30 day notice

Federal Register / Vol. 83, No. 154 / Thursday, August 9, 2018 / Notices
Exchange’s proposal to define the terms
‘‘in-the-money’’ and ‘‘out-of-the-money’’
options does not unduly burden
competition, rather it adds greater
transparency to the Rulebook.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing 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)(iii) of the Act 5 and
subparagraph (f)(6) of Rule 19b–4
thereunder.6
A proposed rule change filed under
Rule 19b–4(f)(6) 7 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),8 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. The
Exchange requests that the Commission
waive the 30-day operative delay so that
the proposal may become operative
immediately upon filing. The Exchange
represents that immediately defining the
terms ‘‘in-the-money’’ and ‘‘out-of-themoney’’ options within its Rulebook
would provide greater transparency to
its Participants. For the same reason, the
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest. Accordingly, the
Commission waives the 30-day
operative delay and designates the
proposed rule change operative upon
filing.9
At any time within 60 days of the
filing of the proposed rule change, the
5 15

U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
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.
7 17 CFR 240.19b–4(f)(6).
8 17 CFR 240.19b–4(f)(6)(iii).
9 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).

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Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.

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submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–BX–2018–035 and should
be submitted on or before August 30,
2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Eduardo A. Aleman,
Assistant Secretary.

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:

[FR Doc. 2018–17005 Filed 8–8–18; 8:45 am]

Electronic Comments
• Use the Commission’s internet
comment form (http://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
BX–2018–035 on the subject line.

Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736

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–BX–2018–035. 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

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BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
Submission for OMB Review;
Comment Request

Extension:
Rule 206(4)–3, SEC File No. 270–218, OMB
Control No. 3235–0242

Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget a
request for approval of extension of the
previously approved collection of
information discussed below.
Rule 206(4)–3 (17 CFR 275.206(4)–3)
under the Investment Advisers Act of
1940, which is entitled ‘‘Cash Payments
for Client Solicitations,’’ provides
restrictions on cash payments for client
solicitations. The rule requires that an
adviser pay all solicitors’ fees pursuant
to a written agreement. When an adviser
will provide only impersonal advisory
services to the prospective client, the
rule imposes no disclosure
requirements. When the solicitor is
affiliated with the adviser and the
adviser will provide individualized
advisory services to the prospective
client, the solicitor must, at the time of
the solicitation or referral, indicate to
the prospective client that he is
affiliated with the adviser. When the
solicitor is not affiliated with the
adviser and the adviser will provide
individualized advisory services to the
prospective client, the solicitor must, at
the time of the solicitation or referral,
provide the prospective client with a
copy of the adviser’s brochure and a
disclosure document containing
information specified in rule 206(4)–3.
Amendments to rule 206(4)–3, adopted
10 17

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CFR 200.30–3(a)(12).

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Federal Register / Vol. 83, No. 154 / Thursday, August 9, 2018 / Notices

in 2010 in connection with rule 206(4)–
5, specify that solicitation activities
involving a government entity, as
defined in rule 206(4)–5, are subject to
the additional limitations of rule
206(4)–5. The information rule 206(4)–
3 requires is necessary to inform
advisory clients about the nature of the
solicitor’s financial interest in the
recommendation so the prospective
clients may consider the solicitor’s
potential bias, and to protect clients
against solicitation activities being
carried out in a manner inconsistent
with the adviser’s fiduciary duty to
clients. Rule 206(4)–3 is applicable to
all Commission registered investment
advisers. The Commission believes that
approximately 4,395 of these advisers
have cash referral fee arrangements. The
rule requires approximately 7.04 burden
hours per year per adviser and results in
a total of approximately 30,941 total
burden hours (7.04 × 4,395) for all
advisers.
The disclosure requirements of rule
206(4)–3 do not require recordkeeping
or record retention. The collections of
information requirements under the
rules are mandatory. Information subject
to the disclosure requirements of rule
206(4)–3 is not submitted to the
Commission. The disclosures pursuant
to the rule are not kept confidential. An
agency may not conduct or sponsor, and
a person is not required to respond to,
a collection of information unless it
displays a currently valid OMB control
number.
The public may view the background
documentation for this information
collection at the following website,
www.reginfo.gov. Comments should be
directed to: (i) Desk Officer for the
Securities and Exchange Commission,
Office of Information and Regulatory
Affairs, Office of Management and
Budget, Room 10102, New Executive
Office Building, Washington, DC 20503,
or by sending an email to: Shagufta_
[email protected]; and (ii) Pamela
Dyson, Director/Chief Information
Officer, Securities and Exchange
Commission, c/o Candace Kenner, 100 F
Street NE, Washington, DC 20549 or
send an email to: PRA_Mailbox@
sec.gov. Comments must be submitted to
OMB within 30 days of this notice.
Dated: August 3, 2018.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–17000 Filed 8–8–18; 8:45 am]
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–83775; File No. SR–
CboeBZX–2018–018]

Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Order Instituting
Proceedings To Determine Whether To
Approve or Disapprove a Proposed
Rule Change To List and Trade Shares
of the Principal Morley Short Duration
Index ETF Under Rule 14.11(c)(4)
August 3, 2018.

I. Introduction
On April 23, 2018, Cboe BZX
Exchange, Inc. (‘‘Exchange’’ or ‘‘BZX’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to list and trade shares
(‘‘Shares’’) of the Principal Morley Short
Duration Index ETF (‘‘Fund’’). The
proposed rule change was published for
comment in the Federal Register on
May 8, 2018.3 On June 20, 2018, the
Commission designated a longer period
within which to approve the proposed
rule change, disapprove the proposed
rule change, or institute proceedings to
determine whether to approve or
disapprove the proposed rule change.4
The Commission has received no
comment letters on the proposed rule
change. This order institutes
proceedings under Section 19(b)(2)(B) of
the Act 5 to determine whether to
approve or disapprove the proposed
rule change.
II. Description of the Proposed Rule
Change
The Exchange proposes to list and
trade the Shares pursuant to BZX Rule
14.11(c)(4), which governs the listing
and trading of index fund shares based
on fixed income securities indexes. The
Fund would seek to provide investment
results that replicate, before expenses,
the performance of The ICE BofA
Merrill Lynch Low Duration U.S. ABS &
CMBS Equal Par Index (‘‘Index’’).6
1 15

U.S.C.78s(b)(1).
CFR 240.19b–4.
Securities Exchange Act Release No. 83152
(May 2, 2018), 83 FR 20892.
4 See Securities Exchange Act Release No. 83479,
83 FR 29838 (June 26, 2018). The Commission
designated August 6, 2018 as the date by which the
Commission shall approve the proposed rule
change, disapprove the proposed rule change, or
institute proceedings to determine whether to
approve or disapprove the proposed rule change.
5 15 U.S.C. 78s(b)(2)(B).
6 The Index value, calculated and disseminated at
least once daily, as well as the components of the
Index and their percentage weighting, will be
available from major market data vendors.
2 17

3 See

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A. The Exchange’s Description of the
Index
The Index is designed to provide
exposure to investment-grade
securitized products issued in the U.S.,
including ABS 7 and CMBS.8
To qualify for inclusion in the Index,
eligible securities must be a component
of The ICE BofA Merrill Lynch US ABS
& CMBS Index (‘‘Feeder Index’’). Such
securities are then selected and
weighted based upon the Index
methodology discussed below.
1. The Feeder Index’s Methodology
In order to be included in the Feeder
Index, a security (whether ABS or
CMBS) must meet the following criteria
(‘‘Basic Criteria’’):
• Be rated investment-grade (based on
an average of Moody’s, S&P Global, and
Fitch);
• have a term of at least one year
remaining until final stated maturity;
and have at least one month to the last
expected cash flow; and
• inverse floating rate, interest only,
and principal only securities are
excluded.
In addition to the Basic Criteria, an
ABS must meet the following criteria:
• Must issue a fixed or floating rate
coupon;
• must have an original deal size for
the collateral group 9 of at least $250
million;
• must have a current outstanding
deal size for the collateral group greater
than or equal to 10% of the original deal
size; and
• a minimum current outstanding
tranche size of $50 million for senior
tranches and $10 million current
amount outstanding for mezzanine and
subordinated tranches.
In addition to the Basic Criteria, a
CMBS (which may include U.S. agency
CMBS) must also meet the following
criteria:
• Must issue a fixed coupon
schedule;
• must have an original deal size for
the collateral group of at least $250
million;
• must have a current outstanding
deal size for the collateral group that is
greater than or equal to 10% of the
original deal size; and
7 ‘‘ABS’’ means fixed and floating rate debt
securities secured by non-mortgage assets.
8 ‘‘CMBS’’ means fixed rate debt securities
secured by first mortgages on commercial real
estate.
9 A collateral group describes the assets
(receivables) that are held by the special purpose
vehicle (‘‘SPV’’) issuing the ABS securities. The
collateral group provides the source of payment for
the SPV’s liabilities (i.e., ABS securities). Typically,
an SPV will include assets greater than its liabilities
as a form of credit enhancement.

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