[Federal Register Volume 84, Number 242 (Tuesday, December 17, 2019)]
[Notices]
[Pages 68999-69007]
[FR Doc No: 2019-27089]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87719; File No. SR-CboeBZX-2019-102]

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing of a Proposed Rule Change To List and Trade Shares of the
Clearbridge Focus Value ETF Under Currently Proposed Rule 14.11(k)

December 11, 2019.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on November 27, 2019, Cboe BZX Exchange, Inc. (the ``Exchange'' or
``BZX'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes a rule change to list and trade shares of the
Clearbridge Focus Value ETF under currently proposed Rule 14.11(k).
    The text of the proposed rule change is also available on the
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange has submitted a proposal and four subsequent
amendments to add new Rule 14.11(k) for the purpose of permitting the
listing and trading of Managed Portfolio Shares, which are securities
issued by an actively managed open-end management investment
company.\3\

Proposed Rule 14.11(k)(2)(A) would require the Exchange to file
separate proposals under Section 19(b) of the Act before listing and
trading any series of Managed Portfolio Shares on the Exchange. As
such, the Exchange is submitting this proposal in order to list and
trade shares of the ClearBridge Focus Value ETF (the ``Fund'') under
proposed Rule 14.11(k).
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    \3\ As proposed, the term ``Managed Portfolio Share'' means a
security that (a) represents an interest in an investment company
registered under the Investment Company Act of 1940 (``Investment
Company'') organized as an open-end management investment company,
that invests in a portfolio of securities selected by the Investment
Company's investment adviser consistent with the Investment
Company's investment objectives and policies; (b) is issued in a
Creation Unit, or multiples thereof, in return for a designated
portfolio of instruments (and/or an amount of cash) with a value
equal to the next determined net asset value and delivered to the
Authorized Participant (as defined in the Investment Company's Form
N-1A filed with the SEC) through a Confidential Account; (c) when
aggregated into a Redemption Unit, or multiples thereof, may be
redeemed for a designated portfolio of instruments (and/or an amount
of cash) with a value equal to the next determined net asset value
delivered to the Confidential Account for the benefit of the
Authorized Participant; and (d) the portfolio holdings for which are
disclosed within at least 60 days following the end of every
calendar quarter. See Securities Exchange Act Release No. 86157
(June 19, 2019), 84 FR 29892 (June 25, 2019) and 87062 (September
23, 2019) (SR-CboeBZX-2019-047) (the ``Proposal'').
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Description of the Fund and the Trust
    The shares of the Fund (the ``Shares'') will be issued by
ActiveShares ETF Trust (the ``Trust''), a statutory trust organized
under the laws of the State of Maryland and registered with the
Commission as an open-end management investment company.\4\ The
investment adviser to the Trust will be Precidian Funds LLC (the
``Adviser''). The Sub-Adviser to the Fund will be ClearBridge
Investments, LLC (``ClearBridge''). Western Asset Management Company,
LLC, (``Western Asset'' and, collectively with ClearBridge, the ``Sub-
Adviser'') manages the portion of the Fund's cash and short-term
instruments allocated to it by the Adviser. Legg Mason Investor
Services, LLC (the ``Distributor'') will serve as the distributor of
the Fund's Shares. All statements and representations made in this
filing regarding the description of the portfolio or reference assets,
limitations on portfolio holdings or reference assets, dissemination
and availability of the Verified Intraday Indicative Value
(``VIIV''),\5\ reference assets, and intraday indicative values, and
the applicability of Exchange rules shall constitute continued listing
requirements for listing the Shares on the Exchange, as provided under
proposed Rule 14.11(a).
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    \4\ The Trust is registered under the 1940 Act. The Trust has
filed a registration statement on Form N-1A relating to the Fund
(the ``Registration Statement''). An order granting exemptive relief
to the Adviser was issued on May 20, 2019 (File No. 812-14405) (the
``Exemptive Order''). Investments made by the Fund will comply with
the conditions set forth in the Exemptive Order. The description of
the operation of the Trust and the Fund herein is based, in part, on
the Exemptive Order. The Exemptive Order specifically notes that
``granting the requested exemptions is appropriate in and consistent
with the public interest and consistent with the protection of
investors and the purposes fairly intended by the policy and
provisions of the Act. It is further found that the terms of the
proposed transactions, including the consideration to be paid or
received, are reasonable and fair and do not involve overreaching on
the part of any person concerned, and that the proposed transactions
are consistent with the policy of each registered investment company
concerned and with the general purposes of the Act.'' See Investment
Company Act Release Nos. 33440 and 33477.
    \5\ Proposed Rule 14.11(k)(3)(B) defines the term VIIV as the
indicative value of a Managed Portfolio Share based on all of the
holdings of a series of Managed Portfolio Shares as of the close of
business on the prior business day and, for corporate actions, based
on the applicable holdings as of the opening of business on the
current business day, priced and disseminated in one second
intervals during Regular Trading Hours by the Reporting Authority.
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    Proposed Rule 14.11(k)(2)(D) provides that if the investment
adviser to the Investment Company issuing Managed Portfolio Shares is
registered as a broker-dealer or is affiliated with a broker-dealer,
such investment adviser will erect and maintain a ``fire wall'' between
the investment adviser and personnel of the broker-dealer or broker-
dealer affiliate, as applicable, with respect to access to information
concerning the composition of and/or changes to such Investment Company
portfolio and/or the Creation Basket.\6\ Any person related to the
investment adviser or Investment Company who makes decisions pertaining
to the Investment Company's portfolio composition or has access to
information regarding the Investment Company's portfolio composition or
changes thereto or the Creation Basket must be subject to procedures
designed to prevent the use and dissemination of material nonpublic
information regarding the applicable Investment Company portfolio or
changes thereto or the Creation Basket.\7\ Proposed Rule 14.11(k)(2)(D)
is similar to Rule 14.11(c)(5)(A)(i), related to Index Fund Shares,
except that proposed Rule 14.11(k)(2)(D) relates to the establishment
of a ``fire wall'' between the investment adviser and the broker-dealer
as applicable to an Investment Company's portfolio and/or Creation
Basket, not an underlying benchmark index, as is the case with index-
based funds. Proposed Rule 14.11(k)(2)(D) is also similar to Rule
14.11(i)(7), related to Managed Fund Shares, except that proposed Rule
14.11(k)(2)(D) relates to the establishment of a ``fire wall'' between
the investment adviser and the broker-dealer as applicable to an
Investment Company's portfolio and/or Creation Basket, and not just the
underlying portfolio, as is the case with Managed Fund Shares. The
Adviser is not registered as a broker-dealer or affiliated with a
broker-dealer. The Sub-Adviser is not registered as a broker-dealer,
but is affiliated with a broker-dealer and has implemented and will
maintain a ``fire wall'' with respect to such broker-dealer regarding
access to information concerning the composition and/or changes to the
Fund's portfolio and Creation Basket.
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    \6\ Proposed Rule 14.11(K)(3)(E) defines the term ``Creation
Basket'' as on any given business day the names and quantities of
the specified instruments (and/or an amount of cash) that are
required for an AP Representative to deposit in-kind on behalf of an
Authorized Participant in exchange for a Creation Unit and the names
and quantities of the specified instruments (and/or an amount of
cash) that will be transferred in-kind to an AP Representative on
behalf of an Authorized Participant in exchange for a Redemption
Unit, which will be identical and will be transmitted to each AP
Representative before the commencement of trading.
    \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, the Sub-Adviser, and their
respective related personnel will be 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 violations, by the investment adviser
and its supervised persons, of the Advisers Act and the Commission
rules adopted thereunder; (ii) implemented, at a minimum, an annual
review regarding the adequacy of the policies and procedures
established pursuant to subparagraph (i) above and the effectiveness
of their implementation; and (iii) designated an individual (who is
a supervised person) responsible for administering the policies and
procedures adopted under subparagraph (i) above.
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    In the event (a) the Adviser or Sub-Adviser becomes registered as a
broker-dealer or becomes 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 its relevant personnel or its broker-dealer
affiliate regarding access to information concerning the composition
and/or changes to the portfolio and/or the Creation Basket, and will be
subject to procedures designed to prevent the use and dissemination of
material non-public information regarding such portfolio and/or
Creation Basket.
    Further, proposed Rule 14.11(k)(2)(E) requires that any person or
entity, including an AP Representative, custodian, Reporting Authority,
distributor, or administrator, who has access to information regarding
the Investment Company's portfolio composition or changes thereto or
the Creation Basket, must be subject to procedures designed to prevent
the use and dissemination of material nonpublic information regarding
the applicable Investment Company portfolio or changes thereto or the
Creation Basket. Moreover, if any such

person or entity is registered as a broker-dealer or affiliated with a
broker-dealer, such person or entity will erect and maintain a ``fire
wall'' between the person or entity and the broker-dealer with respect
to access to information concerning the composition and/or changes to
such Investment Company portfolio or Creation Basket.
Description of the Fund
ClearBridge Focus Value ETF
    The Fund seeks long-term capital appreciation. By employing
fundamental research, in an effort to identify securities with
favorable risk-adjusted return characteristics, the Fund's portfolio
management team constructs the portfolio on a bottom-up basis. The Fund
will invest primarily in equity securities of large capitalization
companies, but may also make limited investments in mid-capitalization
companies. While most investments will be in U.S. companies, the fund
may also invest in American Depository Receipts (``ADRs'') and U.S.-
listed shares of foreign companies. The team considers a number of
variables such as business fundamentals, valuation, free cash flow
generation, earnings growth, management quality and competitive
positioning. The Fund will invest in a diversified portfolio typically
consisting of the securities of 30 to 40 issuers.
    In addition, the Fund may also invest in common stocks, preferred
securities, and warrants and rights of U.S. exchange-listed companies,
U.S. exchange traded notes, U.S. exchange listed real estate investment
trusts (``REITs''), U.S. ETFs,\8\ U.S. exchange-listed ADRs, U.S.
exchange-listed equity futures contracts, and U.S. exchange-listed
equity index futures contracts. All exchange-listed equity securities
in which the Fund will invest will be listed and traded on U.S.
national securities exchanges. The Fund may also hold cash without
limitation, and may invest in short-term U.S. Treasury securities,
government money market funds and may enter into repurchase agreements
for cash management or defensive investment purposes.
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    \8\ For purposes of describing the holdings of the Fund, ETFs
include Portfolio Depository Receipts (as described in Rule
14.11(b)); Index Fund Shares (as described in Rule 14.11(c)); and
Managed Fund Shares (as described in Rule 14.11(i)). The ETFs in
which the Fund may invest all will be listed and traded on U.S.
national securities exchanges.
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    The Exchange notes that the Fund's holdings will meet the generic
listing standards applicable to series of Managed Fund Shares under
Rule 14.11(i)(4)(C). While such standards do not apply directly to
series of Managed Portfolio Shares, the Exchange believes that the
overarching policy issues related to liquidity, market cap, diversity,
and concentration of portfolio holdings that Rule 14.11(i)(4)(C) is
intended to address are equally applicable to series of Managed
Portfolio Shares.
Investment Restrictions
    The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets.\9\ Illiquid securities and other illiquid
assets include those subject to contractual or other restrictions on
resale and other instruments or assets that lack readily available
markets as determined in accordance with Commission staff guidance.\10\
The Fund will monitor its portfolio liquidity on an ongoing basis to
determine whether, in light of current circumstances, an adequate level
of liquidity is being maintained, and will consider taking appropriate
steps in order to maintain adequate liquidity. In any event, the Fund
will not purchase any securities that are illiquid investments at the
time of purchase.
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    \9\ See Rule 22e-4(b)(1)(iv), which prohibits a fund from
acquiring any illiquid investment if, immediately after the
acquisition, the fund would have invested more than 15% of its net
assets in illiquid investments that are assets. See Investment
Company Act Release No. 32315 (Oct. 13, 2016), 81 FR 82142 (Nov. 18,
2016) (adopting Rule 22e-4 under the 1940 Act). Prior to the
adoption of Rule 22e-4 in 2016, the Commission had long-standing
guidelines that required open-end funds to hold no more than 15% of
their net assets in illiquid securities and other illiquid assets.
See Investment Company Act Release No. 28193 (March 11, 2008), 73 FR
14618 (March 18, 2008), FN 34. See also Investment Company Act
Release Nos. 5847 (October 21, 1969), 35 FR 19989 (December 31,
1970) (Statement Regarding ``Restricted Securities''); and 18612
(March 12, 1992), 57 FR 9828 (March 20, 1992) (Revisions of
Guidelines to Form N-1A).
    \10\ A fund's portfolio security is illiquid if it cannot be
disposed of in the ordinary course of business within seven days at
approximately the value ascribed to it by the fund. See Investment
Company Act Release Nos. 14983 (March 12, 1986), 51 FR 9773 (March
21, 1986) (adopting amendments to Rule 2a-7 under the 1940 Act); and
17452 (April 23, 1990), 55 FR 17933 (April 30, 1990) (adopting Rule
144A under the Securities Act of 1933).
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    According to the Registration Statement, the Fund will seek to
qualify for treatment as a Regulated Investment Company (``RIC'') under
the Internal Revenue Code.\11\
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    \11\ 26 U.S.C. 851.
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    The Shares of the Fund will conform to the initial and continued
listing criteria under proposed Rule 14.11(k). The Fund's holdings will
be limited to and consistent with what is permissible under the
Exemptive Order and described herein.
    The Fund's investments will be consistent with its investment
objective and will not be used to enhance leverage. While the Fund may
invest in inverse ETFs, the Fund will not invest in leveraged (e.g.,
2X, -2X, 3X or -3X) ETFs.
Creations and Redemptions of Shares
    Creations and redemptions of the Shares will occur as described in
the Proposal. More specifically, in connection with the creation and
redemption of Creation Units \12\ and Redemption Units,\13\ the
delivery or receipt of any portfolio securities in-kind will be
required to be effected through a separate confidential brokerage
account (a ``Confidential Account'').\14\ Authorized Participants (as
defined in the Fund's Exemptive Application, ``AP'') will sign an
agreement with an AP Representative \15\ establishing the Confidential
Account for the benefit of the AP. AP Representatives will be broker-
dealers. An AP must be a Depository Trust Company (``DTC'') Participant
that has executed a ``Participant Agreement'' with the Distributor with
respect to the creation and redemption of Creation Units and Redemption
Units and formed a Confidential Account for its benefit in accordance
with the terms of the Participant Agreement. For purposes of creations
or redemptions, all transactions will be effected through the
respective AP's Confidential Account, for the benefit of the AP without

disclosing the identity of such securities to the AP.
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    \12\ Proposed Rule 14.11(k)(3)(F) defines the term ``Creation
Unit'' as a specified minimum number of Managed Portfolio Shares
issued by an Investment Company at the request of an Authorized
Participant in return for a designated portfolio of instruments and/
or cash.
    \13\ Proposed Rule 14.11(k)(3)(G) defines the term ``Redemption
Unit'' as a specified minimum number of Managed Portfolio Shares
that may be redeemed to an Investment Company at the request of an
Authorized Participant in return for a portfolio of instruments and/
or cash.
    \14\ Proposed Rule 14.11(k)(3)(D) defines the term
``Confidential Account'' as an account owned by an Authorized
Participant and held with an AP Representative on behalf of the
Authorized Participant. The account will be established and governed
by contractual agreement between the AP Representative and the
Authorized Participant solely for the purposes of creation and
redemption, while keeping confidential the Creation Basket
constituents of each series of Managed Portfolio Shares, including
from the Authorized Participant. The books and records of the
Confidential Account will be maintained by the AP Representative on
behalf of the Authorized Participant.
    \15\ Proposed Rule 14.11(k)(3)(C) defines the term ``AP
Representative'' as an unaffiliated broker-dealer with which an
Authorized Participant has signed an agreement to establish a
Confidential Account for the benefit of such Authorized Participant
that will deliver or receive all consideration to or from the
Investment Company in a creation or redemption. An AP Representative
will be restricted from disclosing the Creation Basket. Each AP
shall enter into its own separate Confidential Account agreement
(``Confidential Account Agreement'') with an AP Representative.
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    Each AP Representative will be given, before the commencement of
trading each Business Day (defined below), the Creation Basket for that
day. This information will permit an AP that has established a
Confidential Account with an AP Representative, to instruct the AP
Representative to buy and sell positions in the portfolio securities to
permit creation and redemption of Creation Units and Redemption Units.
Shares of the Fund will be issued and redeemed in Creation Units and
Redemption Units of 5,000 or more Shares. The Fund will offer and
redeem Creation Units and Redemption Units on a continuous basis at the
net asset value (the ``NAV'') per share next determined after receipt
of an order in proper form. The NAV per share of the Fund will be
determined as of the close of regular trading on the Exchange on each
day that the Exchange is open (a ``Business Day''). The Fund will sell
and redeem Creation Units and Redemption Units only on Business Days.
The Adviser anticipates that the initial price of a share will range
from $20 to $60, and that the price of a Creation Unit will be at least
$100,000.
    To keep costs low and permit the Fund to be as fully invested as
possible, Shares will be purchased and redeemed in Creation Units and
Redemption Units and generally on an in-kind basis. Accordingly, except
where the purchase or redemption will include cash under the
circumstances described in the Exemptive Application, APs will be
required to purchase Creation Units by making an in-kind deposit of
specified instruments (``Deposit Instruments''), and APs redeeming
their Shares will receive an in-kind transfer of specified instruments
(``Redemption Instruments'') through the AP Representative in their
Confidential Account.\16\
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    \16\ The Fund must comply with the federal securities laws in
accepting Deposit Instruments and satisfying redemptions with
Redemption Instruments, including that the Deposit Instruments and
Redemption Instruments are sold in transactions that would be exempt
from registration under the 1933 Act.
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Placement of Purchase Orders
    The Fund will issue Shares through the Distributor on a continuous
basis at NAV. The Exchange represents that the issuance of Shares will
operate in a manner similar to that of other ETFs. The Fund will issue
Shares only at the NAV per share next determined after an order in
proper form is received.
    In the case of a creation, the AP would enter an irrevocable
creation order with the Fund and direct the AP Representative to
purchase the Creation Basket. The AP Representative would then purchase
the necessary securities in the Confidential Account. In purchasing the
necessary securities, the AP Representative will use methods, such as
breaking the transaction into multiple transactions and transacting in
multiple marketplaces, to avoid revealing the composition of the
Creation Basket. Once the Creation Basket has been acquired in the
Confidential Account, the AP Representative would contribute the
Creation Basket in-kind to the Fund.
    The Distributor will furnish acknowledgements to those placing such
orders that the orders have been accepted, but the Distributor may
reject any order which is not submitted in proper form, as described in
the Fund's prospectus or Statement of Additional Information (``SAI'').
The NAV of the Fund is expected to be determined once each Business Day
at a time determined by the Trust's Board of Trustees (``Board''),
currently anticipated to be as of the close of the regular trading
session on the Exchange (ordinarily 4:00 p.m. E.T.) (the ``Valuation
Time''). The Fund will establish a cut-off time (``Order Cut-Off
Time'') for purchase orders in proper form. Such Order Cut-Off Time
will be provided in the Registration Statement. To initiate a purchase
of Shares, an AP must submit to the Distributor an irrevocable order to
purchase such Shares after the most recent prior Valuation Time. All
orders to purchase Creation Units must be received by the Distributor
no later than the Order Cut-Off Time in each case on the date such
order is placed (``Transmittal Date'') for the AP to receive the NAV
per share next determined.\17\
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    \17\ To the extent that the Fund allows creations or redemptions
to be conducted in cash, such transactions will be effected in the
same manner for all APs.
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    Purchases of Shares will be settled in-kind and/or cash for an
amount equal to the applicable NAV per share purchased plus applicable
``Transaction Fees,'' as discussed below. While the Fund will generally
receive securities in-kind, the Adviser may determine from time to time
that it is not in the Fund's best interests to receive securities in-
kind, but rather to receive cash.
Authorized Participant Redemption
    The Shares may be redeemed to the Fund in Redemption Unit size or
multiples thereof as described below. Redemption orders of Redemption
Units must be placed by an AP (``AP Redemption Order''). The Fund will
establish in its Registration Statement an Order Cut-Off Time for
redemption orders of Redemption Units in proper form. Redemption Units
of the Fund will be redeemable at their NAV per share next determined
after receipt of a request for redemption by the Trust in the manner
specified below before the Order Cut-Off Time. To initiate an AP
Redemption Order, an AP must submit to the Distributor an irrevocable
order to redeem such Redemption Unit after the most recent prior
Valuation Time, but not later than the Order Cut-Off Time.
    In the case of a redemption, the AP would enter into an irrevocable
redemption order, and then immediately instruct the AP Representative
to sell the Creation Basket that it will receive in the redemption. As
with the purchase of securities, the AP Representative will use
methods, such as breaking the transaction into multiple transactions
and transacting in multiple marketplaces, to avoid revealing the
composition of the Creation Basket.
    Consistent with the provisions of Section 22(e) of the 1940 Act and
Rule 22e-2 thereunder, the right to redeem will not be suspended, nor
payment upon redemption delayed, except for: (1) Any period during
which the Exchange is closed other than customary weekend and holiday
closings, (2) any period during which trading on the Exchange is
restricted, (3) any period during which an emergency exists as a result
of which disposal by the Fund of securities owned by it is not
reasonably practicable or it is not reasonably practicable for the Fund
to determine its NAV, and (4) for such other periods as the Commission
may by order permit for the protection of shareholders.
    Redemptions will occur primarily in-kind, although redemption
payments may also be made partly or wholly in cash.\18\ The Participant
Agreement signed by each AP will require establishment of a
Confidential Account to receive distributions of securities in-kind
upon redemption. Each AP will be required to open a Confidential
Account with an AP Representative in order to facilitate orderly
processing of redemptions. While the Fund will generally distribute
securities in-kind, the Adviser may determine from time to time that it
is not in the Fund's best interests to distribute securities in-kind,
but rather to sell securities and/or distribute cash. For example, the
Adviser may distribute cash to facilitate orderly portfolio management
in

connection with rebalancing or transitioning a portfolio in line with
its investment objective, or if there is substantially more creation
than redemption activity during the period immediately preceding a
redemption request, or as necessary or appropriate in accordance with
applicable laws and regulations.\19\
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    \18\ The value of any positions not susceptible to in-kind
settlement may be paid in cash.
    \19\ To the extent that the Fund allows creations or redemptions
to be conducted in cash, such transactions will be effected in the
same manner for all APs.
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Net Asset Value
    The NAV per share of the Fund will be computed by dividing the
value of the net assets of the Fund (i.e., the value of its total
assets less total liabilities) by the total number of Shares of the
Fund outstanding, rounded to the nearest cent. Expenses and fees,
including, without limitation, the management, administration and
distribution fees, will be accrued daily and taken into account for
purposes of determining NAV. Interest and investment income on the
Trust's assets accrue daily and will be included in the Fund's total
assets. The NAV per share for the Fund will be calculated by the Fund's
administrator and determined as of the close of the regular trading
session on the Exchange (ordinarily 4:00 p.m., E.T.) on each day that
the Exchange is open.
    Shares of U.S. exchange-listed equity securities, including common
stocks, preferred securities, securities of other investment companies
and of REITs, and warrants and rights, as well as ETFs, exchange-listed
ADRs, and U.S. exchange-listed futures will be valued at market value,
which will generally be determined using the last reported official
closing or last trading price on the exchange or market on which the
securities are primarily traded at the time of valuation.
Availability of Information
    The Fund's website (www.leggmason.com), which will be publicly
available prior to the listing and trading of Shares, will include a
form of 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) the prior Business Day's NAV,
market closing price or mid-point of the bid/ask spread at the time of
calculation of such NAV (the ``Bid/Ask Price''),\20\ and a calculation
of the premium and discount of the market closing price or 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. The website and information will be
publicly available at no charge.
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    \20\ The Bid/Ask Price of the Fund will be determined using the
mid-point between the current NBB and NBO 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.
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    The Trust's SAI and the Fund's shareholder reports will be
available free upon request from the Trust. These documents and forms
may be viewed on-screen or downloaded from the Commission's website at
www.sec.gov.
    Information regarding market price and trading volume of the Shares
will be continually available on a real-time basis throughout the day
on brokers' computer screens and other electronic services. Quotation
and last sale information for the Shares will be available via the
Consolidated Tape Association (``CTA'') high-speed line. In addition,
the VIIV, as defined in proposed Rule 14.11(k)(3)(B) and as described
further below, will be widely disseminated by the Reporting Authority
\21\ and/or one or more major market data vendors in one-second
intervals during Regular Trading Hours.
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    \21\ Proposed Rule 14.11(k)(3)(H) defines the term ``Reporting
Authority'' in respect of a particular series of Managed Portfolio
Shares means the Exchange, the exchange that lists a particular
series of Managed Portfolio Shares (if the Exchange is trading such
series pursuant to unlisted trading privileges), an institution, or
a reporting service designated by the Investment Company as the
official source for calculating and reporting information relating
to such series, including, the net asset value, the Verified
Intraday Indicative Value, or other information relating to the
issuance, redemption or trading of Managed Portfolio Shares. A
series of Managed Portfolio Shares may have more than one Reporting
Authority, each having different functions.
---------------------------------------------------------------------------

Dissemination of the VIIV
    With respect to trading of the Shares, the ability of market
participants to buy and sell Shares at prices near the VIIV is
dependent upon their assessment that the VIIV is a reliable, indicative
real-time value for the Fund's underlying holdings. Market participants
are expected to accept the VIIV as a reliable, indicative real-time
value because (1) the VIIV will be calculated and disseminated based on
the Fund's actual portfolio holdings, (2) the securities in which the
Fund plans to invest are generally highly liquid and actively traded
and therefore generally have accurate real time pricing available, and
(3) market participants will have a daily opportunity to evaluate
whether the VIIV at or near the close of trading is indeed predictive
of the actual NAV. The VIIV for the Fund will be disseminated by the
Reporting Authority and/or one or more major market data vendors in
one-second intervals during Regular Trading Hours. If the Adviser
determines that a portfolio security does not have a readily available
market quotation, that fact along with the identity and weighting of
that security in a Fund's VIIV calculation will be publicly disclosed
on the Fund's website.\22\
---------------------------------------------------------------------------

    \22\ The Exchange notes that this is consistent with the
Exemptive Application, which provides the following: ``Applicants
acknowledge that, if the bid/ask spread on a security is
significant, the mid-point may not accurately reflect the price at
which the security could be bought or sold, which may cause the VIIV
to deviate from the actual purchase or sale price of a Fund's
underlying portfolio securities. In light of this possibility, the
Adviser will monitor the bid and ask quotations for any portfolio
security that stops trading and, if the Adviser determines pursuant
to Board-approved procedures that the current quotations for a
portfolio security are no longer reliable for purposes of
calculating the VIIV, which could be the situation when, for
example, an Exchange institutes an extended trading halt in a
portfolio security, that fact, along with the identity and weighting
of that security in the Fund's VIIV calculation, will be publicly
disclosed on the Fund's website. Applicants believe that this mix of
information will permit market participants to calculate the effect
of that security on the VIIV calculation, determine their own fair
value of the disclosed portfolio security, and better judge the
accuracy of that day's VIIV for the Fund. Nonetheless, the VIIV will
continue to be calculated using the mid-point of the most recent bid
and ask quotations. See Exemptive Application at 23.
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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. The Exchange will halt trading in
the Shares under the conditions specified in BZX Rule 11.18. Trading
may be halted because of market conditions or for reasons that, in the
view of the Exchange, make trading in the Shares inadvisable, including
whether unusual conditions or circumstances detrimental to the
maintenance of a fair and orderly market are present. Trading in the
Shares also will be subject to proposed Rule 14.11(k)(4)(B)(iii)(a) and
(b) in the Proposal, which set forth circumstances under which trading
in the Shares of the Fund will be halted.
    Specifically, Proposed Rule 14.11(k)(4)(B)(iii)(a) provides that
the Exchange may consider all relevant factors in exercising its
discretion to halt trading in a series of Managed Portfolio Shares.
Trading may be halted because of market conditions or for reasons that,
in the view of the Exchange, make trading in the series of Managed
Portfolio Shares inadvisable. These may include: (i) The extent to

which trading is not occurring in the securities and/or the financial
instruments composing the portfolio; or (ii) whether other unusual
conditions or circumstances detrimental to the maintenance of a fair
and orderly market are present. The Adviser has represented to the
Exchange that it will provide the Exchange with prompt notification
upon the existence of any such condition or set of conditions.
    Proposed Rule 14.11(k)(4)(B)(iii)(b) provides that, if the Exchange
becomes aware that: (i) The Verified Intraday Indicative Value of a
series of Managed Portfolio Shares is not being calculated or
disseminated in one second intervals, as required; (ii) the net asset
value with respect to a series of Managed Portfolio Shares is not
disseminated to all market participants at the same time; (iii) the
holdings of a series of Managed Portfolio Shares are not made available
on at least a quarterly basis as required under the 1940 Act; or (iv)
such holdings are not made available to all market participants at the
same time, (except as otherwise permitted under the currently
applicable exemptive order or no-action relief granted by the
Commission or Commission staff to the Investment Company with respect
to the series of Managed Portfolio Shares), it will halt trading in
such series until such time as the Verified Intraday Indicative Value,
the net asset value, or the holdings are available, as required.
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 Exchange only during Regular Trading Hours as provided in proposed
Rule 14.11(k)(2)(B). As provided in BZX Rule 11.11(a), the minimum
price variation for quoting and entry of orders in securities traded on
the Exchange is $0.01, with the exception of securities that are priced
less than $1.00, for which the minimum price variation for order entry
is $0.0001.
    The Shares will conform to the initial and continued listing
criteria under Rule 14.11(k) as well as all terms in the Exemptive
Order. The Exchange represents that, for initial and/or continued
listing, the Fund will be in compliance with Rule 10A-3 under the
Act.\23\ A minimum of 100,000 Shares of the Fund will be outstanding at
the commencement of trading on the Exchange. The Exchange will obtain a
representation from the issuer of the Shares of the Fund that the NAV
per share of the Fund will be calculated daily and will be made
available to all market participants at the same time.
---------------------------------------------------------------------------

    \23\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

Surveillance
    The Exchange believes that its surveillance procedures are adequate
to properly monitor the trading of the Shares on the Exchange during
all trading sessions and to deter and detect violations of Exchange
rules and the applicable federal securities laws. Trading of the Shares
through the Exchange will be subject to the Exchange's surveillance
procedures for derivative products, including Managed Portfolio Shares.
As part of these surveillance procedures and consistent with proposed
Rule 14.11(k)(2)(C), the Adviser will upon request make available to
the Exchange and/or FINRA, on behalf of the Exchange, the daily
portfolio holdings of the Fund. The issuer has represented to the
Exchange that it will advise 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 Exchange Act, the Exchange
will surveil 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 Exchange Rule
14.12.
    The Exchange or FINRA, on behalf of the Exchange, or both, will
communicate as needed regarding trading in the Shares, underlying
equity securities and U.S. exchange-listed futures 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 such
securities from such markets and other entities. In addition, the
Exchange may obtain information regarding trading in the Shares,
underlying equity securities and U.S. exchange-listed futures from
markets and other entities that are members of ISG or with which the
Exchange has in place a comprehensive surveillance sharing
agreement.\24\
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    \24\ For a list of the current members of ISG, see
www.isgportal.org.
---------------------------------------------------------------------------

    In addition, the Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.
Information Circular
    Prior to the commencement of trading, the Exchange will inform its
members in an Information Circular (``Circular'') of the special
characteristics and risks associated with trading the Shares.
Specifically, the Circular will discuss the following: (1) The
procedures for purchases and redemptions of Shares; (2) BZX Rule 3.7,
which imposes suitability obligations on Exchange members with respect
to recommending transactions in the Shares to customers; (3) how
information regarding the VIIV is disseminated; (4) the requirement
that members deliver a prospectus to investors purchasing newly issued
Shares prior to or concurrently with the confirmation of a transaction;
(5) trading information; and (6) that the portfolio holdings will be
disclosed within at least 60 days following the end of every calendar
quarter.
    In addition, the Circular will reference that the Fund is subject
to various fees and expenses described in the Registration Statement.
The Circular will discuss any exemptive, no-action, and interpretive
relief granted by the Commission from any rules under the Act. The
Circular 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 Exchange believes that this proposal is consistent with Section
6(b) of the Act \25\ in general and Section 6(b)(5) of the Act \26\ in
particular in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and a national market system, and, in
general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \25\ 15 U.S.C. 78f.
    \26\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that, to the extent that the Proposal and,
thus proposed Rule 14.11(k), is approved by the Commission, this
proposed rule change is designed to prevent fraudulent and manipulative
acts and practices in that the Fund would meet each of the rules
relating to listing and trading of Managed Portfolio Shares and, to the
extent that the Fund is not in compliance with such rules, the Exchange
would either prevent the Fund from listing and trading if it hadn't
started trading on the Exchange or would commence delisting procedures
under Exchange Rule 14.12. More specifically, the Exchange will
consider the suspension of trading in, and will commence delisting
proceedings under Rule 14.12 for, the Fund under any of the following

circumstances: (a) If, following the initial twelve-month period after
commencement of trading on the Exchange, there are fewer than 50
beneficial holders of the Fund for 30 or more consecutive trading days;
(b) if the Exchange has halted trading in a Fund because the VIIV is
interrupted pursuant to Rule 14.11(k)(4)(B)(iii)(b) and such
interruption persists past the trading day in which it occurred or is
no longer available; (c) if the Exchange has halted trading in a Fund
because the net asset value with respect to such Fund is not
disseminated to all market participants at the same time, the holdings
of such Fund are not made available on at least a quarterly basis as
required under the 1940 Act, or such holdings are not made available to
all market participants at the same time pursuant to Rule
14.11(k)(4)(B)(iii)(b) and such issue persists past the trading day in
which it occurred; (d) if the Exchange has halted trading in the Fund
pursuant to Rule 14.11(k)(4)(B)(iii)(a) and such issue persists past
the trading day in which it occurred; (e) if the Fund has failed to
file any filings required by the Commission or if the Exchange is aware
that the Fund is not in compliance with the conditions of any currently
applicable exemptive order or no-action relief granted by the
Commission or Commission staff with respect to the Fund; (f) if any of
the continued listing requirements set forth in Rule 14.11(k) are not
continuously maintained; (g) if any of the applicable Continued Listing
Representations, as defined in Rule 14.11(a), for the Fund are not
continuously met; or (h) if such other event shall occur or condition
exists which, in the opinion of the Exchange, makes further dealings on
the Exchange inadvisable.
    The Adviser is not registered as a broker-dealer or affiliated with
a broker-dealer. The Sub-Adviser is not registered as a broker-dealer,
but is affiliated with a broker-dealer and has implemented and will
maintain a ``fire wall'' with respect to such broker-dealer regarding
access to information concerning the composition and/or changes to the
Fund's portfolio and Creation Basket.
    In the event (a) the Adviser or Sub-Adviser becomes registered as a
broker-dealer or becomes 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 its relevant personnel or its broker-dealer
affiliate regarding access to information concerning the composition
and/or changes to the portfolio and Creation Basket, and will be
subject to procedures designed to prevent the use and dissemination of
material non-public information regarding such portfolio and Creation
Basket.
    Further, proposed Rule 14.11(k)(2)(E) requires that any person or
entity, including an AP Representative, custodian, Reporting Authority,
distributor, or administrator, who has access to information regarding
the Investment Company's portfolio composition or changes thereto or
the Creation Basket, must be subject to procedures designed to prevent
the use and dissemination of material nonpublic information regarding
the applicable Investment Company portfolio or changes thereto or the
Creation Basket. Moreover, if any such person or entity is registered
as a broker-dealer or affiliated with a broker-dealer, such person or
entity will erect and maintain a ``fire wall'' between the person or
entity and the broker-dealer with respect to access to information
concerning the composition and/or changes to such Investment Company
portfolio or Creation Basket.
    The Exchange further believes that the proposed rules are designed
to prevent fraudulent and manipulative acts and practices related to
the listing and trading of Managed Portfolio Shares because they
provide meaningful requirements about both the data that will be made
publicly available about the Shares as well as the information that
will only be available to certain parties and the controls on such
information. Specifically, the Exchange believes that the requirements
related to information protection enumerated under proposed Rule
14.11(k)(2)(E) will act as a strong safeguard against misuse and
improper dissemination of information related to the Fund's portfolio
composition or changes thereto or the Creation Basket. The requirement
that any person or entity implement procedures to prevent the use and
dissemination of material nonpublic information regarding the portfolio
or Creation Basket will act to prevent any individual or entity from
sharing such information externally and the internal ``fire wall''
requirements applicable where an entity is a registered broker-dealer
or affiliated with a broker-dealer will act to make sure that no entity
will be able to misuse the data for their own purposes. As such, the
Exchange believes that this proposal is designed to prevent fraudulent
and manipulative acts and practices.
    The Exchange further believes that the proposal is designed to
prevent fraudulent and manipulative acts and practices related to the
listing and trading of Managed Portfolio Shares and to promote just and
equitable principles of trade and to protect investors and the public
interest in that the Exchange would halt trading under certain
circumstances under which trading in the Shares may be inadvisable.
Specifically, trading in the Shares will be subject to proposed Rule
14.11(k)(4)(B)(iii)(a), which provides that the Exchange may consider
all relevant factors in exercising its discretion to halt trading in a
series of Managed Portfolio Shares. Trading may be halted because of
market conditions or for reasons that, in the view of the Exchange,
make trading in the series of Managed Portfolio Shares inadvisable.
These may include: (i) The extent to which trading is not occurring in
the securities and/or the financial instruments composing the
portfolio; or (ii) whether other unusual conditions or circumstances
detrimental to the maintenance of a fair and orderly market are
present.\27\ The Adviser has represented to the Exchange that it will
provide the Exchange with prompt notification upon the existence of any
such condition or set of conditions. Trading in the Shares will also be
subject to proposed Rule 14.11(k)(4)(B)(iii)(b), which provides that if
the Exchange becomes aware that: (i) The Verified Intraday Indicative
Value of a series of Managed Portfolio Shares is not being calculated
or disseminated in one second intervals, as required; (ii) the net
asset value with respect to a series of Managed Portfolio Shares is not
disseminated to all market participants at the same time; (iii) the
holdings of a series of Managed Portfolio Shares are not made available
on at least a quarterly basis as required under the 1940 Act; or (iv)
such holdings are not made available to all market participants at the
same time, (except as otherwise permitted under

the currently applicable exemptive order or no-action relief granted by
the Commission or Commission staff to the Investment Company with
respect to the series of Managed Portfolio Shares), it will halt
trading in such series until such time as the Verified Intraday
Indicative Value, the net asset value, or the holdings are available,
as required.
---------------------------------------------------------------------------

    \27\ The Exemptive Application provides that the Investment
Company or their agent will request that the Exchange halt trading
in the applicable series of Managed Portfolio Shares where: (i) The
intraday indicative values calculated by the pricing verification
agent(s) differ by more than 25 basis points for 60 seconds in
connection with pricing of the Verified Intraday Indicative Value;
or (ii) holdings representing 10% or more of a series of Managed
Portfolio Shares' portfolio have become subject to a trading halt or
otherwise do not have readily available market quotations. Any such
requests will be one of many factors considered in order to
determine whether to halt trading in a series of Managed Portfolio
Shares and the Exchange retains sole discretion in determining
whether trading should be halted. As provided in the Application and
Notice, each series of Managed Portfolio Shares would employ a
pricing verification agent to continuously compare two intraday
indicative values during Regular Trading Hours in order to ensure
the accuracy of the Verified Intraday Indicative Value.
---------------------------------------------------------------------------

    With respect to the proposed listing and trading of Shares of the
Fund, the Exchange believes that the proposed rule change is designed
to prevent fraudulent and manipulative acts and practices in that the
Shares will be listed and traded on the Exchange pursuant to the
initial and continued listing criteria in Rule 14.11(k). The Fund will
invest primarily in equity securities of large capitalization
companies, but may also make limited investments in mid-capitalization
companies. While most investments will be in U.S. companies, the fund
may also invest in ADRs and U.S.-listed shares of foreign companies.
The team considers a number of variables such as business fundamentals,
valuation, free cash flow generation, earnings growth, management
quality and competitive positioning. The Fund will invest in a
diversified portfolio typically consisting of the securities of 30 to
40 issuers.
    In addition, the Fund may also invest in common stocks, preferred
securities, and warrants and rights of U.S. exchange-listed companies,
U.S. exchange traded notes, U.S. exchange listed REITs, U.S. ETFs, U.S.
exchange-listed ADRs, U.S. exchange-listed equity futures contracts,
and U.S. exchange-listed equity index futures contracts. The Fund may
also hold cash without limitation, and may invest in short-term U.S.
Treasury securities, government money market funds and may enter into
repurchase agreements for cash management or defensive investment
purposes.
    The Exchange notes that the Fund's holdings will meet the generic
listing standards applicable to series of Managed Fund Shares under
Rule 14.11(i)(4)(C). All equity securities in which the Fund will
invest will be listed and traded on U.S. national securities exchanges.
Price information for the U.S. exchange-listed equity securities held
by the Fund will be available through major market data vendors or
securities exchanges listing and trading such securities. Price
information for any other U.S. exchange-listed instruments held by the
Fund will be available through major market data vendors or exchanges
listing and trading such instruments. The Fund's investments will be
consistent with its investment objective and will not be used to
enhance leverage. The Fund will not invest in non-U.S. exchange-listed
securities. All futures held by the Fund will be listed on U.S. futures
exchanges. The Exchange or FINRA, on behalf of the Exchange, or both,
will communicate as needed regarding trading in the Shares, underlying
equity securities and U.S. exchange-listed futures 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 such securities from such markets and
other entities. In addition, the Exchange may obtain information
regarding trading in the Shares, underlying equity securities, and U.S.
exchange-listed futures from markets and other entities that are
members of ISG or with which the Exchange has in place a comprehensive
surveillance sharing agreement.
    With respect to trading of the Shares, the ability of market
participants to buy and sell Shares at prices near the VIIV is
dependent upon their assessment that the VIIV is a reliable, indicative
real-time value for the Fund's underlying holdings. Market participants
are expected to accept the VIIV as a reliable, indicative real-time
value because (1) the VIIV will be calculated and disseminated based on
the Fund's actual portfolio holdings, (2) the securities in which the
Fund plans to invest are generally highly liquid and actively traded
and therefore generally have accurate real time pricing available, and
(3) market participants will have a daily opportunity to evaluate
whether the VIIV at or near the close of trading is indeed predictive
of the actual NAV.\28\
---------------------------------------------------------------------------

    \28\ The statements in the Statutory Basis section of this
filing relating to pricing efficiency, arbitrage, and activities of
market participants, including market makers and APs, are based on
statements in the Exemptive Order, representations by Precidian, and
review by the Exchange.
---------------------------------------------------------------------------

    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 that the NAV per share
of the Fund will be calculated daily and that the NAV will be made
available to all market participants at the same time. Investors can
also obtain the Fund's SAI, shareholder reports, Form N-CEN, Form N-
CSR, and Form N-PORT. The Fund's SAI and shareholder reports will be
available free upon request from the applicable fund, and those
documents and the Form N-CSR and Form N-PORT may be viewed on-screen or
downloaded from the Commission's website. In addition, with respect to
the Fund, 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 will
be available via the CTA high-speed line. Information regarding the
VIIV will be widely disseminated every second throughout Regular
Trading Hours by the Reporting Authority and/or one or more major
market data vendors. The website for the Fund will include a prospectus
for the Fund that may be downloaded, and additional data relating to
NAV and other applicable quantitative information, updated on a daily
basis.
    Moreover, prior to the commencement of trading, the Exchange will
inform its members in a Circular of the special characteristics and
risks associated with trading the Shares. The Exchange will halt
trading in the Shares under the conditions specified in BZX Rule 11.18
or for reasons that, in the view of the Exchange, make trading in the
Shares inadvisable. Trading in the Shares will be subject to proposed
Rule 14.11(k)(4)(B)(iii)(a) and (b), which set forth circumstances
under which Shares of the Fund will be halted.
    In addition, as noted above, investors will have ready access to
the VIIV, and quotation and last sale information for the Shares. The
Shares will conform to the initial and continued listing criteria under
proposed Rule 14.11(k). The Fund's holdings will be limited to and
consistent with what is permissible under the Exemptive Order and
described herein. The Fund's investments will be consistent with its
investment objective and will not be used to enhance leverage. While
the Fund may invest in inverse ETFs, the Fund will not invest in
leveraged (e.g., 2X, -2X, 3X or -3X) ETFs.
    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 actively-managed exchange-traded product 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 comprehensive surveillance sharing
agreement. In addition, as noted above, investors will have ready
access to information regarding the VIIV and quotation and last sale
information for the Shares.
    For the above reasons, the Exchange believes that the proposed rule
change

is consistent with the requirements of Section 6(b)(5) of the Act.

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, rather will facilitate the listing and trading of
an actively-managed exchange-traded product that will enhance
competition among both market participants and listing venues, 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

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

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period 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 Exchange consents, the Commission will:
    A. By order approve or disapprove such 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-CboeBZX-2019-102 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-CboeBZX-2019-102. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-CboeBZX-2019-102 and should be submitted
on or before January 7, 2020.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
---------------------------------------------------------------------------

    \29\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2019-27089 Filed 12-16-19; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 125 (Friday, June 28, 2019)]
[Notices]
[Pages 31058-31060]
[FR Doc No: 2019-13822]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. IC19-6-000]

Commission Information Collection Activities (FERC-914); Comment
Request; Extension

AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice of information collection and request for comments.

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SUMMARY: In compliance with the requirements of the Paperwork Reduction
Act of 1995, the Federal Energy Regulatory Commission (Commission or
FERC) is soliciting public comment on the currently

approved information collection, FERC-914 (Cogeneration and Small Power
Production--Tariff Filings) and submitting the information collection
to the Office of Management and Budget (OMB) for review. Any interested
person may file comments directly with OMB and should address a copy of
those comments to the Commission as explained below. On January 31,
2019, the Commission published a Notice in the Federal Register in
Docket No. IC19-6-000 requesting public comments. The Commission
received no public comments and is noting that in the related submittal
to OMB.

DATES: Comments on the collection of information are due July 29, 2019.

ADDRESSES: Comments filed with OMB, identified by OMB Control No. 1902-
0231, should be sent via email to the Office of Information and
Regulatory Affairs<EMAIL_ADDRESS>Attention: Federal Energy
Regulatory Commission Desk Officer.
    A copy of the comments should also be sent to the Commission, in
Docket No. IC19-6-000, by either of the following methods:
     eFiling at Commission's website: http://www.ferc.gov/docs-filing/efiling.asp.
     Mail/Hand Delivery/Courier: Federal Energy Regulatory
Commission, Secretary of the Commission, 888 First Street NE,
Washington, DC 20426.
    Instructions: All submissions must be formatted and filed in
accordance with submission guidelines at: http://www.ferc.gov/help/submission-guide.asp. For user assistance, contact FERC Online Support
by email at<EMAIL_ADDRESS>or by phone at:<PHONE_NUMBER>
(toll-free), or<PHONE_NUMBER> for TTY.
    Docket: Users interested in receiving automatic notification of
activity in this docket or in viewing/downloading comments and
issuances in this docket may do so at http://www.ferc.gov/docs-filing/docs-filing.asp.

FOR FURTHER INFORMATION CONTACT: Ellen Brown may be reached by email at
<EMAIL_ADDRESS>telephone at<PHONE_NUMBER>, and fax at (202)
273-0873.

SUPPLEMENTARY INFORMATION:
    Title: FERC-914, Cogeneration and Small Power Production--Tariff
Filings.
    OMB Control No.: 1902-0231.
    Type of Request: Three-year extension of the FERC-914 information
collection requirements with no changes to the current reporting
requirements.
    Abstract: Section 205(c) of the Federal Power Act (FPA) and 18 CFR
292 require that every public utility have all of its jurisdictional
rates and tariffs on file with the Commission and make them available
for public inspection, within such time and in such form as the
Commission may designate. Section 205(d) of the FPA requires that every
public utility must provide notice to the Commission and the public of
any changes to its jurisdictional rates and tariffs, file such changes
with the Commission, and make them available for public inspection, in
such manner as directed by the Commission. In addition, FPA section 206
requires the Commission, upon complaint or its own motion, to modify
existing rates or services that are found to be unjust, unreasonable,
unduly discriminatory or preferential. FPA section 207 requires the
Commission upon complaint by a state commission and a finding of
insufficient interstate service, to order the rendering of adequate
interstate service by public utilities, the rates for which would be
filed in accordance with FPA sections 205 and 206.
    In Order Nos. 671 and 671-A,\1\ the Commission revised its
regulations that govern qualifying small power production and
cogeneration facilities. Among other things, the Commission eliminated
certain exemptions from rate regulation that were previously available
to qualifying facilities (QFs). New qualifying facilities may need to
make tariff filings if they do not meet the exemption requirements.
---------------------------------------------------------------------------

    \1\ Revised Regulations Governing Small Power Production and
Cogeneration Facilities, Order No. 671, 71 FR 7852 (2/15/2006), FERC
Stats. & Regs. ] 31,203 (2006); and Revised Regulations Governing
Small Power Production and Cogeneration Facilities, Order 671-A, 71
FR 30585 (5/30/2006), in Docket No. RM05-36.
---------------------------------------------------------------------------

    FERC implemented the Congressional mandate of the Energy Policy Act
of 2005 (EPAct 2005) to establish criteria for new qualifying
cogeneration facilities by: (1) Amending the exemptions available to
qualifying facilities from the FPA and from Public Utility Holding
Company Act (PUHCA) [resulting in the burden imposed by FERC-914, the
subject of this notice]; (2) ensuring that these facilities are using
their thermal output in a productive and beneficial manner; that the
electrical, thermal, chemical and mechanical output of new qualifying
cogeneration facilities is used fundamentally for commercial,
residential or industrial purposes; and there is continuing progress in
the development of efficient electric energy generating technology; (3)
amending the FERC Form 556 \2\ to reflect the criteria for new
qualifying cogeneration facilities; and (4) eliminating ownership
limitations for qualifying cogeneration and small power production
facilities. The Commission satisfied the statutory mandate and its
continuing obligation to review its policies encouraging cogeneration
and small power production, energy conservation, efficient use of
facilities and resources by electric utilities, and equitable rates for
energy customers.
---------------------------------------------------------------------------

    \2\ The FERC Form 556 (Certification of Qualifying Facility (QF)
Status for a Small Power Production or Cogeneration Facility) is
cleared separately as OMB Control No. 1902-0075 and is not a subject
of this notice.
---------------------------------------------------------------------------

    Type of Respondents: New qualifying facilities and small power
producers that do not meet Commission exemption criteria
    Estimate of Annual Burden: \3\ The Commission estimates the annual
public reporting burden and cost \4\ for the information collection as:
---------------------------------------------------------------------------

    \3\ Burden is the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a Federal agency. For further
explanation of what is included in the information collection
burden, refer to 5 Code of Federal Regulations 1320.3.
    \4\ FERC staff estimates that industry costs for salary plus
benefits are similar to Commission costs. The cost figure is the
FY2018 FERC average annual salary plus benefits ($164,820/year or
$79/hour).

                                            FERC-914--Cogeneration and Small Power Production--Tariff Filings
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Annual number
                                  Number of     of responses    Total number     Average burden hours &     Total annual burden hours &      Cost per
                                 respondents   per respondent   of responses      cost ($) per response        total annual cost ($)      respondent ($)
                                          (1)             (2)     (1) * (2) =  (4).......................  (3) * (4) = (5)..............       (5) / (1)
                                                                          (3)
--------------------------------------------------------------------------------------------------------------------------------------------------------
FPA Section 205 Filings......              35               1              35  183 hrs.; $14,457.........  6,405 hrs.; $505,995.........         $14,457

Electric Quarterly Reports                  0               0               0  230 hrs.; $18,170.........  0 hrs.; $0...................               0
 (initial).
Electric Quarterly Reports                 35               4             140  6 hrs.; $474..............  840 hrs.; $66,360............           1,896
 (later).
Change of Status.............              10               1              10  3 hrs.; $237..............  30 hrs.; $2,370..............             237
                              --------------------------------------------------------------------------------------------------------------------------
    Total....................  ..............  ..............             185  ..........................  7,275 hrs.; $574,725.........  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Comments: Comments are invited on: (1) Whether the collection of
information is necessary for the proper performance of the functions of
the Commission, including whether the information will have practical
utility; (2) the accuracy of the agency's estimate of the burden and
cost of the collection of information, including the validity of the
methodology and assumptions used; (3) ways to enhance the quality,
utility and clarity of the information collection; and (4) ways to
minimize the burden of the collection of information on those who are
to respond, including the use of automated collection techniques or
other forms of information technology.

    Dated: June 13, 2019.
Kimberly D. Bose,
Secretary.
[FR Doc. 2019-13822 Filed 6-27-19; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 78, Number 242 (Tuesday, December 17, 2013)]
[Proposed Rules]
[Pages 76251-76252]
[FR Doc No: 2013-29985]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 25

[Docket No. FAA-2013-0909; Notice No. 25-13-17-SC]

Special Conditions: Airbus, Model A350-900 Series Airplane;
Electronic System Security Protection From Unauthorized External Access

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed special conditions.

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

SUMMARY: This action proposes special conditions for Airbus Model A350-
900 series airplanes. These airplanes will have a novel or unusual
design feature associated with electronic system security protection
from unauthorized external access. The applicable airworthiness
regulations do not contain adequate or appropriate safety standards for
this design feature. These proposed special conditions contain the
additional safety standards that the Administrator considers necessary
to establish a level of safety equivalent to that established by the
existing airworthiness standards.

DATES: Send your comments on or before January 31, 2014.

ADDRESSES: Send comments identified by docket number FAA-2013-0909
using any of the following methods:
     Federal eRegulations Portal: Go to http://www.regulations.gov/ and follow the online instructions for sending
your comments electronically.
     Mail: Send comments to Docket Operations, M-30, U.S.
Department of Transportation (DOT), 1200 New Jersey Avenue SE., Room
W12-140, West Building Ground Floor, Washington, DC, 20590-0001.
     Hand Delivery or Courier: Take comments to Docket
Operations in Room W12-140 of the West Building Ground Floor at 1200
New Jersey Avenue SE, Washington, DC, between 9 a.m. and 5 p.m., Monday
through Friday, except federal holidays.
     Fax: Fax comments to Docket Operations at<PHONE_NUMBER>.
    Privacy: The FAA will post all comments it receives, without
change, to http://www.regulations.gov/, including any personal
information the commenter provides. Using the search function of the
docket Web site, anyone can find and read the electronic form of all
comments received into any FAA docket, including the name of the
individual sending the comment (or signing the comment for an
association, business, labor union, etc.). DOT's complete Privacy Act
Statement can be found in the Federal Register published on April 11,
2000 (65 FR 19477-19478), as well as at http://DocketsInfo.dot.gov/.
    Docket: Background documents or comments received may be read at
http://www.regulations.gov/ at any time. Follow the online instructions
for accessing the docket or go to the Docket Operations in Room W12-140
of the West Building Ground Floor at 1200 New Jersey Avenue SE.,
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday,
except federal holidays.

FOR FURTHER INFORMATION CONTACT: Varun Khanna, FAA, Airplane and
Flightcrew Interface Branch, ANM-111, Transport Airplane Directorate,
Aircraft Certification Service, 1601 Lind Avenue SW., Renton,
Washington 98057-3356; telephone<PHONE_NUMBER>; facsimile (425) 227-
1320.

SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite interested people to take part in this rulemaking by
sending written comments, data, or views. The most helpful comments
reference a specific portion of the special conditions, explain the
reason for any recommended change, and include supporting data.
    We will consider all comments we receive on or before the closing
date for comments. We may change these proposed special conditions
based on the comments we receive.

Background

    On August 25, 2008, Airbus applied for a type certificate for their
new Model A350-900 series airplane. Later, Airbus requested and the FAA
approved an extension to the application for FAA type certification to
June 28, 2009. The Model A350-900 series has a conventional layout with
twin wing-mounted Rolls-Royce Trent XWB engines. It features a twin
aisle 9-abreast economy class layout, and accommodates side-by-side
placement of LD-3 containers in the cargo compartment. The basic Model
A350-900 series configuration will accommodate 315 passengers in a
standard two-class arrangement. The design cruise speed is Mach 0.85
with a Maximum Take-Off Weight of 602,000 lbs. Airbus proposes the
Model A350-900 series to be certified for extended operations (ETOPS)
beyond 180 minutes at entry into service for up to a 420-minute maximum
diversion time.
    Contemporary transport category airplanes have both safety-related
and non-safety-related electronic system networks for many operational
functions. However, electronic system network security considerations
and functions have played a relatively minor role in the certification
of such systems because of the isolation, protection mechanisms, and
limited connectivity between the different networks.

Type Certification Basis

    Under Title 14, Code of Federal Regulations (14 CFR) 21.17, Airbus
must show that the Model A350-900 series meets the applicable
provisions of 14 CFR part 25, as amended by Amendments 25-1 through 25-
129.
    If the Administrator finds that the applicable airworthiness
regulations (i.e., 14 CFR part 25) do not contain adequate or
appropriate safety standards for the Model A350-900 series because of a
novel or unusual design feature, special conditions are prescribed
under Sec.  21.16.
    Special conditions are initially applicable to the model for which
they are issued. Should the type certificate for that model be amended
later to include any other model that incorporates the same novel or
unusual design feature, the proposed special conditions would also
apply to the other model under Sec.  21.101.
    In addition to the applicable airworthiness regulations and
proposed special conditions, the Model A350-900 series must comply with
the fuel vent and exhaust emission requirements of 14 CFR part 34 and
the noise certification requirements of 14 CFR

part 36 and the FAA must issue a finding of regulatory adequacy under
Sec.  611 of Public Law 92-574, the ``Noise Control Act of 1972.''
    The FAA issues special conditions, as defined in 14 CFR 11.19,
under Sec.  11.38, and they become part of the type-certification basis
under Sec.  21.17(a)(2).

Novel or Unusual Design Features

    The Airbus Model A350-900 series will incorporate the following
novel or unusual design feature:
    The digital systems architecture for the Airbus Model A350-900
series airplanes is composed of several connected networks. This
proposed network architecture is used for a diverse set of functions,
providing data connectivity between systems, including:
    1. airplane control, communication, display, monitoring and
navigation systems,
    2. airline business and administrative support systems,
    3. passenger entertainment systems, and
    4. access by systems external to the airplane.

Discussion

    The proposed Airbus Model A350-900 series architecture and network
configuration may allow increased connectivity to and access from
external network sources and airline operations and maintenance
networks to the aircraft control domain and airline information
services domain. The aircraft control domain and airline information
services domain perform functions required for the safe operation and
maintenance of the airplane. Previously these domains had very limited
connectivity with external network sources. The architecture and
network configuration may allow the exploitation of network security
vulnerabilities resulting in intentional or unintentional destruction,
disruption, degradation, or exploitation of data, systems, and networks
critical to the safety and maintenance of the airplane.
    The existing regulations and guidance material did not anticipate
these types of airplane system architectures. Furthermore, 14 CFR
regulations and current system safety assessment policy and techniques
do not address potential security vulnerabilities, which could be
exploited by unauthorized access to airplane networks, data buses, and
servers. Therefore, these special conditions are proposed to ensure
that the security (i.e., confidentiality, integrity, and availability)
of airplane systems is not compromised by unauthorized wired or
wireless electronic connections.

Applicability

    As discussed above, these proposed special conditions apply to
Airbus Model A350-900 series airplanes. Should Airbus apply later for a
change to the type certificate to include another model incorporating
the same novel or unusual design feature, the proposed special
conditions would apply to that model as well.

Conclusion

    This action affects only certain novel or unusual design features
on the Airbus Model A350-900 series airplanes. It is not a rule of
general applicability.

List of Subjects in 14 CFR Part 25

    Aircraft, Aviation safety, Reporting and Recordkeeping
requirements.

    The authority citation for these special conditions is as follows:

    Authority: 49 U.S.C. 106(g), 40113, 44701, 44702, 44704.

The Proposed Special Conditions

    Accordingly, the Federal Aviation Administration (FAA) proposes the
following special conditions as part of the type certification basis
for Airbus Model A350-900 series airplanes. Airplane Electronic System
Security Protection from Unauthorized External Access.
    1. The applicant must ensure airplane electronic system security
protection from access to or by unauthorized sources external to the
airplane, including those possibly caused by maintenance activity.
    2. The applicant must ensure that electronic system security
threats are identified and assessed, and that effective electronic
system security protection strategies are implemented to protect the
airplane from all adverse impacts on safety, functionality, and
continued airworthiness.
    3. The applicant must establish appropriate procedures to allow the
operator to ensure that continued airworthiness of the aircraft is
maintained, including all post type certification modifications that
may have an impact on the approved electronic system security
safeguards.

    Issued in Renton, Washington, on October 22, 2013.
Stephen P. Boyd,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2013-29985 Filed 12-16-13; 8:45 am]
BILLING CODE 4910-13-P