[Federal Register: November 16, 2006 (Volume 71, Number 221)]
[Notices]
[Page 66814-66820]
[DOCID:fr16no06-116]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54731; File No. SR-NYSE-2006-54]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Order Granting Accelerated Approval of Proposed
Rule Change and Amendment No. 1 To List and Trade Two Series of
Commodity-Linked Securities of Wachovia Corporation

November 9, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on July 25, 2006, New York Stock Exchange LLC (the ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. On November 3, 2006, the Exchange
submitted Amendment No. 1 to the proposed rule change.\3\ The
Commission is publishing this notice to solicit comments on the
proposed rule change, as amended, from interested persons and is
approving the proposal, as amended, on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 replaced and superseded the original filing
in its entirety.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to list and trade two series of Commodity-
Linked Securities (the ``Securities'') of Wachovia Corporation, one
having an aggregate principal amount of $45,000,000 and the other
having an aggregate principal amount of $40,000,000. The return on the
Securities, in excess of the principal amount, is linked to the
performance of an equally weighted basket (the ``Basket'') of the
following five commodities: WTI crude oil, natural gas, copper,
aluminum, and gold (each, a ``Component Commodity'' and, collectively,
the ``Component Commodities'').

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, as
amended, 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 III below, and is set forth in
Sections A, B, and C below.

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

1. Purpose
    Under Section 703.19 of the NYSE Listed Company Manual (the
``Manual''), the Exchange may approve for listing and trading
securities not otherwise covered by the criteria of Sections 1 and 7 of
the Manual, provided that the issue is suited for auction market
trading. The Exchange proposes to list and trade, under Section 703.19
of the Manual, the Securities, the return on which, in excess of the
principal amount, is linked to the performance of the Basket. The
Securities are debt securities and are part of a series of debt
securities entitled ``Medium-Term Notes, Series G'' that Wachovia may
issue from time to time. The Securities rank equally with all other
unsecured and unsubordinated debt of Wachovia. The principal amount of
each Security is $25, and they will be traded on the Exchange's equity
trading floor.
    The Exchange believes that the Securities conform to the initial
listing standards for equity securities under Section 703.19 of the
Manual, as Wachovia is a listed company in good standing, each series
of Securities has at least 400 holders at the time of listing, each
series of Securities has a minimum life of one year, and the minimum
public market value of each series of Securities at the time of listing
will exceed $4 million.
    The Exchange states that the Securities will mature (the ``Maturity
Date'') on November 3, 2008, with respect to the Series 1 Securities
and August 6, 2009 with respect to the Series 2 Securities. The
maturity payment amount, in excess of the principal amount, will be
linked to the performance of the Basket, which in turn is based on the
performance of the Component Commodities.
    Each Component Commodity represents 20% of the Basket. The
Component Commodities are set forth below:
     WTI Crude Oil (Bloomberg symbol ``CL1'')
     Natural Gas (Bloomberg symbol ``NG1'')
     Copper (Bloomberg symbol ``LOCADY'')
     Aluminum (Bloomberg symbol ``LOAHDY'')
     Gold (Bloomberg symbol ``GOLDLNPM'')
    The weighting of each Component Commodity is fixed and will not
change during the term of the Securities. Similarly, the Component
Commodities that comprise the Basket will not change, except as
described below under ``Adjustments to the Basket and the Component
Commodity Prices.''
    The Series 1 Securities pay a fixed 2% interest rate semi-annually
on May 3 and November 3, beginning on May 3, 2006. At maturity, for
each Series 1 Security a holder owns, such holder will receive a cash
payment equal to the sum of the principal amount of the Security and
the Basket performance amount, plus any accrued but unpaid interest.
The ``Basket performance amount'' per Series 1 Security will equal the
greater of (i) $0, and (ii) the product of the principal amount of the
Series 1 Security and the percentage change in the level of the Basket,
as further described below. If the Basket ending level is less than or
equal to the Basket starting level, the Basket performance amount will
be $0, and the maturity payment amount will be $25, plus any accrued
but unpaid interest.
    The Series 2 Securities make no payment of interest, periodic or
otherwise. At maturity, for each Series 2 Security a holder owns, such
holder will receive a cash payment equal to the sum of the principal
amount of the Series 2 Security and the Basket performance amount. The
Basket performance amount per Series 2 Security will equal the greater
of (i) $0, and (ii) the product of the principal amount of the Series 2
Security, the percentage change in the level of the Basket, as further
described below, and a participation rate of 150%. If the Basket ending
level is less than or equal to the Basket starting level, the Basket
performance amount will be $0, and the maturity payment amount will be
$25.
    The Exchange states that the Securities will provide for
participation in the positive performance of the Component Commodities
during their term while reducing the risk exposure to investors through
principal protection. The Securities are not callable by Wachovia.
    The Basket performance amount per Security will be determined by
the calculation agent.\4\ The Basket performance amount per Series 1
Security will equal the greater of:
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    \4\ Wachovia Bank, National Association, a subsidiary of
Wachovia, will serve as the calculation agent. Wachovia may at any
time change the calculation agent without notice to holders of
Securities. Wachovia has represented to the Exchange that it has
policies prohibiting insider trading that are applicable to all of
its employees and that it implements and maintains procedures
reasonably designed to prevent the use and dissemination by
employees involved in the activities of Wachovia Bank, National
Association in its capacity as calculation agent, in violation of
applicable laws, rules and regulations, of material non-public
information relating to the Securities.
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    (i) $0, and
    (ii) $25 x (Basket ending level - Basket starting level) / Basket
Starting Level.
    The Basket performance amount per Series 2 Security will equal the
greater of:
    (i) $0, and
    (ii) $25 x ((Basket ending level - Basket starting level) / Basket
starting level) x the Participation Rate.
    The Participation Rate for the Series 2 Securities is 150%.
    The ``Basket starting level'' for both Series 1 and Series 2
Securities is 1,000.
    The ``Basket ending level'' will be determined by the calculation
agent and will equal the closing level of the Basket on the valuation
date. The closing level of the Basket will be calculated based on the
weighted levels of the Component Commodities and will equal the sum of
the products of (i) the component multiplier of each Component
Commodity and (ii) the closing price (as described below) of the
Component Commodity on the valuation date.
    The ``component multiplier'' equals the quotient of (i) the initial
weight of each Component Commodity (20%) multiplied by the Basket
starting level divided by (ii) the closing price of each Component
Commodity on the pricing date of the initial offering of the Securities
(October 27, 2005 for the Series 1 Securities and January 30, 2006 for
the Series 2 Securities).
    The ``closing price'' of each Component Commodity will be
determined by reference to its official closing price or cash
settlement price on the relevant exchange or market on the valuation
date, as reported by Bloomberg LP, as follows:
     In the case of WTI crude oil, the U.S. dollar closing
settlement price per barrel of West Texas Intermediate light sweet
crude oil on the New York Mercantile Exchange (the ``NYMEX'') of the
first nearby futures contract; \5\
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    \5\ The trading day in WTI crude oil and Henry Hub Natural Gas
on the NYMEX is between 10 a.m. and 2:30 p.m. New York Time.
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     In the case of natural gas, the official U.S. dollar
settlement price per MMBtu of natural gas on the NYMEX of the Henry Hub
Natural Gas futures contract in respect of the first nearby month; in
the case of copper, the official U.S. dollar settlement price per ton
of copper-Grade A on the London Metals

Exchange (the ``LME'') for cash delivery; \6\
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    \6\ The Exchange states that the LME is the principal non-
ferrous metals exchange in the world on which contracts for copper
and aluminum, among other metals, are traded. While there is a
futures market for each of copper and aluminum, Wachovia has
informed the Exchange that it is using the respective U.S. dollar
settlement prices as those prices are the generally accepted
standards for determining the market price of those commodities. The
LME is not a cash-cleared market. Both inter-office and floor
trading are cleared and guaranteed by a system run by the London
Clearing House, whose role is to act as a central counterparty to
trades executed between clearing members. The bulk of trading on the
LME is transacted through inter-office dealing that allows the LME
to operate as a 24-hour market. Liquidity for copper and aluminum
primarily exists during the two daily trading sessions on the floor
of the LME, from 11:40 a.m. to 1:15 p.m. and from 3:10 p.m. to 4:35
p.m., London time, and declines substantially outside of these
trading sessions.
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     In the case of aluminum, the official U.S. dollar
settlement price per ton of high grade primary aluminum on the LME for
cash delivery; or
     In the case of gold, the afternoon U.S. dollar fixing
price per troy ounce of unallocated gold bullion for delivery in London
through a member of the London Bullion Market Association (``LBMA'')
authorized to effect such delivery.\7\
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    \7\ The Exchange states that the LBMA is the principal gold
clearing center for over-the-counter gold bullion transactions.
Twice daily during London trading hours a ``fixing'' occurs that
provides reference prices for that day's trading. Information
regarding clearing volume estimates by the LBMA can be found at
http://www.lbma.org.uk/clearing_table.htm. The three measures

published by LBMA are: volume, the amount of metal transferred on
average each day measured in million of troy ounces; value, measured
in U.S. dollars, using the monthly average London PM fixing price;
and the number of transfers, which is the average number recorded
each day. The statistics exclude allocated and unallocated balance
transfers where the sole purpose is for overnight credit and
physical movements arranged by clearing members in locations other
than London. Additionally, the NYMEX publishes price and volume
statistics for transactions in contracts for the future delivery of
gold.
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    Wachovia has informed the Exchange that, in deciding whether to
base the pricing of each individual Component Commodity on its cash
price or on a related futures contract, it used the pricing source in
each case that it believed was most widely used as an indicator of the
market price of that commodity.
    The ``valuation date'' means the fifth business day prior to the
maturity date. However, if that date occurs on a day on which the
calculation agent has determined that a market disruption event has
occurred or is continuing, then the valuation date will be postponed
until the next succeeding business day on which the calculation agent
determines that a market disruption event does not occur or is not
continuing. If the valuation date is postponed, then the maturity date
of the Securities will be postponed by an equal number of business
days.
    The Securities are cash-settled in U.S. dollars and do not give the
holder any right to receive a futures contract, dividend payments, or
any other ownership right or interest in the Component Commodities that
comprise the Basket. The Securities are designed for investors who
desire to participate or gain exposure to the Component Commodities
that comprise the Basket, who are willing to hold the investment to
maturity, and who want to limit risk exposure by receiving principal
protection of their investment amount.
    The Basket is not a recognized market index and was created solely
for the purpose of offering the Securities.
Adjustments to the Basket and the Component Commodities Prices
    The composition of the Basket and/or the method of determining the
closing price for each Component Commodity may be adjusted from time to
time by the calculation agent, in its sole discretion, as follows:
     In the event that an official closing price is not
available for a Component Commodity for whatever reason, including any
discontinuance of trading in the relevant Component Commodity by the
NYMEX, the LME, or the LBMA, then the calculation agent may, in its
sole discretion, take such action, including adjustments to the Basket
or to the method of determining such closing price as it deems
appropriate. By way of example, and without limitation, if a contract
which serves as the basis for determining the closing price of a
particular Component Commodity is discontinued by the exchange or
market on which it traded, the calculation agent may, in its sole
discretion, determine such closing price for that Component Commodity
by reference to another contract for the Component Commodity traded on
another exchange or market or to its bid for the Component Commodity
for delivery on the valuation date.
     In the event that the terms of any contract used for
determining the closing price of any Component Commodity are changed in
a material respect by the commodity exchange upon which the contracts
trade, the calculation agent may take such action, including
adjustments to the Basket or to the method of determining the closing
price of that Component Commodity, as it deems appropriate.
    No adjustments will be made unless the calculation agent
determines, in its sole discretion, that such adjustment is appropriate
to maintain the validity of the closing price as an economic benchmark
for the affected Component Commodity. The calculation agent at any
time, or from time to time, if any, may make such adjustments, on or
prior to the maturity date.
    If any adjustments are of a more than temporary nature, the
Exchange will file a proposed rule change pursuant to Rule 19b-4 under
the Act seeking Commission approval to continue to trade the Securities
and, unless approved, the Exchange will commence delisting the
Securities.
Available Information
    The hypothetical maturity payment amount per Security (the
``Closing Values'') will be published once every NYSE trading day (as
opposed to at least every 15 seconds during the trading day) at
approximately 5 p.m., New York City time, calculated on each day as if
such day were the valuation date. The Closing Value will be accessible
by going to Bloomberg page ``WSSN'' and selecting the ``commodity-
linked'' option.
    The Exchange believes that this daily dissemination of the Closing
Value is appropriate because the Securities are debt securities traded
on the NYSE's equity floor, the value of which is linked to the Basket,
and there will be no creation or redemption of shares as there would be
with an exchange-traded fund (``ETF'').
    As discussed in the prospectus supplement dated October 27, 2005
relating to the Series 1 Securities and the prospectus supplement dated
May 13, 2005 relating to the Series 2 Securities, the trading price of
the Securities will be affected by many factors that interrelate in
complex ways. The negative effect of one factor may offset the positive
effect on the trading price of the Securities of another factor and the
negative effect of one factor may exacerbate the decrease in the
trading price of the Securities caused by another factor. For example,
increased price volatility with respect to one or more of Component
Commodities may offset some or all of any increase in the trading price
of the Securities attributable to another factor, such as an increase
in the prices of one or more of the Component Commodities. In addition,
a change in interest rates may offset other factors that would
otherwise change the prices of the Component Commodities and,
therefore, may significantly change the trading price of the
Securities. The Exchange states that the following bullet points
summarize the expected impact on the trading price of the Securities
given a change in a

specific factor, assuming all other conditions remain constant:
     The level of the Basket at any given point in time;
     Changes in Component Commodity prices;
     The volatility (frequency and magnitude of changes in
prices) of the Component Commodities and in particular market
expectations regarding the volatility of the Component Commodities;
     Interest rates generally, as well as changes in interest
rates and the yield curve;
     Changes in correlation among the prices of the Component
Commodities;
     The time remaining to maturity of the Securities;
     Wachovia's credit worthiness, as represented by its credit
ratings or as otherwise perceived in the market; and
     Geopolitical, economic, financial, political, regulatory
or judicial events, as well as other conditions that affect
commodities' markets in general and that may affect the market prices
of the Component Commodities.
    Pricing information with respect to the Component Commodities is
available as follows:
     The official U.S. dollar settlement price per ton of
coppeR-Grade A on the LME for cash delivery is publicly available on
the Web site of the LME at http://www.lme.com/dataprices_daily_metal.asp
.

     The official U.S. dollar settlement price per ton of high-
grade primary aluminum on the LME for cash delivery is publicly
available on the Web site of the LME at http://www.lme.com/dataprices_daily_metal.asp
.

     The U.S. dollar closing settlement price per barrel of
West Texas Intermediate light sweet crude oil on the NYMEX of the first
nearby futures contract is publicly available on the Web site of the
NYMEX at http://www.nymex.com/index.aspx.

     The official U.S. dollar settlement price per MMBtu of
natural gas on the NYMEX of the Henry Hub Natural Gas futures contract
in respect of the first nearby month is publicly available on the Web
site of the NYMEX at http://www.nymex.com/index.aspx.

     The afternoon U.S. dollar fixing price per troy ounce of
unallocated gold bullion for delivery in London through a member of the
LBMA authorized to effect such delivery is publicly available on the
Web site of the LBMA at http://www.lbma.org.uk/statistics_current.htm.

Complete real-time data for gold futures and options prices traded on
the NYMEX is available by subscription from Reuters and Bloomberg. The
NYMEX also provides delayed futures and options information on current
and past trading sessions and market news free of charge on its Web
site at http://www.nymex.com/index.aspx.

    Real time intraday trading prices and daily closing prices for the
Component Commodities are available by subscription from major market
vendors.
Market Disruption Event
    A market disruption event with respect to a Component Commodity, as
determined by the calculation agent in its sole discretion, means the
occurrence or existence of any of the following events:
     The failure of the relevant exchange, market or price
source to announce or publish the closing price for a Component
Commodity or the temporary or permanent discontinuance or
unavailability of the relevant exchange, market, or price source;
     The failure of trading to commence, or the permanent
discontinuation of trading, in the relevant futures contracts on the
relevant exchange or market, or the disappearance of, or the
disappearance of trading in, the relevant Component Commodity;
     A material change in the formula for or the method of
calculating the closing price for a Component Commodity;
     A material change in the content, composition, or
constitution of a Component Commodity or relevant futures contracts;
     A suspension, absence or material limitation imposed on
trading in the futures contracts or the relevant Component Commodity on
its respective exchange or in any additional futures contract, options
contract, or Component Commodity on any exchange or principal trading
market as specified in the relevant agreement or confirmation; for this
purpose, an absence of trading in the primary exchange on which options
or futures contracts related to any Component Commodities or the
relevant Component Commodities are traded will not include any time
when that exchange itself is closed for trading under ordinary
circumstances; or
     Any other event, if the calculation agent determines in
its sole discretion that the event materially interferes with
Wachovia's ability or the ability of any of its affiliates to unwind
all or a material portion of a hedge with respect to the Securities.
    The following events will not constitute market disruption events:
     a decision to permanently discontinue trading (without
implementation of such decision) in the option or futures contract
relating to any Component Commodity or in any Component Commodity on
the NYMEX, the LME, or the LBMA; or
     a limitation on the hours or numbers of days of trading
that results from an announced change in the regular business hours of
the relevant exchange.

Continued Listing Criteria

    The Exchange prohibits the initial and/or continued listing of any
security that is not in compliance with Rule 10A-3 under the Act.\8\
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    \8\ 15 U.S.C. 78a.
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    The Exchange will delist the Securities if:
     The Securities do not meet the continued listing criteria
of Section 703.19 of the Exchange's Listed Company Manual.
     The Closing Value ceases to be published every NYSE
trading day.
     Such other event shall occur or condition exists which in
the opinion of the Exchange makes further dealings on the Exchange
inadvisable.
    Additionally, the Exchange will file a proposed rule change
pursuant to Rule 19b-4 under the Act, seeking approval to continue
trading the Securities and, unless approved, the Exchange will commence
delisting the Securities if:
     Wachovia removes a Component Commodity from the Basket or
adds a new Component Commodity to the Basket, changes the weighting of
the Component Commodities in the Basket, or changes on a more than
temporary basis the source of the closing price of any of the Component
Commodities; or
     A Market Disruption Event occurs which is of a more than
temporary nature.
Trading Halts
    If the Closing Value for a series of the Securities is not being
disseminated as required, the Exchange may halt trading during the day
immediately following the day on which the interruption to the
dissemination of the Closing Value first occurs. If the interruption to
the dissemination of the Closing Value persists past the trading day
following the day on which the interruption occurred, the Exchange will
halt trading no later than the beginning of the second trading day
following the interruption.
Surveillance
    The Exchange represents that its surveillance procedures are
adequate to properly monitor the trading of the Securities and the
Component

Commodities. The Exchange's surveillance procedures will incorporate
and rely upon existing Exchange surveillance procedures governing
equities. The Exchange believes that these procedures are adequate to
monitor Exchange trading of the Securities and to detect violations of
Exchange rules, thereby deterring manipulation. The Exchange is a party
to information sharing agreements with each of the NYMEX and the LME,
pursuant to which such exchanges are obligated to provide the Exchange
with access to transaction information, including customer identity
information with respect to all commodities traded on such exchanges.
    In connection with its authorization for listing of the
streetTRACKS[reg] Gold Shares (the ``Shares''), the Exchange states
that the Commission found that the unique liquidity and depth of the
gold market, along with the existence of an information sharing
agreement between the NYSE and the NYMEX and the application of NYSE
Rules 1300B and 1301 to the Specialist trading those Securities,
created the basis for the NYSE to monitor fraudulent and manipulative
practices in the trading of the Shares.\9\
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    \9\ See Securities Exchange Act Release No. 50603 (October 28,
2004), 69 FR 64614 (November 5, 2004) (SR-NYSE-2004-22).
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    Similarly, the Exchange believes that the depth and liquidity of
the gold market, along with the information sharing agreement between
the NYSE and the NYMEX and the application of NYSE Rules 1300B and 1301
to the Specialist trading those Securities, will provide adequate
surveillance of the trading of the gold Component Commodity.
Suitability
    The Exchange's existing equity trading rules will apply to trading
of the Securities. The Exchange states that it will also have in place
certain other requirements to provide additional investor protection.
First, pursuant to NYSE Rule 405, the Exchange will impose a duty of
due diligence on its members and member firms to learn the essential
facts relating to every customer prior to trading the Securities.\10\
Second, the Securities will be subject to the equity margin rules of
the Exchange.\11\ Third, the Exchange will, prior to trading the
Securities, distribute a circular to the membership providing guidance
with regard to member firm compliance responsibilities (including
suitability recommendations) when handling transactions in the
Securities and highlighting the special risks and characteristics of
the Securities. With respect to suitability recommendations and risks,
the Exchange will require members, member organizations and employees
thereof recommending a transaction in the Securities: (1) To determine
that such transaction is suitable for the customer; and (2) to have a
reasonable basis for believing that the customer can evaluate the
special characteristics of, and is able to bear the financial risks of,
such transaction.
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    \10\ NYSE Rule 405 requires that every member, member firm or
member corporation use due diligence to learn the essential facts
relative to every customer and to every order or account accepted.
    \11\ See NYSE Rule 431.
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Information Memorandum
    The information memorandum will note to members prospectus delivery
requirements for the Securities.\12\ The information memorandum will
discuss the special characteristics and risks of trading this type of
security. Specifically, the information memorandum, among other things,
will discuss the following: what the Securities are, applicable
Exchange rules, dissemination of information regarding the Closing
Value, trading information, and applicable suitability rules.
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    \12\ Telephone conversation between John Carey, Assistant
General Counsel, NYSE, Florence Harmon, Senior Special Counsel,
Division of Market Regulation (``Division''), Commission, and Angela
Muehr, Attorney, Division, Commission, on November 8, 2006.
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    The information memorandum will also reference the fact that there
is no regulated source of last sale information regarding physical
commodities and that the Commission has no jurisdiction over the
trading of physical commodities such as crude oil, natural gas, copper,
aluminum and gold, or the futures contracts on which a portion of the
value of the Securities is based.
Specialist Trading Obligations
    Supplementary Material .10 to NYSE Rule 1301B applies the
provisions of NYSE Rule 1300B(b) and NYSE Rule 1301B to certain
securities listed on the Exchange pursuant to Section 703.19 (``Other
Securities'') of the Manual. Specifically, NYSE Rules 1300B(b) and
1301B apply to securities listed under Section 703.19 of the Manual
where the price of such securities is based, in whole or in part, on
the price of: (a) A commodity or commodities; (b) any futures contracts
or other derivatives based on a commodity or commodities; or (c) any
index based on either (a) or (b) above.
    As a result of application of NYSE Rule 1300B(b), the specialist in
the Securities, the specialist's member organization and other
specified persons will be prohibited under paragraph (m) of Exchange
Rule 105 Guidelines from acting as market maker or functioning in any
capacity involving market-making responsibilities in the Basket
components, the commodities underlying the Basket components, or
options, futures or options on futures on the Basket, or any other
derivatives (collectively, ``derivative instruments'') based on the
Basket or based on any Basket component or any physical commodity
underlying a Basket component. If the member organization acting as
specialist in the Securities is entitled to an exemption under NYSE
Rule 98 from paragraph (m) of NYSE Rule 105 Guidelines, then that
member organization could act in a market-making capacity in the Basket
components, the commodities underlying the Basket components, or
derivative instruments based on the Basket or based on any Basket
component or commodity underlying a Basket component, other than as a
specialist in the Securities themselves, in another market center.
    Under NYSE Rule 1301B(a), the member organization acting as
specialist in the Securities will be: (1) Obligated to conduct all
trading in the Securities in its specialist account (subject only to
the ability to have one or more investment accounts, all of which must
be reported to the Exchange); (2) required to file with the Exchange
and keep current a list identifying all accounts for trading in the
Basket components or the physical commodities underlying the Basket
components, or derivative instruments based on the Basket or based on
the Basket components or the physical commodities underlying the Basket
components, which the member organization acting as specialist may have
or over which it may exercise investment discretion; and (3) prohibited
from trading in the Basket components or the physical commodities
underlying the Basket components, or derivative instruments based on
the Basket or based on the Basket components or the physical
commodities underlying the Basket components, in an account in which a
member organization acting as specialist, controls trading activities
which have not been reported to the Exchange as required by NYSE Rule
1301B.
    Under NYSE Rule 1301B(b), the member organization acting as
specialist in the Securities will be required to

make available to the Exchange such books, records, or other
information pertaining to transactions by the member organization and
other specified persons for its or their own accounts in the Basket
components or the physical commodities underlying the Basket
components, or derivative instruments based on the Basket or based on
the Basket components or the physical commodities underlying the Basket
components, as may be requested by the Exchange. This requirement is in
addition to existing obligations under Exchange rules regarding the
production of books and records.
    Under NYSE Rule 1301B(c), in connection with trading the Basket
components or the physical commodities underlying the Basket
components, or derivative instruments based on the Basket or based on
the Basket components or the physical commodities underlying the Basket
components, the specialist could not use any material nonpublic
information received from any person associated with a member or
employee of such person regarding trading by such person or employee in
the Basket components or the physical commodities underlying the Basket
components, or derivative instruments based on the Basket or based on
the Basket components or the physical commodities underlying the Basket
components.
2. Statutory Basis
    The Exchange believes that the proposed rule change, as amended, is
consistent with Section 6(b) of the Act \13\ in general and furthers
the objectives of Section 6(b)(5),\14\ 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
and perfect the mechanisms of a free and open market, and, in general,
to protect investors and the public interest.
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    \13\ 15 U.S.C. 78s(b).
    \14\ 15 U.S.C. 78s(b)(5).
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change, as
amended, will impose any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act.

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. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change, as amended, 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 e-mail to<EMAIL_ADDRESS>Please include

File Number SR-NYSE-2006-54 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2006-54. This file
number should be included on the subject line if e-mail 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 inspection and
copying in the Commission's Public Reference Room. Copies of such
filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NYSE-2006-54 and should be submitted on or before
December 7, 2006.

IV. Commission's Findings and Order Granting Accelerated Approval of
Proposed Rule Change

    After careful consideration, the Commission finds that the proposed
rule change, as amended, is consistent with the requirements of the Act
and the rules and regulations thereunder applicable to a national
securities exchange.\15\ In particular, the Commission finds that the
proposed rule change is consistent with Section 6(b)(5) of the Act,\16\
which requires that an exchange have rules designed, among other
things, 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.
---------------------------------------------------------------------------

    \15\ In approving this rule change, the Commission notes that it
has considered the proposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
    \16\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

A. Surveillance

    Information sharing agreements with primary markets are an
important part of a self-regulatory organization's ability to monitor
for trading abuses in derivative products. The Commission believes that
the Exchange's comprehensive surveillance sharing agreements with the
LME and the NYMEX for the purpose of providing information in
connection with trading of the Securities and Component Commodities
create the basis for NYSE to monitor for fraudulent and manipulative
practices in the trading of the Securities.
    Moreover, NYSE Rules, including Rule 1301B, give NYSE the authority
to request the Exchange specialist in the Securities to provide NYSE
Regulation with information to monitor for fraudulent and manipulative
trading facilities. The Commission believes that these rules provide
the NYSE with the tools necessary to adequately surveil trading in the
Securities.

B. Dissemination of Information

    The Commission believes that sufficient venues exist for obtaining
reliable information so that investors in the Securities can monitor
the Component Commodities relative to the indicative value of their
Securities. There is a considerable amount of information about the
Component Commodities available through public Web sites, and real time
intraday prices and daily closing prices for the Component Commodities
are available by subscription from major market vendors.
    The Exchange will calculate and disseminate the Closing Value once
each trading day. The Commission believes that this daily dissemination
of an indicative basket amount is appropriate because there will be no
creation or redemption of shares as

there would be with an ETF. Additionally, the Securities are debt,
whose value, while linked to the basket, is at least 100% of the
principal investment amount, and whose value is affected by factors,
such as interest rates, time remaining to maturity, and the issuer's
creditworthiness, that make an intraday indicative value not as
determinative. The Closing Value will be published at approximately 5
p.m., New York City time, calculated on each day as if such day were
the valuation date. The Closing Value will be accessible by going to
Bloomberg page ``WSSN'' and selecting the ``commodity-linked'' option.
Wachovia will determine the value of the Securities at maturity, which
will consist of at least 100% of the principal investment amount, plus
the Basket Performance Amount.

C. Listing and Trading

    The Commission finds that the Exchange's proposed rules and
procedures for the listing and trading of the proposed Securities are
consistent with the Act. The Securities will trade as equity securities
under Section 703.19 of the Manual and will be subject to NYSE rules
applicable to equity trading including, among others, rules governing
priority, parity and precedence of orders, specialist responsibilities,
account opening and customer suitability requirements. The Commission
believes that the listing and delisting criteria for the Securities
should help to maintain a minimum level of liquidity and therefore
minimize the potential for manipulation of the Securities. The Exchange
represents that it would file a proposed rule change, pursuant to Rule
19b-4 under the Act,\17\ if Wachovia removes a Component Commodity from
the Basket, adds a new Component Commodity to the Basket, changes the
weighting of the Component Commodities in the Basket, or changes on a
more than temporary basis the source of the closing price of any of the
Component Commodities; or a market disruption event occurs which is of
a more than temporary nature. Finally, the Commission notes that the
Information Memorandum the Exchange will distribute will inform members
and member organizations about the terms, characteristics and risks in
trading the Securities, including their prospectus delivery
obligations.
---------------------------------------------------------------------------

    \17\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

D. Accelerated Approval

    The Commission finds good cause for approving this proposed rule
change before the thirtieth day after the publication of notice thereof
in the Federal Register. The Commission notes that this product is
similar to other products already approved by the Commission.\18\ The
Commission presently is not aware of any issue that would cause it to
revisit such earlier findings or preclude the trading of these
Securities on the Exchange. Therefore, accelerating approval of this
proposed rule change should benefit investors by creating, without
undue delay, opportunities for investors to trade in such Securities.
---------------------------------------------------------------------------

    \18\ See, e.g., Securities Exchange Act Release No. 54033 (June
22, 2006), 71 FR 37131 (June 29, 2006) (order approving the listing
and trading of principal protected notes linked to the Metals-China
Basket).
---------------------------------------------------------------------------

V. Conclusion

    It Is Therefore Ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change, as amended (SR-NYSE-2006-54), is hereby
approved on an accelerated basis.\19\
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\20\
Nancy M. Morris,
Secretary.
---------------------------------------------------------------------------

    \20\ 17 CFR 200.30-3(a)(12).
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 [FR Doc. E6-19364 Filed 11-15-06; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 69 (Friday, April 10, 2015)]
[Notices]
[Pages 19380-19381]
[FR Doc No: 2015-08258]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 31547; 812-14400]

Van Eck Associates Corporation, et al.; Notice of Application

April 6, 2015.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application under section 6(c) of the Investment
Company Act of 1940 (``Act'') for an exemption from rule 12d1-2(a)
under the Act.

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

    Summary of Application: Applicants request an order to permit open-
end management investment companies relying on rule 12d1-2 under the
Act to invest in certain financial instruments.
    Applicants: Van Eck Associates Corporation (the ``VEAC''), Van Eck
Securities Corporation (``VESC''), Market Vectors ETF Trust (``MV
Trust''), Van Eck VIP Trust (``VIP Trust'') and Van Eck Funds (``VE
Funds'' and, together with MV Trust and VIP Trust, the ``Trusts'').
    Filing Date: The application was filed on December 18, 2014.
    Hearing or Notification of Hearing: An order granting the
application will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicants with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on May 1, 2015, and should be accompanied by proof of service
on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Pursuant to rule 0-5 under the Act, hearing
requests should state the nature of the writer's interest, any facts
bearing upon the desirability of a hearing on the matter, the reason
for the request, and the issues contested. Persons who wish to be
notified of a hearing may request notification by writing to the
Commission's Secretary.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street
NE., Washington, DC 20549-1090; Applicants: Johnathan R. Simon, Van Eck
Associates Corporation, 335 Madison Avenue, New York, NY 10017.

FOR FURTHER INFORMATION CONTACT: Emerson S. Davis, Senior Counsel, at
(202) 551-6868, or Daniele Marchesani, Branch Chief, at<PHONE_NUMBER>
(Division of Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or for an
applicant using the Company name box, at http://www.sec.gov/search/search.htm or by calling<PHONE_NUMBER>.

Applicants' Representations

    1. Van Eck Funds is organized as a Massachusetts business trust and
is registered under the Act as an open-end management investment
company. Van Eck Funds is a trust which currently consists of eight
Funds (as defined below), each with its own investment objective and
policies. VIP Trust is a Massachusetts business trust and is registered
under the Act as an open-end management investment company. VIP Trust
currently consists of six Funds, each with its own investment objective
and policies. MV Trust is a Delaware statutory trust and is registered
under the Act as an open-end management investment company. MV Trust
currently consists of 60 Funds, each with its own investment objective
and policies.
    2. VEAC is registered as an investment adviser under the Investment
Advisers Act of 1940 (the ``Advisers Act''). VEAC currently is the
investment adviser to the Trusts. VESC, a broker-dealer registered
under the Securities Exchange Act of 1934, as amended (``Exchange
Act''), serves as the principal underwriter for the Trusts.
    3. Applicants request an exemption to the extent necessary to
permit any existing or future series of the Trusts and any other
registered open-end management investment company or series thereof
that: (a) Is advised by VEAC or any investment adviser controlling,
controlled by, or under common control with VEAC (any such adviser or
VEAC, the ``Adviser''); \1\ (b) is in the same group of investment
companies as defined in section 12(d)(1)(G) of the Act as the Trusts;
(c) invests in other registered open-end

management investment companies (``Underlying Funds'') in reliance on
section 12(d)(1)(G) of the Act; and (d) also is eligible to invest in
securities (as defined in section 2(a)(36) of the Act) in reliance on
rule 12d1-2 under the Act (each a ``Fund of Funds''), and together with
the Underlying Funds, the ``Funds''), also to invest, to the extent
consistent with its investment objectives, policies, strategies and
limitations, in financial instruments that may not be securities within
the meaning of section 2(a)(36) of the Act (``Other Investments'').\2\
Applicants also request that the order exempt any entity controlling,
controlled by or under common control with VESC, that now or in the
future acts as principal underwriter with respect to the transactions
described in the application.
---------------------------------------------------------------------------

    \1\ Each Adviser will be registered as an investment adviser
under the Advisers Act.
    \2\ Every existing entity that currently intends to rely on the
requested order is named as an applicant. Any entity that relies on
the order in the future will do so only in accordance with the terms
and condition in the application.
---------------------------------------------------------------------------

    4. Consistent with its fiduciary obligations under the Act, each
Fund of Funds' board of trustees will review the advisory fees charged
by the Fund of Funds' Adviser to ensure that they are based on services
provided that are in addition to, rather than duplicative of, services
provided pursuant to the advisory agreement of any investment company
in which the Fund of Funds may invest.

Applicants' Legal Analysis

    1. Section 12(d)(1)(A) of the Act provides that no registered
investment company (``acquiring company'') may acquire securities of
another investment company (``acquired company'') if such securities
represent more than 3% of the acquired company's outstanding voting
stock or more than 5% of the acquiring company's total assets, or if
such securities, together with the securities of other investment
companies, represent more than 10% of the acquiring company's total
assets. Section 12(d)(1)(B) of the Act provides that no registered
open-end investment company may sell its securities to another
investment company if the sale will cause the acquiring company to own
more than 3% of the acquired company's voting stock, or cause more than
10% of the acquired company's voting stock to be owned by investment
companies and companies controlled by them.
    2. Section 12(d)(1)(G) of the Act provides, in part, that section
12(d)(1) will not apply to securities of an acquired company purchased
by an acquiring company if: (i) The acquired company and acquiring
company are part of the same group of investment companies; (ii) the
acquiring company holds only securities of acquired companies that are
part of the same group of investment companies, Government securities,
and short-term paper; (iii) the aggregate sales loads and distribution-
related fees of the acquiring company and the acquired company are not
excessive under rules adopted pursuant to section 22(b) or section
22(c) of the Act by a securities association registered under section
15A of the Exchange Act or by the Commission; and (iv) the acquired
company has a policy that prohibits it from acquiring securities of
registered open-end investment companies or registered unit investment
trusts in reliance on section 12(d)(1)(F) or (G) of the Act.
    3. Rule 12d1-2 under the Act permits a registered open-end
investment company or a registered unit investment trust that relies on
section 12(d)(1)(G) of the Act to acquire, in addition to securities
issued by another registered investment company in the same group of
investment companies, Government securities, and short-term paper: (i)
Securities issued by an investment company that is not in the same
group of investment companies, when the acquisition is in reliance on
section 12(d)(1)(A) or 12(d)(1)(F) of the Act; (ii) securities (other
than securities issued by an investment company); and (iii) securities
issued by a money market fund, when the investment is in reliance on
rule 12d1-1 under the Act. For the purposes of rule 12d1-2,
``securities'' means any security as defined in section 2(a)(36) of the
Act.
    4. Section 6(c) of the Act provides that the Commission may exempt
any person, security, or transaction from any provision of the Act, or
from any rule under the Act, if such exemption is necessary or
appropriate in the public interest and consistent with the protection
of investors and the purposes fairly intended by the policies and
provisions of the Act. Applicants submit that their request for relief
meets this standard.
    5. Applicants request an order under section 6(c) of the Act for an
exemption from rule 12d1-2(a) to allow the Funds of Funds to invest in
Other Investments while investing in Underlying Funds. Applicants state
that the Funds of Funds will comply with rule 12d1-2 under the Act, but
for the fact that the Funds of Funds may invest a portion of their
assets in Other Investments. Applicants assert that permitting the
Funds of Funds to invest in Other Investments as described in the
application would not raise any of the concerns that the requirements
of section 12(d)(1) were designed to address.

Applicants' Condition

    Applicants agree that any order granting the requested relief will
be subject to the following condition: Applicants will comply with all
provisions of rule 12d1-2 under the Act, except for paragraph (a)(2) to
the extent that it restricts any Fund of Funds from investing in Other
Investments as described in the application.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Brent J. Fields,
Secretary.
[FR Doc. 2015-08258 Filed 4-9-15; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: December 20, 2010 (Volume 75, Number 243)]
[Rules and Regulations]
[Page 79295]
[DOCID:fr20de10-7]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Docket No. FAA-2010-0692; Airspace Docket No. 10-AEA-16]

Establishment of Class E Airspace; Crewe, VA

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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

SUMMARY: This action establishes Class E Airspace at Crewe, VA, to
accommodate the additional airspace needed for the Standard Instrument
Approach Procedures (SIAPs) developed for Crewe Municipal Airport. This
action enhances the safety and airspace management of Instrument Flight
Rules (IFR) operations at the airport.

DATES: Effective 0901 UTC, March 10, 2011. The Director of the Federal
Register approves this incorporation by reference action under title 1,
Code of Federal Regulations, part 51, subject to the annual revision of
FAA Order 7400.9 and publication of conforming amendments.

FOR FURTHER INFORMATION CONTACT: Melinda Giddens, Operations Support
Group, Eastern Service Center, Federal Aviation Administration, P.O.
Box 20636, Atlanta, Georgia 30320; telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

History

    On September 20, 2010, the FAA published in the Federal Register a
notice of proposed rulemaking to establish Class E airspace at Crewe,
VA (75 FR 57215) Docket No. FAA-2010-0692. Interested parties were
invited to participate in this rulemaking effort by submitting written
comments on the proposal to the FAA. No comments were received. Class E
airspace designations are published in paragraph 6005 of FAA Order
7400.9U dated August 18, 2010, and effective September 15, 2010, which
is incorporated by reference in 14 CFR Part 71.1. The Class E airspace
designations listed in this document will be published subsequently in
the Order.

The Rule

    This amendment to Title 14, Code of Federal Regulations (14 CFR)
part 71 establishes the Class E airspace extending upward from 700 feet
above the surface at Crewe, VA, to provide controlled airspace required
to support the SIAPs developed for Crewe Municipal Airport. This action
is necessary for the safety and management of IFR operations at the
airports.
    The FAA has determined that this regulation only involves an
established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current, is
non-controversial and unlikely to result in adverse or negative
comments. It, therefore, (1) is not a ``significant regulatory action''
under Executive Order 12866; (2) is not a ``significant rule'' under
DOT Regulatory Policies and Procedures (44 FR 11034; February 26,
1979); and (3) does not warrant preparation of a Regulatory Evaluation
as the anticipated impact is so minimal. Since this is a routine matter
that will only affect air traffic procedures and air navigation, it is
certified that this rule, when promulgated, will not have a significant
economic impact on a substantial number of small entities under the
criteria of the Regulatory Flexibility Act.
    The FAA's authority to issue rules regarding aviation safety is
found in Title 49 of the United States Code. Subtitle I, Section 106
describes the authority of the FAA Administrator. Subtitle VII,
Aviation Programs, describes in more detail the scope of the agency's
authority.
    This rulemaking is promulgated under the authority described in
Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the
FAA is charged with prescribing regulations to assign the use of
airspace necessary to ensure the safety of aircraft and the efficient
use of airspace. This regulation is within the scope of that authority
as it establishes Class E airspace at Crewe, VA.

Lists of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (Air).

Adoption of the Amendment

    In consideration of the foregoing, the Federal Aviation
Administration amends 14 CFR Part 71 as follows:

PART 71--DESIGNATION OF CLASS A, B, C, D AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND REPORTING POINTS

0
1. The authority citation for Part 71 continues to read as follows:

    Authority: 49 U.S.C. 106(g); 40103, 40113, 40120; E.O. 10854, 24
FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

Sec.  71.1  [Amended]

0
2. The incorporation by reference in 14 CFR 71.1 of Federal Aviation
Administration Order 7400.9U, Airspace Designations and Reporting
Points, dated August 18, 2010, effective September 15, 2010, is amended
as follows:

Paragraph 6005 Class E airspace areas extending upward from 700
feet or more above the surface of the earth.

* * * * *

AEA VA E5 Crewe, VA [NEW]

Crewe Municipal Airport, VA
    (Lat. 37[deg]10'52'' N., long. 78[deg]05'54'' W.)

    That airspace extending upward from 700 feet above the surface
within a 6.3-mile radius of Crewe Municipal Airport.

    Issued in College Park, Georgia on December 10, 2010.
Barry A. Knight,
Acting Manager, Operations Support Group, Eastern Service Center, Air
Traffic Organization.
[FR Doc. 2010-31762 Filed 12-17-10; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 83, Number 8 (Thursday, January 11, 2018)]
[Notices]
[Pages 1438-1442]
[FR Doc No: 2018-00303]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82444; File No. SR-CboeBZX-2017-023]

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing of a Proposed Rule Change To List and Trade Shares of the
iShares Gold Exposure ETF, a Series of the iShares U.S. ETF Trust,
Under Exchange Rule 14.11(i), Managed Fund Shares

January 5, 2018.
    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 December 21, 2017, Cboe BZX Exchange, Inc. (``Exchange'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I and II below, which Items have been
prepared by the Exchange. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange filed a proposal to list and trade shares of the
iShares Gold Exposure ETF (the ``Fund''), a series of the iShares U.S.
ETF Trust (the ``Trust''), under Exchange Rule 14.11(i) (``Managed Fund
Shares''). The shares of the Fund are referred to herein as the
``Shares.''
    The text of the proposed rule change is available at the Exchange's
website at www.markets.cboe.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 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 parts 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 proposes to list and trade the Shares under Exchange
Rule 14.11(i), which governs the listing and trading of Managed Fund
Shares on the Exchange.\3\ The Fund is a series of, and the Shares will
be offered by, the Trust, which was established as a Delaware statutory
trust on June 21, 2011. BlackRock Fund Advisors (the ``Adviser'') will
serve as the investment adviser to the Fund. The Trust is registered
with the Commission as an open-end management investment company and
has filed a registration statement on behalf of the Fund on Form N-1A
(``Registration Statement'') with the Commission.\4\
---------------------------------------------------------------------------

    \3\ The Commission originally approved Exchange Rule 14.11(i) in
Securities Exchange Act Release No. 65225 (August 30, 2011), 76 FR
55148 (September 6, 2011) (SR-BATS-2011-018) and subsequently
approved generic listing standards for Managed Fund Shares under
Exchange Rule 14.11(i)(4)(C) in Securities Exchange Act Release No.
78396 (July 22, 2016), 81 FR 49698 (July 28, 2016) (SR-BATS-2015-
100) (``Generic Listing Rules'').
    \4\ See Registration Statement on Form N-1A for the Trust, filed
with the Commission on November 1, 2017 (File Nos. 333-179904 and
811-22649). The descriptions of the Fund and the Shares contained
herein are based, in part, on information in the Registration
Statement. The Commission has issued an order granting certain
exemptive relief to the Adviser and open-end management companies
advised by the Adviser under the Investment Company Act of 1940 (15
U.S.C. 80a-1). See Investment Company Act Release No. 29571 (January
24, 2011) (File No. 812-13601).
---------------------------------------------------------------------------

    As a result of the instruments that will be indirectly held by the
Fund, the Adviser, which is a member of the National Futures
Association (``NFA''), will register as a commodity pool operator \5\
with respect to the Fund. If the Fund retains any sub-adviser in the
future, such sub-adviser will register as a commodity pool operator or
commodity trading adviser, if required by Commodity Futures Trading
Commission (``CFTC'') regulations. The Fund will be subject to
regulation by the CFTC and NFA and applicable disclosure, reporting and
recordkeeping rules imposed upon commodity pools.
---------------------------------------------------------------------------

    \5\ As defined in Section 1a(11) of the Commodity Exchange Act.
---------------------------------------------------------------------------

    Exchange Rule 14.11(i)(7) provides that, if the investment adviser
to the investment company issuing Managed Fund Shares is affiliated
with a broker-dealer, such investment adviser shall erect a ``fire
wall'' between the investment adviser and the broker-dealer with
respect to access to information concerning the composition and/or
changes to such investment company portfolio.\6\ In addition, Exchange
Rule 14.11(i)(7) further requires that personnel who make decisions on
the investment company's portfolio composition must be subject to
procedures designed to prevent the use and dissemination of material
nonpublic information regarding the applicable investment company
portfolio. Exchange Rule 14.11(i)(7) is similar to Exchange Rule
14.11(b)(5)(A)(i) (which applies to index-based funds); however,
Exchange Rule 14.11(i)(7) in connection with the establishment of a
``fire wall'' between the investment adviser and the broker-dealer
reflects the applicable open-end fund's portfolio, not an underlying
benchmark index, as is the case with index-based funds. The Adviser is
not a registered broker-dealer, but is affiliated with multiple broker-
dealers and has implemented ``fire walls'' with respect to such broker-
dealers regarding access to information concerning the composition and/
or changes to the Fund's portfolio. In addition, Adviser personnel who
make decisions regarding the Fund's portfolio are subject to procedures
designed to prevent the use and dissemination of material nonpublic
information regarding the Fund's portfolio. In the event that (a) the
Adviser becomes registered as a broker-dealer or newly affiliated with
another 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 a fire wall with respect to its relevant personnel or
such broker-dealer affiliate, as applicable, regarding access to
information concerning the composition and/or changes to the portfolio,
and will be subject to procedures designed to prevent the use and
dissemination of material non-public information regarding such
portfolio.
---------------------------------------------------------------------------

    \6\ An investment adviser to an open-end fund is required to be
registered under the Investment Advisers Act of 1940 (the ``Advisers
Act''). As a result, the Adviser and its related personnel are
subject to the provisions of Rule 204A-1 under the Advisers Act
relating to codes of ethics. This Rule requires investment advisers
to adopt a code of ethics that reflects the fiduciary nature of the
relationship to clients as well as compliance with other applicable
securities laws. Accordingly, procedures designed to prevent the
communication and misuse of non-public information by an investment
adviser must be consistent with Rule 204A-1 under the Advisers Act.
In addition, Rule 206(4)-7 under the Advisers Act makes it unlawful
for an investment adviser to provide investment advice to clients
unless such investment adviser has (i) adopted and implemented
written policies and procedures reasonably designed to prevent
violation, by the investment adviser and its supervised persons, of
the Advisers Act and the Commission rules adopted thereunder; (ii)
implemented, at a minimum, an annual review regarding the adequacy
of the policies and procedures established pursuant to subparagraph
(i) above and the effectiveness of their implementation; and (iii)
designated an individual (who is a supervised person) responsible
for administering the policies and procedures adopted under
subparagraph (i) above.
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    The Fund intends to qualify each year as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as
amended.
    The Exchange submits this proposal in order to allow the Fund to
hold listed derivatives (i.e., Listed Gold Derivatives, as defined
below) in a manner that does not comply with Exchange Rule
14.11(i)(4)(C)(iv)(b).\7\ Otherwise, the

Fund will comply with all other listing requirements on an initial and
continued listing basis under Exchange Rule 14.11(i) for Managed Fund
Shares.
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    \7\ Exchange Rule 14.11(i)(4)(C)(iv)(b) provides that ``the
aggregate gross notional value of listed derivatives based on any
five or fewer underlying reference assets shall not exceed 65% of
the weight of the portfolio (including gross notional exposures),
and the aggregate gross notional value of listed derivatives based
on any single underlying reference asset shall not exceed 30% of the
weight of the portfolio (including gross notional exposures).''
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iShares Gold Exposure ETF
    The Fund will seek to provide exposure, on a total return basis, to
the price performance of gold. The Fund will seek to achieve its
investment objective by investing primarily in a combination of (i)
exchange-traded gold futures contracts (``Gold Futures'') \8\ and other
listed derivatives \9\ that correlate to the investment returns of
physical gold (such other listed derivatives together with Gold
Futures, ``Listed Gold Derivatives''), based on the notional value of
such derivative instruments; (ii) over-the-counter (``OTC'')
derivatives that correlate to the investment returns of physical gold
(``OTC Gold Derivatives''), based on the notional value of such
derivative instruments; and (iii) exchange-traded products (``ETPs'')
\10\ backed by or linked to physical gold (``Gold ETPs,'' and
collectively with Listed Gold Derivatives and OTC Gold Derivatives, the
``Gold Investments''). In seeking total return, the Fund will
additionally aim to generate interest income and capital appreciation
through a cash management strategy consisting primarily of cash and
cash equivalents, including repurchase agreements and money market
instruments, investments in government obligations, including U.S.
government and agency securities, treasury inflation-protected
securities, and sovereign debt obligations of non-U.S. countries, and
investment-grade fixed-income securities, including corporate bonds
(collectively, ``Fixed Income Investments''). The Fund will be an
actively managed exchange-traded fund and will not seek to replicate
the performance of a specified index.
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    \8\ Gold Futures held by the Fund will primarily be front month
COMEX gold futures contracts (GC).
    \9\ For purposes of this proposal, the term ``listed
derivatives'' will be consistent with its use in Exchange Rule
14.11(i)(4)(C)(iv), which provides that listed derivatives include
listed futures, options, and swaps on commodities, currencies and
financial instruments (e.g., stocks, fixed income, interest rates,
and volatility) or a basket or index of any of the foregoing.
    \10\ As defined in Exchange Rule 11.8(e)(1)(A), ETP means any
security listed pursuant to Exchange Rule 14.11.
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    The Fund's investment strategy related to the Gold Investments will
seek to maximize correlation with the Bloomberg Composite Gold Index
(the ``Bloomberg Benchmark''), which is comprised of exchange-traded
gold futures contracts and one or more ETPs backed by or linked to
physical gold. The Bloomberg Benchmark is designed to track the price
performance of gold. Although the Fund generally holds, among other
instruments, the same futures contracts under the same futures rolling
schedule, and the same ETPs backed by or linked to physical gold, as
those included in the Bloomberg Benchmark, the Fund is not obligated to
invest in any such futures contracts or ETPs included in, and does not
seek to track the performance of, the Bloomberg Benchmark.
    The Fund expects to seek to gain exposure to Gold Investments by
investing through a wholly-owned subsidiary organized in the Cayman
Islands (the ``Subsidiary''). The Subsidiary is advised by the Adviser.
Unlike the Fund, the Subsidiary is not an investment company registered
under the Investment Company Act of 1940. The Subsidiary has the same
investment objective as the Fund. References below to the holdings of
the Fund are inclusive of the direct holdings of the Fund as well as
the indirect holdings of the Fund through the Subsidiary.
    In order to achieve its investment objective, under Normal Market
Conditions,\11\ the aggregate gross notional value of Listed Gold
Derivatives is generally not expected to exceed 75%, but may, in
certain circumstances, approach 100%, of the Fund (including gross
notional values). As noted above, Exchange Rule 14.11(i)(4)(C)(iv)
prevents the Fund from holding listed derivatives based on any five or
fewer underlying reference assets in excess of 65% of the weight of the
portfolio (including gross notional exposures) and from holding listed
derivatives based on any single underlying reference asset in excess of
30% of the weight of its portfolio (including gross notional
exposures). The Exchange is proposing to allow the Fund to hold up to
100% of the weight of its portfolio (including gross notional
exposures) in listed derivatives based on a single underlying reference
asset through its investment in Listed Gold Derivatives. Allowing the
Fund to hold a greater portion of its portfolio in Listed Gold
Derivatives would mitigate the Fund's dependency on holding OTC
derivative instruments, which would reduce the Fund's operational
burden by allowing the Fund to primarily use listed futures contracts
and other listed derivatives to achieve its investment objective and
would also reduce counter-party risk associated with holding OTC
instruments.
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    \11\ As defined in Exchange Rule 14.11(i)(3)(E), the term
``Normal Market Conditions'' includes, but is not limited to, the
absence of trading halts in the applicable financial markets
generally; operational issues causing dissemination of inaccurate
market information or system failures; or force majeure type events
such as natural or man-made disaster, act of God, armed conflict,
act of terrorism, riot or labor disruption, or any similar
intervening circumstance.
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    Under Normal Market Conditions, the Fund generally will primarily
hold Listed Gold Derivatives, including Gold Futures, OTC Gold
Derivatives,\12\ Gold ETPs,\13\ and/or Fixed Income Investments.\14\
The Exchange represents that, except for the 65% and 30% limitations in
Exchange Rule 14.11(i)(4)(C)(iv)(b), the Fund's proposed investments
will satisfy, on an initial and continued listing basis, all of the
Generic Listing Rules and all other applicable requirements for Managed
Fund Shares under Exchange Rule 14.11(i). The Trust is required to
comply with Rule 10A-3 under the Act for the initial and continued
listing of the Shares of the Fund. In addition, the Exchange represents
that the Shares of the Fund will meet and be subject to all other
requirements of the Generic Listing Rules and other applicable
continued listing requirements for Managed Fund Shares under Exchange
Rule 14.11(i), including those requirements regarding the Disclosed
Portfolio (as defined in the Exchange rules) and the requirement that
the Disclosed Portfolio and the net asset value (``NAV'') will be made
available to all market participants at the same time,\15\ intraday
indicative value,\16\ suspension of trading or removal,\17\ trading
halts,\18\ disclosure,\19\ and firewalls.\20\ Further, at least 100,000
Shares will be outstanding upon the commencement of trading.\21\
Moreover, at least 90% of the weight of the Fund in Listed Gold
Derivatives will trade on markets that are a member of

Intermarket Surveillance Group (``ISG'') or affiliated with a member of
ISG or with which the Exchange has in place a comprehensive
surveillance sharing agreement.\22\ 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 reference assets and intraday
indicative values, and the applicability of Exchange listing rules
specified in this filing shall constitute continued listing
requirements for the Fund. The Trust, on behalf of the Fund, has
represented to the Exchange that it will advise the Exchange of any
failure by the Fund or the Shares to comply with the continued listing
requirements, and, pursuant to its obligations under Section 19(g)(1)
of the Act, the Exchange will surveil for compliance with the continued
listing requirements. If the Fund or the Shares are not in compliance
with the applicable listing requirements, the Exchange will commence
delisting procedures under Exchange Rule 14.12.
---------------------------------------------------------------------------

    \12\ The aggregate gross notional value of the Fund's holdings
in OTC Gold Derivatives will not exceed 20% of the weight of the
portfolio (including gross notional exposures) in compliance with
Exchange Rule 14.11(i)(4)(C)(v).
    \13\ The Fund's holdings in Gold ETPs will comply with the
requirements of Exchange Rule 14.11(i)(4)(C)(i)(a).
    \14\ The Fund will hold Fixed Income Investments (which includes
cash and cash equivalents) in order to collateralize its derivatives
positions and such holdings will comply with Exchange Rules
14.11(i)(4)(C)(ii) and (iii).
    \15\ See Exchange Rules 14.11(i)(4)(A)(ii) and
14.11(i)(4)(B)(ii).
    \16\ See Exchange Rule 14.11(i)(4)(B)(i).
    \17\ See Exchange Rule 14.11(i)(4)(B)(iii).
    \18\ See Exchange Rule 14.11(i)(4)(B)(iv).
    \19\ See Exchange Rule 14.11(i)(6).
    \20\ See Exchange Rule 14.11(i)(7).
    \21\ See Exchange Rule 14.11(i)(4)(A)(i).
    \22\ For a list of the current members and affiliate members of
ISG, see www.isgportal.com. The Exchange notes that not all
components of the Disclosed Portfolio for the Fund may trade on
markets that are members of ISG or with which the Exchange has in
place a comprehensive surveillance sharing agreement.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section
6(b) of the Act \23\ in general and Section 6(b)(5) of the Act \24\ in
particular because the Exchange believes that the proposed rule change
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, 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 given that the
Shares will meet each of the initial and continued listing criteria in
Exchange Rule 14.11(i) with the exception of Exchange Rule
14.11(i)(4)(C)(iv)(b), which requires that the aggregate gross notional
value of listed derivatives based on any five or fewer underlying
reference assets shall not exceed 65% of the weight of the portfolio
(including gross notional exposures), and the aggregate gross notional
value of listed derivatives based on any single underlying reference
asset shall not exceed 30% of the weight of the portfolio (including
gross notional exposures). The Exchange believes that the liquidity in
the Listed Gold Derivatives markets mitigates the concerns that
Exchange Rule 14.11(i)(4)(C)(iv)(b) is intended to address and that
such liquidity would prevent the Shares from being susceptible to
manipulation.\25\ Further, allowing the Fund to hold a greater portion
of its portfolio in Listed Gold Derivatives would mitigate the Fund's
dependency on holding OTC instruments, which would reduce the Fund's
operational burden by allowing the Fund to primarily use listed futures
contracts and other listed derivatives to achieve its investment
objective and would also reduce counter-party risk associated with
holding OTC instruments. 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. At least 90% of the weight of the Fund in Listed Gold Derivatives
will trade on markets that are a member of ISG or affiliated with a
member of ISG or with which the Exchange has in place a comprehensive
surveillance sharing agreement. The Exchange may obtain information
regarding trading in the Shares and at least 90% of the weight of the
Fund invested in Listed Gold Derivatives via the ISG from other
exchanges who are members or affiliates of the ISG or with which the
Exchange has entered into a comprehensive surveillance sharing
agreement.\26\ The Exchange further notes that the Fund will meet and
be subject to all other requirements of the Generic Listing Rules and
other applicable continued listing requirements for Managed Fund Shares
under Exchange Rule 14.11(i), including those requirements regarding
the Disclosed Portfolio and the requirement that the Disclosed
Portfolio and the NAV will be made available to all market participants
at the same time, intraday indicative value, suspension of trading or
removal, trading halts, disclosure, and firewalls. Further, at least
100,000 Shares will be outstanding upon the commencement of trading.
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78f.
    \24\ 15 U.S.C. 78f(b)(5).
    \25\ In September and October of 2017, the average daily COMEX
gold futures contract volume was 340,000 and 292,000 for front month
contracts, respectively. This equates to an average daily traded
notional value of approximately $37.5 billion and $44.9 billion,
respectively.
    \26\ See note 22, supra.
---------------------------------------------------------------------------

    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 additional actively-managed exchange-traded fund 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 proposal is
consistent with the Act. Comments may be submitted by any of the
following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File No. SR-CboeBZX-2017-023 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 No. SR-CboeBZX-2017-023. 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 No. SR-
CboeBZX-2017-023 and should be submitted on or before February 1, 2018.
---------------------------------------------------------------------------

    \27\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-00303 Filed 1-10-18; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register: August 2, 2006 (Volume 71, Number 148)]
[Notices]
[Page 43722]
[DOCID:fr02au06-45]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RP06-442-000]

El Paso Natural Gas Company; Notice of Tariff Filing

July 26, 2006.
    Take notice that on July 21, 2006, El Paso Natural Gas Company
(EPNG) tendered for filing as part of its FERC Gas Tariff, Second
Revised Volume No. 1-A, First Revised Sheet No. 375, to be effective
July 10, 2006.
    EPNG states that this tariff sheet is filed to establish rights and
conditions for TSAs subject to Article 11.2 of EPNG's 1996 Settlement
regarding out-of-zone charges, capacity release, and scheduling
priorities.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211 and 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed in accordance with the provisions of
Section 154.210 of the Commission's regulations (18 CFR 154.210).
Anyone filing an intervention or protest must serve a copy of that
document on the Applicant. Anyone filing an intervention or protest on
or before the intervention or protest date need not serve motions to
intervene or protests on persons other than the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://www.ferc.gov.
 Persons unable to file electronically should submit an

original and 14 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426.
    This filing is accessible on-line at http://www.ferc.gov, using the

``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For

TTY, call<PHONE_NUMBER>.

Magalie R. Salas,
Secretary.
 [FR Doc. E6-12374 Filed 8-1-06; 8:45 am]

BILLING CODE 6717-01-P