclude application of those provisions to certain ``Derivative
Securities Products'' that are exchange-traded investment company
securities, including Investment Company Units (as described in NYSE
Arca Rule 5.2-E(j)(3)), Portfolio Depositary Receipts (as described in
NYSE Arca Rule 8.100-E) and Managed Fund Shares (as described in NYSE
Arca Rule 8.600-E).\32\ In its

2008 Approval Order approving amendments to Commentary .01(a) to Rule
5.2(j)(3) that exclude Derivative Securities Products from certain
provisions of Commentary .01(a) (which exclusions are similar to those
in Commentary .01(a)(1) to Rule 8.600-E), the Commission stated that
``based on the trading characteristics of Derivative Securities
Products, it may be difficult for component Derivative Securities
Products to satisfy certain quantitative index criteria, such as the
minimum market value and trading volume limitations.'' The Exchange
notes that it would be difficult or impossible to apply to non-
exchange-traded investment company securities the generic quantitative
criteria (e.g., market capitalization, trading volume, or portfolio
criteria) in Commentary .01 (a) through (d) applicable to U.S.
Component Stocks. For example, the requirement for U.S. Component
Stocks in Commentary .01(a)(1)(B) that there be minimum monthly trading
volume of 250,000 shares, or minimum notional volume traded per month
of $25,000,000, averaged over the last six months is tailored to
exchange-traded securities (e.g., U.S. Component Stocks) and not to
mutual fund shares, which do not trade in the secondary market.
Moreover, application of such criteria would not serve the purpose
served with respect to U.S. Component Stocks, namely, to establish
minimum liquidity and diversification criteria for U.S. Component
Stocks held by series of Managed Fund Shares.
---------------------------------------------------------------------------

    \32\ The Commission initially approved the Exchange's proposed
rule change to exclude ``Derivative Securities Products'' (i.e.,
Investment Company Units and securities described in Section 2 of
Rule 8) and ``Index-Linked Securities (as described in Rule 5.2-E
(j)(6)) from Commentary .01(a)(A) (1) through (4) to Rule 5.2-E(j)(3
in Securities Exchange Act Release No. 57751 (May 1, 2008), 73 FR
25818 (May 7, 2008) (SR-NYSEArca-2008-29) (Order Granting Approval
of a Proposed Rule Change, as Modified by Amendment No. 1 Thereto,
to Amend the Eligibility Criteria for Components of an Index
Underlying Investment Company Units) (``2008 Approval Order''). See
also, Securities Exchange Act Release No. 57561 (March 26, 2008), 73
FR 17390 (April 1, 2008) (Notice of Filing of Proposed Rule Change
and Amendment No. 1 Thereto to Amend the Eligibility Criteria for
Components of an Index Underlying Investment Company Units). The
Commission subsequently approved generic criteria applicable to
listing and trading of Managed Fund Shares, including exclusions for
Derivative Securities Products and Index-Linked Securities in
Commentary .01(a)(1)(A) through (D), in Securities Exchange Act
Release No. 78397 (July 22, 2016), 81 FR 49320 (July 27, 2016)
(Order Granting Approval of Proposed Rule Change, as Modified by
Amendment No. 7 Thereto, Amending NYSE Arca Equities Rule 8.600 To
Adopt Generic Listing Standards for Managed Fund Shares). See also,
Amendment No. 7 to SR-NYSEArca-2015-110, available at https://www.sec.gov/comments/sr-nyseArca-2015-110/nysearca2015110-9.pdf.
---------------------------------------------------------------------------

    The Exchange notes that the Commission has previously approved
listing and trading of an issue of Managed Fund Shares that may invest
in equity securities that are non-exchange-traded securities of other
open-end investment company securities notwithstanding that the fund
would not meet the requirements of Commentary .01(a)(1)(A) through (E)
to Rule 8.600-E with respect to such fund's investments in such
securities.\33\ Thus, the Exchange believes that it is appropriate to
permit the Fund to invest in non-exchange-traded open-end management
investment company securities, as described above.
---------------------------------------------------------------------------

    \33\ See Securities Exchange Act Release No. 83319 (May 24,
2018) (SR-NYSEArca-2018-15) (Order Approving a Proposed Rule Change,
as Modified by Amendment No. 1 Thereto, to Continue Listing and
Trading Shares of the PGIM Ultra Short Bond ETF Under NYSE Arca Rule
8.600-E).
---------------------------------------------------------------------------

    Deviations from the generic requirements are necessary for the Fund
to achieve its investment objective in a manner that is cost-effective
and that maximizes investors' returns. Further, the proposed
alternative requirements are narrowly tailored to allow the Fund to
achieve its investment objective in manner that is consistent with the
principles of Section 6(b)(5) of the Act. As a result, it is in the
public interest to approve listing and trading of Shares of the Fund on
the Exchange pursuant to the requirements set forth herein.
    The Exchange notes that, other than Commentary .01(a)(1), (a)(2),
(b)(1), (b)(4), (b)(5), and (e) to Rule 8.600-E, as described above,
the Fund's portfolio will meet all other requirements of Rule 8.600-E.
Availability of Information
    The Fund's website (www.ftportfolios.com) will include the
prospectus for the Fund that may be downloaded. The Fund's website will
include additional quantitative information updated on a daily basis
including, for the Fund, (1) daily trading volume, the prior business
day's reported closing price, NAV and midpoint of the bid/ask spread at
the time of calculation of such NAV (the ``Bid/Ask Price''),\34\ and a
calculation of the premium and discount of the Bid/Ask Price against
the NAV, and (2) data in chart format displaying the frequency
distribution of discounts and premiums of the daily Bid/Ask Price
against the NAV, within appropriate ranges, for each of the four
previous calendar quarters. On each business day, before commencement
of trading in Shares in the Core Trading Session on the Exchange, the
Fund will disclose on its website the Disclosed Portfolio as defined in
NYSE Arca Rule 8.600-E(c)(2) that forms the basis for the Fund's
calculation of NAV at the end of the business day.\35\
---------------------------------------------------------------------------

    \34\ The Bid/Ask Price of the Fund's Shares will be determined
using the mid-point of the highest bid and the lowest offer on the
Exchange as of the time of calculation of the Fund's NAV. The
records relating to Bid/Ask Prices will be retained by the Fund and
its service providers.
    \35\ Under accounting procedures followed by the Fund, trades
made on the prior business day (``T'') will be booked and reflected
in NAV on the current business day (``T+1''). Accordingly, the Fund
will be able to disclose at the beginning of the business day the
portfolio that will form the basis for the NAV calculation at the
end of the business day.
---------------------------------------------------------------------------

    On a daily basis, the Fund will disclose the information required
under NYSE Arca Rule 8.600-E(c)(2) to the extent applicable. The
website information will be publicly available at no charge.
    In addition, a basket composition file, which includes the security
names and share quantities, if applicable, required to be delivered in
exchange for the Fund's Shares, together with estimates and actual cash
components, will be publicly disseminated daily prior to the opening of
the Exchange via the NSCC. The basket represents one Creation Unit of
the Fund. Authorized Participants may refer to the basket composition
file for information regarding Fixed Income Securities, and any other
instrument that may comprise the Fund's basket on a given day.
Investors can also obtain the Trust's Statement of Additional
Information (``SAI''), the Fund's Shareholder Reports, and the Fund's
Forms N-CSR and Forms N-SAR, filed twice a year. The Fund's SAI and
Shareholder Reports will be available free upon request from the Trust,
and those documents and the Form N-CSR, Form N-PX and Form N-SAR may be
viewed on-screen or downloaded from the Commission's website at
www.sec.gov.
    Intra-day and closing price information regarding exchange-traded
options will be available from the exchange on which such instruments
are traded. Intra-day and closing price information regarding Fixed
Income Securities will be available from major market data vendors.
Price information relating to OTC options, forwards and swaps will be
available from major market data vendors. Intra-day price information
for exchange-traded derivative instruments will be available from the
applicable exchange and from major market data vendors. Intraday and
other price information for the Fixed Income Securities in which the
Fund will invest will be available through subscription services, such
as Bloomberg, Markit and Thomson Reuters, which can be accessed by
Authorized Participants and other market participants. Additionally,
the Trade Reporting and Compliance Engine (``TRACE'') of the Financial
Industry Regulatory Authority (``FINRA'') will be a source of price
information for corporate bonds, and Private ABS/MBS, to the extent
transactions in such securities are reported to TRACE.\36\

Trade price and other information relating to municipal bonds is
available through the Municipal Securities Rulemaking Board's
Electronic Municipal Market Access (``EMMA'') system. Non-exchange-
traded open-end investment company securities are typically priced once
each business day and their prices will be available through the
applicable fund's website or from major market data vendors. Price
information regarding U.S. government securities, bank loans, Private
ABS/MBS, cash equivalents and short-term instruments with maturities of
three months or more generally may be obtained from brokers and dealers
who make markets in such securities or through nationally recognized
pricing services through subscription agreements. Information relating
to average loan maturity for Private ABS/MBS is widely available from
major market data vendors such as Bloomberg.
---------------------------------------------------------------------------

    \36\ Broker-dealers that are FINRA member firms have an
obligation to report transactions in specified debt securities to
TRACE to the extent required under applicable FINRA rules.
Generally, such debt securities will have at issuance a maturity
that exceeds one calendar year. For Fixed Income Securities that are
not reported to TRACE, (i) intraday price quotations will generally
be available from broker-dealers and trading platforms (as
applicable) and (ii) price information will be available from feeds
from market data vendors, published or other public sources, or
online information services, as described above.
---------------------------------------------------------------------------

    Information regarding market price and trading volume of the
Shares, ETFs, ETNs, common stocks, preferred stocks, REITs, equity
securities issued upon conversion of fixed income convertible
securities, Work-Out Securities and closed-end funds will be
continually available on a real-time basis throughout the day on
brokers' computer screens and other electronic services. Information
regarding the previous day's closing price and trading volume
information for the Shares will be published daily in the financial
section of newspapers.
    Quotation and last sale information for the Shares, ETFs, ETNs,
closed-end funds, REITs, certain common stocks, certain preferred
stocks, certain equity securities issued upon conversion of fixed
income convertible securities, and certain Work-Out Securities will be
available via the Consolidated Tape Association (``CTA'') high-speed
line. Exchange-traded options quotation and last sale information for
options cleared via the Options Clearing Corporation (``OCC'') are
available via the Options Price Reporting Authority (``OPRA''). In
addition, the Portfolio Indicative Value (``PIV''), as defined in NYSE
Arca Rule 8.600-E(c)(3), will be widely disseminated by one or more
major market data vendors at least every 15 seconds during the Core
Trading Session.
Trading Halts
    With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares of the Fund.\37\ Trading in Shares of the Fund
will be halted if the circuit breaker parameters in NYSE Arca Rule
7.12-E have been reached. Trading also may be halted because of market
conditions or for reasons that, in the view of the Exchange, make
trading in the Shares inadvisable. Trading in the Fund's Shares also
will be subject to Rule 8.600-E(d)(2)(D) (``Trading Halts'').
---------------------------------------------------------------------------

    \37\ See NYSE Arca Rule 7.12-E.
---------------------------------------------------------------------------

Trading Rules
    The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. Shares will trade on
the NYSE Arca Marketplace from 4 a.m. to 8 p.m., E.T. in accordance
with NYSE Arca Rule 7.34-E (Early, Core, and Late Trading Sessions).
The Exchange has appropriate rules to facilitate transactions in the
Shares during all trading sessions. As provided in NYSE Arca Rule 7.6-
E, the minimum price variation (``MPV'') for quoting and entry of
orders in equity securities traded on the NYSE Arca Marketplace is
$0.01, with the exception of securities that are priced less than $1.00
for which the MPV for order entry is $0.0001.
    With the exception of the requirements of Commentary .01(a)(1),
(a)(2), (b)(1), (b)(4), (b)(5), and (e) to Rule 8.600-E as described
above in ``Application of Generic Listing Requirements,'' the Shares of
the Fund will conform to the initial and continued listing criteria
under NYSE Arca Rule 8.600-E. Consistent with NYSE Arca Rule 8.600-
E(d)(2)(B)(ii), the Adviser and Sub-Adviser will implement and
maintain, or be subject to, procedures designed to prevent the use and
dissemination of material non-public information regarding the actual
components of the Fund's portfolio.
    The Exchange represents that, for initial and continued listing,
the Fund will be in compliance with Rule 10A-3 \38\ under the Act, as
provided by NYSE Arca Rule 5.3-E. The Exchange will obtain a
representation from the issuer of the Shares that the NAV per Share
will be calculated daily and that the NAV and the Disclosed Portfolio
will be made available to all market participants at the same time. The
Fund's investments will be consistent with its investment goal and will
not be used to provide multiple returns of a benchmark or to produce
leveraged returns.
---------------------------------------------------------------------------

    \38\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------

Surveillance
    The Exchange represents that trading in the Shares will be subject
to the existing trading surveillances, administered by FINRA on behalf
of the Exchange, or by regulatory staff of the Exchange, which are
designed to detect violations of Exchange rules and applicable federal
securities laws. 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.\39\
---------------------------------------------------------------------------

    \39\ FINRA conducts cross-market surveillances on behalf of the
Exchange pursuant to a regulatory services agreement. The Exchange
is responsible for FINRA's performance under this regulatory
services agreement.
---------------------------------------------------------------------------

    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.
    The Exchange or FINRA, on behalf of the Exchange, or both, will
communicate as needed regarding trading in the Shares, certain
exchange-traded options and certain exchange-traded futures, ETFs,
ETNs, closed-end funds, certain common stocks, certain preferred
stocks, certain REITs, certain equity securities issued upon conversion
of fixed income convertible securities, certain Work-Out Securities
with other markets and other entities that are members of the
Intermarket Surveillance Group (``ISG''), and the Exchange or FINRA, on
behalf of the Exchange, or both, may obtain trading information
regarding trading in such securities and financial instruments from
such markets and other entities.\40\ In addition, the Exchange may
obtain information regarding trading in such securities and financial
instruments from markets and other entities that are members of ISG or
with which the Exchange has in place a CSSA. In addition, FINRA, on
behalf of the Exchange, is able to access, as needed, trade information
for certain fixed income securities held by the Fund

reported to FINRA's TRACE. FINRA also can access data obtained from the
Municipal Securities Rulemaking Board relating to municipal bond
trading activity for surveillance purposes in connection with trading
in the Shares.
---------------------------------------------------------------------------

    \40\ For a list of the current members of ISG, see
www.isgportal.org. The Exchange notes that not all components of the
Disclosed Portfolio may trade on markets that are members of ISG or
with which the Exchange has in place a comprehensive surveillance
sharing agreement (``CSSA'').
---------------------------------------------------------------------------

    In addition, the Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.
    All statements and representations made in this filing regarding
(a) the description of the portfolio or reference asset, (b)
limitations on portfolio holdings or reference assets, or (c) the
applicability of Exchange listing rules specified in this rule filing
shall constitute continued listing requirements for listing the Shares
of the Fund on the Exchange.
    The issuer must notify the Exchange of any failure by the Fund to
comply with the continued listing requirements, and, pursuant to its
obligations under Section 19(g)(1) of the Act, the Exchange will
monitor for compliance with the continued listing requirements. If the
Fund is not in compliance with the applicable listing requirements, the
Exchange will commence delisting procedures under NYSE Arca Rule 5.5-
E(m).
Information Bulletin
    The Exchange will inform its Equity Trading Permit Holders in an
Information Bulletin (``Bulletin'') of the special characteristics and
risks associated with trading the Shares. Specifically, the Bulletin
will discuss the following: (1) The procedures for purchases and
redemptions of Shares in Creation Unit aggregations (and that Shares
are not individually redeemable); (2) NYSE Arca Rule 9.2-E(a), which
imposes a duty of due diligence on its Equity Trading Permit Holders to
learn the essential facts relating to every customer prior to trading
the Shares; (3) the risks involved in trading the Shares during the
Early and Late Trading Sessions when an updated PIV will not be
calculated or publicly disseminated; (4) how information regarding the
PIV and the Disclosed Portfolio is disseminated; (5) the requirement
that Equity Trading Permit Holders deliver a prospectus to investors
purchasing newly issued Shares prior to or concurrently with the
confirmation of a transaction; and (6) trading information.
    In addition, the Bulletin will reference that the Fund is subject
to various fees and expenses described in the Registration Statement.
The Bulletin will discuss any exemptive, no-action, and interpretive
relief granted by the Commission from any rules under the Act. The
Bulletin will also disclose that the NAV for the Shares will be
calculated after 4:00 p.m., E.T. each trading day.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \41\ 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.
---------------------------------------------------------------------------

    \41\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices in that the
Shares are listed and traded on the Exchange pursuant to the initial
and continued listing criteria in NYSE Arca Rule 8.600-E. The Exchange
has in place surveillance procedures that are adequate to properly
monitor trading in the Shares in all trading sessions and to deter and
detect violations of Exchange rules and applicable federal securities
laws. The Exchange or FINRA, on behalf of the Exchange, or both, will
communicate as needed regarding trading in the Shares, certain
exchange-traded options and certain exchange-traded futures, ETFs,
ETNs, closed-end funds, certain common stocks, certain preferred
stocks, certain REITs, certain equity securities issued upon conversion
of fixed income convertible securities and certain Work-Out Securities
with other markets and other entities that are members of the ISG, and
the Exchange or FINRA, on behalf of the Exchange, or both, may obtain
trading information regarding trading in such securities and financial
instruments from such markets and other entities. The Exchange may
obtain information regarding trading in such securities and financial
instruments from markets and other entities that are members of ISG or
with which the Exchange has in place a CSSA. In addition, FINRA, on
behalf of the Exchange, is able to access, as needed, trade information
for certain fixed income securities held by the Fund reported to TRACE.
FINRA also can access data obtained from the Municipal Securities
Rulemaking Board relating to municipal bond trading activity for
surveillance purposes in connection with trading in the Shares. The
Adviser and Sub-Adviser are not registered as broker-dealers. The
Adviser is affiliated with First Trust Portfolios L.P., a broker-dealer
and has implemented and will maintain a fire wall with respect to its
broker-dealer affiliate regarding access to information concerning the
composition and/or changes to the portfolios. The Sub-Adviser is
affiliated with multiple broker-dealers and has implemented and will
maintain a fire wall with respect to its broker-dealer affiliates
regarding access to information concerning the composition and/or
changes to the portfolio.
    The Exchange notes that, other than Commentary .01(a)(1), (a)(2),
(b)(1), (b)(4), (b)(5), and (e) to Rule 8.600-E, as described above,
the Fund's portfolio will meet all other requirements of Rule 8.600-E.
    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 Exchange will obtain a representation from the issuer of the
Shares that the NAV per Share will be calculated daily and that the NAV
and the Disclosed Portfolio will be made available to all market
participants at the same time. In addition, a large amount of
information will be publicly available regarding the Fund and the
Shares, thereby promoting market transparency. Quotation and last sale
information for the Shares, ETFs, ETNs, closed-end funds, certain
REITs, certain common stocks, certain preferred stocks, certain equity
securities issued upon conversion of fixed income convertible
securities, and certain Work-Out Securities will be available via the
CTA high-speed line. Exchange-traded options quotation and last sale
information for options cleared via the OCC are available via OPRA. The
Exchange will inform its Equity Trading Permit Holders in an
Information Bulletin of the special characteristics and risks
associated with trading the Shares. Trading in Shares of the Fund will
be halted if the circuit breaker parameters in NYSE Arca Rule 7.12-E
have been reached or because of market conditions or for reasons that,
in the view of the Exchange, make trading in the Shares inadvisable.
Trading in the Shares will be subject to NYSE Arca Rule 8.600-
E(d)(2)(D), which sets forth circumstances under which Shares of the
Fund may be halted. In addition, as noted above, investors will have
ready access to information regarding the Fund's holdings, NAV, the
PIV, the Disclosed Portfolio, and quotation and last sale information
for the Shares.
    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 additional type of actively-managed exchange-traded product that

generally will principally hold fixed income securities and that will
enhance competition among market participants, to the benefit of
investors and the marketplace. As noted above, the Exchange has in
place surveillance procedures relating to trading in the Shares and may
obtain information via ISG from other exchanges that are members of ISG
or with which the Exchange has entered into a CSSA. In addition, as
noted above, investors will have ready access to information regarding
the Fund's holdings, NAV, Disclosed Portfolio, and quotation and last
sale information for the Shares.
    Deviations from the generic requirements, as described above, are
necessary for the Fund to achieve its investment objective in a manner
that is cost-effective and that maximizes investors' returns. Further,
the proposed alternative requirements are narrowly tailored to allow
the Fund to achieve its investment objective in a manner that is
consistent with the principles of Section 6(b)(5) of the Act. As a
result, it is in the public interest to approve listing and trading of
Shares of the Fund on the Exchange pursuant to the requirements set
forth herein.
    As noted above, the Fund will not comply with the requirements set
forth in Commentary .01(a)(1) and (a)(2) to NYSE Arca Rule 8.600-E with
respect to the Fund's investments in equity securities. Instead, the
Exchange proposes that (i) the Fund's investments in equity securities
will meet the requirements of Commentary .01(a) with the exception of
Commentary .01(a)(1)(C) and .01(a)(1)(D) (with respect to U.S.
Component Stocks) and Commentary .01(a)(2)(C) and .01(a)(2)(D) (with
respect to Non-U.S. Component Stocks).\42\ The Exchange believes it is
appropriate and in the public interest to approve listing and trading
of Shares of the Fund notwithstanding that the Fund's holdings in such
equity securities do not comply with the requirements set forth in
Commentary .01(a)(1) and (a)(2) to NYSE Arca Rule 8.600-E in that any
Fund investment in exchange-traded common stocks, preferred stocks,
REITS, ETFs, ETNs, U.S. exchange-traded closed-end funds, exchange-
traded equity securities issued upon conversion of fixed income
convertible securities, and exchange-traded Work Out Securities would
provide for enhanced diversification of the Fund's portfolio. Such
securities would be Non-Principal Investments, not exceeding 20% of the
Fund's net assets in the aggregate.
---------------------------------------------------------------------------

    \42\ See notes 19 and 20, supra.
---------------------------------------------------------------------------

    The Fund will not comply with the requirement in Commentary
.01(b)(1) to Rule 8.600-E that components that in the aggregate account
for at least 75% of the fixed income weight of the portfolio each shall
have a minimum original principal amount outstanding of $100 million or
more. Instead, the Exchange proposes that components that in the
aggregate account for at least 50% of the fixed income weight of the
portfolio each shall have a minimum original principal amount
outstanding of $50 million or more. As noted above, the Fund may not
invest more than 2% of its total assets in any one Fixed Income
Security (excluding U.S. government securities and TIPS) on a per CUSIP
basis. In addition, at least 50% of the weight of the Fund's portfolio
would continue to be subject to a substantial minimum (i.e., $50
million) original principal amount outstanding. The Exchange believes
this limitation would provide significant additional diversification to
the Fund's investments in Fixed Income Securities, and reduce concerns
that the Fund's investments in such securities would be readily
susceptible to market manipulation.
    The Exchange proposes that Private ABS/MBS will not be required to
comply with the requirements of Commentary .01(b)(4) because certain
Private ABS/MBS cannot satisfy the criteria in Commentary .01(b)(4).
Instead, the Exchange proposes that the Fund's investments in Fixed
Income Securities other than Private ABS/MBS will be required to comply
with the requirements of Commentary .01(b)(4). The Exchange believes
that this is appropriate because Commentary .01(b)(4) does not appear
to be designed for structured finance vehicles such as Private ABS/MBS.
As noted above, the Fund may not invest more than 2% of its total
assets in any one Fixed Income Security (excluding U.S. government
securities and TIPS) on a per CUSIP basis. The Exchange believes this
limitation would provide additional diversification to the Fund's
investments in Private ABS/MBS, and reduce concerns that the Fund's
investment in such securities would be readily susceptible to market
manipulation.
    As noted above, the Fund will not comply with the requirement in
Commentary .01(b)(5) to Rule 8.600-E that Private ABS/MBS in the Fund's
portfolio account, in the aggregate, for no more than 20% of the weight
of the fixed income portion of the Fund's portfolio. Instead, the
Exchange proposes that, in order to enable the portfolio to be more
diversified and provide the Fund with an opportunity to earn higher
returns, the Fund may invest up to 50% of its total assets in the
aggregate in Private ABS/MBS, provided that the Fund (1) may not invest
more than 25% of its total assets in non-agency ABS; (2) may not invest
more than 30% of its total assets in non-agency RMBS; and (3) may not
invest more than 25% of its total assets in non-agency CMBS and CLOs.
With respect to the Fund's investments in up to 30% of its total assets
in Private ABS/MBS that exceed the 20% of the weight of the fixed
income portion of the Fund's portfolio that may be invested in Private
ABS/MBS under Commentary .01(b)(5) to NYSE Arca Rule 8.600-E, the
Fund's holdings in Private ABS/MBS will be subject to minimum average
loan maturity restrictions described above.\43\ In addition, as noted
above, the Fund may not invest more than 2% of its total assets in any
one Fixed Income Security (excluding U.S. government securities and
TIPS) on a per CUSIP basis.\44\ The Exchange believes these limitations
would provide additional diversification to the Fund's Private ABS/MBS
investments and reduce concerns that the Fund's investment in such
securities would be readily susceptible to market manipulation.
---------------------------------------------------------------------------

    \43\ See note 14 and accompanying text, supra.
    \44\ See note 26, supra.
---------------------------------------------------------------------------

    The Exchange believes it is appropriate and in the public interest
to approve listing and trading of Shares of the Fund notwithstanding
that the Fund's holdings in such Private ABS/MBS do not comply with the
requirements set forth in Commentary .01(b)(5) to NYSE Arca Rule 8.600-
E in that the Fund's investment in Private ABS/MBS is expected to
provide the Fund with benefits associated with increased
diversification, as Private ABS/MBS investments tend to be less
correlated to interest rates than many other fixed income securities.
The Fund's investment in Private ABS/MBS will be subject to the Fund's
liquidity procedures as adopted by the Board, and the Adviser and Sub-
Adviser do not expect that investments in Private ABS/MBS of up to 50%
of the total assets of the Fund will have any material impact on the
liquidity of the Fund's investments.
    The Adviser and Sub-Adviser represent that the RMBS sector can be
an important component of the Fund's investment strategy because of the
potential for attractive risk-adjusted returns relative to other fixed
income sectors and the potential to add

significantly to the diversification in the Fund's portfolio.
Similarly, the Private ABS/MBS sectors also have the potential for
attractive risk-adjusted returns and added portfolio diversification.
    As noted above, the Fund's portfolio will not comply with the
requirements set forth in Commentary .01(e) to NYSE Arca Rule 8.600-E.
The Exchange proposes that up to 25% of the Fund's assets (calculated
as the aggregate gross notional value) may be invested in OTC
derivatives that are used to reduce currency, interest rate or credit
risk arising from the Fund's investments (that is, ``hedge''), and that
the Fund's investments in OTC derivatives other than OTC derivatives
used to hedge the Fund's portfolio against currency, interest rate or
credit risk will be limited to 20% of the assets in the Fund's
portfolio, calculated as the aggregate gross notional value of such OTC
derivatives. As noted above, the Fund will not use derivative
instruments to gain exposure to Private ABS/MBS, and derivative
instruments linked to such securities will be used for hedging purposes
only.
    The Exchange believes it is appropriate and in the public interest
to approve listing and trading of Shares of the Fund notwithstanding
that the Fund's holdings in OTC derivatives do not comply with the
requirements set forth in Commentary .01(e) to NYSE Arca Rule 8.600-E
in that, depending on market conditions, it may be critical that the
Fund be able to utilize available OTC derivatives to attempt to reduce
impact of currency, interest rate or credit fluctuations on Fund
assets. Therefore, the Exchange believes it is appropriate to apply a
limit of up to 25% of the Fund's assets to the Fund's investments in
OTC derivatives (calculated as the aggregate gross notional value of
such OTC derivatives), including forwards, options and swaps, that are
used for hedging purposes, as described above.
    The Adviser and Sub-Adviser represent that OTC derivatives can be
tailored to hedge the specific risk arising from the Fund's investments
and frequently may be a more efficient hedging vehicle than listed
derivatives. For example, the Fund could obtain an OTC foreign currency
derivative in a notional amount that exactly matches the notional
amount of the Fund's investments. If the Fund were limited to investing
up to 20% of assets in OTC derivatives, the Fund might have to ``over
hedge'' or ``under hedge'' if round lot sizes in listed derivatives
were not available. In addition, for example, an OTC CDX option can be
structured to provide protection tailored to the Fund's credit exposure
and can be a more efficient way to hedge credit risk with respect to
specific exposures than listed derivatives. Similarly, OTC interest
rate derivatives can be more effective hedges of interest rate exposure
because they can be customized to match the basis risk arising from the
term of the investments held by the Fund.
    Because the Fund, in furtherance of its investment objective, may
invest a substantial percentage of its investments in foreign currency
denominated Fixed Income Securities, the 20% limit in Commentary .01(e)
to Rule 8.600-E could result in the Fund being unable to fully pursue
its investment objective while attempting to sufficiently mitigate
investment risks. The inability of the Fund to adequately hedge its
holdings would effectively limit the Fund's ability to invest in
certain instruments, or could expose the Fund to additional investment
risk. For example, if the Fund's assets (on a gross notional value
basis) were $100 million and no listed derivative were suitable to
hedge the Fund's risk, under the generic standards the Fund would be
limited to holding up to $20 million gross notional value in OTC
derivatives ($100 million * 20%). Accordingly, the maximum amount the
Fund would be able to invest in foreign currency denominated Fixed
Income Securities while remaining adequately hedged would be $20
million. The Fund then would hold $60 million in assets that could not
be hedged, other than with listed derivatives, which, as noted above,
might not be sufficiently tailored to the specific instruments to be
hedged.
    In addition, by applying the 20% limitation in Commentary .01(e) to
Rule 8.600-E, the Fund would be less able to protect its holdings from
more than one risk simultaneously. For example, if the Fund's assets
(on a gross notional basis) were $100 million and the Fund held $20
million in foreign currency denominated Fixed Income Instruments with
two types of risks (e.g., currency and credit risk) which could not be
hedged using listed derivatives, the Fund would be faced with the
choice of either holding $20 million aggregate gross notional value in
OTC derivatives to mitigate one of the risks while passing the other
risk to its shareholders, or, for example, holding $10 million
aggregate gross notional value in OTC derivatives on each of the risks
while passing the remaining portion of each risk to the Fund's
shareholders.
    The Adviser and Sub-Adviser believe that it is in the best
interests of the Fund's shareholders for the Fund to be allowed to
reduce the currency, interest rate or credit risk arising from the
Fund's investments using the most efficient financial instrument. While
certain risks can be hedged via listed derivatives, OTC derivatives
(such as forwards, options and swaps) can be customized to hedge
against precise risks. Accordingly, the Adviser and Sub-Adviser believe
that OTC derivatives may frequently be a more efficient hedging vehicle
than listed derivatives. Therefore, the Exchange believes that
increasing the percentage limit in Commentary .01(e), as described
above, to the Fund's investments in OTC derivatives, including
forwards, options and swaps, that are used specifically for hedging
purposes would help protect investors and the public interest.
    As noted above, the Fund's portfolio will not meet the requirements
of Commentary .01(a)(1)(A) through (E) to Rule 8.600-E with respect to
the Fund's investments in non-exchange-traded securities of open-end
investment company securities, and, with respect to the Fund's holdings
of OTC equity securities issued upon conversion of fixed income
convertible securities and OTC Work Out Securities, would not meet the
requirements of Commentary .01(a)(1)(A) through (E) and Commentary
.01(a)(2)(A) through (E) to Rule 8.600-E. The Exchange believes that it
is appropriate and in the public interest to approve listing and
trading of Shares of the Fund on the Exchange notwithstanding that the
Fund would not meet the requirements of Commentary .01(a)(1)(A) through
(E) to Rule 8.600-E with respect to the Fund's investments in non-
exchange-traded securities of open-end investment company securities,
and notwithstanding that the Fund's holdings of OTC equity securities
issued upon conversion of fixed income convertible securities and OTC
Work Out Securities would not meet the requirements of Commentary
.01(a)(1)(A) through (E) and Commentary .01(a)(2)(A) through (E) to
Rule 8.600-E. Investments in non-exchange-traded securities of open-end
investment company securities will not be principal investments of the
Fund.\45\ Such investments, which may include mutual funds that invest,
for example, principally in fixed income securities, would be utilized
to help the Fund meet its investment objective and to equitize cash in
the short term.
---------------------------------------------------------------------------

    \45\ See note 30, supra.
---------------------------------------------------------------------------

    With respect to any Fund holdings of exchange-traded or OTC equity
securities issued upon conversion of

fixed income convertible securities and Work Out Securities, such
securities will not exceed 10% and 5%, respectively, of the Fund's
total assets. The Adviser and Sub-Adviser represent that the Fund
generally will not actively invest in equity securities issued upon
conversion of fixed income convertible securities or Work Out
Securities, but may, at times, receive a distribution of such
securities in connection with the Fund's holdings in other securities.
Therefore, the Fund's holdings in equity securities issued upon
conversion of fixed income convertible securities and Work Out
Securities generally would not be acquired as the result of the Fund's
voluntary investment decisions.
    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
shares of an additional type of actively-managed exchange-traded
product that will enhance competition among market participants, to the
benefit of investors and the marketplace.

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 notes that the
proposed rule change will facilitate the listing and trading of an
additional type of actively-managed exchange-traded product that
generally will principally hold fixed income securities and that will
enhance competition among market participants, to the benefit of
investors and the marketplace.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or up to 90 days (i) as the Commission may designate
if it finds such longer period to be appropriate and publishes its
reasons for so finding or (ii) as to which the self-regulatory
organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule
change should be 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<EMAIL_ADDRESS>Please include
File Number SR-NYSEArca-2019-33 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-2019-33. 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-2019-33, and should be
submitted on or before June 18, 2019.
---------------------------------------------------------------------------

    \46\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\46\
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-10987 Filed 5-24-19; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 110 (Thursday, June 7, 2018)]
[Rules and Regulations]
[Page 26374]
[FR Doc No: 2018-12032]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Part 373

RIN 2126-AC06

General Technical, Organizational, Conforming, and Correcting
Amendments to the Federal Motor Carrier Safety Regulations; Correction

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Final rule; correction.

-----------------------------------------------------------------------

SUMMARY: FMCSA corrects the technical corrections final rule published
on May 17, 2018, that amended FMCSA regulations to make minor changes
to correct inadvertent errors and omissions, remove or update obsolete
references, ensure conformity with Office of the Federal Register style
guidelines, and improve the clarity and consistency of certain
regulatory provisions. This document corrects an amendatory
instruction.

DATES: Effective June 18, 2018.

FOR FURTHER INFORMATION CONTACT: Mr. David Miller, Federal Motor
Carrier Safety Administration, Regulatory Development Division, 1200
New Jersey Avenue SE, Washington, DC 20590-0001, by telephone at (202)
366-5370 or via email at [email protected]. Office hours are from 9
a.m. to 5 p.m. e.t., Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION: In FR Doc. 2018-10437, appearing on page
22873 in the Federal Register of Thursday, May 17, 2018, the following
correction is made:

Sec.  373.103  [Corrected]

0
1. On page 22873, in the third column, in amendment 10a., the
instruction ``Withdraw the amendments to Sec.  373.103 published April
16, 2018, at 83 FR 16224'' is withdrawn.

    Issued under the authority delegated in 49 CFR 1.87 on: May 30,
2018.
Larry W. Minor,
Associate Administrator for Policy.
[FR Doc. 2018-12032 Filed 6-6-18; 8:45 am]
BILLING CODE 4910-EX-P