[Federal Register Volume 85, Number 62 (Tuesday, March 31, 2020)]
[Notices]
[Pages 17908-17910]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-06613]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88468; File No. SR-CboeBZX-2020-028]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Expand 
the Trading Hours Applicable to Managed Portfolio Shares To Include all 
Trading Sessions

March 25, 2020.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on March 23, 2020, Cboe BZX Exchange, Inc. (``Exchange'' or ``BZX'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') proposes to 
expand the trading hours applicable to Managed Portfolio Shares to 
include all trading sessions instead of just Regular Trading Hours. The 
text of the proposed rule change is provided in Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, and at 
the Commission's Public Reference Room.

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

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

[[Page 17909]]

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

1. Purpose
    The Exchange received approval to add new Rule 14.11(k) for the 
purpose of permitting the listing and trading of Managed Portfolio 
Shares, which are securities issued by an actively managed open-end 
management investment company,\3\ on December 16, 2019.\4\ Rule 
14.11(k)(2)(B) currently provides that transactions in Managed 
Portfolio Shares will occur only during Regular Trading Hours. The 
Exchange is proposing to change rule 14.11(k)(2)(B) in order to allow 
for trading in Managed Portfolio Shares during all trading sessions on 
the Exchange, which would include the Early Trading Session,\5\ the 
Pre-Opening Session,\6\ Regular Trading Hours, and the After Hours 
Trading Session.\7\ The Exchange notes that Managed Portfolio Shares 
are currently the only product-type that is not available for trading 
during all trading sessions on the Exchange. As such, this proposal 
would allow Managed Portfolio Shares to be traded on the Exchange in a 
manner identical to all other products listed and/or traded on the 
Exchange. The Exchange proposes to implement this change immediately.
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    \3\ As defined in Rule 14.11(k)(3)(A), the term ``Managed 
Portfolio Share'' means a security that (a) represents an interest 
in an investment company registered under the Investment Company Act 
of 1940 (``Investment Company'') organized as an open-end management 
investment company, that invests in a portfolio of securities 
selected by the Investment Company's investment adviser consistent 
with the Investment Company's investment objectives and policies; 
(b) is issued in a Creation Unit (as defined in Rule 
14.11(k)(3)(F)), or multiples thereof, in return for a designated 
portfolio of instruments (and/or an amount of cash) with a value 
equal to the next determined net asset value and delivered to the 
Authorized Participant (as defined in the Investment Company's Form 
N-1A filed with the Commission) through a Confidential Account; (c) 
when aggregated into a Redemption Unit (as defined in Rule 
14.11(k)(3)(G)), or multiples thereof, may be redeemed for a 
designated portfolio of instruments (and/or an amount of cash) with 
a value equal to the next determined net asset value delivered to 
the Confidential Account (as defined in Rule 14.11(k)(3)(D)) for the 
benefit of the Authorized Participant; and (d) the portfolio 
holdings for which are disclosed within at least 60 days following 
the end of every fiscal quarter.
    \4\ See Securities Exchange Act Release No. 87759 (December 16, 
2019), 84 FR 70223 (December 20, 2019) (SR-CboeBZX-2019-047).
    \5\ As defined in Rule 1.5(ee), the term ``Early Trading 
Session'' shall mean the time between 7:00 a.m. and 8:00 a.m. 
Eastern Time.
    \6\ As defined in Rule 1.5(r), the term ``Pre-Opening Session'' 
shall mean the time between 8:00 a.m. and 9:30 a.m. Eastern Time.
    \7\ As defined in Rule 1.5(c), the term ``After Hours Trading 
Session'' shall mean the time between 4:00 p.m. and 8:00 p.m. 
Eastern Time
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\8\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \9\ requirements that the rules of an exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in regulating, clearing, 
settling, processing information with respect to, and facilitating 
transactions in securities, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and, 
in general, to protect investors and the public interest.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    In particular, the Exchange believes that allowing Managed 
Portfolio Shares to trade during all trading sessions on the Exchange 
will remove impediments to and perfect a national market system by 
reducing the complexity and potential investor confusion that could be 
associated with limiting the trading hours for one product type. The 
Exchange notes that other trading platforms will not necessarily be 
restricted in the hours during which they will offer trading series of 
Managed Portfolio Shares and believes that allowing them to trade 
during all trading sessions on the Exchange will eliminate confusion 
and complexity related to which platforms are offering trading in 
Managed Portfolio Shares at different times of the day. The proposed 
change would further reduce complexity by allowing the Exchange (and 
other venues) to accommodate the listing and trading series of Managed 
Portfolio Shares without requiring the Exchange to implement and 
maintain separate trading hour requirements for one product type.

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 purposes of the Act. The Exchange notes that the 
proposed rule change, rather, will facilitate the listing and trading 
of Managed Portfolio Shares in a manner that is consistent with other 
product types listed and traded on the Exchange as well as on other 
trading platforms, enhancing competition among market participants, 
product types, and platforms, to the benefit of investors and the 
marketplace.

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

    The Exchange neither solicited nor received comments on the 
proposed rule change.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6) thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally 
does not become operative for 30 days after the date of the filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\13\ the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Exchange states that 
waiver of the operative delay would allow trading of Managed Portfolio 
Shares on the Exchange during all trading sessions as soon as possible, 
making the treatment of Managed Portfolio Shares consistent with all 
other product types listed on the Exchange and reducing confusion and 
complexity associated with Managed Portfolio Shares. In addition, the 
Exchange states that the proposal raises no novel or unique issues in 
that it would allow Managed Portfolio Shares to trade in a manner 
identical to all other products listed and/or traded on the Exchange 
and consistent with the

[[Page 17910]]

exemptive relief granted by the Commission. The Exchange further notes 
that it does not currently list any series of Managed Portfolio Shares, 
so there is no immediate impact of implementing such functionality. For 
these reasons, the Commission believes that waiver of the 30-day 
operative delay is consistent with the protection of investors and the 
public interest. Accordingly, the Commission waives the 30-day 
operative delay and designates the proposed rule change operative upon 
filing.\14\
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    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-CboeBZX-2020-028 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CboeBZX-2020-028. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-CboeBZX-2020-028 and should be submitted 
on or before April 21, 2020.
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    \15\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-06613 Filed 3-30-20; 8:45 am]
BILLING CODE 8011-01-P