[Federal Register Volume 83, Number 241 (Monday, December 17, 2018)]
[Notices]
[Pages 64622-64630]
[FR Doc No: 2018-27206]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84789; File No. SR-CboeBZX-2018-085]

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To List
Shares of the Cambria Global Momentum ETF Under Rule 14.11(i), Managed
Fund Shares

December 11, 2018.
    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 November 28, 2018, Cboe BZX Exchange, Inc. (``Exchange'' or ``BZX'')
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 Exchange filed the proposal as
a ``non-controversial'' proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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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 shares of the Cambria Global Momentum
ETF (the ``Fund'') under Rule 14.11(i), (``Managed Fund Shares''),\5\
which governs the listing and trading of Managed Fund Shares on the
Exchange.\6\ The Exchange notes that the Fund is currently listed on
Arca and the Shares are already trading on the Exchange pursuant to
unlisted trading privileges, as provided in Rule 14.11(j).
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    \5\ The Exchange notes that the Commission previously approved a
proposal to list and trade shares of the Fund on Arca. See
Securities Exchange Act Release No. 73004 (September 5, 2014), 79 FR
54333 (September 11, 2014) (SR-NYSEArca-2014-76) (the ``Prior
Proposal''). This proposal is substantively identical to the Prior
Proposal and the issuer represents that all material representations
contained within the Prior Proposal remain true. As further
described below, the Exchange believes that its surveillance
procedures are adequate to properly monitor the trading of the
Shares on the Exchange during all trading sessions and to deter and
detect violations of Exchange rules and the applicable federal
securities laws. Trading of the Shares through the Exchange will be
subject to the Exchange's surveillance procedures for derivative
products, including Managed Fund Shares.
    \6\ The Commission approved BZX Rule 14.11(i) in Securities
Exchange Act Release No. 65225 (August 30, 2011), 76 FR 55148
(September 6, 2011) (SR-BATS-2011-018).
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    The text of the proposed rule change is also available on the
Exchange's website (www.cboe.com), at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to list shares of the Cambria Global Momentum
ETF (the ``Fund'') under Rule 14.11(i), (``Managed Fund Shares''),\7\
which governs the listing and trading of Managed Fund Shares on the
Exchange.\8\ The Exchange notes that the Fund is currently listed on
Arca and the Shares are already trading on the Exchange pursuant to
unlisted trading privileges, as provided in Rule 14.11(j).
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    \7\ The Exchange notes that the Commission previously approved a
proposal to list and trade shares of the Fund on Arca. See
Securities Exchange Act Release No. 73004 (September 5, 2014), 79 FR
54333 (September 11, 2014) (SR-NYSEArca-2014-76) (the ``Prior
Proposal''). This proposal is substantively identical to the Prior
Proposal and the issuer represents that all material representations
contained within the Prior Proposal remain true. As further
described below, the Exchange believes that its surveillance
procedures are adequate to properly monitor the trading of the
Shares on the Exchange during all trading sessions and to deter and
detect violations of Exchange rules and the applicable federal
securities laws. Trading of the Shares through the Exchange will be
subject to the Exchange's surveillance procedures for derivative
products, including Managed Fund Shares.
    \8\ The Commission approved BZX Rule 14.11(i) in Securities
Exchange Act Release No. 65225 (August 30, 2011), 76 FR 55148
(September 6, 2011) (SR-BATS-2011-018).
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    The Shares are offered by the Cambria ETF Trust (the ``Trust''), a
Delaware statutory trust which is registered with the Commission as an
open-end management investment company.\9\
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    \9\ The Trust is registered under the 1940 Act. On September 21,
2018, the Trust filed an amendment to the Trust's registration
statement on Form N-1A under the Securities Act of 1933 (the ``1933
Act'') (15 U.S.C. 77a), and under the 1940 Act relating to the Fund
(File Nos. 333-180879 and 811-22704) (the ``Registration
Statement''). The description of the operation of the Trust and the
Fund herein is based, in part, on the Registration Statement. In
addition, the Commission has issued an order granting certain
exemptive relief to the Trust under the 1940 Act. See Investment
Company Act Release No. 30340 (January 4, 2013) (``Exemptive
Order''). Investments made by the Fund will comply with the
conditions set forth in the Exemptive Order.
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Description of the Shares and the Fund
    Cambria Investment Management, L.P. (``Cambria'' or the
``Adviser'') serves as the investment adviser of the Fund. SEI
Investments Distribution Co. (the ``Distributor'') is the principal

underwriter and distributor of the Fund's Shares. SEI Investments
Global Funds Services (``SEI'') serves as the fund accountant and
administrator of the Fund. Brown Brothers Harriman & Co. serves as the
Custodian and Transfer Agent of the Fund's assets.
    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.\10\ In addition, 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. Rule 14.11(i)(7) is
similar to Rule 14.11(b)(5)(A)(i), however, 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 registered as a broker-
dealer and is not affiliated with a broker-dealer. In the event that
(a) the Adviser or any sub-adviser becomes registered as, or becomes
newly affiliated with, a broker-dealer, or (b) any new adviser or sub-
adviser is a registered broker-dealer or becomes affiliated with a
broker-dealer, it will implement a fire wall with respect to its
relevant personnel or 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.
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    \10\ An investment adviser to an open-end fund is required to be
registered under the Investment Advisers Act of 1940, as amended
(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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Principal Investment Policies
    According to the Registration Statement, the Fund will seek to
preserve and grow capital from investments in the U.S. and foreign
equity, fixed income, commodity and currency markets, independent of
market direction. The Fund will be considered a ``fund of funds'' that
seeks to achieve its investment objective by primarily investing in
other 1940 Act-registered exchange-traded funds (``ETFs'') and other
exchange traded products (``ETPs'') including, but not limited to,
exchange-traded notes (``ETNs''),\11\ exchange traded currency trusts,
and closed-end funds (together, ``Underlying Vehicles'') \12\ that
offer diversified exposure, including inverse exposure, to global
regions (including emerging markets), countries, styles (i.e., market
capitalization, value, growth, etc.) and sectors. Under normal market
conditions,\13\ the Fund will invest at least 80% of its net assets in
the securities of Underlying Vehicles.
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    \11\ As described in the Registration Statement, ETFs are
registered investment companies whose shares are exchange-traded and
give investors a proportional interest in the pool of securities and
other assets held by the ETF. ETPs are exchange-traded equity
securities whose value derives from an underlying asset or portfolio
of assets, which may correlate to a benchmark, such as a commodity,
currency, interest rate or index. ETFs are one type of ETP. ETNs are
unsecured and unsubordinated debt securities whose value derives, in
part, from an underlying asset or benchmark and, in part, from the
credit quality of the securities' issuer.
    \12\ For purposes of this filing, the term ``Underlying
Vehicles'' includes Index Fund Shares (as described in BZX Rule
14.11(c)); Index-Linked Securities (as described in Rule BZX Rule
14.11(d)); Portfolio Depositary Receipts (as described in BZX Rule
14.11(b)); Trust Issued Receipts (as described in BZX Rule
14.11(f)(1)); Commodity-Based Trust Shares (as described in BZX Rule
14.11(e)(4)); Currency Trust Shares (as described in BZX Rule
14.11(e)(5)); Commodity Index Trust Shares (as described in BZX Rule
14.11(e)(6)); Commodity Futures Trust Shares (as described in BZX
Rule 14.11(e)(7)); Managed Fund Shares (as described in BZX Rule
14.11(i)); and closed-end funds (as described in BZX Rule 14.8(e)).
All Underlying Vehicles will be listed and traded in the U.S. on a
national securities exchange. The Fund will not invest in inverse or
leveraged (e.g., 2X, -2X, 3X or -3X) Underlying Vehicles.
    \13\ The term ``under normal market conditions'' includes, but
is not limited to, the absence of extreme volatility or trading
halts in the equity markets or the financial markets generally;
operational issues causing dissemination of inaccurate market
information; or force majeure type events such as systems failure,
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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    According to the Registration Statement, the Fund will seek to
preserve and grow capital by producing absolute returns with reduced
volatility and manageable risk and drawdowns. The Fund will invest in
Underlying Vehicles spanning all the major world asset classes
including equities, bonds (including high yield bonds, which are
commonly referred to as ``junk bonds''), real estate, derivatives,
commodities, and currencies. The Adviser will actively manage the
Fund's portfolio utilizing a quantitative strategy with risk management
controls in an attempt to protect capital. Through Underlying Vehicles,
the Fund may have exposure to companies in any industry and of any
market capitalization. Under normal market conditions, the Fund expects
to invest at least 40% of its net assets, including through investments
in Underlying Vehicles, in securities of issuers located in at least
three different countries (including the United States).
    Through Underlying Vehicles, the Fund may invest in shares of real
estate investment trusts (``REITs''), which are pooled investment
vehicles that invest primarily in real estate or real estate-related
loans and trade on a U.S. exchange.
Other Investments
    While, under normal market conditions, the Fund will invest at
least 80% of its net assets in Underlying Vehicles, as described above,
the Fund may invest its remaining 20% of net assets in other securities
and financial instruments, other than Underlying Vehicles, including
futures contracts, cash and cash equivalents, as described below.
    Exchange-Traded Equity Securities. The Fund may invest in exchange-
traded common stocks. The Fund also may invest in foreign securities by
purchasing ``Depositary Receipts'', including American Depositary
Receipts (``ADRs''), European Depositary Receipts (``EDRs'') and Global
Depositary Receipts (``GDRs'') or other securities convertible into
securities of issuers based in foreign countries. These securities may
not necessarily be denominated in the same currency as the securities
which they represent.\14\
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    \14\ Generally, ADRs, in registered form, are denominated in
U.S. dollars and are designed for use in the U.S. securities
markets, GDRs, in bearer form, are issued and designed for use
outside the United States, and EDRs, in bearer form, may be
denominated in other currencies and are designed for use in European
securities markets. ADRs are receipts typically issued by a U.S.
bank or trust company evidencing ownership of the underlying
securities. EDRs are European receipts evidencing a similar
arrangement. GDRs are receipts typically issued by non-United States
banks and trust companies that evidence ownership of either foreign
or domestic securities. ADRs may be sponsored or unsponsored, but
unsponsored ADRs will not exceed 10% of the Fund's net assets.

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    With respect to its exchange-traded equity securities investments,
the Fund will normally invest in equity securities that are listed and
traded on a U.S. exchange or in markets that are members of the
Intermarket Surveillance Group (``ISG'') or parties to a comprehensive
surveillance sharing agreement with the Exchange. In any case, not more
than 10% of the net assets of the Fund in the aggregate invested in
exchange-traded equity securities will consist of equity securities
whose principal market is not a member of ISG or a market with which
the Exchange does not have a comprehensive surveillance sharing
agreement.
    Fixed Income Securities. The Fund may invest in debt and other
fixed income securities, as described below. Debt and other fixed
income securities include fixed and floating rate securities of any
maturity. Fixed rate securities pay a specified rate of interest or
dividends. Floating rate securities pay a rate that is adjusted
periodically by reference to a specified index or market rate. Fixed
and floating rate securities may be issued by federal, state, local,
and foreign governments and related agencies, and by a wide range of
private issuers. The Fund's investments in debt and other fixed income
securities will be limited to those described below.
    The Fund may invest in indexed bonds, which are a type of fixed
income security whose principal value and/or interest rate is adjusted
periodically according to a specified instrument, index, or other
statistic (e.g., another security, inflation index, currency, or
commodity).
    The Fund may invest in securities issued or guaranteed by the U.S.
Government, its agencies, instrumentalities, and political
subdivisions; \15\ securities issued by foreign governments, their
authorities, agencies, instrumentalities, and political subdivisions;
securities issued by supra-national agencies; \16\ corporate debt
securities; master demand notes; \17\ Yankee dollar and Eurodollar bank
certificates of deposit; time deposits; bankers' acceptances;
commercial paper; \18\ and inflation-indexed securities. The Fund may
invest also in zero coupon securities, which may be issued by a wide
variety of corporate and governmental issuers.
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    \15\ U.S. Government securities include securities issued or
guaranteed by the U.S. Government or its authorities, agencies, or
instrumentalities. Foreign government securities include securities
issued or guaranteed by foreign governments (including political
subdivisions) or their authorities, agencies, or instrumentalities
or by supra-national agencies. Different kinds of U.S. government
securities and foreign government securities have different kinds of
government support. For example, some U.S. government securities
(e.g., U.S. Treasury bonds) are supported by the full faith and
credit of the U.S. Other U.S. government securities are issued or
guaranteed by federal agencies or government-chartered or -sponsored
enterprises but are neither guaranteed nor insured by the U.S.
government (e.g., debt securities issued by the Federal Home Loan
Mortgage Corporation (``Freddie Mac''), Federal National Mortgage
Association (``FNMA'' or ``Fannie Mae''), and Federal Home Loan
Banks (``FHLBs''). Similarly, some foreign government securities are
supported by the full faith and credit of a foreign national
government or political subdivision and some are not.
    \16\ Supra-national agencies are agencies whose member nations
make capital contributions to support the agencies' activities.
Examples include the International Bank for Reconstruction and
Development (the World Bank), the Asian Development Bank, the
European Coal and Steel Community, and the Inter-American
Development Bank.
    \17\ The Fund may invest in master demand notes that are
denominated in U.S. dollars. Master demand notes are demand notes
that permit the investment of fluctuating amounts of money at
varying rates of interest pursuant to arrangements with issuers who
meet the quality criteria of the Fund. The interest rate on a master
demand note may fluctuate based upon changes in specified interest
rates, be reset periodically according to a prescribed formula or be
a set rate. Although there is no secondary market in master demand
notes, if such notes have a demand future, the payee may demand
payment of the principal amount of the note upon relatively short
notice. Master demand notes are generally illiquid and therefore
subject to the Fund's percentage limitations for investments in
illiquid securities.
    \18\ Commercial paper consists of short-term promissory notes
issued by corporations. Commercial paper may be traded in the
secondary market after its issuance.
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    The Fund may invest in fixed income securities of any credit
quality, from investment grade securities to high yield securities.
Investment grade securities are securities rated in one of the four
highest rating categories by at least two nationally recognized
statistical rating organizations (``Rating Organizations'') rating that
security, such as Standard & Poor's Ratings Services (``Standard &
Poor's'') or Moody's Investors Service, Inc. (``Moody's''), or rated in
one of the four highest rating categories by one Rating Organization if
it is the only Rating Organization rating that security, or unrated, if
deemed to be of comparable quality\19\ by Cambria and traded publicly
on the world market. The Fund, at the discretion of the Adviser, may
retain a debt security that has been downgraded below the initial
investment criteria.\20\
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    \19\ In determining whether a security is of ``comparable
quality'', the Adviser will consider, for example, whether the
issuer of the security has issued other rated securities; whether
the obligations under the security are guaranteed by another entity
and the rating of such guarantor (if any); whether and (if
applicable) how the security is collateralized; other forms of
credit enhancement (if any); the security's maturity date; liquidity
features (if any); relevant cash flow(s); valuation features; other
structural analysis; macroeconomic analysis and sector or industry
analysis.
    \20\ Securities rated lower than Baa by Moody's, or equivalently
rated by S&P or Fitch, are sometimes referred to as ``high yield
securities'' or ``junk bonds.''
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    For securities that carry a rating assigned by a Rating
Organization, Cambria will use the highest rating assigned by the
Rating Organization to determine a security's credit rating. Commercial
paper must be rated at least ``A-1'' or equivalent by a Rating
Organization. Corporate debt obligations must be rated at least ``B-
''or equivalent by a Rating Organization. For securities that are not
rated by a Rating Organization, Cambria's internal credit rating will
apply and be subject to equivalent rating minimums.
    Futures. The Fund may invest in futures contracts on indices,
currencies and commodities. The Fund will trade only futures contracts
that are listed and traded on a U.S. board of trade. According to the
Registration Statement, the Fund's investments in futures, will be
subject to the limits on leverage imposed by the 1940 Act. Section
18(f) of the 1940 Act and related Commission guidance limit the amount
of leverage that an investment company, such as the Fund, can obtain.
    Cash and Cash Equivalents. The Fund may temporarily invest a
portion of its assets in cash or cash equivalents pending other
investments or to maintain liquid assets required in connection with
some of the Fund's investments. Cash and cash equivalents include money
market instruments, such as obligations issued or guaranteed by the
U.S. Government, its agencies and/or instrumentalities (including
government-sponsored enterprises), bankers' acceptances, bank
certificates of deposit, repurchase agreements \21\ and investment
companies that invest primarily in such instruments (i.e., money market
funds). The Fund may hold funds in bank deposits in U.S. or foreign
currency, including during the completion of investment programs.
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    \21\ A repurchase agreement is an agreement under which
securities are acquired by the Fund from a securities dealer or bank
subject to resale at an agreed upon price on a later date. The Fund
may enter into repurchase agreements with banks and broker-dealers.
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    Investments in Other Investment Companies. The Fund may invest in
the securities of other investment companies to the extent permitted by
law. The Fund may make significant

investments in money market funds. In addition, the Trust intends to
enter into agreements with unaffiliated ETFs that permit such
unaffiliated ETFs to sell, and the Fund to purchase, the unaffiliated
ETFs' shares in excess of the limits imposed by Sections 12(d)(1)(A)
and (B) of the 1940 Act.
    Temporary Defensive Position. To respond to adverse market,
economic, political or other conditions, the Fund may invest 100% of
its total assets, without limitation, in high-quality debt securities
(i.e., BBB or higher) and money market instruments (as described
above). The Fund may be invested in these instruments for extended
periods, depending on Cambria's assessment of market conditions.
Investment Restrictions
    The Fund may invest in the securities of other investment companies
to the extent that such an investment would be consistent with the
requirements of Section 12(d)(1) of the 1940 Act, or any rule,
regulation or order of the Commission or interpretation thereof.\22\
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    \22\ 15 U.S.C. 80a-12(d)(1).
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    According to the Registration Statement, the Fund will seek to
qualify for treatment as a Regulated Investment Company (``RIC'') under
the Internal Revenue Code.\23\
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    \23\ 26 U.S.C. 851.
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    The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets (calculated at the time of investment),
including Rule 144A securities deemed illiquid by the Adviser \24\ and
master demand notes, consistent with Commission guidance. The Fund will
monitor its portfolio liquidity on an ongoing basis to determine
whether, in light of current circumstances, an adequate level of
liquidity is being maintained, and will consider taking appropriate
steps in order to maintain adequate liquidity if, through a change in
values, net assets, or other circumstances, more than 15% of the Fund's
net assets are held in illiquid assets. Illiquid assets include
securities subject to contractual or other restrictions on resale and
other instruments that lack readily available markets as determined in
accordance with Commission staff guidance.\25\
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    \24\ In reaching liquidity decisions, the Adviser may consider
the following factors: the frequency of trades and quotes for the
security; the number of dealers willing to purchase or sell the
security and the number of other potential purchasers; dealer
undertakings to make a market in the security; and the nature of the
security and the nature of the marketplace trades (e.g., the time
needed to dispose of the security, the method of soliciting offers,
and the mechanics of transfer).
    \25\ The Commission has stated that long-standing Commission
guidelines have required open-end funds to hold no more than 15% of
their net assets in illiquid securities and other illiquid assets.
See Investment Company Act Release No. 28193 (March 11, 2008), 73 FR
14618 (March 18, 2008), footnote 34. See also, Investment Company
Act Release No. 5847 (October 21, 1969), 35 FR 19989 (December 31,
1970) (Statement Regarding ``Restricted Securities''); Investment
Company Act Release No. 18612 (March 12, 1992), 57 FR 9828 (March
20, 1992) (Revisions of Guidelines to Form N-1A). A fund's portfolio
security is illiquid if it cannot be disposed of in the ordinary
course of business within seven days at approximately the value
ascribed to it by the fund. See Investment Company Act Release No.
14983 (March 12, 1986), 51 FR 9773 (March 21, 1986) (adopting
amendments to Rule 2a-7 under the 1940 Act); Investment Company Act
Release No. 17452 (April 23, 1990), 55 FR 17933 (April 30, 1990)
(adopting Rule 144A under the 1933 Act).
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    The Fund's investments will be consistent with the Fund's
investment objective and will not be used to achieve inverse returns or
leveraged returns (i.e., 2Xs and 3Xs) of the Fund's broad-based
securities market index (as defined in Form N-1A).\26\
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    \26\ The Fund's broad-based securities market index is the
Cambria Global Value Index.
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Net Asset Value
    The net asset value (``NAV'') of Shares will be calculated each
business day by SEI as of the close of regular trading on the New York
Stock Exchange (``NYSE''), generally 4:00 p.m., Eastern Time on each
day that the NYSE is open. The Fund will calculate its NAV per Share by
taking the value of its total assets, subtracting any liabilities, and
dividing that amount by the total number of Shares outstanding, rounded
to the nearest cent. Expenses and fees, including the management fees,
will be accrued daily and taken into account for purposes of
determining NAV.
    When calculating the NAV of the Fund's Shares, investments will
generally be valued using market valuations. Market valuations are
generally valuations (i) obtained from an exchange, a pricing service
or a major market maker (or dealer) or (ii) based on a price quotation
or other equivalent indication of a value supplied by an exchange, a
pricing service or a major market maker (or dealer), in each case as
approved by the Trust's Board of Trustees pursuant to the Trust's
valuation policies and procedures. Thus, to the extent that the Fund
uses a pricing vendor approved for the Trust by the Board, whether the
pricing vendor bases valuations upon dealer quotes, a proprietary
analysis of the relevant market, matrix pricing, sensitivity analysis,
a combination of the above or any other means, the price provided by
the pricing vendor may be considered a market valuation.
    Exchange-traded equity securities, including Underlying Vehicles,
common stocks and sponsored Depositary Receipts, as well as futures
contracts, will be valued at the official closing price on their
principal exchange or board of trade, or, lacking any current reported
sale at the time of valuation, at the mean of the most recent bid and
asked quotations on their principal exchange or board of trade.
Unsponsored Depositary Receipts, fixed income securities (including
bonds; U.S. Government obligations; corporate debt securities;
securities issued by foreign governments and supra-national agencies;
master-demand notes; Yankee dollar and Eurodollar bank certificates of
deposit; time deposits; bankers' acceptances; commercial paper;
inflation-indexed securities; zero coupon securities; and money market
instruments) will be valued at the mean between the most recent bid and
asked quotations.
    Repurchase agreements will be valued at cost. Fixed-income
instruments maturing in 60 days or less will be valued at amortized
cost and those maturing in excess of 60 days will be valued at the
midpoint of bid and asked quotations. Investments in non-exchange-
traded investment companies (including money market funds) will be
valued at their NAV.
    Any assets or liabilities denominated in currencies other than the
U.S. dollar will be converted into U.S. dollars at the current exchange
rate on the date of valuation as quoted by one or more third parties.
    If a market quotation is not readily available or is deemed not to
reflect an instrument's market value, the Fund will determine its fair
value pursuant to policies and procedures approved by the Board. The
Fund may use fair valuation to price securities that trade on a foreign
exchange, if any, when a significant event has occurred after the
foreign exchange closes but before the time at which the Fund's NAV is
calculated. In such cases, the Fund may use various criteria, including
an evaluation of U.S. market moves after the close of foreign markets,
in determining whether a foreign security's market price is reflective
of market value and, if not, the fair value of the security. In
general, in determining an instrument's fair value, the Fund may
consider, among other things, price comparisons among multiple sources,
corporate actions and news events, other financial indicators. Fair
value pricing involves subjective judgments.
    Accordingly, it is possible that the fair value determination for
an instrument is materially different than the value that could be
realized upon its sale.

Creation and Redemption of Shares
    According to the Registration Statement, the Fund will sell and
redeem Shares in aggregations of 50,000 Shares (each, a ``Creation
Unit'') on a continuous basis through the Distributor, without a sales
load, at the NAV next determined after receipt of an order in proper
form on any business day. The size of a Creation Unit is subject to
change.
    The purchase or redemption of Creation Units from the Fund must be
effected by or through an ``Authorized Participant'' (i.e., either a
broker-dealer or other participant in the Continuous Net Settlement
System of the National Securities Clearing Corporation (``NSCC'')) or a
participant in the Depository Trust Company (``DTC'') with access to
the DTC system, and who has executed an agreement (``Participant
Agreement'') with the Distributor that governs transactions in the
Fund's Creation Units.
    The consideration for a Creation Unit of the Fund will be the
``Fund Deposit''. The Fund Deposit will consist of the ``In-Kind
Creation Basket'' and ``Cash Component'', or an all cash payment
(``Cash Value''), as determined by Cambria to be in the best interest
of the Fund. The Cash Component will typically include a ``Balancing
Amount'' reflecting the difference, if any, between the NAV of a
Creation Unit and the market value of the securities in the ``In-Kind
Creation Basket''.
    If the NAV per Creation Unit exceeds the market value of the
securities in the In-Kind Creation Basket, the purchaser will pay the
Balancing Amount to the Fund. By contrast, if the NAV per Creation Unit
is less than the market value of the securities in the In-Kind Creation
Basket, the Fund will pay the Balancing Amount to the purchaser.
    The Transfer Agent, in a portfolio composition file sent via the
NSCC, generally will make available on each business day, immediately
prior to the opening of business on the Exchange (currently 9:30 a.m.,
Eastern time), a list of the names and the required number of shares of
each security in the In-Kind Creation Basket to be included in the
current Fund Deposit for the Fund (based on information about the
Fund's portfolio at the end of the previous business day) (subject to
amendment or correction). If applicable, the Transfer Agent, through
the NSCC, also will make available on each business day, the estimated
Cash Component or Cash Value, effective through and including the
previous business day, per Creation Unit.
    The announced Fund Deposit will be applicable, subject to any
adjustments as described below, for purchases of Creation Units of the
Fund until such time as the next-announced Fund Deposit is made
available. From day to day, the composition of the In-Kind Creation
Basket may change as, among other things, corporate actions and
investment decisions by Cambria are implemented for the Fund's
portfolio. The Fund reserves the right to accept a nonconforming (i.e.,
custom) Fund Deposit.
    The Fund may, in its sole discretion, permit or require the
substitution of an amount of cash (``cash in lieu'') to be added to the
Cash Component to replace any security in the In-Kind Creation Basket.
The Fund may permit or require cash in lieu when, for example, the
securities in the In-Kind Creation Basket may not be available in
sufficient quantity for delivery or may not be eligible for transfer
through the systems of DTC. Similarly, the Fund may permit or require
cash in lieu when, for example, the Authorized Participant or its
underlying investor is restricted under U.S. or local securities law or
policies from transacting in one or more securities in the In-Kind
Creation Basket.\27\
---------------------------------------------------------------------------

    \27\ The Adviser represents that, to the extent the Trust
effects the creation of Shares in cash, such transactions will be
effected in the same manner for all Authorized Participants.
---------------------------------------------------------------------------

    To compensate the Trust for costs incurred in connection with
creation and redemption transactions, investors will be required to pay
to the Trust a ``Transaction Fee'' as described in the Registration
Statement.
    According to the Registration Statement, Fund Shares may be
redeemed only in Creation Units at their NAV next determined after
receipt of a redemption request in proper form by the Fund through the
Transfer Agent and only on a business day. The redemption proceeds for
a Creation Unit will consist of the ``In-Kind Redemption Basket'' and a
``Cash Redemption Amount'', or an all cash payment (``Cash Value''), in
all instances equal to the value of a Creation Unit.
    The Cash Redemption Amount will typically include a Balancing
Amount, reflecting the difference, if any, between the NAV of a
Creation Unit and the market value of the securities in the In-Kind
Redemption Basket. If the NAV per Creation Unit exceeds the market
value of the securities in the In-Kind Redemption Basket, the Fund will
pay the Balancing Amount to the redeeming investor. By contrast, if the
NAV per Creation Unit is less than the market value of the securities
in the In-Kind Redemption Basket, the redeeming investor will pay the
Balancing Amount to the Fund.
    The composition of the In-Kind Creation Basket will normally be the
same as the composition of the In-Kind Redemption Basket. Otherwise,
the In-Kind Redemption Basket will be made available by the Adviser or
Transfer Agent. The Fund reserves the right to accept a nonconforming
(i.e., custom) ``Fund Redemption''.
    In lieu of an In-Kind Redemption Basket and Cash Redemption Amount,
Creation Units may be redeemed consisting solely of cash in an amount
equal to the NAV of a Creation Unit, which amount is referred to as the
Cash Value. If applicable, information about the Cash Value will be
made available by the Adviser or Transfer Agent.
    The right of redemption may be suspended or the date of payment
postponed:
    (i) for any period during which the NYSE is closed (other than
customary weekend and holiday closings);
    (ii) for any period during which trading on the NYSE is suspended
or restricted;
    (iii) for any period during which an emergency exists as a result
of which disposal of the Shares or determination of the Fund's NAV is
not reasonably practicable; or
    (iv) in such other circumstances as permitted by the Commission.
    The Fund may, in its sole discretion, permit or require the
substitution of an amount of cash (``cash in lieu'') to be added to the
Cash Redemption Amount to replace any security in the In-Kind
Redemption Basket. A Fund may permit or require cash in lieu when, for
example, the securities in the In-Kind Redemption Basket may not be
available in sufficient quantity for delivery or may not be eligible
for transfer through the systems of DTC. Similarly, the Fund may permit
or require cash in lieu when, for example, the Authorized Participant
or its underlying investor is restricted under U.S. or local securities
law or policies from transacting in one or more securities in the In-
Kind Redemption Basket.
    If it is not possible to effect deliveries of the securities in the
In-Kind Redemption Basket, the Trust may in its discretion exercise its
option to redeem Shares in cash, and the redeeming beneficial owner
will be required to receive its redemption proceeds in cash. In
addition, an investor may request a redemption in cash that the Fund
may, in its sole discretion, permit. In either case, the investor will
receive a cash payment equal to the NAV of its Shares

based on the NAV of Shares of the relevant Fund next determined after
the redemption request is received in proper form (minus a Transaction
Fee, including a variable charge, if applicable, as described in the
Registration Statement).\28\
---------------------------------------------------------------------------

    \28\ The Adviser represents that, to the extent the Trust
effects the redemption of Shares in cash, such transactions will be
effected in the same manner for all Authorized Participants.
---------------------------------------------------------------------------

    The Fund may also, in its sole discretion, upon request of a
shareholder, provide such redeemer a portfolio of securities that
differs from the exact composition of the In-Kind Redemption Basket, or
cash in lieu of some securities added to the Cash Component, but in no
event will the total value of the securities delivered and the cash
transmitted differ from the NAV. Redemptions of Fund Shares for the In-
Kind Redemption Basket will be subject to compliance with applicable
federal and state securities laws and the Fund (whether or not it
otherwise permits cash redemptions) reserves the right to redeem
Creation Units for cash to the extent that the Trust could not lawfully
deliver specific securities in the In-Kind Redemption Basket upon
redemptions or could not do so without first registering the securities
in the In-Kind Redemption Basket under such laws.
    When cash redemptions of Creation Units are available or specified
for the Fund, they will be effected in essentially the same manner as
in-kind redemptions. In the case of a cash redemption, the investor
will receive the cash equivalent of the In-Kind Redemption Basket minus
any Transaction Fees.
Availability of Information
    The Fund's website (www.cambriafunds.com), which will be publicly
available prior to the public offering of Shares, will include a form
of the prospectus for the Fund that may be downloaded. The Fund's
website will include additional quantitative information updated on a
daily basis, including, for the Fund (1) the prior business day's NAV
and the market closing price or mid-point of the bid/ask spread at the
time of calculation of such NAV (the ``Bid/Ask Price''),\29\ and a
calculation of the premium and discount of the closing price or Bid/Ask
Price against the NAV, and (2) data in chart format displaying the
frequency distribution of discounts and premiums of the daily closing
price or Bid/Ask Price against the NAV, within appropriate ranges, for
each of the four previous calendar quarters. On each business day,
before commencement of trading in Shares during Regular Trading
Hours,\30\ the Fund will disclose on its website the Disclosed
Portfolio as defined in BZX Rule 14.11(i)(3)(B), that will form the
basis for the Fund's calculation of NAV at the end of the business
day.\31\
---------------------------------------------------------------------------

    \29\ The Bid/Ask Price of the Fund will be determined using the
midpoint of the highest bid and the lowest offer on the Exchange as
of the time of calculation of the Fund's NAV. The records relating
to Bid/Ask Prices will be retained by the Fund and their service
providers.
    \30\ As defined in Rule 1.5(w), the term ``Regular Trading
Hours'' means the time between 9:30 a.m. and 4:00 p.m. Eastern Time.
    \31\ Under accounting procedures followed by the Fund, trades
made on the prior business day (``T'') will be booked and reflected
in NAV on the current business day (``T+1''). Accordingly, the Fund
will be able to disclose at the beginning of the business day the
portfolio that will form the basis for the NAV calculation at the
end of the business day.
---------------------------------------------------------------------------

    On a daily basis, the Fund will disclose on its website the
following information regarding each portfolio holding, as applicable
to the type of holding: ticker symbol, CUSIP number or other
identifier, if any; a description of the holding (including the type of
holding); the identity of the security, commodity, index or other asset
or instrument underlying the holding, if any; quantity held (as
measured by, for example, par value, notional value or number of
shares, contracts or units); maturity date, if any; coupon rate, if
any; effective date, if any; market value of the holding; and the
percentage weighting of the holding in the Fund's portfolio. The
website information will be publicly available at no charge.
    In addition, a basket composition file, which includes the security
names and share quantities required to be delivered in exchange for the
Fund's Shares, together with estimates and actual cash components, will
be publicly disseminated daily prior to the opening of BZX via NSCC.
The basket represents one Creation Unit of the Fund.
    Investors can also obtain the Trust's Statement of Additional
Information (``SAI''), a Fund's Shareholder Reports, and the Trust's
Form N-CSR and Form N-SAR, filed twice a year. The Trust's SAI and
Shareholder Reports are available free upon request from the Trust, and
those documents and the Form N-CSR and Form N-SAR may be viewed on-
screen or downloaded from the Commission's website at www.sec.gov.
Information regarding market price and trading volume of the Shares
will be continually available on a real-time basis throughout the day
on brokers' computer screens and other electronic services.
    Quotation and last sale information for the Shares will be
available via the Exchange proprietary quote and trade services and via
the Consolidated Tape Association (``CTA'') high-speed line.
    Intra-day price quotations on the securities and other assets held
by the Fund will be available from major broker-dealer firms. Intra-day
price information on such assets will also be available through free
and subscription services that can be accessed by Authorized
Participants and other investors. For example, pricing information for
exchange-traded instruments (including exchange-traded equity
securities (such as common stocks, ETNs, closed-end funds, and
Underlying Vehicles), futures contracts and sponsored Depositary
Receipts), will be readily available from the websites of the exchanges
or boards of trade trading such securities or futures contracts,
automated quotation systems, published or other public sources, and
subscription services such as Bloomberg or Reuters. Information
regarding the previous day's closing price and trading volume
information for the Shares will be published daily in the financial
section of newspapers. Pricing information for unsponsored Depositary
Receipts, non-exchange-traded investment company securities, fixed
income securities (including bonds; U.S. Government obligations;
corporate debt securities; securities issued by foreign governments and
supra-national agencies; master-demand notes; Yankee dollar and
Eurodollar bank certificates of deposit; time deposits; bankers'
acceptances; commercial paper; inflation-indexed securities; and zero
coupon securities), repurchase agreements, and money market instruments
will be available through brokers and dealers and/or subscription
services, such as Markit, Bloomberg and Thompson Reuters. In addition,
the Intraday Indicative Value, as defined in BZX Rule 14.11(i)(3)(C),
will be widely disseminated at least every 15 seconds during Regular
Trading Hours by one or more major market data vendors.\32\ The
dissemination of the Intraday Indicative Value, together with the
Disclosed Portfolio, will allow investors to determine the value of the
underlying portfolio of the Fund and provide a close estimate of that
value throughout the trading day.
---------------------------------------------------------------------------

    \32\ Currently, it is the Exchange's understanding that several
major market data vendors display and/or make widely available
Intraday Indicative Values taken from CTA or other data feeds.
---------------------------------------------------------------------------

    Additional information regarding the Trust and the Shares,
including investment strategies, risks, creation and redemption
procedures, fees, portfolio holdings, disclosure policies,

distributions and taxes is included in the Registration Statement.
Trading Halts
    With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares of the Fund.\33\ Trading in Shares of the Fund
will be halted if the circuit breaker parameters in BZX Rule 11.18 have
been reached. Trading also may be halted because of market conditions
or for reasons that, in the view of the Exchange, make trading in the
Shares inadvisable. These may include: (1) The extent to which trading
is not occurring in the securities and/or the financial instruments
comprising the Disclosed Portfolio of the Funds; or (2) whether other
unusual conditions or circumstances detrimental to the maintenance of a
fair and orderly market are present. Trading in the Shares will be
subject to BZX Rule 11.18, which sets forth circumstances under which
Shares of the Fund may be halted.
---------------------------------------------------------------------------

    \33\ See BZX Rule 11.18.
---------------------------------------------------------------------------

Trading Rules
    The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. The Exchange will
allow trading in the Shares from 8:00 a.m. until 5:00 p.m. Eastern
Time. The Exchange has appropriate rules to facilitate transactions in
the Shares during all trading sessions. As provided in BZX Rule
14.11(i)(2)(C), the minimum price variation for quoting and entry of
orders in Managed Fund Shares traded on the Exchange is $0.01. 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. At least
100,000 Shares will be outstanding upon the commencement of trading.
Surveillance
    The Exchange believes that its surveillance procedures are adequate
to properly monitor the trading of the Shares on the Exchange during
all trading sessions and to deter and detect violations of Exchange
rules and the applicable federal securities laws. Trading of the Shares
through the Exchange will be subject to the Exchange's surveillance
procedures for derivative products, including Managed Fund Shares.
    The Exchange will communicate as needed regarding trading in the
Shares, Underlying Vehicles, other exchange-traded equity securities,
and futures with other markets and other entities that are members of
the ISG, and FINRA, on behalf of the Exchange, may obtain trading
information regarding trading in the Shares and Underlying Vehicles,
other exchange-traded equity securities, and futures from such markets
and other entities. In addition, the Exchange may obtain information
regarding trading in the Shares, Underlying Vehicles, other exchange-
traded equity securities, and futures from markets and other entities
that are members of ISG or with which the Exchange has in place a
comprehensive surveillance sharing agreement.\34\ In addition, the
Exchange is able to access, as needed, trade information for certain
fixed income instruments reported to FINRA's Trade Reporting and
Compliance Engine (``TRACE'').
---------------------------------------------------------------------------

    \34\ For a list of the current members of ISG, see
www.isgportal.org. The Exchange notes that not all components of the
Disclosed Portfolio for each Fund may trade on markets that are
members of ISG or with which the Exchange has in place a
comprehensive surveillance sharing agreement.
---------------------------------------------------------------------------

    Not more than 10% of the net assets of the Fund in the aggregate
invested in exchange-traded equity securities shall consist of equity
securities whose principal market is not a member of the ISG or party
to a CSSA with the Exchange.
    In addition, the Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.
Information Circular
    Prior to the commencement of listing on the Exchange, the Exchange
will inform its members in an Information Circular of the special
characteristics and risks associated with trading the Shares.
Specifically, the Information Circular will discuss the following: (1)
The procedures for purchases and redemptions of Shares in Creation
Units (and that Shares are not individually redeemable); (2) BZX Rule
3.7, which imposes suitability obligations on Exchange members with
respect to recommending transactions in the Shares to customers; (3)
how information regarding the Intraday Indicative Value and the
Disclosed Portfolio is disseminated; (4) the risks involved in trading
the Shares during the Pre-Opening \35\ and After Hours Trading Sessions
\36\ when an updated Intraday Indicative Value will not be calculated
or publicly disseminated; (5) the requirement that members deliver a
prospectus to investors purchasing newly issued Shares prior to or
concurrently with the confirmation of a transaction; and (6) trading
information.
---------------------------------------------------------------------------

    \35\ The Pre-Opening Session is from 8:00 a.m. to 9:30 a.m.
Eastern Time.
    \36\ The After Hours Trading Session is from 4:00 p.m. to 5:00
p.m. Eastern Time.
---------------------------------------------------------------------------

    In addition, the Information Circular will advise members, prior to
the commencement of trading, of the prospectus delivery requirements
applicable to the Fund. Members purchasing Shares from the Fund for
resale to investors will deliver a prospectus to such investors. The
Information Circular will also discuss any exemptive, no-action, and
interpretive relief granted by the Commission from any rules under the
Act.
    In addition, the Information Circular will reference that the Fund
is subject to various fees and expenses described in the Registration
Statement. The Information Circular will also disclose the trading
hours of the Shares of the Fund and the applicable NAV Calculation Time
for the Shares. The Information Circular will disclose that information
about the Shares of the Fund will be publicly available on the Fund
website. In addition, the Information Circular will reference that the
Trust is subject to various fees and expenses described in the Fund
Registration Statement.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \37\ 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.
---------------------------------------------------------------------------

    \37\ 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 will be listed and traded on the Exchange pursuant to the
applicable initial and continued listing criteria in BZX Rule 14.11(i).
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. If the investment adviser
to the investment company issuing Managed Fund Shares is affiliated
with a broker-dealer, such investment adviser to the investment company
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. The Exchange will communicate as needed
regarding trading in the Shares, the Underlying Vehicles, other
exchange-traded equity securities, and futures with other markets and
other entities that are members of the ISG, and the Exchange may obtain
trading information regarding trading in the Shares, the Underlying
Vehicles, other exchange-traded equity securities, and futures from
such markets and other entities. In addition, the Exchange may obtain
information regarding trading in the Shares, the Underlying Vehicles,
other exchange-traded equity securities, and futures from markets and
other entities that are members of ISG or with which the Exchange has
in place a comprehensive surveillance sharing agreement.\38\ In
addition, the Exchange is able to access, as needed, trade information
for certain fixed income instruments reported to TRACE. Not more than
10% of the net assets of the Fund in the aggregate invested in
exchange-traded equity securities shall consist of equity securities
whose principal market is not a member of the ISG or party to a CSSA
with the Exchange.
---------------------------------------------------------------------------

    \38\ For a list of the current members of ISG, see
www.isgportal.org. 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.
---------------------------------------------------------------------------

    In addition, the Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.
    The Adviser is not registered as a broker-dealer and is not
affiliated with a broker-dealer. In the event that (a) the Adviser or
any sub-adviser becomes registered as, or becomes newly affiliated
with, a broker-dealer, or (b) any new adviser or sub-adviser is a
registered broker-dealer or becomes affiliated with a broker-dealer, it
will implement a fire wall with respect to its relevant personnel or
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. The Fund may
hold up to an aggregate amount of 15% of its net assets in illiquid
securities (calculated at the time of investment), consistent with
Commission guidance. The Fund's investments will be consistent with its
respective investment objective and will not be used to enhance
leverage.
    The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that the Exchange will obtain a representation from the issuer of the
Shares that the NAV per Share will be calculated daily and that the NAV
and the Disclosed Portfolio will be made available to all market
participants at the same time. In addition, a large amount of
information is publicly available regarding the Funds and the Shares,
thereby promoting market transparency. Moreover, the Intraday
Indicative Value will be widely disseminated by one or more major
market data vendors at least every 15 seconds during the Regular
Trading Hours. On each business day, before commencement of trading in
Shares in the Regular Trading on the Exchange, the Adviser will
disclose on its website the Disclosed Portfolio that will form the
basis for the Fund's calculation of NAV at the end of the business day.
    Quotation and last sale information for the Shares will be
available via the Exchange proprietary quote and trade services and via
the CTA high-speed line. Intra-day price quotations on the securities
and other assets held by the Fund will be available from major broker-
dealer firms. Intra-day price information on such assets will also be
available through free and subscription services that can be accessed
by Authorized Participants and other investors. For example, pricing
information for exchange-traded securities (including exchange-traded
equity securities (such as common stocks and Underlying Vehicles),
futures contracts and sponsored Depositary Receipts), will be readily
available from the websites of the exchanges or boards of trade trading
such securities or futures contracts, automated quotation systems,
published or other public sources, and subscription services such as
Bloomberg or Reuters. Information regarding the previous day's closing
price and trading volume information for the Shares will be published
daily in the financial section of newspapers. Pricing information for
unsponsored Depositary Receipts, non-exchange-traded investment company
securities, fixed income securities (including bonds; U.S. Government
obligations; corporate debt securities; securities issued by foreign
governments and supra-national agencies; masterdemand [sic] notes;
Yankee dollar and Eurodollar bank certificates of deposit; time
deposits; bankers' acceptances; commercial paper; inflation-indexed
securities; and zero coupon securities), repurchase agreements, and
money market instruments will be available through brokers and dealers
and/or subscription services. Moreover, prior to the commencement of
listing on the Exchange, the Exchange will inform its Members in an
Information Circular of the special characteristics and risks
associated with trading the Shares. Trading in Shares of the Fund will
be halted under the conditions specified in BZX Rule 11.18. Trading may
also be halted because of market conditions or for reasons that, in the
view of the Exchange, make trading in the Shares inadvisable. Finally,
trading in the Shares will be subject to BZX Rule 14.11(i)(4)(B)(iv),
which sets forth circumstances under which Shares of the Fund may be
halted. As noted above, investors will also have ready access to
information regarding the Fund's holdings, the Intraday Indicative
Value, the Disclosed Portfolio, and quotation and last sale information
of the Shares. The proposed rule change is designed to perfect the
mechanism of a free and open market and, in general, to protect
investors and the public interest in that it will facilitate the
listing and trading of additional types of actively-managed exchange-
traded products that will enhance competition among market
participants, to the benefit of investors and the marketplace. As noted
above, the Exchange may obtain information regarding trading in the
Shares from markets and other entities that are members of ISG or with
which the Exchange has in place a comprehensive surveillance sharing
agreement. In addition, as noted above, investors will have ready
access to information regarding the Fund's holdings, the Intraday
Indicative Value, the Disclosed Portfolio, and quotation and last sale
information for the Shares.

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 transfer from Arca and
listing of an additional actively-managed exchange-traded product on
the Exchange, which will enhance competition among listing venues, to
the benefit of issuers, investors, and the marketplace more broadly.

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

    Because the proposed rule change does not: (i) Significantly affect
the protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate, it has become effective pursuant to Section
19(b)(3)(A) of the Act \39\ and Rule 19b-4(f)(6) thereunder.\40\
---------------------------------------------------------------------------

    \39\ 15 U.S.C. 78s(b)(3)(A).
    \40\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    The Exchange has asked the Commission to waive the 30-day operative
delay so that the proposal may become operative immediately upon
filing. The Commission notes that BZX is requesting approval to list a
series of Managed Fund Shares that was previously approved by the
Commission to list and trade, and is currently listed and traded, on
Arca and that the Exchange has represented that this proposal is
substantively identical to the Prior Proposal, and the issuer
represents that all material representations contained within the Prior
Proposal remain true.\41\ Accordingly, the Commission believes that the
proposal raises no new or novel regulatory issues and that waiver of
the 30-day operative delay is consistent with the protection of
investors and the public interest. The Commission therefore waives the
30-day operative delay and designates the proposed rule change to be
operative upon filing.\42\
---------------------------------------------------------------------------

    \41\ See supra note 7.
    \42\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-CboeBZX-2018-085 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
    All submissions should refer to File Number SR-CboeBZX-2018-085.
This file number should be included on the subject line if email is
used. To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's internet website (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for website
viewing and printing in the Commission's Public Reference Room, 100 F
Street NE, Washington, DC 20549 on official business days between the
hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be
available for inspection and copying at the principal office of the
Exchange. All comments received will be posted without change. Persons
submitting comments are cautioned that we do not redact or edit
personal identifying information from comment submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-CboeBZX-2018-085 and should
be submitted on or before January 7, 2019.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\43\
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    \43\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2018-27206 Filed 12-14-18; 8:45 am]
 BILLING CODE 8011-01-P