[Federal Register Volume 84, Number 119 (Thursday, June 20, 2019)]
[Notices]
[Pages 28871-28874]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-13073]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86112; File No. SR-NYSEArca-2019-28]


Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting 
Approval of a Proposed Rule Change, as Modified by Amendment No. 3, To 
List and Trade Shares of the Virtus WMC Risk-Managed Alternative Equity 
ETF Under NYSE Arca Rule 8.600-E

June 14, 2019.

I. Introduction

    On April 15, 2019, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'') 
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 Virtus WMC Risk-Managed 
Alternative Equity ETF (``Fund'') under NYSE Arca Rule 8.600-E. The 
proposed rule change was published for comment in the Federal Register 
on May 3, 2019.\3\ On May 14, 2019, the Exchange filed Amendment No. 1 
to the proposed rule change. On May 16, 2019, the Exchange filed 
Amendment No. 2 to the proposed rule change, which amended and replaced 
the proposed rule change as modified by Amendment No. 1. On June 10, 
2019, the Exchange filed Amendment No. 3 to the proposed rule change, 
which amended and replaced the proposed rule change as modified by 
Amendment No. 2.\4\ The Commission has received no comments on the 
proposed rule change. This order approves the proposed rule change, as 
modified by Amendment No. 3.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 85751 (April 30, 
2019), 84 FR 19141.
    \4\ In Amendment No. 3, the Exchange: (a) Clarified the 
permitted investments of the Fund; (b) clarified that the only OTC 
derivatives that the Fund may invest in are forward foreign currency 
contracts and OTC options on U.S. and foreign exchange-listed equity 
securities, U.S. and foreign exchange-listed equity securities 
indices, and interest rates; (c) stated that price information 
relating to currency forwards will be available from major market 
data vendors; and (d) made other clarifying, technical, and 
conforming changes. Amendment No. 3 is not subject to notice and 
comment because it does not materially alter the substance of the 
proposed rule change or raise unique or novel regulatory issues. 
Amendment No. 3 is available at: https://www.sec.gov/comments/sr-nysearca-2019-28/srnysearca201928-5656834-185771.pdf.
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II. Description of the Proposal, as Modified by Amendment No. 3 
5
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    \5\ For a complete description of the Exchange's proposal, see 
Amendment No. 3, supra note 4.
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    The Exchange proposes to list and trade Shares of the Fund under 
NYSE Arca Rule 8.600-E, which governs the listing and trading of 
Managed Fund Shares on the Exchange. The Fund is a series of ETFis 
Series I (``Trust'').\6\ Virtus ETF Advisors LLC (``Adviser'') is the 
investment adviser for the Fund. Wellington Management Company LLP is 
the sub-adviser to the Fund (``Sub-Adviser'').\7\ ETF Distributors LLC, 
a registered broker-dealer, will act as the distributor for the Fund's 
Shares and the Bank of New York Mellon will serve as the custodian, 
administrator, and transfer agent for the Fund.
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    \6\ According to the Exchange, on February 28, 2019, the Trust 
filed with the Commission a Post-Effective Amendment to the Trust's 
registration statement on Form N-1A under the Securities Act of 1933 
and the 1940 Act relating to the Fund (File Nos. 333-187668 and 811-
22819) (``Registration Statement''). The Exchange represents that 
the Trust will file an amendment to the Registration Statement as 
necessary to conform to the representations in this filing. In 
addition, the Exchange states that the Commission has issued an 
order granting certain exemptive relief to the Trust under the 1940 
Act. See Investment Company Act Release No. 30607 (July 23, 2013) 
(File No. 812-14080).
    \7\ The Exchange states that the Adviser and the Sub-Adviser are 
not registered as broker-dealers but that each is affiliated with 
one or more broker-dealers and has implemented and will maintain a 
``fire wall'' with respect to each such broker-dealer affiliate 
regarding access to information concerning the composition of and/or 
changes to the Fund's portfolio. In addition, in the event (a) the 
Adviser or the Sub-Adviser becomes registered as a broker-dealer or 
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, such entity will implement and maintain a ``fire 
wall'' with respect to its relevant personnel or broker-dealer 
affiliate regarding access to information concerning the composition 
of 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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A. Principal Investments of the Fund

    According to the Exchange, the investment objective of the Fund is 
to seek to provide superior risk-adjusted total returns over the long 
term. The Fund will seek to achieve its investment objective, under 
normal market conditions,\8\ by (i) investing in a broadly diversified 
portfolio of global equity securities in both developed and emerging 
markets, and (ii) implementing a beta management strategy by shorting 
futures contracts and purchasing and selling options, as further 
described below. Under normal market conditions, the Fund will invest 
at least 80% of its net assets (plus any

[[Page 28872]]

borrowings for investment purposes) in equity securities, listed 
derivatives and over-the-counter (``OTC'') derivatives, cash and cash 
equivalents, each as further described below.
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    \8\ The term ``normal market conditions'' is defined in NYSE 
Arca Rule 8.600-E(c)(5).
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    The Fund will invest in the following U.S. and foreign exchange-
listed equity securities of U.S. and foreign issuers: Common stock, 
preferred stock, convertible preferred stock, rights, warrants, 
American Depositary Receipts, Global Depositary Receipts, and real 
estate investment trusts.
    The Fund may hold cash and cash equivalents.\9\
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    \9\ The term ``cash equivalents'' is defined in NYSE Arca Rule 
8.600-E, Commentary .01(c).
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    The Fund may hold U.S. and foreign exchange-traded futures and U.S. 
and foreign exchange-traded or OTC options on U.S. and foreign 
exchange-listed equity securities, U.S. and foreign exchange-listed 
equity securities indices, and interest rates.
    The Fund may invest in forward foreign currency contracts and U.S. 
and foreign exchange-traded foreign currency futures contracts.
    The Fund may enter into short sales of any securities and financial 
instruments in which the Fund may invest.
    The Fund may use derivative instruments described above as a 
substitute for investing directly in an underlying security or other 
financial instrument, to seek to enhance returns, to seek to manage or 
reduce exposure/risk, or to seek to manage foreign currency risk.

B. Other Investments

    While the Fund, under normal market conditions, will invest at 
least 80% in the securities and financial instruments described above, 
the Fund may invest its remaining assets in the following securities 
and financial instruments: Exchange-traded funds (``ETFs''); \10\ 
convertible bonds; and U.S. government securities (that are not cash 
equivalents as defined in NYSE Arca Rule 8.600-E, Commentary 
.01(c)).\11\
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    \10\ For purposes of this filing, the term ``ETFs'' includes 
Investment Company Units (as described in NYSE Arca Rule 5.2-
E(j)(3)); Portfolio Depositary Receipts (as described in NYSE Arca 
Rule 8.100-E); and Managed Fund Shares (as described in NYSE Arca 
Rule 8.600-E). All ETFs will be listed and traded in the U.S. on a 
national securities exchange. While the Fund may invest in inverse 
ETFs, the Fund will not invest in leveraged (e.g., 2X, -2X, 3X or -
3X) ETFs.
    \11\ These are obligations guaranteed by the U.S. government and 
include U.S. Treasury notes, U.S. Treasury bonds, and U.S. Treasury 
bills.
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C. Investment Restrictions

    The Fund will not invest in securities or other financial 
instruments that have not been described in the proposed rule change.
    The Fund's investments, including derivatives, will be consistent 
with the Fund's investment objective and will not be used to enhance 
leverage (although certain derivatives and other investments may result 
in leverage). That is, the Fund's investments will not be used to seek 
performance that is the multiple or inverse multiple (e.g., 2X or -3X) 
of the Fund's primary broad-based securities benchmark index (as 
defined in Form N-1A).\12\
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    \12\ The Fund's broad-based securities benchmark index will be 
identified in a future amendment to the Registration Statement 
following the Fund's first full calendar year of performance.
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D. Use of Derivatives by the Fund

    The Exchange represents that the Fund' investments in derivative 
instruments will be made in accordance with the 1940 Act and consistent 
with the Fund's investment objective and policies. To limit the 
potential risk associated with such transactions, the Fund will enter 
into offsetting transactions or segregate or ``earmark'' assets 
determined to be liquid by the Adviser in accordance with procedures 
established by the Trust's Board of Trustees and in accordance with the 
1940 Act or as permitted by applicable Commission guidance. According 
to the Exchange, these procedures have been adopted consistent with 
Section 18 of the 1940 Act and related Commission guidance. In 
addition, the Exchange states that the Fund has included appropriate 
risk disclosure in its offering documents, including leveraging risk.
    The Exchange states that the Adviser and Sub-Adviser will monitor 
counterparty credit risk exposure (including for OTC derivatives) and 
evaluate counterparty credit quality on a continuous basis.
    The Exchange states that the Adviser and the Sub-Adviser believe 
that there will be minimal, if any, impact to the arbitrage mechanism 
as a result of the Fund's use of derivatives. According to the 
Exchange, the Adviser and the Sub-Adviser understand that market makers 
and participants should be able to value derivatives as long as the 
positions are disclosed with relevant information. The Adviser and the 
Sub-Adviser believe that the price at which Shares of the Fund trade 
will continue to be disciplined by arbitrage opportunities created by 
the ability to purchase or redeem Shares of the Fund at their net asset 
value (``NAV''), which should ensure that Shares of the Fund will not 
trade at a material discount or premium in relation to their NAV.

E. Application of Generic Listing Requirements

    The Exchange states that the portfolio for the Fund will not meet 
all of the generic listing requirements set forth in Commentary .01 to 
NYSE Arca Rule 8.600-E applicable to the listing of Managed Fund 
Shares. The Exchange represents that the Fund's portfolio will meet all 
such requirements except for those set forth in Commentary .01(e) with 
respect to the Fund's investments in OTC derivatives.\13\
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    \13\ Commentary .01(e) to Rule 8.600-E provides that a portfolio 
may hold OTC derivatives, including forwards, 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; however, on both an initial and continuing 
basis, no more than 20% of the assets in the portfolio may be 
invested in OTC derivatives (calculated as the aggregate gross 
notional value of the OTC derivatives).
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    Specifically, the Exchange states that the aggregate gross notional 
value of the Fund's investments in OTC derivatives may exceed 20% of 
Fund assets, calculated as the aggregate gross notional value of such 
OTC derivatives. The Exchange proposes that up to 50% of the Fund's 
assets (calculated as the aggregate gross notional value) may be 
invested in OTC derivatives that are used to reduce currency, interest 
rate, or credit risk arising from the Fund's investments (i.e., for 
hedging purposes). The Exchange states that the Fund's investments in 
OTC derivatives, other than OTC derivatives used to hedge the Fund's 
portfolio against currency, interest rate, or credit risk, will be 
limited to 20% of the assets in the Fund's portfolio, calculated as the 
aggregate gross notional value of such OTC derivatives. As discussed 
above, the only OTC derivatives that the Fund may invest in are forward 
foreign currency contracts and OTC options on U.S. and foreign 
exchange-listed equity securities, U.S. and foreign exchange-listed 
equity securities indices, and interest rates.
    The Exchange states that the Adviser and Sub-Adviser represent that 
the proposed exception from the generics described above is consistent 
with the Fund's investment objective and will further assist the 
Adviser and Sub-Adviser to achieve such investment objective. The 
Exchange states that, other than Commentary .01(e), the Shares of the 
Fund will conform to the initial and continued listing criteria under 
NYSE Arca Rule 8.600-E and will meet all other requirements of NYSE 
Arca Rule 8.600-E.

[[Page 28873]]

III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule 
change, as modified by Amendment No. 3, is consistent with the Act and 
the rules and regulations thereunder applicable to a national 
securities exchange.\14\ In particular, the Commission finds that the 
proposed rule change, as modified by Amendment No. 3, is consistent 
with Section 6(b)(5) of the Act,\15\ which requires, among other 
things, that the Exchange's rules be designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, to remove impediments to and perfect the mechanism 
of a free and open market and a national market system, and, in 
general, to protect investors and the public interest.
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    \14\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \15\ 15 U.S.C. 78f(b)(5).
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    As noted above, the aggregate gross notional value of the Fund's 
investments in OTC derivatives may exceed the 20% limit in Commentary 
.01(e) to NYSE Arca Rule 8.600-E. Specifically, the Exchange proposes 
that up to 50% of the Fund's assets may be invested in OTC derivatives 
that are used to hedge the Fund's portfolio, and that up to 20% of the 
Fund's assets may be invest in other OTC derivatives (in each case, 
calculated as the aggregate gross notional value of such OTC 
derivatives).
    According to the Exchange, if the Fund were limited to investing up 
to 20% of its assets in OTC derivatives, the Fund would have to exclude 
or underweight its strategies utilizing OTC derivatives and the Fund 
would be less diversified, concentrating risk in the other strategies 
it plans to utilize.\16\ In addition, the Exchange states that the 
inability of the Fund to adequately hedge its holdings could expose the 
Fund's shareholders to additional investment risk.\17\ Furthermore, the 
Exchange states that OTC derivatives can provide the Fund with more 
flexibility to manage risk and may frequently be a more efficient 
hedging vehicle than listed derivatives.\18\ The Exchange states that 
OTC derivatives can be customized to a greater degree than listed 
derivatives and can provide the Fund with more flexibility to negotiate 
the exact exposure the Fund requires, thereby providing a better hedge 
on Fund assets than listed derivatives.\19\ In addition, the Exchange 
states that the use of OTC derivatives can mitigate trading costs 
because they allow for more control over the duration of a hedge and 
are not subject to costs of rolling that are associated with listed 
derivatives.\20\
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    \16\ See Amendment No. 3, supra note 4, at 11-12. The Exchange 
states that the Adviser represents that it is not possible to 
implement its strategies efficiently using listed derivatives 
because the foreign exchange forward market is OTC. The Exchange 
also states that use of OTC options on U.S. and foreign exchange-
listed equity securities and U.S. and foreign exchange-listed equity 
securities indices may be an important means to reduce risk in the 
Fund's equity investments or to enhance returns of such investments. 
See id. at 11.
    \17\ See id. at 18.
    \18\ See id.
    \19\ See id. at 10.
    \20\ See id.
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    On a daily basis, the Fund will disclose on its website the 
information regarding the Disclosed Portfolio required under NYSE Arca 
Rule 8.600-E(c)(2) to the extent applicable.\21\ The website 
information will be publicly available at no charge.\22\
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    \21\ NYSE Arca Rule 8.600-E(c)(2) requires that the website for 
each series of Managed Fund Shares disclose the following 
information regarding the Disclosed Portfolio, to the extent 
applicable: (A) ticker symbol; (B) CUSIP or other identifier; (C) 
description of the holding; (D) with respect to holdings in 
derivatives, the identity of the security, commodity, index or other 
asset upon which the derivative is based; (E) the strike price for 
any options; (F) the quantity of each security or other asset held 
as measured by (i) par value, (ii) notional value, (iii) number of 
shares, (iv) number of contracts, and (v) number of units; (G) 
maturity date; (H) coupon rate; (I) effective date; (J) market 
value; and (K) percentage weighting of the holding in the portfolio.
    \22\ See Amendment No. 3, supra note 4, at 13.
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    The Commission notes that, other than Commentary .01(e), the Fund 
will meet all the requirements of NYSE Arca Rule 8.600-E.
    The Commission also finds that the proposal is consistent with 
Section 11A(a)(1)(C)(iii) of the Act,\23\ which sets forth Congress's 
finding that it is in the public interest and appropriate for the 
protection of investors and the maintenance of fair and orderly markets 
to assure the availability to brokers, dealers, and investors of 
information with respect to quotations for, and transactions in, 
securities. Quotation and last sale information for the Shares will be 
available via the Consolidated Tape Association (``CTA'') high-speed 
line. The Portfolio Indicative Value (``PIV'') for the Fund, as defined 
in NYSE Arca Rule 8.600-E(c)(3), will be widely disseminated by one or 
more major market data vendors at least every 15 seconds during the 
Exchange's Core Trading Session. 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. 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.
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    \23\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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    Quotation and last sale information for ETFs and other U.S. 
exchange-traded equity securities will be available via the CTA high-
speed line. Quotation and last sale information for options cleared via 
the Options Clearing Corporation are available via the Options Price 
Reporting Authority. Intra-day and closing price information regarding 
U.S and foreign exchange-traded options and futures will be available 
from the exchange on which such instruments are traded. Price 
information relating to OTC options and currency forwards will be 
available from major market data vendors. Intra-day price information 
for U.S. and foreign exchange-traded options on futures will be 
available from the applicable exchange and from major market data 
vendors. For U.S. and foreign exchange-listed equity securities, 
intraday price quotations will generally be available from broker-
dealers and trading platforms (as applicable). Price information for 
cash equivalents and convertible bonds will be available from major 
market data vendors. Price information regarding U.S. government 
securities generally may be obtained from brokers and dealers who make 
markets in such securities or through nationally recognized pricing 
services through subscription agreements. Additionally, the Trade 
Reporting and Compliance Engine (``TRACE'') of the Financial Industry 
Regulatory Authority (``FINRA'') will be a source of price information 
for certain fixed income securities to the extent transactions in such 
securities are reported to TRACE.\24\
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    \24\ Broker-dealers that are FINRA member firms have an 
obligation to report transactions in specified debt securities to 
TRACE to the extent required under applicable FINRA rules. 
Generally, such debt securities will have at issuance a maturity 
that exceeds one calendar year. For fixed income securities that are 
not reported to TRACE, (i) intraday price quotations will generally 
be available from broker-dealers and trading platforms (as 
applicable) and (ii) price information will be available from feeds 
from market data vendors, published or other public sources, or 
online information services, as described above. See Amendment No. 
3, supra note 4, at 13, n. 14.
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    The Commission also believes that the proposal is reasonably 
designed to promote fair disclosure of information that may be 
necessary to price the Shares appropriately and to prevent trading when 
a reasonable degree of transparency cannot be assured. The Exchange has 
obtained a representation from the issuer of the Shares that the

[[Page 28874]]

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. Trading in the Shares will be halted if the circuit-
breaker parameters in NYSE Arca Rule 7.12-E 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. 
Moreover, trading in the Shares will be subject to NYSE Arca Rule 
8.600-E(d)(2)(D), which sets forth circumstances under which Shares may 
be halted.
    The Exchange states that it has a general policy prohibiting the 
distribution of material, non-public information by its employees. The 
Exchange states that neither the Adviser nor the Sub-Adviser are 
registered as a broker-dealer but each is affiliated with one or more 
broker-dealers and each has implemented and will maintain a ``fire 
wall'' with respect to such broker-dealer affiliate regarding access to 
information concerning the composition of and/or changes to the Fund's 
portfolio. Further, the Commission notes that the Reporting Authority 
that provides the Disclosed Portfolio must implement and maintain, or 
be subject to, procedures designed to prevent the use and dissemination 
of material, non-public information regarding the actual components of 
the portfolio.\25\
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    \25\ See NYSE Arca Rule 8.600-E(d)(2)(B)(ii).
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    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. In support of this 
proposal, the Exchange represents that:
    (1) Other than Commentary .01(e), as specifically described herein, 
the Fund will meet all other requirements of NYSE Arca Rule 8.600-E.
    (2) A minimum of 100,000 Shares of the Fund will be outstanding at 
the commencement of trading on the Exchange.
    (3) Trading in the Shares will be subject to the existing trading 
surveillances administered by the Exchange, as well as cross-market 
surveillances administered by FINRA on behalf of the Exchange, and 
these procedures are adequate to properly monitor Exchange trading of 
the Shares in all trading sessions and to deter and detect violations 
of Exchange rules and applicable federal securities laws.
    (4) The Exchange or FINRA, on behalf of the Exchange, or both, will 
communicate as needed, and may obtain information, regarding trading in 
the Shares, certain exchange-traded equity securities (including ETFs), 
certain exchange-traded options, and certain futures with other markets 
and other entities that are members of the Intermarket Surveillance 
Group (``ISG''). In addition, the Exchange may obtain information 
regarding trading in the Shares, certain exchange-traded equity 
securities (including ETFs), certain exchange-traded options and 
certain futures from markets and other entities with which the Exchange 
has in place a comprehensive surveillance sharing agreement. FINRA, on 
behalf of the Exchange, is able to access, as needed, trade information 
for certain fixed income securities held by the Fund reported to 
FINRA's TRACE.
    (5) Prior to the commencement of trading, the Exchange will inform 
its Equity Trading Permit Holders in an Information Bulletin of the 
special characteristics and risks associated with trading the Shares. 
Specifically, the Information Bulletin will discuss: (a) The procedures 
for purchases and redemptions of Shares in creation units (and that 
Shares are not individually redeemable); (b) NYSE Arca Rule 9.2-E(a), 
which imposes a duty of due diligence on its Equity Trading Permit 
Holders to learn the essential facts relating to every customer prior 
to trading the Shares; (c) the risks involved in trading the Shares 
during the Early and Late Trading Sessions when an updated PIV will not 
be calculated or publicly disseminated; (d) how information regarding 
the PIV and the Disclosed Portfolio is disseminated; (e) the 
requirement that Equity Trading Permit Holders deliver a prospectus to 
investors purchasing newly issued Shares prior to or concurrently with 
the confirmation of a transaction; and (f) trading information.
    (6) The Exchange has appropriate rules to facilitate transactions 
in the Shares during all trading sessions.
    (7) For initial and continued listing, the Fund will be in 
compliance with Rule 10A-3 under the Act.\26\
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    \26\ See 17 CFR 240.10A-3.
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    (8) The Fund's investments, including derivatives, will be 
consistent with the Fund's investment objective and will not be used to 
enhance leverage (although certain derivatives and other investments 
may result in leverage). That is, the Fund's investments will not be 
used to seek performance that is the multiple or inverse multiple 
(e.g., 2X or -3X) of the Fund's primary broad-based securities 
benchmark index (as defined in Form N-1A).
    (9) The only OTC derivatives that the Fund may invest in are 
forward foreign currency contracts and OTC options on U.S. and foreign 
exchange-listed equity securities, U.S. and foreign exchange-listed 
equity securities indices, and interest rates.
    The Exchange represents that all statements and representations 
made in this filing regarding (a) the description of the portfolio or 
reference asset, (b) limitations on portfolio holdings or reference 
assets, or (c) the applicability of Exchange listing rules specified in 
the rule filing constitute continued listing requirements for listing 
the Shares on the Exchange. In addition, the issuer has represented to 
the Exchange that it will advise the Exchange of any failure by the 
Fund to comply with the continued listing requirements, and, pursuant 
to its obligations under Section 19(g)(1) of the Act, the Exchange will 
monitor \27\ for compliance with the continued listing requirements. If 
the Fund is not in compliance with the applicable listing requirements, 
the Exchange will commence delisting procedures under NYSE Arca Rule 
5.5-E(m).
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    \27\ The Commission notes that certain proposals for the listing 
and trading of exchange-traded products include a representation 
that the exchange will ``surveil'' for compliance with the continued 
listing requirements. See, e.g., Securities Exchange Act Release No. 
77499 (April 1, 2016), 81 FR 20428, 20432 (April 7, 2016) (SR-BATS-
2016-04). In the context of this representation, it is the 
Commission's view that ``monitor'' and ``surveil'' both mean ongoing 
oversight of compliance with the continued listing requirements. 
Therefore, the Commission does not view ``monitor'' as a more or 
less stringent obligation than ``surveil'' with respect to the 
continued listing requirements.
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    This approval order is based on all of the Exchange's statements 
and representations, including those set forth above and in Amendment 
No. 3.
    For the foregoing reasons, the Commission finds that the proposed 
rule change, as modified by Amendment No. 3, is consistent with Section 
6(b)(5) of the Act \28\ and Section 11A(a)(1)(C)(iii) of the Act \29\ 
and the rules and regulations thereunder applicable to a national 
securities exchange.
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    \28\ 15 U.S.C. 78f(b)(5).
    \29\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\30\ that the proposed rule change (SR-NYSEArca-2019-28), as 
modified by Amendment No. 3, be, and it hereby is, approved.
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    \30\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\31\
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    \31\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Acting Secretary.
[FR Doc. 2019-13073 Filed 6-19-19; 8:45 am]
 BILLING CODE 8011-01-P


