[Federal Register Volume 84, Number 143 (Thursday, July 25, 2019)]
[Notices]
[Pages 35910-35918]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-15774]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86417; File No. SR-NYSEArca-2019-51]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change Regarding Investments of the Janus Henderson 
Mortgage-Backed Securities ETF Currently Listed and Traded on the 
Exchange Under NYSE Arca Rule 8.600-E

July 19, 2019.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on July 9, 2019, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I, II, and III below, which 
Items have been prepared by the self-regulatory organization. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange proposes certain changes regarding investments of the 
Janus Henderson Mortgage-Backed Securities ETF, shares of which are 
currently listed and traded on the Exchange under NYSE Arca Rule 8.600-
E (``Managed Fund Shares''). The proposed change is available on the 
Exchange's website at www.nyse.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes certain changes regarding investments of the 
Janus Henderson Mortgage-Backed Securities ETF (``Fund''), shares 
(``Shares'') of which are currently listed and traded on the Exchange 
under NYSE Arca Rule 8.600-E, which governs the listing and trading of 
Managed Fund Shares \4\ on the Exchange. Shares of the Fund commenced 
listing and trading on the Exchange on September 12, 2018 under the 
generic listing standards under Commentary .01 to NYSE Arca Rule 8.600-
E.
---------------------------------------------------------------------------

    \4\ A Managed Fund Share is a security that represents an 
interest in an investment company registered under the Investment 
Company Act of 1940 (15 U.S.C. 80a-1) (``1940 Act'') organized as an 
open-end investment company or similar entity that invests in a 
portfolio of securities selected by its investment adviser 
consistent with its investment objectives and policies. In contrast, 
an open-end investment company that issues Investment Company Units, 
listed and traded on the Exchange under NYSE Arca Rule 5.2-E(j)(3), 
seeks to provide investment results that correspond generally to the 
price and yield performance of a specific foreign or domestic stock 
index, fixed income securities index or combination thereof.
---------------------------------------------------------------------------

    The Fund is a series of Janus Detroit Street Trust (``Trust'').\5\ 
Janus Capital Management LLC is the Fund's investment adviser 
(``Adviser''). State Street Bank and Trust Company is the custodian and 
transfer agent (``Transfer Agent'') for the Fund. ALPS

[[Page 35911]]

Distributors, Inc. is the distributor (``Distributor'') for the Fund's 
Shares.
---------------------------------------------------------------------------

    \5\ The Trust is registered under the 1940 Act. On February 28, 
2019, the Trust filed with the Commission a registration statement 
on Form N-1A under the Securities Act of 1933 (15 U.S.C. 77a) 
(``Securities Act'') and the 1940 Act relating to the Fund (File 
Nos. 333-207814 and 811-23112) (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. 
31540 (March 30, 2015) (``Exemptive Order'').
---------------------------------------------------------------------------

    Commentary .06 to Rule 8.600-E 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 
and maintain a ``fire wall'' between the investment adviser and the 
broker-dealer with respect to access to information concerning the 
composition and/or changes to such investment company portfolio.\6\ In 
addition, Commentary .06 further requires that personnel who make 
decisions on the open-end fund's portfolio composition must be subject 
to procedures designed to prevent the use and dissemination of material 
nonpublic information regarding the open-end fund's portfolio. The 
Adviser is not registered as a broker-dealer but is affiliated with a 
broker-dealer and has implemented and will maintain a fire wall with 
respect to such broker-dealer affiliate regarding access to information 
concerning the composition and/or changes to the portfolio. In the 
event (a) the Adviser becomes registered as a broker-dealer or newly 
affiliated with one or more broker-dealers, or (b) any new adviser or 
sub-adviser is a registered broker-dealer or becomes affiliated with a 
broker-dealer, it will implement and maintain a fire wall with respect 
to its relevant personnel or its broker-dealer affiliate regarding 
access to information concerning the composition and/or changes to the 
portfolio, and will be subject to procedures designed to prevent the 
use and dissemination of material non-public information regarding such 
portfolio.
---------------------------------------------------------------------------

    \6\ An investment adviser to an open-end fund is required to be 
registered under the Investment Advisers Act of 1940 (the ``Advisers 
Act''). As a result, the Adviser and its related personnel are 
subject to the provisions of Rule 204A-1 under the Advisers Act 
relating to codes of ethics. This Rule requires investment advisers 
to adopt a code of ethics that reflects the fiduciary nature of the 
relationship to clients as well as compliance with other applicable 
securities laws. Accordingly, procedures designed to prevent the 
communication and misuse of non-public information by an investment 
adviser must be consistent with Rule 204A-1 under the Advisers Act. 
In addition, Rule 206(4)-7 under the Advisers Act makes it unlawful 
for an investment adviser to provide investment advice to clients 
unless such investment adviser has (i) adopted and implemented 
written policies and procedures reasonably designed to prevent 
violation, by the investment adviser and its supervised persons, of 
the Advisers Act and the Commission rules adopted thereunder; (ii) 
implemented, at a minimum, an annual review regarding the adequacy 
of the policies and procedures established pursuant to subparagraph 
(i) above and the effectiveness of their implementation; and (iii) 
designated an individual (who is a supervised person) responsible 
for administering the policies and procedures adopted under 
subparagraph (i) above.
---------------------------------------------------------------------------

Janus Henderson Mortgage-Backed Securities ETF
Principal Investments
    According to the Registration Statement, the Fund's investment 
objective is to seek a high level of total return consisting of income 
and capital appreciation.
    Under normal market conditions,\7\ the Fund invests at least 80% of 
its net assets in a portfolio of mortgage-related fixed income 
instruments of varying maturities. The mortgage-related fixed income 
instruments in which the Fund may invest are the following: Residential 
mortgage-backed securities (``RMBS''); commercial mortgage-backed 
securities (``CMBS''); collateralized mortgage obligations (``CMOs''); 
stripped mortgage-backed securities; mortgage pass-through securities; 
and other securities representing an interest in or secured by or 
related to mortgages, including asset-backed securities (``ABS'').\8\
---------------------------------------------------------------------------

    \7\ The term ``normal market conditions'' is defined in NYSE 
Arca Rule 8.600-E(c)(5).
    \8\ The Fund will typically invest in asset-backed securities 
backed by pools of home equity loans and other mortgage-related 
debt. Asset-backed securities are collateralized by pools of 
obligations or assets. Asset-backed securities may take the form of 
commercial paper, notes, or pass-through certificates and may be 
structured as floaters, inverse floaters, interest-only and 
principal-only obligations.
---------------------------------------------------------------------------

    Under normal market conditions, the Fund will invest at least 80% 
of its net assets in mortgage-related securities issued by the U.S. 
government and its agencies, such as the Government National Mortgage 
Association (``GNMA'' or ``Ginnie Mae''), the Federal National Mortgage 
Association (``FNMA'' or ``Fannie Mae'') or the Federal Home Loan 
Mortgage Corporation (``FHLMC'' or ``Freddie Mac'').
    The Fund may invest in exchange-traded funds (``ETFs'').\9\
---------------------------------------------------------------------------

    \9\ For purposes of this filing, ``ETFs'' are 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.
---------------------------------------------------------------------------

    The Fund will typically enter into ``to be announced'' or ``TBA'' 
commitments when purchasing mortgage-backed securities.
Other Investments
    While the Fund, under normal market conditions, will invest at 
least 80% of its assets in agency mortgage-backed securities, the Fund 
may invest up to 20% of its assets in the securities and financial 
instruments described below.
    The Fund may hold cash and cash equivalents.\10\
---------------------------------------------------------------------------

    \10\ For purposes of this filing, cash equivalents include the 
securities included in Commentary .01(c) to NYSE Arca Rule 8.600-E.
---------------------------------------------------------------------------

    In addition to the securities described above under Principal 
Investments, the Fund may hold the following fixed income securities 
(``Fixed Income Securities''):
     U.S. government securities;
     industrial development bonds
     inflation-indexed bonds, including municipal inflation-
indexed bonds and corporate inflation-indexed bonds; or in derivatives 
that are linked to these securities;
     municipal lease obligations;
     pass-through securities;
     variable and floating rate obligations (including 
``inverse floaters);
     subordinated or junior debt;
     corporate bonds, debentures, notes, and other similar 
corporate debt instruments;
     non-agency, or privately-issued, residential and 
commercial mortgage-backed securities, and other mortgage-related 
securities.\11\
---------------------------------------------------------------------------

    \11\ Non-agency, or privately-issued, residential and commercial 
MBS, and other mortgage-related securities and other asset-backed 
securities are referred to herein as ``Private ABS/MBS''.
---------------------------------------------------------------------------

    The Fund may enter into mortgage dollar rolls and may invest in to-
be-announced transactions (``TBA'').
    The Fund may enter into short sales of any securities in which the 
Fund may invest.
    The Fund may hold the following listed derivative instruments: 
Futures, options (including options on futures), and swaps on 
commodities, currencies, U.S. and non-U.S. equity securities, fixed 
income securities as defined in Commentary .01(b) to Rule 8.600-E, 
interest rates, U.S. Treasuries, or a basket or index of any of the 
foregoing. Such listed derivatives will comply with the criteria in 
Commentary .01(d) of NYSE Arca Rule 8.600-E.
    The Fund may hold the following over-the-counter (``OTC'') 
derivative instruments: Forwards, options, and OTC total return swaps 
on commodities, currencies, U.S. and non-U.S. equity securities, fixed 
income securities as defined in Commentary .01(b) to Rule 8.600-E, 
interest rates, or a basket or index of any of the foregoing. The Fund 
also may hold OTC credit default swaps.
    The Fund may enter into OTC options on swap agreements 
(``swaptions'').
    The Fund may invest in securities of non-exchange-traded investment 
company securities, subject to applicable limitations under Section 
12(d)(1) of the 1940 Act.

[[Page 35912]]

    The Fund may invest in private placements, restricted securities 
and Rule 144A securities.
    The Fund will not invest in securities or other financial 
instruments that have not been described in this proposed rule change.
Other Restrictions
    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, while the Fund will be permitted to borrow as 
permitted under the 1940 Act, the Fund's investments will not be used 
to seek performance that is the multiple or inverse multiple (e.g., 2Xs 
and 3Xs) of the Fund's primary broad-based securities benchmark index 
(as defined in Form N-1A).\12\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

The Fund's Use of Derivatives
    Investments in derivative instruments will be made in accordance 
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 (the 
``Board''). In addition, the Fund has included appropriate risk 
disclosure in its offering documents, including leveraging risk. 
Leveraging risk is the risk that certain transactions of the Fund, 
including the Fund's use of derivatives, may give rise to leverage, 
causing the Fund to be more volatile than if it had not been leveraged.
Creation and Redemption of Shares
    According to the Registration Statement, the Trust will issue and 
redeem Shares only in Creation Units of at least 25,000 Shares on a 
continuous basis at their NAV per Share next determined after receipt 
of an order on any business day. The size of a Creation Unit is subject 
to change. The consideration for purchase of Creation Units of the Fund 
generally consists of cash. If creations are not conducted in cash, the 
consideration for purchase of Creation Units of the Fund generally 
consists of the in-kind deposit of a designated portfolio of securities 
(including any portion of such securities for which cash may be 
substituted) (``Deposit Securities'') and the Cash Component computed 
as described below. Together, the Deposit Securities and the Cash 
Component constitute the ``Fund Deposit,'' which will be applicable to 
creation requests received in proper form. The Fund Deposit represents 
the minimum initial and subsequent investment amount for a Creation 
Unit of a Fund.
    The ``Cash Component'' is an amount equal to the difference between 
the NAV of the Shares (per Creation Unit) and the ``Deposit Amount,'' 
which is an amount equal to the market value of the Deposit Securities, 
and serves to compensate for any differences between the NAV per 
Creation Unit and the Deposit Amount.
    Janus Capital makes available through the National Securities 
Clearing Corporation (``NSCC'') on each business day prior to the 
opening of business on the Exchange, the list of names and the required 
number or par value of each Deposit Security and the amount of the Cash 
Component to be included in the current Fund Deposit (based on 
information as of the end of the previous business day for the Fund). 
Such Fund Deposit is applicable to purchases of Creation Units of 
Shares of the Fund until such time as the next-announced Fund Deposit 
is made available.
    The Fund reserves the right to permit or require the substitution 
of a ``cash in lieu'' amount to be added to the Cash Component to 
replace any Deposit Security that may not be available in sufficient 
quantity for delivery or that may not be eligible for transfer through 
Depository Trust Company (``DTC'') or the Clearing Process (as 
discussed below). The Fund also reserves the right to permit or require 
a ``cash in lieu'' amount in certain circumstances, including 
circumstances in which (i) the delivery of the Deposit Security by the 
Authorized Participant (as described below) would be restricted under 
applicable securities or other local laws or (ii) the delivery of the 
Deposit Security to the Authorized Participant would result in the 
disposition of the Deposit Security by the Authorized Participant 
becoming restricted under applicable securities or other local laws, or 
in certain other situations.
Procedures for Creating Creation Units
    To be eligible to place orders with the Distributor and to create a 
Creation Unit of the Fund, an entity must be: (i) A ``Participating 
Party,'' i.e., a broker-dealer or other participant in the clearing 
process through the Continuous Net Settlement System of the NSCC (the 
``Clearing Process'') or (ii) a DTC Participant, and must have executed 
an agreement with the Distributor, with respect to creations and 
redemptions of Creation Units (``Authorized Participant Agreement''). A 
Participating Party or DTC Participant who has executed an Authorized 
Participant Agreement is referred to as an ``Authorized Participant.'' 
Creation Units may be purchased only by or through a DTC Participant 
that has entered into an Authorized Participant Agreement with the 
Distributor.
Purchase Orders
    To initiate an order for a Creation Unit, an Authorized Participant 
must submit to the Distributor or its agent an irrevocable order to 
purchase Shares of the Fund, in proper form, by the ``Cutoff Time'' (as 
defined below).
    An Authorized Participant must submit an irrevocable order to 
purchase Shares of the Fund generally before 3:00 p.m. (``Cutoff 
Time''), Eastern time (``E.T.'') on any business day in order to 
receive that day's NAV. Purchase orders and redemption requests, if 
accepted by the Trust, will be processed based on the NAV next 
determined after such acceptance.
Redemption of Creation Units
    Shares of the Fund may be redeemed by Authorized Participants only 
in Creation Units at their NAV next determined after receipt of a 
redemption request in proper form by the Transfer Agent or its agent 
and only on a business day.
    Janus Capital will make available through the NSCC, prior to the 
opening of business on the Exchange (currently 9:30 a.m. E.T.) on each 
business day, the designated portfolio of securities (including any 
portion of such securities for which cash may be substituted) that will 
be applicable to redemption requests received in proper form on that 
day (``Fund Securities''), and an amount of cash (the ``Cash Amount,'' 
as described below). Fund Securities received on redemption may not be 
identical to Deposit Securities that are applicable to creations of 
Creation Units.
    The redemption proceeds for a Creation Unit generally consist of 
Fund Securities, plus the Cash Amount, which is an amount equal to the 
difference between the net asset value of the Shares being redeemed, as 
next determined after the receipt of a redemption request in proper 
form, and the value of Fund Securities, less a redemption transaction 
fee.
    The Trust may, in its sole discretion, substitute a ``cash in 
lieu'' amount to replace any Fund Security. The Trust also reserves the 
right to permit or

[[Page 35913]]

require a ``cash in lieu'' amount in certain circumstances. The amount 
of cash paid out in such cases will be equivalent to the value of the 
substituted security listed as a Fund Security. In the event that the 
Fund Securities have a value greater than the NAV of the Shares, a 
compensating cash payment equal to the difference is required to be 
made by or through an Authorized Participant by the redeeming 
shareholder. The Fund generally redeems Creation Units in Fund 
Securities, plus any Cash Amount due.
Cash Redemption Method
    Although the Trust will not ordinarily permit partial or full cash 
redemptions of Creation Units of the Fund, when partial or full cash 
redemptions of Creation Units are available or specified they will be 
effected in essentially the same manner as in-kind redemptions thereof. 
In the case of partial or full cash redemption, the Authorized 
Participant receives the cash equivalent of the Fund Securities it 
would otherwise receive through an in-kind redemption, plus the same 
Cash Amount to be paid to an in-kind redeemer.\13\
---------------------------------------------------------------------------

    \13\ The Adviser represents that, to the extent the Trust 
effects the creation or redemption of Shares in cash on any given 
day, such transactions will be effected in the same manner for all 
Authorized Participants placing trades with the Fund on that day.
---------------------------------------------------------------------------

Placement of Redemption Orders
    Redemption requests for Creation Units of the Fund must be 
submitted to the Transfer Agent by or through an Authorized 
Participant. An Authorized Participant must submit an irrevocable 
request to redeem Shares of the Fund generally before 3:00 p.m., E.T. 
on any business day, in order to receive that day's NAV.
Disclosed Portfolio
    The Fund's disclosure of derivative positions in the applicable 
Disclosed Portfolio includes information that market participants can 
use to value these positions intraday. On a daily basis, the Fund will 
disclose the information regarding the Disclosed Portfolio required 
under NYSE Arca Rule 8.600-E (c)(2) to the extent applicable. The 
Fund's website information will be publicly available at no charge.
Impact on Arbitrage Mechanism
    The Adviser believes there will be minimal impact to the arbitrage 
mechanism as a result of the use of derivatives. Market makers and 
participants should be able to value derivatives as long as the 
positions are disclosed with relevant information. The Adviser believes 
that the price at which Shares trade will continue to be disciplined by 
arbitrage opportunities created by the ability to purchase or redeem 
Shares at their NAV, which should ensure that Shares will not trade at 
a material discount or premium in relation to their NAV.
    The Adviser does not believe there will be any significant impacts 
to the settlement or operational aspects of the Fund's arbitrage 
mechanism due to the use of derivatives. Because derivatives generally 
are not eligible for in-kind transfer, they will typically be 
substituted with a ``cash in lieu'' amount when the Fund processes 
purchases or redemptions of creation units in-kind.
Application of Generic Listing Requirements
    The Exchange is submitting this proposed rule change because the 
portfolio for the Fund will not meet all of the ``generic'' listing 
requirements of Commentary .01 to NYSE Arca Rule 8.600-E applicable to 
the listing of Managed Fund Shares. The Fund's portfolio would meet all 
such requirements except for those set forth in Commentary .01(a) \14\ 
and Commentary .01(b)(4) \15\ to NYSE Arca Rule 8.600-E.
---------------------------------------------------------------------------

    \14\ Commentary .01(a) to Rule 8.600-E specifies the equity 
securities accommodated by the generic criteria in Commentary 
.01(a), namely, U.S. Component Stocks (as described in Rule 5.2-
E(j)(3)) and Non-U.S. Component Stocks (as described in Rule 5.2-
E(j)(3)). Commentary .01(a)(1) to Rule 8.600-E (U.S. Component 
Stocks) provides that the component stocks of the equity portion of 
a portfolio that are U.S. Component Stocks shall meet the following 
criteria initially and on a continuing basis:
    (A) Component stocks (excluding Derivative Securities Products 
and Index-Linked Securities) that in the aggregate account for at 
least 90% of the equity weight of the portfolio (excluding such 
Derivative Securities Products and Index-Linked Securities) each 
shall have a minimum market value of at least $75 million;
    (B) Component stocks (excluding Derivative Securities Products 
and Index-Linked Securities) that in the aggregate account for at 
least 70% of the equity weight of the portfolio (excluding such 
Derivative Securities Products and Index-Linked Securities) each 
shall have a minimum monthly trading volume of 250,000 shares, or 
minimum notional volume traded per month of $25,000,000, averaged 
over the last six months;
    (C) The most heavily weighted component stock (excluding 
Derivative Securities Products and Index-Linked Securities) shall 
not exceed 30% of the equity weight of the portfolio, and, to the 
extent applicable, the five most heavily weighted component stocks 
(excluding Derivative Securities Products and Index-Linked 
Securities) shall not exceed 65% of the equity weight of the 
portfolio;
    (D) Where the equity portion of the portfolio does not include 
Non-U.S. Component Stocks, the equity portion of the portfolio shall 
include a minimum of 13 component stocks; provided, however, that 
there shall be no minimum number of component stocks if (i) one or 
more series of Derivative Securities Products or Index-Linked 
Securities constitute, at least in part, components underlying a 
series of Managed Fund Shares, or (ii) one or more series of 
Derivative Securities Products or Index-Linked Securities account 
for 100% of the equity weight of the portfolio of a series of 
Managed Fund Shares; and
    (E) Except as provided herein, equity securities in the 
portfolio shall be U.S. Component Stocks listed on a national 
securities exchange and shall be NMS Stocks as defined in Rule 600 
of Regulation NMS under the Securities Exchange Act of 1934.
    \15\ Commentary .01(b)(4) provides that component securities 
that in the aggregate account for at least 90% of the fixed income 
weight of the portfolio must be either: (a) From issuers that are 
required to file reports pursuant to Sections 13 and 15(d) of the 
Act; (b) from issuers that have a worldwide market value of its 
outstanding common equity held by non-affiliates of $700 million or 
more; (c) from issuers that have outstanding securities that are 
notes, bonds debentures, or evidence of indebtedness having a total 
remaining principal amount of at least $1 billion; (d) exempted 
securities as defined in Section 3(a)(12) of the Act; or (e) from 
issuers that are a government of a foreign country or a political 
subdivision of a foreign country.
---------------------------------------------------------------------------

    The Fund will not comply with the requirements in Commentary 
.01(b)(4) to Rule 8.600-E that component securities that in the 
aggregate account for at least 90% of the fixed income weight of the 
portfolio meet one of the criteria specified in Commentary .01(b)(4), 
because certain Private ABS/MBS by their nature cannot satisfy the 
criteria in Commentary .01(b)(4).\16\ Instead, the Exchange proposes 
that the Fund's investments in Fixed Income Securities other than 
Private ABS/MBS will be required to comply with the requirements of 
Commentary .01(b)(4). The Exchange believes that excluding Private ABS/
MBS from the 90% calculation in Commentary .01(b)(4) is consistent with 
the Act because the Fund's portfolio will minimize the risk to the 
overall Fund associated with any particular holding of the Fund as a 
result of the diversification provided by the investments and the 
Adviser's selection process, which closely monitors investments to 
ensure maintenance of credit and liquidity standards. Further, the 
Exchange believes that this alternative limitation is appropriate 
because Commentary .01(b)(4) to Rule 8.600-E is not designed for 
structured finance vehicles such as Private ABS/MBS.
---------------------------------------------------------------------------

    \16\ Private ABS/MBS are generally issued by special purpose 
vehicles in amounts smaller than the minimum dollar threshold set 
forth in Commentary .01(b)(4), so the criteria in Commentary 
.01(b)(4) to Rule 8.600-E regarding an issuer's market 
capitalization and the remaining principal amount of an issuer's 
securities are typically unavailable with respect to Private ABS/
MBS, even though such Private ABS/MBS may own significant assets.
---------------------------------------------------------------------------

    The Exchange notes that the Commission has previously approved

[[Page 35914]]

the listing of Managed Fund Shares with similar investment objectives 
and strategies without imposing requirements that a certain percentage 
of such funds' securities meet one of the criteria comparable to those 
set forth in Commentary .01(b)(4).\17\
---------------------------------------------------------------------------

    \17\ See, e.g., Exchange Act Release Nos. 67894 (September 20, 
2012), 77 FR 59227 (September 26, 2012) (SR-BATS-2012-033) (order 
approving the listing and trading of shares of the iShares Short 
Maturity Bond Fund); 70342 (September 6, 2013), 78 FR 56256 
(September 12, 2013) (SR-NYSEArca-2013-71) (order approving the 
listing and trading of shares of the SPDR SSgA Ultra Short Term Bond 
ETF, SPDR SSgA Conservative Ultra Short Term Bond ETF and SPDR SSgA 
Aggressive Ultra Short Term Bond ETF). See also, Securities Exchange 
Act Release Nos. 84047 (September 6, 2018), 83 FR 46200 (September 
12, 2018) (SR-NASDAQ-2017-128) (Notice of Filing of Amendment No. 3 
and Order Granting Accelerated Approval of a Proposed Rule Change, 
as Modified by Amendment No. 3, to List and Trade Shares of the 
Western Asset Total Return ETF); 85022 (January 31, 2019), 25 FR 
2265 (February 6, 2019) (SR-NASDAQ-2018-080) (Notice of Filing of 
Amendment No. 3 and Order Granting Accelerated Approval of a 
Proposed Rule Change, as Modified by Amendment Nos. 1, 2 and 3, To 
List and Trade Shares of the BrandywineGLOBAL-Global Total Return 
ETF).
---------------------------------------------------------------------------

    The Fund may invest in non-exchange-traded investment company 
securities, which are equity securities. Because such securities have a 
net asset value based on the value of securities and financial assets 
the investment company holds, the Exchange believes it is both 
unnecessary and inappropriate to apply to such investment company 
securities the criteria in Commentary .01(a)(1).\18\
---------------------------------------------------------------------------

    \18\ The Commission has previously approved proposed rule 
changes under Section 19(b) of the Act for series of Managed Fund 
Shares that may invest in non-exchange traded investment company 
securities. See, e.g., Securities Exchange Act Release No. 85244 
(March 4, 2019), 84 FR 8553 (March 8, 2019) (SR-NYSEArca-2018-82) 
(Order Granting Approval of a Proposed Rule Change, as Modified by 
Amendment Nos. 1 and 2, Regarding Certain Changes Relating to 
Investments of the PGIM Active High Yield Bond ETF).
---------------------------------------------------------------------------

    The Exchange notes that the Commission has previously approved the 
listing of Managed Fund Shares with similar investment objectives and 
strategies where such funds were permitted to invest in the shares of 
other registered investment companies that are not ETFs or money market 
funds.\19\
---------------------------------------------------------------------------

    \19\ See, e.g., Securities Exchange Act Release Nos. 79053 
(October 5, 2016), 81 FR 70468 (October 12, 2016) (SR-BatsBZX-2016-
35) (permitting the JPMorgan Global Bond Opportunities ETF to invest 
in ``investment company securities that are not ETFs''); 74297 
(February 18, 2015), 80 FR 9788 (February 24, 2015) (SR-BATS-2014-
056) (permitting the U.S. Fixed Income Balanced Risk ETF to invest 
in ``exchange traded and non-exchange traded investment companies 
(including investment companies advised by the Adviser or its 
affiliates) that invest in such Fixed Income Securities''); 83319 
(May 24, 2018), 83 FR 25097 (May 31, 2018) (SR-NYSEArca-2018-15), 
(Order Approving a Proposed Rule Change, as Modified by Amendment 
No. 1 Thereto, to Continue Listing and Trading Shares of the PGIM 
Ultra Short Bond ETF under NYSE Arca Rule 8.600-E).
---------------------------------------------------------------------------

    The Adviser represents that the proposed exceptions from the 
requirements of Commentary .01 to Rule 8.600-E described above are 
consistent with the Fund's investment objective, and will further 
assist the Adviser to achieve such investment objective. Deviations 
from the generic requirements are necessary for the Fund to achieve its 
investment objective in a manner that is cost-effective and that 
maximizes investors' returns. Further, the proposed alternative 
requirements are narrowly tailored to allow the Fund to achieve its 
investment objective in manner that is consistent with the principles 
of Section 6(b)(5) of the Act. As a result, it is in the public 
interest to approve listing and trading of Shares of the Fund on the 
Exchange pursuant to the requirements set forth herein.
    The Exchange notes that, other than Commentary .01(a) and (b)(4) to 
Rule 8.600-E, as described above, the Fund's portfolio will meet all 
other requirements of Rule 8.600-E.
Availability of Information
    The Fund's website (www.janus henderson.com), which is publicly 
available, includes a form of the prospectus for the Fund that may be 
downloaded. The Fund's website includes additional quantitative 
information updated on a daily basis, including, for the Fund, (1) 
daily trading volume, the prior business day's reported closing price, 
NAV and mid-point of the bid/ask spread at the time of calculation of 
such NAV (the ``Bid/Ask Price''),\20\ and a calculation of the premium 
and discount of the Bid/Ask Price against the NAV, and (2) data in 
chart format displaying the frequency distribution of discounts and 
premiums of the daily 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 in the Core 
Trading Session on the Exchange, the Adviser discloses on the Fund's 
website the Disclosed Portfolio for the Fund as defined in NYSE Arca 
Rule 8.600-E(c)(2) that will form the basis for the Fund's calculation 
of NAV at the end of the business day.\21\
---------------------------------------------------------------------------

    \20\ The Bid/Ask Price of the Fund's Shares will be determined 
using the mid-point 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 are retained by the Fund and/or 
its service providers.
    \21\ Under accounting procedures to be followed by the Fund, 
trades made on the prior business day (``T'') are booked and 
reflected in NAV on the current business day (``T+1''). Accordingly, 
the Fund is 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.
---------------------------------------------------------------------------

    Investors can also obtain the Trust's Statement of Additional 
Information (``SAI''), the Fund's Shareholder Reports, and its 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.
    Quotation and last sale information for the Shares and ETFs will be 
available via the CTA high speed line. Price information for U.S. and 
foreign exchange-traded futures and options on futures will be 
available from the exchange on which they are listed. Quotation and 
last sale information for exchange-listed options cleared via the 
Options Clearing Corporation will be available via the Options Price 
Reporting Authority. Information regarding market price and trading 
volume for the Shares is 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 are published daily in the 
financial section of newspapers.
    Quotation information for RMBS, CMBS, CMOs, ABS, OTC options, cash 
equivalents, swaps, swaptions, and Fixed Income Securities may be 
obtained from brokers and dealers who make markets in such securities 
or through nationally recognized pricing services through subscription 
agreements. Price information for OTC derivative instruments, OTC 
credit default swaps, 144A securities, private placement securities and 
restricted securities is available from major market data vendors.
    In addition, the Portfolio Indicative Value (``PIV''), as defined 
in NYSE Arca Rule 8.600-E(c)(3), is widely disseminated by one or more 
major market data vendors at least every 15 seconds during the Core 
Trading Session.\22\ The dissemination of the PIV, together with the 
Disclosed Portfolio, allows investors to determine the approximate 
value of the underlying portfolio of the Fund on a daily basis and 
provides a close estimate of that value throughout the trading day.
---------------------------------------------------------------------------

    \22\ Currently, it is the Exchange's understanding that several 
major market data vendors display and/or make widely available PIVs 
taken from the CTA or other data feeds.

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

[[Page 35915]]

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.\23\ Trading in Shares of the Fund 
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 of the Fund inadvisable.
---------------------------------------------------------------------------

    \23\ See NYSE Arca Rule 7.12-E.
---------------------------------------------------------------------------

    Trading in the Shares will be subject to NYSE Arca Rule 8.600-
E(d)(2)(D), which sets forth circumstances under which Shares of the 
Fund may be halted.
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. Shares will trade on 
the NYSE Arca Marketplace from 4:00 a.m. to 8:00 p.m. E.T. in 
accordance with NYSE Arca Rule 7.34-E (Early, Core, and Late Trading 
Sessions). The Exchange has appropriate rules to facilitate 
transactions in the Shares during all trading sessions. As provided in 
NYSE Arca Rule 7.6-E, the minimum price variation (``MPV'') for quoting 
and entry of orders in equity securities traded on the NYSE Arca 
Marketplace is $0.01, with the exception of securities that are priced 
less than $1.00 for which the MPV for order entry is $0.0001.
    Except as described herein, the Shares of the Fund will conform to 
the continued listing criteria under NYSE Arca Rule 8.600-E. The 
Exchange represents that, for continued listing, the Fund will be in 
compliance with Rule 10A-3 \24\ under the Act, as provided by NYSE Arca 
Rule 5.3-E. The Exchange has obtained a representation from the issuer 
of the Shares of the Fund that the NAV and the Disclosed Portfolio will 
be made available to all market participants at the same time.
---------------------------------------------------------------------------

    \24\ 17 CFR 240 10A-3.
---------------------------------------------------------------------------

Surveillance
    The Exchange represents that trading in the Shares is subject to 
the existing trading surveillances administered by the Exchange, as 
well as cross-market surveillances administered by the Financial 
Industry Regulatory Authority (``FINRA'') on behalf of the Exchange, 
which are designed to detect violations of Exchange rules and 
applicable federal securities laws.\25\ The Exchange represents that 
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.
---------------------------------------------------------------------------

    \25\ FINRA conducts cross-market surveillances on behalf of the 
Exchange pursuant to a regulatory services agreement. The Exchange 
is responsible for FINRA's performance under this regulatory 
services agreement.
---------------------------------------------------------------------------

    The surveillances referred to above generally focus on detecting 
securities trading outside their normal patterns, which could be 
indicative of manipulative or other violative activity. When such 
situations are detected, surveillance analysis follows and 
investigations are opened, where appropriate, to review the behavior of 
all relevant parties for all relevant trading violations.
    The Exchange or FINRA, on behalf of the Exchange, or both, will 
communicate as needed regarding trading in the Shares, ETFs, certain 
futures, and certain exchange-traded options with other markets and 
other entities that are members of the Intermarket Surveillance Group 
(``ISG''), and the Exchange or FINRA, on behalf of the Exchange, or 
both, may obtain trading information regarding trading such securities 
and financial instruments from such markets and other entities. In 
addition, the Exchange may obtain information regarding trading in such 
securities and financial instruments from markets and other entities 
that are members of ISG or with which the Exchange has in place a 
comprehensive surveillance sharing agreement.\26\ FINRA, on behalf of 
the Exchange, is able to access, as needed, trade information for 
certain fixed income securities held by the Fund reported to FINRA's 
Trade Reporting and Compliance Engine (``TRACE'').
---------------------------------------------------------------------------

    \26\ 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.
    All statements and representations made in this filing regarding 
(a) the description of the portfolio holdings or reference asset, (b) 
limitations on portfolio holdings or reference assets, or (c) the 
applicability of Exchange listing rules specified in this rule filing 
shall constitute continued listing requirements for listing the Shares 
on the Exchange.
    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 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).
Information Bulletin
    The Exchange will inform its Equity Trading Permit (``ETP'') 
Holders in an Information Bulletin (``Bulletin'') of the special 
characteristics and risks associated with trading the Shares of the 
Fund. Specifically, the Bulletin will discuss the following: (1) The 
procedures for purchases and redemptions of Shares in Creation Units 
(and that Shares are not individually redeemable); (2) NYSE Arca 9.2-
E(a), which imposes a duty of due diligence on its ETP Holders to learn 
the essential facts relating to every customer prior to trading the 
Shares; (3) 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; (4) how information regarding the PIV and the 
Disclosed Portfolio is disseminated; (5) the requirement that ETP 
Holders deliver a prospectus to investors purchasing newly issued 
Shares prior to or concurrently with the confirmation of a transaction; 
and (6) trading information.
    In addition, the Bulletin will reference that the Fund is subject 
to various fees and expenses described in the Registration Statement. 
The Bulletin will discuss any exemptive, no-action, and interpretive 
relief granted by the Commission from any rules under the Act. The 
Bulletin will also disclose that the NAV for the Shares of the Fund 
will be calculated after 4:00 p.m. E.T. each trading day.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \27\ 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.
---------------------------------------------------------------------------

    \27\ 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

[[Page 35916]]

be listed and traded on the Exchange pursuant to the initial and 
continued listing criteria in NYSE Arca Rule 8.600-E. The Adviser is 
not registered as a broker-dealer but is affiliated with a broker-
dealer and has implemented and will maintain a fire wall with respect 
to such broker-dealer affiliate regarding access to information 
concerning the composition and/or changes to the portfolio. The 
Exchange represents that 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, which are designed to detect violations of Exchange rules and 
applicable federal securities laws. The Exchange represents that 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. The Exchange or 
FINRA, on behalf of the Exchange, or both, will communicate as needed 
regarding trading in the Shares, ETFs, certain futures, and certain 
exchange-traded options with other markets and other entities that are 
members of the ISG, and the Exchange or FINRA, on behalf of the 
Exchange, or both, may obtain trading information regarding trading 
such securities and financial instruments from such markets and other 
entities. In addition, the Exchange may obtain information regarding 
trading in such securities and financial instruments from markets and 
other entities that are members of ISG or 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.
    Except as described herein, the Shares of the Fund will conform to 
the continued listing criteria under NYSE Arca Rule 8.600-E. The 
Exchange represents that, for continued listing, the Fund will be in 
compliance with Rule 10A-3 under the Act, as provided by NYSE Arca Rule 
5.3-E. The Exchange has obtained a representation from the issuer of 
the Shares of the Fund that the NAV per Share is calculated daily and 
that the NAV and the Disclosed Portfolio are made available to all 
market participants at the same time. In addition, a large amount of 
information is publicly available regarding the Fund and the Shares, 
thereby promoting market transparency. The Fund's portfolio holdings 
are disclosed on its website daily after the close of trading on the 
Exchange and prior to the opening of trading on the Exchange the 
following day. On a daily basis, the Fund discloses the information 
regarding the Disclosed Portfolio required under NYSE Arca Rule 8.600-E 
(c)(2) to the extent applicable. The Fund's website information is 
publicly available at no charge.
    Investors can also obtain the Trust's SAI, the Fund's Shareholder 
Reports, and its 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.
    The website for the Fund includes a form of the prospectus for the 
Fund and additional data relating to NAV and other applicable 
quantitative information. Trading in Shares of the Fund will be halted 
if the circuit breaker parameters in NYSE Arca Rule 7.12-E have been 
reached or because of market conditions or for reasons that, in the 
view of the Exchange, make trading in the Shares inadvisable, and 
trading in the Shares will be subject to NYSE Arca Rule 8.600-
E(d)(2)(D), which sets forth circumstances under which Shares of the 
Fund may be halted. In addition, as noted above, investors have ready 
access to information regarding the Fund's holdings, the PIV, the 
Disclosed Portfolio, and quotation and last sale information for the 
Shares. 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, while the Fund will be permitted to 
borrow as permitted under the 1940 Act, the Fund's investments will not 
be used to seek performance that is the multiple or inverse multiple 
(e.g., 2Xs and 3Xs) of the Fund's primary broad-based securities 
benchmark index (as defined in Form N-1A).
    With respect to the Fund's investment in Private ABS/MBS, the 
proposed non-compliance with the requirements in Commentary .01(b)(4) 
to Rule 8.600-E that component securities that in the aggregate account 
for at least 90% of the fixed income weight of the portfolio meet one 
of the criteria specified in Commentary .01(b)(4) is appropriate 
because certain Private ABS/MBS by their nature cannot satisfy the 
criteria in Commentary .01(b)(4). Instead, the Exchange proposes that 
the Fund's investments in Fixed Income Securities other than Private 
ABS/MBS will be required to comply with the requirements of Commentary 
.01(b)(4), and Private ABS/MBS will be limited to 20% of the weight of 
the Fund's portfolio. The Exchange believes that excluding Private ABS/
MBS from the 90% calculation in Commentary .01(b)(4) is consistent with 
the Act because the Fund's portfolio will minimize the risk to the 
overall Fund associated with any particular holding of the Fund as a 
result of the diversification provided by the investments and the 
Adviser's selection process, which closely monitors investments to 
ensure maintenance of credit and liquidity standards. Further, the 
Exchange believes that this alternative limitation is appropriate 
because Commentary .01(b)(4) to Rule 8.600-E is not designed for 
structured finance vehicles such as Private ABS/MBS.
    The Exchange notes that the Commission has previously approved the 
listing of Managed Fund Shares with similar investment objectives and 
strategies without imposing requirements that a certain percentage of 
such funds' securities meet one of the criteria set forth in Commentary 
.01(b)(4).\28\
---------------------------------------------------------------------------

    \28\ See note 17, supra.
---------------------------------------------------------------------------

    The Fund may invest in shares of non-exchange-traded open-end 
management investment company securities, which are equity securities. 
Therefore, the Fund will not comply with the requirements of Commentary 
.01(a)(1) to NYSE Arca Rule 8.600-E (U.S. Component Stocks) with 
respect to its equity securities holdings. It is appropriate and in the 
public interest to approve listing and trading of Shares of the Fund 
notwithstanding that the Fund's holdings in such securities would not 
meet the requirements of Commentary .01(a)(1)(A) through (E) to Rule 
8.600-E. The Fund's investment in shares of non-exchange-traded open-
end management investment company securities will be utilized in order 
to obtain income on short-term cash balances while awaiting attractive 
investment opportunities, to provide liquidity in preparation for 
anticipated redemptions or for defensive purposes, which will allow the 
Fund to obtain the benefits of a more diversified portfolio available 
in the shares of non-exchange-traded open-end management investment 
company securities than might otherwise be available. Moreover, such 
investments, which may include mutual funds that invest, for example, 
principally in fixed income securities,

[[Page 35917]]

would be utilized to help the Fund meet its investment objective and to 
equitize cash in the short term. The Fund will invest in such 
securities only to the extent that those investments would be 
consistent with the requirements of Section 12(d)(1) of the 1940 Act 
and the rules thereunder. Because such securities must satisfy 
applicable 1940 Act diversification requirements, and have a net asset 
value based on the value of securities and financial assets the 
investment company holds, it is both unnecessary and inappropriate to 
apply to such investment company securities the criteria in Commentary 
.01(a)(1).
    The Exchange notes that it would be difficult or impossible to 
apply to mutual fund shares certain of the generic quantitative 
criteria (e.g., market capitalization, trading volume, or portfolio 
criteria) in Commentary .01 (A) through (D) applicable to U.S. 
Component Stocks. For example, the requirements for U.S. Component 
Stocks in Commentary .01(a)(1)(B) that there be minimum monthly trading 
volume of 250,000 shares, or minimum notional volume traded per month 
of $25,000,000, averaged over the last six months are tailored to 
exchange-traded securities (i.e., U.S. Component Stocks) and not to 
mutual fund shares, which do not trade in the secondary market and for 
which no such volume information is reported. In addition, Commentary 
.01(a)(1)(A) relating to minimum market value of portfolio component 
stocks, Commentary .01(a)(1)(C) relating to weighting of portfolio 
component stocks, and Commentary .01(a)(1)(D) relating to minimum 
number of portfolio components are not appropriately applied to open-
end management investment company securities; open-end investment 
companies hold multiple individual securities as disclosed publicly in 
accordance with the 1940 Act, and application of Commentary 
.01(a)(1)(A) through (D) would not serve the purposes served with 
respect to U.S. Component Stocks, namely, to establish minimum 
liquidity and diversification criteria for U.S. Component Stocks held 
by series of Managed Fund Shares.
    The Exchange accordingly believes that it is appropriate and in the 
public interest to approve listing and trading of Shares of the Fund on 
the Exchange notwithstanding that the Fund would not meet the 
requirements of Commentary .01(a)(1)(A) through (D) and (b)(4) to Rule 
8.600-E. The Exchange notes that, other than Commentary .01(a)(1) and 
(b)(4) to Rule 8.600-E, the Fund's portfolio will meet all other 
requirements of Rule 8.600-E.
    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 
an additional type of actively-managed exchange-traded product that 
principally holds fixed income securities and derivatives and that will 
enhance competition among market participants, to the benefit of 
investors and the marketplace. As noted above, the Exchange has in 
place surveillance procedures relating to trading in the Shares of the 
Fund and may obtain information via ISG from other exchanges that are 
members of ISG or with which the Exchange has entered into a 
comprehensive surveillance sharing agreement. In addition, as noted 
above, investors have ready access to information regarding the Fund's 
holdings, the PIV, the Disclosed Portfolio for the Fund, and quotation 
and last sale information for the Shares of the Fund.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purpose of the Act. The Exchange notes that the 
proposed rule change will facilitate the listing and trading of an 
additional type of actively-managed exchange-traded product that 
principally holds fixed income securities and derivatives and that will 
enhance competition among market participants, to the benefit of 
investors and the marketplace.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 45 days of the date of publication of this notice in the 
Federal Register or up to 90 days (i) as the Commission may designate 
if it finds such longer period to be appropriate and publishes its 
reasons for so finding or (ii) as to which the self-regulatory 
organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSEArca-2019-51 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-NYSEArca-2019-51. 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-NYSEArca-2019-51 and

[[Page 35918]]

should be submitted on or before August 15, 2019.
---------------------------------------------------------------------------

    \29\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\29\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-15774 Filed 7-24-19; 8:45 am]
BILLING CODE 8011-01-P