[Federal Register Volume 82, Number 129 (Friday, July 7, 2017)]
[Notices]
[Pages 31651-31656]
[FR Doc No: 2017-14242]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81062; File No. SR-NYSEArca-2017-56]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change to Facilitate the Listing and Trading of
Certain Series of Investment Company Units Listed Pursuant to NYSE Arca
Equities Rule 5.2(j)(3)

June 30, 2017.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on June 19, 2017, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, and
II below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    The Exchange proposes to facilitate the listing and trading of
certain series of Investment Company Units listed pursuant to NYSE Arca
Equities Rule 5.2(j)(3). The proposed rule change is available on the
Exchange's Web site at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    Pursuant to NYSE Arca Equities Rule 5.2(j)(3), the Exchange
proposes to facilitate the listing and trading of certain series of
Investment Company Units that do not otherwise meet the standards set
forth in Commentary.02 to Rule 5.2(j)(3). Specifically, the Exchange
proposes to facilitate the listing and trading of the following series
of Investment Company Units based on a multistate index of fixed income
municipal bond securities: iShares National Muni Bond ETF, iShares
Short-Term National Muni Bond ETF, VanEck Vectors AMT-Free Intermediate
Municipal Index ETF, VanEck Vectors AMT-Free Long Municipal Index ETF,
VanEck Vectors AMT-Free Short Municipal Index ETF, VanEck Vectors High-
Yield Municipal Index ETF, VanEck Vectors Pre-Refunded Municipal Index
ETF, PowerShares VRDO Tax-Free Weekly Portfolio, SPDR Nuveen Bloomberg
Barclays Short Term Municipal Bond ETF and SPDR Nuveen Bloomberg
Barclays Municipal Bond ETF (collectively, the ``Multistate Municipal
Bond Funds'').
    In addition, the Exchange proposes to facilitate the listing and
trading of the following series of Investment Company Units based on a
single-state index of fixed income municipal bond securities: iShares
California Muni Bond ETF and the iShares New York Muni Bond ETF
(collectively, the ``Single-state Municipal Bond Funds'' and, together
with the Multistate Municipal Bond Funds, the ``Municipal Bond
Funds'').
    Each of the Municipal Bond Funds listed on the Exchange prior to
2010 and is based on an index of fixed-income municipal bond
securities. Commentary .02 to Rule 5.2(j)(3) sets forth the generic
listing requirements for an index of fixed income securities underlying
a series of Investment Company Units. One of the enumerated listing
requirements is that component fixed income securities that, in the
aggregate, account for at least 75% of the weight of the index each
shall have a minimum principal amount outstanding of $100 million or
more.\4\ The Exchange proposes to facilitate the listing and trading of
the Municipal Bond Funds notwithstanding the fact that the indices on
which they are based do not meet the requirements of Commentary
.02(a)(2) to Rule 5.2(j)(3). Each of the indices on which the Municipal
Bond Funds are based meet all of the other requirements of such
rule.\5\
---------------------------------------------------------------------------

    \4\ See Commentary .02(a)(2) to NYSE Arca Equities Rule
5.2(j)(3).
    \5\ The Commission previously has approved proposed rule changes
relating to listing and trading on the Exchange of Units based on
municipal bond indexes. See Securities Exchange Act Release Nos.
67985 (October 4, 2012), 77 FR 61804 (October 11, 2012) (SR-
NYSEArca-2012-92) (order approving proposed rule change relating to
the listing and trading of iShares 2018 S&P AMT-Free Municipal
Series and iShares 2019 S&P AMT-Free Municipal Series under NYSE
Arca Equities Rule 5.2(j)(3), Commentary .02); 67729 (August 24,
2012), 77 FR 52776 (August 30, 2012) (SR-NYSEArca-2012-92) (notice
of proposed rule change relating to the listing and trading of
iShares 2018 S&P AMT-Free Municipal Series and iShares 2019 S&P AMT-
Free Municipal Series under NYSE Arca Equities Rule 5.2(j)(3),
Commentary .02) (``iShares 2018 Notice''); 72523, (July 2, 2014), 79
FR 39016 (July 9, 2014) (SR-NYSEArca-2014-37) (order approving
proposed rule change relating to the listing and trading of iShares
2020 S&P AMT-Free Municipal Series under NYSE Arca Equities Rule
5.2(j)(3), Commentary .02); 72172 (May 15, 2014), 79 FR 29241 (May
21, 2014) (SR-NYSEArca-2014-37) (notice of proposed rule change
relating to the listing and trading of iShares 2020 S&P AMT-Free
Municipal Series under NYSE Arca Equities Rule 5.2(j)(3), Commentary
.02) (``iShares 2020 Notice''); 72464 (June 25, 2014), 79 FR 37373
(July 1, 2014) (File No. SR-NYSEArca-2014-45) (order approving
proposed rule change governing the continued listing and trading of
shares of the PowerShares Insured California Municipal Bond
Portfolio, PowerShares Insured National Municipal Bond Portfolio,
and PowerShares Insured New York Municipal Bond Portfolio)
(``PowerShares Order''); 75468 (July 16, 2015), 80 FR 43500 (July
22, 2015) (SR-NYSEArca-2015-25) (order approving proposed rule
change relating to the listing and trading of iShares iBonds Dec
2021 AMT-Free Muni Bond ETF and iShares iBonds Dec 2022 AMT-Free
Muni Bond ETF under NYSE Arca Equities Rule 5.2(j)(3)) (``iShares
2021/2022 Order''); 74730 (April 15, 2015), 76 FR 22234 (April 21,
2015) (notice of proposed rule change relating to the listing and
trading of iShares iBonds Dec 2021 AMT-Free Muni Bond ETF and
iShares iBonds Dec 2022 AMT-Free Muni Bond ETF under NYSE Arca
Equities Rule 5.2(j)(3), Commentary .02) (``iShares 2021/2022
Notice''); 74730 75376 (July 7, 2015), 80 FR 40113 (July 13, 2015)
(SR-NYSEArca-2015-18) (order approving proposed rule change relating
to the listing and trading of Vanguard Tax-Exempt Bond Index Fund
under NYSE Arca Equities Rule 5.2(j)(3)). The Commission also has
issued a notice of filing and immediate effectiveness of a proposed
rule change relating to listing and trading on the Exchange of
shares of the iShares Taxable Municipal Bond Fund. See Securities
Exchange Act Release No. 63176 (October 25, 2010), 75 FR 66815
(October 29, 2010) (SR-NYSEArca-2010-94). The Commission has
approved for Exchange listing and trading of shares of actively
managed funds of [sic] that principally hold municipal bonds. See,
e.g., Securities Exchange Act Release Nos. 60981 (November 10,
2009), 74 FR 59594 (November 18, 2009) (SR-NYSEArca-2009-79) (order
approving listing and trading of shares of the PIMCO Short-Term
Municipal Bond Strategy Fund and PIMCO Intermediate Municipal Bond
Strategy Fund); 79293 (November 10, 2016), 81 FR 81189 (November 17,
2016) (SR-NYSEArca-2016-107) (order approving listing and trading of
shares of Cumberland Municipal Bond ETF). The Commission also has
approved listing and trading on the Exchange of shares of the SPDR
Nuveen S&P High Yield Municipal Bond Fund under Commentary .02 of
NYSE Arca Equities Rule 5.2(j)(3). See Securities Exchange Act
Release No.63881 (February 9, 2011), 76 FR 9065 (February 16, 2011)
(SR-NYSEArca-2010-120).

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

    The Exchange believes it is appropriate to facilitate the listing
and trading of the Municipal Bond Funds because each such fund is based
on a broad-based index of fixed income municipal bond securities that
is not readily susceptible to manipulation. As of April 1, 2017, the
indices on which the Municipal Bond Funds are based had the following
---------------------------------------------------------------------------
characteristics:

    1. The iShares National Muni Bond ETF is based on the S&P
National AMT-Free Municipal Bond Index, which included 11,333
component fixed income municipal bond securities from issuers in 47
different states or U.S. territories. The most heavily weighted
security in the index represented approximately 0.25% of the total
weight of the index and the aggregate weight of the top five most
heavily weighted securities in the index represented less than 1% of
the total weight of the index. Approximately 99.29% of the weight of
the index components was composed of individual maturities that were
part of an entire municipal bond offering with a minimum original
principal amount outstanding of $100 million or more for all
maturities in the offering. Approximately 31.79% of the weight of
the components in the index had a minimum original principal amount
outstanding of $100 million or more. In addition, the total dollar
amount outstanding of issues in the index was approximately
$628,460,731,594 and the average dollar amount outstanding of issues
in the index was approximately $55,454,048.
    2. The iShares Short Term National Muni Bond ETF is based on the
S&P Short Term National AMT-Free Municipal Bond Index, which
included 3,309 component fixed income municipal bond securities from
issuers in 44 different states or U.S. territories. The most heavily
weighted security in the index represented approximately 1% of the
total weight of the index and the aggregate weight of the top five
most heavily weighted securities in the index represented
approximately 2% of the total weight of the index. Approximately
98.22% of the weight of the index components was composed of
individual maturities that were part of an entire municipal bond
offering with a minimum original principal amount outstanding of
$100 million or more for all maturities in the offering.
Approximately 27.63% of the weight of the components in the index
had a minimum original principal amount outstanding of $100 million
or more. In addition, the total dollar amount outstanding of issues
in the index was approximately $166,147,941,156 and the average
dollar amount outstanding of issues in the index was approximately
$50,210,922.
    3. The VanEck Vectors AMT-Free Intermediate Municipal Index ETF
is based on the Bloomberg Barclays AMT-Free Intermediate Continuous
Municipal Index, which included 17,272 component fixed income
municipal bond securities from issuers in 50 different states or
U.S. territories. The most heavily weighted security in the index
represented less than 0.25% of the total weight of the index and the
aggregate weight of the top five most heavily weighted securities in
the index represented approximately 0.50% of the total weight of the
index. Approximately 96.13% of the weight of the index components
was composed of individual maturities that were part of an entire
municipal bond offering with a minimum original principal amount
outstanding of $100 million or more for all maturities in the
offering. Approximately 7.75% of the weight of the components in the
index had a minimum original principal amount outstanding of $100
million or more. In addition, the total dollar amount outstanding of
issues in the index was approximately $340,102,539,050 and the
average dollar amount outstanding of issues in the index was
approximately $19,690,976.
    4. The VanEck Vectors AMT-Free Long Municipal Index ETF is based
on the Bloomberg Barclays AMT-Free Long Continuous Municipal Index,
which included 7,657 component fixed income municipal bond
securities from issuers in 50 different states or U.S. territories.
The most heavily weighted security in the index represented less
than 0.50% of the total weight of the index and the aggregate weight
of the top five most heavily weighted securities in the index
represented approximately 1.25% of the total weight of the index.
Approximately 93.84% of the weight of the index components was
composed of individual maturities that were part of an entire
municipal bond offering with a minimum original principal amount
outstanding of $100 million or more for all maturities in the
offering. Approximately 32.34% of the weight of the components in
the index had a minimum original principal amount outstanding of
$100 million or more. In addition, the total dollar amount
outstanding of issues in the index was approximately
$279,575,285,082 and the average dollar amount outstanding of issues
in the index was approximately $36,512,379.
    5. The VanEck Vectors AMT-Free Short Municipal Index ETF is
based on the Bloomberg Barclays AMT-Free Short Continuous Municipal
Index, which included 7,229 component fixed income municipal bond
securities from issuers in 48 different states or U.S. territories.
The most heavily weighted security in the index represented
approximately 1% of the total weight of the index and the aggregate
weight of the top five most heavily weighted securities in the index
represented approximately 2.25% of the total weight of the index.
Approximately 94.4% of the weight of the index components was
composed of individual maturities that were part of an entire
municipal bond offering with a minimum original principal amount
outstanding of $100 million or more for all maturities in the
offering. Approximately 13.60% of the weight of the components in
the index had a minimum original principal amount outstanding of
$100 million or more. In addition, the total dollar amount
outstanding of issues in the index was approximately
$152,020,140,995 and the average dollar amount outstanding of issues
in the index was approximately $21,026,299.
    6. The VanEck Vectors High-Yield Municipal Index ETF is based on
the Bloomberg Barclays Municipal Custom High Yield Composite Index,
which included 4,702 component fixed income municipal bond
securities from issuers in 50 different states or U.S. territories.
The most heavily weighted security in the index represented
approximately 1.25% of the total weight of the index and the
aggregate weight of the top five most heavily weighted securities in
the index represented approximately 6% of the total weight of the
index. Approximately 75.16% of the weight of the index components
was composed of individual maturities that were part of an entire
municipal bond offering with a minimum original principal amount
outstanding of $100 million or more for all maturities in the
offering. Approximately 43.26% of the weight of the components in
the index had a minimum original principal amount outstanding of
$100 million or more. In addition, the total dollar amount
outstanding of issues in the index was approximately
$224,318,153,150 and the average dollar amount outstanding of issues
in the index was approximately $47,706,966.
    7. The VanEck Vectors Pre-Refunded Municipal Index ETF is based
on the Bloomberg Barclays Municipal Pre-Refunded-Treasury-Escrowed
Index, which included 3,691 component fixed income municipal bond
securities from issuers in 50 different states or U.S. territories.
The most heavily weighted security in the index represented
approximately 0.50% of the total weight of the index and the
aggregate weight of the top five most heavily weighted securities in
the index represented approximately 2.25% of the total weight of the
index. Approximately 93.70% of the weight of the index components
was composed of individual maturities that were part of an entire
municipal bond offering with a minimum original principal amount
outstanding of $100 million or more for all maturities in the
offering. Approximately 19.23% of the weight of the components in
the index had a minimum original principal amount outstanding of
$100 million or more. In addition, the total dollar amount
outstanding of issues in the index was approximately $94,289,476,486
and the average dollar amount outstanding of issues in the index was
approximately $25,545,780.
    8. The PowerShares VRDO Tax-Free Weekly Portfolio is based on
the Bloomberg US Municipal AMT-Free Weekly VRDO Index, which
included 1,494 component fixed income municipal bond securities from
issuers in 49 different states or U.S. territories. The most heavily
weighted security in the index represented approximately 0.75% of
the total weight of the index and the aggregate weight of the top
five most heavily weighted securities in the index represented
approximately 2.75% of the total weight of the index. Approximately
44.76% of the weight of the index components was composed of
individual maturities that were part of an entire municipal bond
offering with a minimum original principal amount outstanding of
$100 million or more for all maturities in the offering.
Approximately 34.88% of the weight of the components in the index
had a minimum original principal amount outstanding of $100 million
or more. In addition, the total dollar amount outstanding

of issues in the index was approximately $68,489,564,000 and the
average dollar amount outstanding of issues in the index was
approximately $45,843,082.
    9. The SPDR Nuveen Bloomberg Barclays Short Term Municipal Bond
ETF is based on the Bloomberg Barclays Managed Money Municipal Short
Term Index, which included 4,263 component fixed income municipal
bond securities from issuers in 44 different states or U.S.
territories. The most heavily weighted security in the index
represented approximately 0.75% of the total weight of the index and
the aggregate weight of the top five most heavily weighted
securities in the index represented approximately 2% of the total
weight of the index. Approximately 94.54% of the weight of the index
components was composed of individual maturities that were part of
an entire municipal bond offering with a minimum original principal
amount outstanding of $100 million or more for all maturities in the
offering. Approximately 10.82% of the weight of the components in
the index had a minimum original principal amount outstanding of
$100 million or more. In addition, the total dollar amount
outstanding of issues in the index was approximately $85,187,709,681
and the average dollar amount outstanding of issues in the index was
approximately $19,983,042.
    10. The SPDR Nuveen Bloomberg Barclays Municipal Bond ETF is
based on the Bloomberg Barclays Municipal Managed Money Index, which
included 22,247 component fixed income municipal bond securities
from issuers in 48 different states or U.S. territories. The most
heavily weighted security in the index represented less than 0.25%
of the total weight of the index and the aggregate weight of the top
five most heavily weighted securities in the index represented
approximately 0.50% of the total weight of the index. Approximately
95.05% of the weight of the index components was composed of
individual maturities that were part of an entire municipal bond
offering with a minimum original principal amount outstanding of
$100 million or more for all maturities in the offering.
Approximately 13.35% of the weight of the components in the index
had a minimum original principal amount outstanding of $100 million
or more. In addition, the total dollar amount outstanding of issues
in the index was approximately $496,240,108,998 and the average
dollar amount outstanding of issues in the index was approximately
$22,305,934.
    11. The iShares California Muni Bond ETF is based on the S&P
California AMT-Free Municipal Bond Index, which included 2,115
component fixed income municipal bond securities from more than 150
distinct municipal bond issuers in the State of California. The most
heavily weighted security in the index represented approximately
0.50% of the total weight of the index and the aggregate weight of
the top five most heavily weighted securities in the index
represented approximately 2.75% of the total weight of the index.
Approximately 96.31% of the weight of the index components was
composed of individual maturities that were part of an entire
municipal bond offering with a minimum original principal amount
outstanding of $100 million or more for all maturities in the
offering. Approximately 38.89% of the weight of the components in
the index had a minimum original principal amount outstanding of
$100 million or more. In addition, the total dollar amount
outstanding of issues in the index was approximately
$137,796,471,640 and the average dollar amount outstanding of issues
in the index was approximately $65,151,996.
    12. The iShares New York Muni Bond Fund is based on the S&P New
York AMT-Free Municipal Bond Index, which included 2,191 component
fixed income municipal bond securities from more than 20 distinct
municipal bond issuers in the State of New York. The most heavily
weighted security in the index represented approximately 1.50% of
the total weight of the index and the aggregate weight of the top
five most heavily weighted securities in the index represented
approximately 4.25% of the total weight of the index. Approximately
98.63% of the weight of the index components was composed of
individual maturities that were part of an entire municipal bond
offering with a minimum original principal amount outstanding of
$100 million or more for all maturities in the offering.
Approximately 34.50% of the weight of the components in the index
had a minimum original principal amount outstanding of $100 million
or more. In addition, the total dollar amount outstanding of issues
in the index was approximately $124,381,556,872 and the average
dollar amount outstanding of issues in the index was approximately
$56,769,309.

    Based on the characteristics of each index as described above, the
Exchange believes it is appropriate to facilitate the listing and
trading of the Municipal Bond Funds. Each index underlying the
Municipal Bond Funds satisfies all of the generic listing requirements
for Investment Company Units based on a fixed income index, except for
the minimum principal amount outstanding requirement of Commentary
.02(a)(2) to Rule 5.2(j)(3). A fundamental purpose behind the minimum
principal amount outstanding requirement is to ensure that component
securities of an index are sufficiently liquid such that the potential
for index manipulation is reduced.
    As described above, each index underlying the Multistate Municipal
Bond Funds is broad-based and currently includes, on average, more than
8,000 component securities. Whereas the generic listing rules require
that an index contain securities from a minimum of 13 non-affiliated
issuers,\6\ each index underlying the Multistate Municipal Bond Funds
currently includes securities issued by municipal entities in more than
40 states or U.S. territories. Further, whereas the generic listing
rules permit a single component security to represent up to 30% of the
weight of an index and the top five component securities to, in
aggregate, represent up to 65% of the weight of an index,\7\ no single
security currently represents more than approximately 1.5% of the
weight of any index underlying the Multistate Municipal Bond Funds.
Similarly, the aggregate weight of the five most heavily weighted
securities in each index does not exceed approximately 6%. The Exchange
believes that this significant diversification and the lack of
concentration among constituent securities provides a strong degree of
protection against index manipulation.
---------------------------------------------------------------------------

    \6\ See Commentary .02(a)(5) to NYSE Arca Equities Rule
5.2(j)(3).
    \7\ See Commentary .02(a)(4) to NYSE Arca Equities Rule
5.2(j)(3).
---------------------------------------------------------------------------

    Each index on which the Single-state Municipal Bond Funds is based
is similarly well diversified to protect against index manipulation. On
average, the indices underlying the Single-state Municipal Bond Funds
include more than 1,500 securities. Each index includes securities from
at least 20 distinct municipal bond issuers and the most heavily
weighted security in any of the indices underlying the Single-state
Municipal Bond Funds represents approximately 2% and the aggregate
weight of the five most heavily weighted securities in any of the
indices represents approximately 6.25% of the total index weight.
    On a continuous basis, each index underlying a Municipal Bond Fund
will contain at least 500 component securities.\8\ In addition, the
Exchange represents that: (1) Except for Commentary .02(a)(2) to Rule
5.2(j)(3), each index currently satisfies all of the generic listing
standards under Rule 5.2(j)(3); (2) the continued listing standards
under Rules 5.2(j)(3) (except for Commentary .02(a)(2)) and 5.5(g)(2)
applicable to Investment Company Units will apply to the shares of each
Municipal Bond Fund; and (3) the issuer of each Municipal Bond Fund is

required to comply with Rule 10A-3 \9\ under the Act for the initial
and continued listing of the shares of each Municipal Bond Fund. In
addition, the Exchange represents that the shares of each Municipal
Bond Fund will comply with all other requirements applicable to
Investment Company Units including, but not limited to, requirements
relating to the dissemination of key information such as the value of
the underlying index and the applicable Intraday Indicative Value
(``IIV''),\10\ rules governing the trading of equity securities,
trading hours, trading halts, surveillance, information barriers and
the Information Bulletin to Equity Trading Permit Holders (``ETP
Holders''), as set forth in Exchange rules applicable to Investment
Company Units and prior Commission orders approving the generic listing
rules applicable to the listing and trading of Investment Company
Units.\11\
---------------------------------------------------------------------------

    \8\ The Commission has previously approved a proposed rule
change relating to the listing and trading on the Exchange of a
series of Investment Company Units based on a municipal bond index
that did not satisfy Commentary .02(a)(2) of Rule 5.2(j)(3) provided
that such municipal bond index contained at least 500 component
securities on a continuous basis. See Securities Exchange Act
Release No. 79767 (January 10, 2017), 82 FR 4950 (January 17, 2017)
(SR-NYSEArca-2016-62) (order approving proposed rule change relating
to the listing and trading of the PowerShares Build America Bond
Portfolio). The total dollar amount of issues in the index
underlying the PowerShares Build America Bond Portfolio was
approximately $281,589,346,769 and the average dollar amount
outstanding of issues in the index was approximately $27,808,547.
Those metrics are comparable to the metrics of the indices
underlying the Municipal Bond Funds.
    \9\ 17 CFR 240.10A-3.
    \10\ The IIV will be widely disseminated by one or more major
market data vendors at least every 15 seconds during the Exchange's
Core Trading Session of 9:30 a.m. to 4:00 p.m., Eastern time.
Currently, it is the Exchange's understanding that several major
market data vendors display and/or make widely available IIVs taken
from the Consolidated Tape Association (``CTA'') or other data
feeds.
    \11\ See, e.g., Securities Exchange Act Release Nos. 55783 (May
17, 2007), 72 FR 29194 (May 24, 2007) (SR-NYSEArca-2007-36) (order
approving NYSE Arca generic listing standards for Units based on a
fixed income index); 44551 (July 12, 2001), 66 FR 37716 (July 19,
2001) (SR-PCX-2001-14) (order approving generic listing standards
for Units and Portfolio Depositary Receipts); 41983 (October 6,
1999), 64 FR 56008 (October 15, 1999) (SR-PCX-98-29) (order
approving rules for listing and trading of Units).
---------------------------------------------------------------------------

    The current value of each index underlying the Municipal Bond Funds
is widely disseminated by one or more major market data vendors at
least once per day, as required by NYSE Arca Equities Rule 5.2(j)(3),
Commentary .02 (b)(ii). The IIV for shares of each Municipal Bond Fund
is disseminated by one or more major market data vendors, updated at
least every 15 seconds during the Exchange's Core Trading Session, as
required by NYSE Arca Equities Rule 5.2(j)(3), Commentary .02 (c). In
addition, the portfolio of securities held by each Municipal Bond Fund
is disclosed daily on each Municipal Bond Fund's Web site.
    The Exchange notes that each of the Municipal Bond Funds has been
listed on the Exchange for at least eight years \12\ and that, during
such time, the Exchange has not become aware of any potential
manipulation of the underlying indices. Further, the Exchange's
existing rules require that the Municipal Bond Funds notify the
Exchange of any material change to the methodology used to determine
the composition of the index.\13\ Therefore, if the methodology of an
index underlying the Municipal Bond Funds was changed in a manner that
would materially alter its existing composition, the Exchange would
have advance notice and would evaluate the index, as modified, to
determine whether it was sufficiently broad-based and well diversified.
---------------------------------------------------------------------------

    \12\ The VanEck Vectors High-Yield Municipal Index ETF is the
most recently listed of the Multistate Municipal Bond Funds and
listed on the Exchange on February 5, 2009.
    \13\ See NYSE Arca Equities Rule 5.3(i)(1)(i)(P).
---------------------------------------------------------------------------

2. Statutory Basis
    The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \14\ that an exchange have rules that
are designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to remove
impediments to, and perfect the mechanism of a free and open market
and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \14\ 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 of each Municipal Bond Fund will be listed and traded on the
Exchange pursuant to the initial and continued listing criteria in NYSE
Arca Equities Rule 5.2(j)(3) (except for Commentary .02(a)(2)). The
Exchange represents that trading in the shares of each Municipal Bond
Fund will be subject to the existing trading surveillances administered
by the Exchange as well as cross-market surveillances administered by
the Financial Industry Regulatory Authority (``FINRA'') on behalf of
the Exchange, which are designed to detect violations of Exchange rules
and federal securities laws applicable to trading on the Exchange.\15\
The Exchange represents that these procedures are adequate to properly
monitor Exchange trading of the shares of each Municipal Bond Fund in
all trading sessions and to deter and detect violations of Exchange
rules and federal securities laws applicable to trading on the
Exchange. The Exchange or FINRA, on behalf of the Exchange, or both,
will communicate as needed regarding trading in the shares of each
Municipal Bond Fund with other markets that are members of the
Intermarket Surveillance Group (``ISG''). In addition, the Exchange
will communicate as needed regarding trading in the shares of each
Municipal Bond Fund with other markets that are members of the ISG or
with which the Exchange has in place a comprehensive surveillance
sharing agreement. 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 of each Municipal Bond Fund. 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 Trade
Reporting and Compliance Engine (``TRACE'').
---------------------------------------------------------------------------

    \15\ 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.
---------------------------------------------------------------------------

    As discussed above, the Exchange believes that each index
underlying the Municipal Bond Funds is sufficiently broad-based to
deter potential manipulation. Each index underlying the Multistate
Municipal Bond Funds currently includes, on average, more than 8,000
component securities. Whereas the generic listing rules require that an
index contain securities from a minimum of 13 non-affiliated
issuers,\16\ each index underlying the Multistate Municipal Bond Funds
currently includes securities issued by municipal entities in more than
40 states or U.S. territories. Further, whereas the generic listing
rules permit a single component security to represent up to 30% of the
weight of an index and the top five component securities to, in
aggregate, represent up to 65% of the weight of an index,\17\ no single
security currently represents more than approximately 1.5% of the
weight of any index underlying the Multistate Municipal Bond Funds.
Similarly, the aggregate weight of the five most heavily weighted
securities in each index does not exceed approximately 6%.
---------------------------------------------------------------------------

    \16\ See Commentary .02(a)(5) to NYSE Arca Equities Rule
5.2(j)(3).
    \17\ See Commentary .02(a)(4) to NYSE Arca Equities Rule
5.2(j)(3).
---------------------------------------------------------------------------

    Further, the indices underlying the Single-state Municipal Bond
Funds include, on average, more than 1,500 securities. Each such index
includes securities from at least 20 distinct municipal bond issuers
and the most heavily weighted security in any of the indices underlying
the Single-state Municipal Bond Funds represents approximately 2% and
the aggregate weight of the five most heavily weighted securities in
any of the indices represents approximately 6.25% of the total index
weight.

    On a continuous basis, each index underlying a Municipal Bond Fund
will contain at least 500 component securities.
    The Exchange believes that, within a single municipal bond issuer,
separate issues by the same issuer are likely to trade similarly to one
another. In addition, the Exchange believes that individual CUSIPs
within each index underlying the Municipal Bond Funds that share
characteristics with other CUSIPs have a high yield to maturity
correlation, and frequently have a correlation of one or close to one.
    In support of its proposed rule change, the Exchange notes that the
Commission has previously approved a rule change to facilitate the
listing and trading of series of Investment Company Units based on an
index of municipal bond securities that did not otherwise meet the
generic listing requirements of NYSE Arca Rule 5.2(j)(3). For example,
the Commission previous [sic] approved the listing and trading of the
PowerShares Insured California Municipal Bond Portfolio, PowerShares
Insured National Municipal Bond Portfolio and the PowerShares Insured
New York Municipal Bond Portfolio (the ``PowerShares Municipal Bond
Funds'') notwithstanding the fact that the index underlying each fund
did not satisfy the criteria of Commentary .02(a)(2) to Rule
5.2(j)(3).\18\ In finding such proposal to be consistent with the Act
and the rules regulations thereunder, the Commission noted that each
underlying index was sufficiently broad-based to deter potential
manipulation. The Exchange believes that each of the indices underlying
the Municipal Bond Funds shares comparable characteristics to the
indices underlying the PowerShares Municipal Bond Funds.
---------------------------------------------------------------------------

    \18\ See Securities Exchange Act Release No. 72464 (June 25,
2014), 79 FR 37373 (July 1, 2014) (File No. SR-NYSEArca-2014-45).
---------------------------------------------------------------------------

    The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that a large amount of information is publicly available regarding the
Municipal Bond Funds, thereby promoting market transparency. Each
Municipal Bond Fund's portfolio holdings will be disclosed on such
Municipal Bond Fund's Web site daily after the close of trading on the
Exchange and prior to the opening of trading on the Exchange the
following day. Moreover, the IIV for shares of each Municipal Bond Fund
will be widely disseminated by one or more major market data vendors at
least every 15 seconds during the Exchange's Core Trading Session. The
current value of each index underlying the Municipal Bond Funds will be
disseminated by one or more major market data vendors at least once per
day. Information regarding market price and trading volume of the
shares of each Municipal Bond Fund will be continually available on a
real-time basis throughout the day on brokers' computer screens and
other electronic services, and quotation and last sale information will
be available via the CTA high-speed line. The Web site for each
Municipal Bond Fund will include the prospectus for such Municipal Bond
Fund and additional data relating to net asset value (``NAV'') and
other applicable quantitative information. If the Exchange becomes
aware that a Municipal Bond Fund's NAV is not being disseminated to all
market participants at the same time, it will halt trading in the
shares of such Municipal Bond Fund until such time as the NAV is
available to all market participants. 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 a Municipal Bond
Fund. Trading also may be halted because of market conditions or for
reasons that, in the view of the Exchange, make trading in the shares
of a particular Municipal Bond Fund inadvisable. If the IIV and index
value are not being disseminated for a particular Municipal Bond Fund
as required, the Corporation may halt trading during the day in which
the interruption to the dissemination of the IIV or index value occurs.
If the interruption to the dissemination of an IIV or index value
persists past the trading day in which it occurred, the Corporation
will halt trading. Trading in the shares of a Municipal Bond Fund will
be halted if the circuit breaker parameters in NYSE Arca Equities Rule
7.12 have been reached or because of market conditions or for reasons
that, in the view of the Exchange, make trading in the shares of a
particular Municipal Bond Fund inadvisable, and trading in the shares
of each Municipal Bond Fund will be subject to NYSE Arca Equities Rule
7.34, which sets forth circumstances under which such shares may be
halted. In addition, investors will have ready access to information
regarding the applicable IIV, and quotation and last sale information
for the shares of each Municipal Bond Fund. Trade price and other
information relating to municipal bonds is available through the
Municipal Securities Rulemaking Board's Electronic Municipal Market
Access (``EMMA'') system.
    All statements and representations made in this filing regarding
(a) the description of each Municipal Bond Fund's portfolio, (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 each Municipal Bond Fund on the Exchange. Each issuer of the
Municipal Bond Funds is required to advise the Exchange of any failure
by its Municipal Bond 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 a Municipal Bond Fund is not in compliance
with the applicable listing requirements, the Exchange will commence
delisting procedures under NYSE Arca Rule 5.5(m).
    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
exchange-traded products that principally hold municipal bonds and that
will enhance competition among market participants, to the benefit of
investors and the marketplace. The Exchange has in place surveillance
procedures relating to trading in the shares of each Municipal Bond
Fund 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, investors
will have ready access to information regarding the IIV and quotation
and last sale information for the shares of each Municipal Bond Fund.

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 not necessary or appropriate in
furtherance of the purposes of the Act, as amended. The Exchange notes
that the proposed rule change will facilitate the listing and trading
of exchange-traded products that hold municipal 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 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 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-2017-56 in the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2017-56. This
file number should be included in the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing will also be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEArca-2017-56 and should
be submitted on or before July 28, 2017.
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
Brent J. Fields,
Secretary.
[FR Doc. 2017-14242 Filed 7-6-17; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 121 (Friday, June 22, 2012)]
[Notices]
[Page 37732]
[FR Doc No: 2012-15234]

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

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

Notice of Applications for Certificates of Public Convenience and
Necessity and Foreign Air Carrier Permits Filed Under Subpart B
(Formerly Subpart Q) During the Week Ending June 9, 2012

    The following Applications for Certificates of Public Convenience
and Necessity and Foreign Air Carrier Permits were filed under Subpart
B (formerly Subpart Q) of the Department of Transportation's Procedural
Regulations (See 14 CFR 301.201 et seq.). The due date for Answers,
Conforming Applications, or Motions To Modify Scope are set forth below
for each application. Following the Answer period DOT may process the
application by expedited procedures. Such procedures may consist of the
adoption of a show-cause order, a tentative order, or in appropriate
cases a final order without further proceedings.
    Docket Number: DOT-OST-2003-16316.
    Date Filed: June 7, 2012.
    Due Date for Answers, Conforming Applications, or Motion To Modify
Scope: June 28, 2012.
    Description: Application of Hapag-Lloyd Executive GmbH (``HLE'')
requesting a renewal of exemption authority to engage in: (i) Foreign
charter air transportation of persons, property and mail from any point
or points behind any Member State of the European Union via any point
or points in any Member State and via intermediate points to any point
or points in the United States and beyond; (ii) foreign charter air
transportation of persons, property, and mail between any point or
points in the United States and any point or points in any member of
the European Common Aviation Area; (iii) other charters; and (iv)
transportation authorized by any additional route rights made available
to European Community carriers in the future. HLE further requests
issuance of a foreign air carrier permit pursuant to the Air Transport
Agreement Between the United States and the European Community and the
Member States of the European Community to enable HLE to engage in the
same air transportation described above.

Renee V. Wright,
Program Manager, Docket Operations, Federal Register Liaison.
[FR Doc. 2012-15234 Filed 6-21-12; 8:45 am]
BILLING CODE 4910-9X-P