81_FR_59868 81 FR 59700 - Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing of a Proposed Rule Change to Rule 14.11(c)(4) To List and Trade Shares of the iShares iBonds Dec 2023 Term Muni Bond ETF and iShares iBonds Dec 2024 Term Muni Bond ETF of the iShares U.S. ETF Trust

81 FR 59700 - Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing of a Proposed Rule Change to Rule 14.11(c)(4) To List and Trade Shares of the iShares iBonds Dec 2023 Term Muni Bond ETF and iShares iBonds Dec 2024 Term Muni Bond ETF of the iShares U.S. ETF Trust

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 168 (August 30, 2016)

Page Range59700-59709
FR Document2016-20735

Federal Register, Volume 81 Issue 168 (Tuesday, August 30, 2016)
[Federal Register Volume 81, Number 168 (Tuesday, August 30, 2016)]
[Notices]
[Pages 59700-59709]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-20735]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78666; File No. SR-BatsBZX-2016-48]


Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of 
Filing of a Proposed Rule Change to Rule 14.11(c)(4) To List and Trade 
Shares of the iShares iBonds Dec 2023 Term Muni Bond ETF and iShares 
iBonds Dec 2024 Term Muni Bond ETF of the iShares U.S. ETF Trust

August 24, 2016.
    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 August 9, 2016, Bats 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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[[Page 59701]]

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

    The Exchange filed a proposal to list and trade under BZX Rule 
14.11(c)(4) shares of the iShares iBonds Dec 2023 Term Muni Bond ETF 
and iShares iBonds Dec 2024 Term Muni Bond ETF (each a ``Fund'' or, 
collectively, the ``Funds'') of the iShares U.S. ETF Trust (the 
``Trust''). The shares of the Funds are referred to herein as the 
``Shares.''
    The text of the proposed rule change is available at the Exchange's 
Web site at www.batstrading.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 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 parts of such 
statements.

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

1. Purpose
    The Exchange proposes to list and trade the Shares of the following 
series of the Trust under BZX Rule 14.11(c)(4),\3\ which governs the 
listing and trading of index fund shares based on fixed income 
securities indexes.\4\ The Shares will be offered by the Trust, which 
was established as a Delaware statutory trust on March 15, 2001. The 
Trust is registered with the Commission as an open-end investment 
company and has filed a registration statement on behalf of the Funds 
on Form N-1A (``Registration Statement'') with the Commission.\5\ All 
statements and representations made in this filing regarding (a) the 
description of the portfolio, (b) limitations on portfolio holdings or 
reference assets, or (c) the applicability of Exchange rules and 
surveillance procedures shall constitute continued listing requirements 
for listing the Shares on the Exchange.
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    \3\ The Commission approved BZX Rule 14.11(c) in Securities 
Exchange Act Release No. 65225 (August 30, 2011), 76 FR 55148 
(September 6, 2011) (SR-BATS-2011-018).
    \4\ The Commission previously has approved a proposed rule 
change relating to listing and trading of funds based on municipal 
bond indexes. See Securities Exchange Act Release Nos. 78329 (July 
14, 2016), 81 FR 47217 (July 20, 2016) (SR-BatsBZX-2016-01) (order 
approving proposed rule change relating to the listing and trading 
of VanEck Vectors AMT-Free 6-8 Year Municipal Index ETF, VanEck 
Vectors AMT-Free 8-12 Year Municipal Index ETF, and VanEck Vectors 
AMT-Free 12-17 Year Municipal Index ETF); 67985 (October 4, 2012), 
77 FR 61804 (October 11, 2012) (SR-NYSEArca-2012-92) (order 
approving proposed rule change relating to the listing and trading 
of iShares 2018 S&P AMT-Free Municipal Series and iShares 2019 S&P 
AMT-Free Municipal Series under NYSE Arca, Inc. (``NYSE Arca'') Rule 
5.2(j)(3), Commentary .02); 72523 (July 2, 2014), 79 FR 39016 (July 
9, 2014) (SR-NYSEArca-2014-37) (order approving proposed rule change 
relating to the listing and trading of iShares 2020 S&P AMT-Free 
Municipal Series under NYSE Arca Rule 5.2(j)(3), Commentary .02); 
and 75468 (July 16, 2015), 80 FR 43500 (July 22, 2015) (SR-NYSEArca-
2015-25) (order approving proposed rule change relating to the 
listing and trading of the iShares iBonds Dec 2021 AMT-Free Muni 
Bond ETF and iShares iBonds Dec 2022 AMT-Free Muni Bond ETF under 
NYSE Arca Rule 5.2(j)(3), Commentary .02). The Commission also has 
issued a notice of filing and immediate effectiveness of a proposed 
rule change relating to listing and trading on the Exchange of the 
iShares Taxable Municipal Bond Fund. See Securities Exchange Act 
Release No. 63176 (October 25, 2010), 75 FR 66815 (October 29, 2010) 
(SR-NYSEArca-2010-94). The Commission has approved two actively 
managed funds of the PIMCO ETF Trust that hold municipal bonds. See 
Securities Exchange Act Release No. 60981 (November 10, 2009), 74 FR 
59594 (November 18, 2009) (SR-NYSEArca-2009-79) (order approving 
listing and trading of PIMCO ShortTerm Municipal Bond Strategy Fund 
and PIMCO Intermediate Municipal Bond Strategy Fund, among others). 
The Commission also has approved listing and trading on the Exchange 
of the SPDR Nuveen S&P High Yield Municipal Bond Fund. See 
Securities Exchange Act Release No. 63881 (February 9, 2011), 76 FR 
9065 (February 16, 2011) (SR-NYSEArca-2010-120).
    \5\ See Registration Statement on Form N-1A for the Trust, dated 
October 29, 2015 (File Nos. 333-123257 and 811-10325). The 
descriptions of the Funds and the Shares contained herein are based, 
in part, on information in the Registration Statement. The 
Commission has issued an order granting certain exemptive relief to 
the Trust under the Investment Company Act of 1940 (15 U.S.C. 80a-1) 
(``1940 Act'') (the ``Exemptive Order''). See Investment Company Act 
Release No. 28021 (October 24, 2007) (File No. 812-13426).
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Description of the Shares and the Funds
    BlackRock Fund Advisors is the investment adviser (``BFA'' or 
``Adviser'') to the Funds.\6\ State Street Bank and Trust Company is 
the administrator, custodian, and transfer agent (``Administrator,'' 
``Custodian,'' and ``Transfer Agent,'' respectively) for the Trust. 
BlackRock Investments, LLC serves as the distributor (``Distributor'') 
for the Trust.
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    \6\ BFA is an indirect wholly owned subsidiary of BlackRock, 
Inc.
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iShares iBonds Dec 2023 Term Muni Bond ETF
    According to the Registration Statement, the Fund will seek to 
replicate as closely as possible, before fees and expenses, the price 
and yield performance of the S&P AMT-Free Municipal Series Dec 2023 
Index (the ``2023 Index''). As of July 18, 2016, there were 4,612 
issues in the 2023 Index. Unless otherwise noted, all statistics 
related to the 2023 Index presented hereafter were accurate as of July 
18, 2016.
    To be included in the 2023 Index, a bond must have a rating of at 
least BBB- by S&P, Baa3 by Moody's, or BBB- by Fitch (except in the 
case of a pre-refunded/escrowed to maturity bond). A bond must be rated 
by at least one of the three rating agencies in order to qualify for 
index inclusion. For the avoidance of doubt, the lowest rating is used 
in determining if a bond is investment grade. Potential constituents 
must have an outstanding par value of at least $2 million. The bonds 
will have a maturity range of January 1, 2023 to December 1, 2023. The 
following types of bonds are excluded from the 2023 Index: Bonds 
subject to the alternative minimum tax, bonds with early redemption 
dates (callable provisions), bonds with sinking fund provisions, 
commercial paper, conduit bonds where the obligor is a for-profit 
institution, derivative securities, non-rated bonds (except pre-
refunded/escrowed to maturity bonds), notes, taxable municipals, 
tobacco bonds, and variable rate debt (except for known step-up/down 
coupon schedule bonds). The 2023 Index is calculated using a market 
value weighting methodology. The composition of the 2023 Index is 
rebalanced monthly.
    The Fund generally invests at least 90% of its assets in the 
component securities of the Fund's benchmark index, except during the 
last months of the Fund's operations. From time to time when conditions 
warrant, however, the Fund may invest at least 80% of its assets in the 
component securities of the Fund's benchmark index. The 2023 Index 
measures the performance of the non-callable investment-grade, tax-
exempt U.S. municipal bonds with specific annual maturities 
(``Municipal Securities''). The Fund has adopted a non-fundamental 
investment policy to invest at least 80% of its net assets, plus the 
amount of any borrowings for investment purposes, in securities in the 
Fund's benchmark index. This policy may be changed without shareholder 
approval upon 60 days' prior written notice to shareholders.\7\ 
Municipal

[[Page 59702]]

Securities are fixed and variable rate securities issued in the U.S. by 
U.S. states and territories, municipalities and other political 
subdivisions, agencies, authorities, and instrumentalities of states 
and multi-state agencies and authorities and will include only the 
following instruments: General obligation bonds,\8\ limited obligation 
bonds (or revenue bonds),\9\ municipal notes,\10\ municipal commercial 
paper,\11\ tender option bonds,\12\ variable rate demand obligations 
(``VRDOs''),\13\ municipal lease obligations,\14\ stripped 
securities,\15\ structured securities,\16\ and zero coupon 
securities.\17\
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    \7\ As noted herein, each Fund's policy to invest 80% of its 
total assets in securities that comprise the Fund's benchmark index 
(the ``80% Investment Policy'') is non-fundamental and may be 
changed without shareholder approval upon 60 days' prior written 
notice to shareholders. The Exchange notes that, notwithstanding the 
foregoing, all statements and representations made in this filing 
regarding (a) the description of the portfolios, (b) limitations on 
portfolio holdings or reference assets (including, for example, each 
Fund's 80% Investment Policy), or (c) the applicability of Exchange 
rules and surveillance procedures shall constitute continued listing 
requirements for listing the Shares on the Exchange. As noted below, 
the issuer has represented to the Exchange that it will advise the 
Exchange of any failure by a Fund to comply with the continued 
listing requirements (or any changes made with respect to a Fund's 
80% Investment Policy), and, pursuant to its obligations under 
Section 19(g)(1) of the Exchange Act, the Exchange will surveil 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 Exchange Rule 
14.12.
    \8\ General obligation bonds are obligations involving the 
credit of an issuer possessing taxing power and are payable from 
such issuer's general revenues and not from any particular source.
    \9\ Limited obligation bonds are payable only from the revenues 
derived from a particular facility or class of facilities or, in 
some cases, from the proceeds of a special excise or other specific 
revenue source, and also include industrial development bonds issued 
pursuant to former U.S. federal tax law. Industrial development 
bonds generally are also revenue bonds and thus are not payable from 
the issuer's general revenues. The credit and quality of industrial 
development bonds are usually related to the credit of the corporate 
user of the facilities. Payment of interest on and repayment of 
principal of such bonds is the responsibility of the corporate user 
(and/or any guarantor).
    \10\ Municipal notes are shorter-term municipal debt obligations 
that may provide interim financing in anticipation of tax 
collection, receipt of grants, bond sales, or revenue receipts.
    \11\ Municipal commercial paper is generally unsecured debt that 
is issued to meet short-term financing needs.
    \12\ Tender option bonds are synthetic floating-rate or 
variable-rate securities issued when long-term bonds are purchased 
in the primary or secondary market and then deposited into a trust. 
Custodial receipts are then issued to investors, such as the Fund, 
evidencing ownership interests in the trust.
    \13\ VRDOs are tax-exempt obligations that contain a floating or 
variable interest rate adjustment formula and a right of demand on 
the part of the holder thereof to receive payment of the unpaid 
principal balance plus accrued interest upon a short notice period 
not to exceed seven days.
    \14\ Municipal lease obligations include certificates of 
participation issued by government authorities or entities to 
finance the acquisition or construction of equipment, land, and/or 
facilities.
    \15\ Stripped securities are created when an issuer separates 
the interest and principal components of an instrument and sells 
them as separate securities. In general, one security is entitled to 
receive the interest payments on the underlying assets and the other 
to receive the principal payments.
    \16\ Structured securities are privately negotiated debt 
obligations where the principal and/or interest is determined by 
reference to the performance of an underlying investment, index, or 
reference obligation, and may be issued by governmental agencies. 
While structured securities are part of the principal holdings of 
the Fund, the Issuer represents that such securities, when combined 
with those instruments held as part of the other portfolio holdings 
described below, will not exceed 20% of the Fund's net assets.
    \17\ Zero coupon securities are securities that are sold at a 
discount to par value and do not pay interest during the life of the 
security. The discount approximates the total amount of interest the 
security will accrue and compound over the period until maturity at 
a rate of interest reflecting the market rate of the security at the 
time of issuance. Upon maturity, the holder of a zero coupon 
security is entitled to receive the par value of the security.
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    In the last months of operation, as the bonds held by the Fund 
mature, the proceeds will not be reinvested in bonds but instead will 
be held in cash and cash equivalents, including, without limitation, 
shares of money market funds advised by BFA or its affiliates 
(``BlackRock Cash Funds''), AMT-free tax-exempt municipal notes, 
variable rate demand notes and obligations, tender option bonds and 
municipal commercial paper. These cash equivalents may not be included 
in the Underlying Index. By December 2, 2023, the Underlying Index is 
expected to consist entirely of cash earned in this manner. Around the 
same time, the Fund will wind up and terminate, and its net assets will 
be distributed to then-current shareholders.
    The Fund intends to qualify for and to elect treatment as a 
regulated investment company (a ``RIC'') under Subchapter M of the 
Internal Revenue Code of 1986, as amended. The Fund will invest its 
assets, and otherwise conduct its operations, in a manner that is 
intended to satisfy the qualifying income, diversification and 
distribution requirements necessary to establish and maintain RIC 
qualification under Subchapter M.
Other Portfolio Holdings
    The Fund may also, to a limited extent (under normal circumstances, 
less than 20% of the Fund's net assets), engage in transactions in 
futures contracts, options, or swaps in order to facilitate trading or 
to reduce transaction costs.\18\ The Fund's investments will be 
consistent with its investment objective and will not be used to 
achieve leveraged returns (i.e. two times or three times the Fund's 
benchmark, as described in the Registration Statement).
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    \18\ Derivatives might be included in the Fund's investments to 
serve the investment objectives of the Fund. Such derivatives 
include only the following: Interest rate futures, interest rate 
options, interest rate swaps, and swaps on Municipal Securities 
indexes. The derivatives will be centrally cleared and they will be 
collateralized. Derivatives are not a principal investment strategy 
of the Fund.
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    The Fund may also enter into repurchase and reverse repurchase 
agreements for Municipal Securities (collectively, ``Repurchase 
Agreements''). Repurchase Agreements involve the sale of securities 
with an agreement to repurchase the securities at an agreed-upon price, 
date and interest payment and have the characteristics of borrowing as 
part of the Fund's principal holdings.\19\
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    \19\ The Fund's exposure to reverse repurchase agreements will 
be covered by liquid assets having a value equal to or greater than 
such commitments. The use of reverse repurchase agreements is a form 
of leverage because the proceeds derived from reverse repurchase 
agreements may be invested in additional securities. As further 
stated below, the Fund's investments will be consistent with its 
investment objective and will not be used to achieve leveraged 
returns.
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    The Fund may also invest in short-term instruments (``Short-Term 
Instruments''),\20\ which include exchange traded and non-exchange 
traded investment companies (including investment companies advised by 
BFA

[[Page 59703]]

or its affiliates) that invest in money market instruments.
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    \20\ The Fund may invest in Short-Term Instruments, including 
money market instruments, on an ongoing basis to provide liquidity 
or for other reasons. Money market instruments are generally short-
term investments that include only the following: (i) Shares of 
money market funds (including those advised by BFA or otherwise 
affiliated with BFA); (ii) obligations issued or guaranteed by the 
U.S. government, its agencies or instrumentalities (including 
government-sponsored enterprises); (iii) negotiable certificates of 
deposit (``CDs''), bankers' acceptances, fixed-time deposits and 
other obligations of U.S. and non-U.S. banks (including non-U.S. 
branches) and similar institutions; (iv) commercial paper, including 
asset-backed commercial paper; (v) non-convertible corporate debt 
securities (e.g., bonds and debentures) with remaining maturities at 
the date of purchase of not more than 397 days and that satisfy the 
rating requirements set forth in Rule 2a-7 under the 1940 Act; and 
(vi) short-term U.S. dollar-denominated obligations of non-U.S. 
banks (including U.S. branches) that, in the opinion of BFA, are of 
comparable quality to obligations of U.S. banks which may be 
purchased by the Fund. All money market securities acquired by the 
Fund will be rated investment grade. The Fund does not intend to 
invest in any unrated money market securities. However, it may do 
so, to a limited extent, such as where a rated money market security 
becomes unrated, if such money market security is determined by the 
Adviser to be of comparable quality. BFA may determine that unrated 
securities are of comparable quality based on such credit quality 
factors that it deems appropriate, which may include, among other 
things, performing an analysis similar, to the extent possible, to 
that performed by a nationally recognized statistical rating 
organization rating similar securities and issuers.
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Index Overview
    The Exchange is submitting this proposed rule change because the 
2023 Index for the Fund does not meet all of the ``generic'' listing 
requirements of Rule 14.11(c)(4) applicable to the listing of index 
fund shares based on fixed income securities indexes. The 2023 Index 
meets all such requirements except for those set forth in Rule 
14.11(c)(4)(B)(i)(b).\21\ Specifically, as of July 18, 2016, 5.83% of 
the weight of the 2023 Index components have a minimum original 
principal amount outstanding of $100 million or more.
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    \21\ Rule 14.11(c)(4)(B)(i)(b) provides that components that in 
the aggregate account for at least 75% of the weight of the index or 
portfolio each shall have a minimum original principal amount 
outstanding of $100 million or more.
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    As of July 18, 2016, 73.56% of the weight of the 2023 Index 
components was comprised of individual maturities that were part of an 
entire municipal bond offering with a minimum original principal amount 
outstanding $100 million or more for all maturities of the offering. In 
addition, the total face amount outstanding of issues in the 2023 Index 
was approximately $38.5 billion, the market value was $46.4 billion, 
and the average dollar amount outstanding of issues in the 2023 Index 
was approximately $8.3 million. Further, the most heavily weighted 
component represented 1.61% of the weight of the 2023 Index and the 
five most heavily weighted components represented 3.66% of the weight 
of the 2023 Index.\22\ Therefore, the Exchange believes that, 
notwithstanding that the 2023 Index does not satisfy the criterion in 
Rule 14.11(c)(4)(B)(i)(b), the 2023 Index is sufficiently broad-based 
to deter potential manipulation, given that it is comprised of 
approximately 4,612 issues. In addition, the 2023 Index securities are 
sufficiently liquid to deter potential manipulation in that a 
substantial portion (73.56%) of the 2023 Index weight is comprised of 
maturities that are part of a minimum original principal amount 
outstanding of $100 million or more, and in view of the substantial 
total dollar amount outstanding and the average dollar amount 
outstanding of the 2023 Index issues, as referenced above.\23\ 48% of 
the 2023 Index weight consisted of issues with a rating of AA/Aa2 or 
higher.
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    \22\ Rule 14.11(c)(4)(B)(i)(d) provides that no component fixed-
income security (excluding Treasury Securities, as defined therein) 
shall represent more than 30% of the weight of the index or 
portfolio, and the five most heavily weighted component fixed-income 
securities in the index or portfolio shall not in the aggregate 
account for more than 65% of the weight of the index or portfolio.
    \23\ The Adviser represents that when bonds are close 
substitutes for one another, pricing vendors can use executed trade 
information from all similar bonds as pricing inputs for an 
individual security. This can make individual securities more 
liquid.
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    The 2023 Index value, calculated and disseminated at least once 
daily, as well as the components of the 2023 Index and their percentage 
weighting, will be available from major market data vendors. In 
addition, the portfolio of securities held by the Fund will be 
disclosed on the Fund's Web site at www.iShares.com.
iShares iBonds Dec 2024 Term Muni Bond ETF
    According to the Registration Statement, the Fund will seek to 
replicate as closely as possible, before fees and expenses, the price 
and yield performance of the S&P AMT-Free Municipal Series Dec 2024 
Index (the ``2024 Index''). As of July 18, 2016, there were 3,624 
issues in the 2024 Index. Unless otherwise noted, all statistics 
related to the 2024 Index presented hereafter were accurate as of July 
18, 2016.
    To be included in the 2024 Index, a bond must have a rating of at 
least BBB- by S&P, Baa3 by Moody's, or BBB- by Fitch (except in the 
case of a pre-refunded/escrowed to maturity bond). A bond must be rated 
by at least one of the three rating agencies in order to qualify for 
index inclusion. For the avoidance of doubt, the lowest rating is used 
in determining if a bond is investment grade. Potential constituents 
must have an outstanding par value of at least $2 million. The bonds 
will have a maturity range of January 1, 2024 to December 1, 2024. The 
following types of bonds are excluded from the 2024 Index: Bonds 
subject to the alternative minimum tax, bonds with early redemption 
dates (callable provisions), bonds with sinking fund provisions, 
commercial paper, conduit bonds where the obligor is a for-profit 
institution, derivative securities, non-rated bonds (except pre-
refunded/escrowed to maturity bonds), notes, taxable municipals, 
tobacco bonds, and variable rate debt (except for known step-up/down 
coupon schedule bonds). The 2024 Index is calculated using a market 
value weighting methodology. The composition of the 2024 Index is 
rebalanced monthly.
    The Fund generally invests at least 90% of its assets in the 
component securities of the Fund's benchmark index, except during the 
last months of the Fund's operations. From time to time when conditions 
warrant, however, the Fund may invest at least 80% of its assets in the 
component securities of the Fund's benchmark index. The 2024 Index 
measures the performance of the non-callable investment-grade, tax-
exempt U.S. municipal bonds with specific annual maturities 
(``Municipal Securities''). The Fund has adopted a non-fundamental 
investment policy to invest at least 80% of its net assets, plus the 
amount of any borrowings for investment purposes, in securities in the 
Fund's benchmark index. This policy may be changed without shareholder 
approval upon 60 days' prior written notice to shareholders.\24\ 
Municipal Securities are fixed and variable rate securities issued in 
the U.S. by U.S. states and territories, municipalities and other 
political subdivisions, agencies, authorities, and instrumentalities of 
states and multi-state agencies and authorities and will include only 
the following instruments: General obligation bonds,\25\ limited 
obligation bonds (or revenue bonds),\26\ municipal

[[Page 59704]]

notes,\27\ municipal commercial paper,\28\ tender option bonds,\29\ 
variable rate demand obligations (``VRDOs''),\30\ municipal lease 
obligations,\31\ stripped securities,\32\ structured securities,\33\ 
and zero coupon securities.\34\
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    \24\ As noted herein, each Fund's policy to invest 80% of its 
total assets in securities that comprise the Fund's benchmark index 
(the ``80% Investment Policy'') is non-fundamental and may be 
changed without shareholder approval upon 60 days' prior written 
notice to shareholders. The Exchange notes that, notwithstanding the 
foregoing, all statements and representations made in this filing 
regarding (a) the description of the portfolios, (b) limitations on 
portfolio holdings or reference assets (including, for example, each 
Fund's 80% Investment Policy), or (c) the applicability of Exchange 
rules and surveillance procedures shall constitute continued listing 
requirements for listing the Shares on the Exchange. As noted below, 
the issuer has represented to the Exchange that it will advise the 
Exchange of any failure by a Fund to comply with the continued 
listing requirements (or any changes made with respect to a Fund's 
80% Investment Policy), and, pursuant to its obligations under 
Section 19(g)(1) of the Exchange Act, the Exchange will surveil 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 Exchange Rule 
14.12.
    \25\ General obligation bonds are obligations involving the 
credit of an issuer possessing taxing power and are payable from 
such issuer's general revenues and not from any particular source.
    \26\ Limited obligation bonds are payable only from the revenues 
derived from a particular facility or class of facilities or, in 
some cases, from the proceeds of a special excise or other specific 
revenue source, and also include industrial development bonds issued 
pursuant to former U.S. federal tax law. Industrial development 
bonds generally are also revenue bonds and thus are not payable from 
the issuer's general revenues. The credit and quality of industrial 
development bonds are usually related to the credit of the corporate 
user of the facilities. Payment of interest on and repayment of 
principal of such bonds is the responsibility of the corporate user 
(and/or any guarantor).
    \27\ Municipal notes are shorter-term municipal debt obligations 
that may provide interim financing in anticipation of tax 
collection, receipt of grants, bond sales, or revenue receipts.
    \28\ Municipal commercial paper is generally unsecured debt that 
is issued to meet short-term financing needs.
    \29\ Tender option bonds are synthetic floating-rate or 
variable-rate securities issued when long-term bonds are purchased 
in the primary or secondary market and then deposited into a trust. 
Custodial receipts are then issued to investors, such as the Fund, 
evidencing ownership interests in the trust.
    \30\ VRDOs are tax-exempt obligations that contain a floating or 
variable interest rate adjustment formula and a right of demand on 
the part of the holder thereof to receive payment of the unpaid 
principal balance plus accrued interest upon a short notice period 
not to exceed seven days.
    \31\ Municipal lease obligations include certificates of 
participation issued by government authorities or entities to 
finance the acquisition or construction of equipment, land, and/or 
facilities.
    \32\ Stripped securities are created when an issuer separates 
the interest and principal components of an instrument and sells 
them as separate securities. In general, one security is entitled to 
receive the interest payments on the underlying assets and the other 
to receive the principal payments.
    \33\ Structured securities are privately negotiated debt 
obligations where the principal and/or interest is determined by 
reference to the performance of an underlying investment, index, or 
reference obligation, and may be issued by governmental agencies. 
While structured securities are part of the principal holdings of 
the Fund, the Issuer represents that such securities, when combined 
with those instruments held as part of the other portfolio holdings 
described below, will not exceed 20% of the Fund's net assets.
    \34\ Zero coupon securities are securities that are sold at a 
discount to par value and do not pay interest during the life of the 
security. The discount approximates the total amount of interest the 
security will accrue and compound over the period until maturity at 
a rate of interest reflecting the market rate of the security at the 
time of issuance. Upon maturity, the holder of a zero coupon 
security is entitled to receive the par value of the security.
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    In the last months of operation, as the bonds held by the Fund 
mature, the proceeds will not be reinvested in bonds but instead will 
be held in cash and cash equivalents, including, without limitation, 
shares of BlackRock Cash Funds, AMT-free tax-exempt municipal notes, 
variable rate demand notes and obligations, tender option bonds and 
municipal commercial paper. These cash equivalents may not be included 
in the Underlying Index. By December 2, 2023, the Underlying Index is 
expected to consist entirely of cash earned in this manner. Around the 
same time, the Fund will wind up and terminate, and its net assets will 
be distributed to then-current shareholders.
    The Fund intends to qualify for and to elect treatment as a RIC 
under Subchapter M of the Internal Revenue Code of 1986, as amended. 
The Fund will invest its assets, and otherwise conduct its operations, 
in a manner that is intended to satisfy the qualifying income, 
diversification and distribution requirements necessary to establish 
and maintain RIC qualification under Subchapter M.
Other Portfolio Holdings
    The Fund may also, to a limited extent (under normal circumstances, 
less than 20% of the Fund's net assets), engage in transactions in 
futures contracts, options, or swaps in order to facilitate trading or 
to reduce transaction costs.\35\ The Fund's investments will be 
consistent with its investment objective and will not be used to 
achieve leveraged returns (i.e. two times or three times the Fund's 
benchmark, as described in the Registration Statement).
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    \35\ Derivatives might be included in the Fund's investments to 
serve the investment objectives of the Fund. Such derivatives 
include only the following: Interest rate futures, interest rate 
options, interest rate swaps, and swaps on Municipal Securities 
indexes. The derivatives will be centrally cleared and they will be 
collateralized. Derivatives are not a principal investment strategy 
of the Fund.
---------------------------------------------------------------------------

    The Fund may also enter into repurchase and reverse repurchase 
agreements for Municipal Securities (collectively, ``Repurchase 
Agreements''). Repurchase Agreements involve the sale of securities 
with an agreement to repurchase the securities at an agreed-upon price, 
date and interest payment and have the characteristics of borrowing as 
part of the Fund's principal holdings.\36\
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    \36\ The Fund's exposure to reverse repurchase agreements will 
be covered by liquid assets having a value equal to or greater than 
such commitments. The use of reverse repurchase agreements is a form 
of leverage because the proceeds derived from reverse repurchase 
agreements may be invested in additional securities. As further 
stated below, the Fund's investments will be consistent with its 
investment objective and will not be used to achieve leveraged 
returns.
---------------------------------------------------------------------------

    The Fund may also invest in short-term instruments (``Short-Term 
Instruments''),\37\ which include exchange traded and non-exchange 
traded investment companies (including investment companies advised by 
BFA or its affiliates) that invest in money market instruments.
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    \37\ The Fund may invest in Short-Term Instruments, including 
money market instruments, on an ongoing basis to provide liquidity 
or for other reasons. Money market instruments are generally short-
term investments that include only the following: (i) Shares of 
money market funds (including those advised by BFA or otherwise 
affiliated with BFA); (ii) obligations issued or guaranteed by the 
U.S. government, its agencies or instrumentalities (including 
government-sponsored enterprises); (iii) negotiable certificates of 
deposit (``CDs''), bankers' acceptances, fixed-time deposits and 
other obligations of U.S. and non-U.S. banks (including non-U.S. 
branches) and similar institutions; (iv) commercial paper, including 
asset-backed commercial paper; (v) non-convertible corporate debt 
securities (e.g., bonds and debentures) with remaining maturities at 
the date of purchase of not more than 397 days and that satisfy the 
rating requirements set forth in Rule 2a-7 under the 1940 Act; and 
(vi) short-term U.S. dollar-denominated obligations of non-U.S. 
banks (including U.S. branches) that, in the opinion of BFA, are of 
comparable quality to obligations of U.S. banks which may be 
purchased by the Fund. All money market securities acquired by the 
Fund will be rated investment grade. The Fund does not intend to 
invest in any unrated money market securities. However, it may do 
so, to a limited extent, such as where a rated money market security 
becomes unrated, if such money market security is determined by the 
Adviser to be of comparable quality. BFA may determine that unrated 
securities are of comparable quality based on such credit quality 
factors that it deems appropriate, which may include, among other 
things, performing an analysis similar, to the extent possible, to 
that performed by a nationally recognized statistical rating 
organization rating similar securities and issuers.
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Index Overview
    The Exchange is submitting this proposed rule change because the 
2024 Index for the Fund does not meet all of the ``generic'' listing 
requirements of Rule 14.11(c)(4) applicable to the listing of index 
fund shares based on fixed income securities indexes. The 2024 Index 
meets all such requirements except for those set forth in Rule 
14.11(c)(4)(B)(i)(b).\38\ Specifically, as of July 18, 2016, 5.72% of 
the weight of the 2024 Index components have a minimum original 
principal amount outstanding of $100 million or more.
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    \38\ Rule 14.11(c)(4)(B)(i)(b) provides that components that in 
the aggregate account for at least 75% of the weight of the index or 
portfolio each shall have a minimum original principal amount 
outstanding of $100 million or more.
---------------------------------------------------------------------------

    As of July 18, 2016, 72.27% of the weight of the 2024 Index 
components was comprised of individual maturities that were part of an 
entire municipal bond offering with a minimum original principal amount 
outstanding $100 million or more for all maturities of the offering. In 
addition, the total face amount outstanding of issues in the 2024 Index 
was approximately $29.9 billion, the market value is $36.4 billion, and 
the average dollar amount outstanding of issues in the 2024 Index was 
approximately $8.3 million. Further, the most heavily weighted 
component represented 0.72% of the weight of the 2024 Index and the 
five most heavily weighted components represented 2.74% of the weight 
of the 2024 Index.\39\ Therefore, the Exchange believes that, 
notwithstanding that the

[[Page 59705]]

2024 Index does not satisfy the criterion in Rule 14.11(c)(4)(B)(i)(b), 
the 2024 Index is sufficiently broad-based to deter potential 
manipulation, given that it is comprised of approximately 3,624 issues. 
In addition, the 2024 Index securities are sufficiently liquid to deter 
potential manipulation in that a substantial portion (72.27%) of the 
2024 Index weight is comprised of maturities that are part of a minimum 
original principal amount outstanding of $100 million or more, and in 
view of the substantial total dollar amount outstanding and the average 
dollar amount outstanding of the 2024 Index issues, as referenced 
above.\40\ 47.71% of the 2024 Index weight consisted of issues with a 
rating of AA/Aa2 or higher.
---------------------------------------------------------------------------

    \39\ Rule 14.11(c)(4)(B)(i)(d) provides that no component fixed-
income security (excluding Treasury Securities, as defined therein) 
shall represent more than 30% of the weight of the index or 
portfolio, and the five most heavily weighted component fixed-income 
securities in the index or portfolio shall not in the aggregate 
account for more than 65% of the weight of the index or portfolio.
    \40\ The Adviser represents that when bonds are close 
substitutes for one another, pricing vendors can use executed trade 
information from all similar bonds as pricing inputs for an 
individual security. This can make individual securities more 
liquid.
---------------------------------------------------------------------------

    The 2024 Index value, calculated and disseminated at least once 
daily, as well as the components of the 2024 Index and their percentage 
weighting, will be available from major market data vendors. In 
addition, the portfolio of securities held by the Fund will be 
disclosed on the Fund's Web site at www.iShares.com.
Correlation Among Municipal Bond Instruments With Common 
Characteristics
    With respect to the Funds, the Adviser represents that the nature 
of the municipal bond market and municipal bond instruments makes it 
feasible to categorize individual issues represented by CUSIPs (i.e., 
the specific identifying number for a security) into categories 
according to common characteristics, specifically, rating, geographical 
region, purpose, and maturity. Bonds that share similar characteristics 
tend to trade similarly to one another; therefore, within these 
categories, the issues may be considered fungible from a portfolio 
management perspective, allowing one CUSIP to be represented by another 
that shares similar characteristics for purposes of developing an 
investment strategy. Therefore, while 5.83% of the weight of the 2023 
Index and 5.72% of the 2024 Index components have a minimum original 
principal amount outstanding of $100 million or more, the nature of the 
municipal bond market makes the issues relatively fungible for 
investment purposes when aggregated into categories such as ratings, 
geographical region, purpose and maturity. In addition, within a single 
municipal bond issuer, there are often multiple contemporaneous or 
sequential issuances that have the same rating, structure and maturity, 
but have different CUSIPs; these separate issues by the same issuer are 
also likely to trade similarly to one another.
    The Adviser represents that the Funds are managed utilizing the 
principle that municipal bond issues are generally fungible in nature 
when sharing common characteristics, and specifically make use of the 
four categories referred to above. In addition, this principle is used 
in, and consistent with, the portfolio construction process in order to 
facilitate the creation and redemption process, and to enhance 
liquidity (among other benefits, such as reducing transaction costs), 
while still allowing each Fund to closely track its reference index.
Net Asset Value
    According to the Registration Statement, the net asset value 
(``NAV'') of each Fund will be determined each business day as of the 
close of trading (ordinarily 4:00 p.m. Eastern time) on the Exchange. 
Any assets or liabilities denominated in currencies other than the U.S. 
dollar are converted into U.S. dollars at the current market rates on 
the date of valuation as quoted by one or more sources.
    The values of each Fund's portfolio securities are based on the 
securities' closing prices, when available. In the absence of a last 
reported sales price, or if no sales were reported, and for other 
assets for which market quotes are not readily available, values may be 
based on quotes obtained from a quotation reporting system, established 
market makers or by an outside independent pricing service. Municipal 
Securities, repurchase agreements, reverse repurchase agreements, and 
money market instruments with maturities of more than 60 days are 
normally valued on the basis of quotes from brokers or dealers, 
established market makers or an outside independent pricing service. 
Prices obtained by an outside independent pricing service may use 
information provided by market makers or estimates of market values 
obtained from yield data related to investments or securities with 
similar characteristics and may use a computerized grid matrix of 
securities and its evaluations in determining what it believes is the 
fair value of the portfolio securities. Short-term investments, 
including money market instruments having a maturity of 60 days or 
less, are valued at amortized cost. Futures contracts will be valued at 
the settlement price established each day by the board or exchange on 
which they are traded. Exchange-traded options will be valued at the 
closing price in the market where such contracts are principally 
traded. Swaps will be valued based on valuations provided by 
independent, third-party pricing agents. Securities of non-exchange-
traded investment companies will be valued at NAV. Exchange-traded 
investment companies will be valued at the last reported sale price on 
the primary exchange on which they are traded.
Creation and Redemption of Shares
    The NAV of the Funds will be determined each business day as of the 
close of trading, (normally 4:00 p.m. Eastern time) on the exchange. 
The Funds currently anticipate that a ``Creation Unit'' will consist of 
50,000 Shares, though this number may change from time to time, 
including prior to the listing of a Fund. The exact number of Shares 
that will comprise a Creation Unit will be disclosed in the 
Registration Statement of each Fund. The Trust will issue and sell 
Shares of the Funds only in Creation Units on a continuous basis 
through the Distributor, without an initial sales load (but subject to 
transaction fees), at their NAV per Share next determined after 
receipt, on any business day, of an order in proper form.
    The consideration for purchase of a Creation Unit of a Fund 
generally will consist of either (i) the in-kind deposit of a 
designated portfolio of fixed income securities (the ``Deposit 
Securities'') per each Creation Unit and the Cash Component (defined 
below), computed as described below, or (ii) as permitted or required 
by the Funds, of cash. The Cash Component together with the Deposit 
Securities, as applicable, are referred to as the ``Fund Deposit,'' 
which represents the minimum initial and subsequent investment amount 
for Shares. The Cash Component represents the difference between the 
NAV of a Creation Unit and the market value of Deposit Securities and 
may include a Dividend Equivalent Payment. The ``Dividend Equivalent 
Payment'' enables the Funds to make a complete distribution of 
dividends on the next dividend payment date, and is an amount equal, on 
a per Creation Unit basis, to the dividends on all the securities held 
by each of the Funds (``Fund Securities'') with ex-dividend dates 
within the accumulation period for such distribution (the 
``Accumulation Period''), net of expenses and liabilities for such 
period, as if all of the Fund Securities had been held by the Trust for 
the entire Accumulation Period. The Accumulation Period begins on the 
ex-

[[Page 59706]]

dividend date for each Fund and ends on the next ex-dividend date.
    The Administrator, through the National Securities Clearing 
Corporation (``NSCC''), makes available on each business day, 
immediately prior to the opening of business on the Exchange (currently 
9:30 a.m. Eastern time), the list of the names and the required number 
of shares of each Deposit Security to be included in the current Fund 
Deposit (based on information at the end of the previous business day) 
as well as the Cash Component for each Fund. Such Fund Deposit is 
applicable, subject to any adjustments as described below, in order to 
effect creations of Creation Units of each Fund until such time as the 
next-announced Fund Deposit composition is made available.
    Shares may be redeemed only in Creation Units at their NAV next 
determined after receipt of a redemption request in proper form by the 
Distributor,\41\ only on a business day and only through a 
Participating Party or DTC Participant who has executed a Participation 
Agreement.
---------------------------------------------------------------------------

    \41\ To be eligible to place orders with the Distributor to 
create Creation Units of the Funds, an entity or person either must 
be: (1) a ``Participating Party,'' i.e., a broker-dealer or other 
participant in the Clearing Process through the Continuous Net 
Settlement System of the NSCC; or (2) a DTC Participant (as defined 
below); and, in either case, must have executed an agreement with 
the Distributor and the Transfer Agent (as it may be amended from 
time to time in accordance with its terms) (``Participant 
Agreement''). DTC Participants are participants of the Depository 
Trust Company (``DTC'') that acts as securities depositary for Index 
Fund Shares. A Participating Party and DTC Participant are 
collectively referred to as an ``Authorized Participant.''
---------------------------------------------------------------------------

    The Administrator, through NSCC, makes available immediately prior 
to the opening of business on the Exchange (currently 9:30 a.m. Eastern 
time) on each day that the Exchange is open for business, the Fund 
Securities that will be applicable (subject to possible amendment or 
correction) to redemption requests received in proper form (as defined 
below) on that day.
    Unless cash redemptions are permitted or required for the Fund, the 
redemption proceeds for a Creation Unit generally consist of Fund 
Securities as announced by the Administrator on the business day of the 
request for redemption, plus cash in an amount equal to the difference 
between the NAV of the Shares being redeemed, as next determined after 
a receipt of a request in proper form, and the value of the Fund 
Securities, less the redemption transaction fee and variable fees 
described below. Should the Fund Securities have a value greater than 
the NAV of the Shares being redeemed, a compensating cash payment to 
the Trust equal to the differential plus the applicable redemption 
transaction fee will be required to be arranged for by or on behalf of 
the redeeming shareholder. Each Fund reserves the right to honor a 
redemption request by delivering a basket of securities or cash that 
differs from the Fund Securities.\42\
---------------------------------------------------------------------------

    \42\ The Adviser represents that, to the extent that the Trust 
permits or requires a ``cash in lieu'' amount, such transactions 
will be effected in the same or equitable manner for all Authorized 
Participants.
---------------------------------------------------------------------------

    Orders to redeem Creation Units of the Funds must be delivered 
through a DTC Participant that has executed the Participant Agreement 
with the Distributor and with the Trust. A DTC Participant who wishes 
to place an order for redemption of Creation Units of a Fund to be 
effected need not be a Participating Party, but such orders must state 
that redemption of Creation Units of the Fund will instead be effected 
through transfer of Creation Units of the Fund directly through DTC. An 
order to redeem Creation Units of a Fund is deemed received by the 
Administrator on the transmittal date if (i) such order is received by 
the Administrator not later than 4:00 p.m. Eastern time on such 
transmittal date; (ii) such order is preceded or accompanied by the 
requisite number of Shares of Creation Units specified in such order, 
which delivery must be made through DTC to the Administrator no later 
than 11:00 a.m. Eastern time, on such transmittal date (the ``DTC Cut-
Off-Time''); and (iii) all other procedures set forth in the 
Participant Agreement are properly followed.
    After the Administrator has deemed an order for redemption 
received, the Administrator will initiate procedures to transfer the 
requisite Fund Securities (or contracts to purchase such Fund 
Securities) which are expected to be delivered within three business 
days and the cash redemption payment to the redeeming beneficial owner 
by the third business day following the transmittal date on which such 
redemption order is deemed received by the Administrator.
Availability of Information
    Each Fund's Web site, which will be publicly available prior to the 
public offering of Shares, will include a form of the prospectus for 
the Fund that may be downloaded. The Web site will include additional 
quantitative information updated on a daily basis, including, for the 
Fund: (1) the prior business day's reported NAV, daily trading volume, 
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. Daily trading volume information for the 
Funds will also be available in the financial section of newspapers, 
through subscription services such as Bloomberg, Thomson Reuters, and 
International Data Corporation, which can be accessed by authorized 
participants and other investors, as well as through other electronic 
services, including major public Web sites. On each business day, 
before commencement of trading in Shares during Regular Trading Hours 
\43\ on the Exchange, each Fund will disclose on its Web site the 
identities and quantities of the portfolio of securities and other 
assets in the daily disclosed portfolio held by the Funds that formed 
the basis for each Fund's calculation of NAV at the end of the previous 
business day. The daily disclosed portfolio will include, as 
applicable: the ticker symbol; CUSIP number or other identifier, if 
any; a description of the holding (including the type of holding, such 
as the type of swap); the identity of the security, index or other 
asset or instrument underlying the holding, if any; for options, the 
option strike price; quantity held (as measured by, for example, par 
value, notional value or number of shares, contracts, or units); 
maturity date, if any; coupon rate, if any; effective date, if any; 
market value of the holding; and the percentage weighting of the 
holding in each Fund's portfolio. The Web site and information will be 
publicly available at no charge. The value, components, and percentage 
weightings of each of the Indices will be calculated and disseminated 
at least once daily and will be available from major market data 
vendors. Rules governing the Indices are available on Barclays' Web 
site and in each respective Fund's prospectus.
---------------------------------------------------------------------------

    \43\ Regular Trading Hours are 9:30 a.m. to 4:00 p.m. Eastern 
Time.
---------------------------------------------------------------------------

    In addition, for each Fund, an estimated value, defined in BZX Rule 
14.11(c)(6)(A) as the ``Intraday Indicative Value,'' that reflects an 
estimated intraday value of each Fund's portfolio, will be 
disseminated. Moreover, the Intraday Indicative Value will be based 
upon the current value for the components of the daily disclosed 
portfolio and will be updated and widely disseminated by one or more 
major market data vendors at least every 15 seconds during the 
Exchange's Regular Trading Hours.\44\ In addition,

[[Page 59707]]

the quotations of certain of each Fund's holdings may not be updated 
during U.S. trading hours if updated prices cannot be ascertained.
---------------------------------------------------------------------------

    \44\ Currently, it is the Exchange's understanding that several 
major market data vendors display and/or make widely available 
Intraday Indicative Values published via the Consolidated Tape 
Association (``CTA'') or other data feeds.
---------------------------------------------------------------------------

    The dissemination of the Intraday Indicative Value, together with 
the daily disclosed portfolio, will allow investors to determine the 
value of the underlying portfolio of the Funds on a daily basis and 
provide a close estimate of that value throughout the trading day.
    Quotation and last sale information for the Shares of each Fund 
will be available via the CTA high speed line. Quotation information 
for investment company securities (excluding ETFs) may be obtained 
through nationally recognized pricing services through subscription 
agreements or from brokers and dealers who make markets in such 
securities. Price information regarding Municipal Securities and non-
exchange traded assets, including investment companies, derivatives, 
money market instruments, repurchase agreements, and reverse repurchase 
agreements is available from third party pricing services and major 
market data vendors. For exchange-traded assets, including investment 
companies, futures, and options, such intraday information is available 
directly from the applicable listing exchange.
    Initial and Continued Listing
    The Shares of each Fund will conform to the initial and continued 
listing criteria under BZX Rule 14.11(c)(4), except for those set forth 
in 14.11(c)(4)(B)(i)(b). The Exchange represents that, for initial and/
or continued listing, the Funds and the Trust must be in compliance 
with Rule 10A-3 under the Act.\45\ A minimum of 50,000 Shares of each 
Fund will be outstanding at the commencement of trading on the 
Exchange. The Exchange will obtain a representation from the issuer of 
the Shares that the NAV per Share for each Fund will be calculated 
daily and will be made available to all market participants at the same 
time.
---------------------------------------------------------------------------

    \45\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

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 Funds. The Exchange will halt trading in 
the Shares under the conditions specified in BZX Rule 11.18. Trading 
may be halted because of market conditions or for reasons that, in the 
view of the Exchange, make trading in the Shares inadvisable. These may 
include: (1) the extent to which trading is not occurring in the 
securities and/or the financial instruments composing the daily 
disclosed portfolio of the Funds; or (2) whether other unusual 
conditions or circumstances detrimental to the maintenance of a fair 
and orderly market are present. Trading in the Shares also will be 
subject to Rule 14.11(c)(1)(B)(iv), which sets forth circumstances 
under which Shares of a 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. The Exchange will 
allow trading in the Shares from 8:00 a.m. until 5:00 p.m. Eastern Time 
and has the appropriate rules to facilitate transactions in the Shares 
during all trading sessions. As provided in BZX Rule 11.11(a), the 
minimum price variation for quoting and entry of orders in securities 
traded on the Exchange is $0.01, with the exception of securities that 
are priced less than $1.00, for which the minimum price variation for 
order entry is $0.0001.
Surveillance
    The Exchange believes that its surveillance procedures are adequate 
to properly monitor the trading of the Shares on the Exchange during 
all trading sessions and to deter and detect violations of Exchange 
rules and the applicable federal securities laws. Trading of the Shares 
through the Exchange will be subject to the Exchange's surveillance 
procedures for derivative products, including Index Fund Shares. 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 Exchange Act, the Exchange will surveil 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 Exchange Rule 14.12. The Exchange may obtain 
information regarding trading in the Shares and the underlying shares 
in exchange traded equity securities via the ISG, from other exchanges 
that are members or affiliates of the ISG, or with which the Exchange 
has entered into a comprehensive surveillance sharing agreement.\46\ In 
addition, the Exchange is able to access, as needed, trade information 
for certain fixed income instruments reported to FINRA's Trade 
Reporting and Compliance Engine (``TRACE''). FINRA also can access data 
obtained from the Municipal Securities Rulemaking Board (``MSRB'') 
relating to municipal bond trading activity for surveillance purposes 
in connection with trading in the Shares. In addition, the Exchange may 
obtain information regarding trading in the Shares and the underlying 
shares in exchange-traded investment companies, futures, and options 
from markets or other entities that are members of ISG or with which 
the Exchange has in place a comprehensive surveillance sharing 
agreement. The Exchange prohibits the distribution of material non-
public information by its employees.
---------------------------------------------------------------------------

    \46\ 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.
---------------------------------------------------------------------------

Information Circular
    Prior to the commencement of trading, the Exchange will inform its 
members in an Information Circular of the special characteristics and 
risks associated with trading the Shares. Specifically, the Information 
Circular will discuss the following: (1) the procedures for purchases 
and redemptions of Shares in Creation Units (and that Shares are not 
individually redeemable); (2) BZX Rule 3.7, which imposes suitability 
obligations on Exchange members with respect to recommending 
transactions in the Shares to customers; (3) how information regarding 
the Intraday Indicative Value is disseminated; (4) the risks involved 
in trading the Shares during the Pre-Opening \47\ and After Hours 
Trading Sessions \48\ when an updated Intraday Indicative Value will 
not be calculated or publicly disseminated; (5) the requirement that 
members deliver a prospectus to investors purchasing newly issued 
Shares prior to or concurrently with the confirmation of a transaction; 
and (6) trading information.
---------------------------------------------------------------------------

    \47\ The Pre-Opening Session is from 8:00 a.m. to 9:30 a.m. 
Eastern Time.
    \48\ The After Hours Trading Session is from 4:00 p.m. to 5:00 
p.m. Eastern Time.
---------------------------------------------------------------------------

    In addition, the Information Circular will advise members, prior to 
the commencement of trading, of the prospectus delivery requirements 
applicable to the Funds. Members purchasing Shares from the Funds for 
resale to investors will deliver a prospectus to such investors. The 
Information Circular will also discuss any exemptive, no-action, and

[[Page 59708]]

interpretive relief granted by the Commission from any rules under the 
Act.
    In addition, the Information Circular will reference that each Fund 
is subject to various fees and expenses described in the Registration 
Statement. The Information Circular will also disclose the trading 
hours of the Shares of the Funds and the applicable NAV calculation 
time for the Shares. The Information Circular will disclose that 
information about the Shares of the Funds will be publicly available on 
the Funds' Web site. In addition, the Information Circular will 
reference that the Trust is subject to various fees and expenses 
described in each Fund's Registration Statement.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section 
6(b) of the Act \49\ in general and Section 6(b)(5) of the Act \50\ in 
particular in that it is 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 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.
---------------------------------------------------------------------------

    \49\ 15 U.S.C. 78f.
    \50\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change is designed to 
prevent fraudulent and manipulative acts and practices in that the 
Shares will be listed and traded on the Exchange pursuant to the 
listing criteria in BZX Rule 14.11(c). The Exchange believes that its 
surveillances, which generally focus on detecting securities trading 
outside of their normal patterns which could be indicative of 
manipulative or other violative activity, and associated surveillance 
procedures are adequate to properly monitor the trading of the Shares 
on the Exchange during all trading sessions and to deter and detect 
violations of Exchange rules and the applicable federal securities 
laws. The Exchange will communicate as needed regarding trading in the 
Shares with other markets or other entities that are members of the 
Intermarket Surveillance group (``ISG''), and may obtain trading 
information regarding trading in the Shares from such markets or 
entities. The Exchange can also access data obtained from the Municipal 
Securities Rulemaking Board relating to municipal bond trading activity 
for surveillance purposes in connection with trading in the Shares. The 
Exchange is able to access, as needed, trade information for certain 
fixed income securities held by a Fund reported to FINRA's TRACE. FINRA 
also can access data obtained from the Municipal Securities Rulemaking 
Board (``MSRB'') relating to municipal bond trading activity for 
surveillance purposes in connection with trading in the Shares. In 
addition, the Exchange may obtain information regarding trading in the 
Shares and the underlying shares in exchange-traded investment 
companies, futures, and options from markets or other entities that are 
members of ISG or with which the Exchange has in place a comprehensive 
surveillance sharing agreement.
    The Index Provider is not a broker-dealer, but is affiliated with a 
broker-dealer and has implemented a ``fire wall'' with respect to such 
broker-dealer regarding access to information concerning the 
composition and/or changes to the Indices. The Index Provider has also 
implemented procedures designed to prevent the use and dissemination of 
material, non-public information regarding the Indices.
    As of July 18, 2016, the 2023 Index had the following 
characteristics: there were 4,612 issues; 5.83% of the weight of 
components had a minimum original principal amount outstanding of $100 
million or more; 73.56% of the weight of components was comprised of 
individual maturities that were part of an entire municipal bond 
offering with a minimum original principal amount outstanding of $100 
million or more for all maturities of the offering; total face amount 
outstanding of issues in the 2023 Index was approximately $38.5 
billion, the market value is $46.4 billion, and the average dollar 
amount outstanding per issue was approximately $8.3 million; the most 
heavily weighted component represented 1.61% of the 2023 Index and the 
five most heavily weighted components represented 3.66% of the 2023 
Index. Therefore, the Exchange believes that, notwithstanding that the 
2023 Index does not satisfy the criterion in BZX Rule 
14.11(c)(4)(B)(i), the 2023 Index is sufficiently broad-based to deter 
potential manipulation in that a substantial portion (73.56%) of the 
2023 Index weight is comprised of maturities that are part of a minimum 
original principal amount outstanding of $100 million or more, and in 
view of the substantial total dollar amount outstanding and the average 
dollar amount outstanding of index issues.
    As of July 18, 2016, the 2024 Index had the following 
characteristics: there were 3,624 issues; 5.72% of the weight of 
components had a minimum original principal amount outstanding of $100 
million or more; 72.27% of the weight of components was comprised of 
individual maturities that were part of an entire municipal bond 
offering with a minimum original principal amount outstanding of $100 
million or more for all maturities of the offering; the total face 
amount outstanding of issues in the 2024 Index was approximately $29.9 
billion, the market value is $36.4 billion, and the average dollar 
amount outstanding of issues in the 2024 Index was approximately $8.3 
million; the most heavily weighted component represented 0.72% of the 
2024 Index and the five most heavily weighted components represented 
2.74% of the 2024 Index. Therefore, the Exchange believes that, 
notwithstanding that the 2024 Index does not satisfy the criterion in 
BZX Rule 14.11(c)(4)(B)(i), the 2024 Index is sufficiently broad-based 
to deter potential manipulation in that a substantial portion (72.27%) 
of the 2024 Index weight is comprised of maturities that are part of a 
minimum original principal amount outstanding of $100 million or more, 
and in view of the substantial total dollar amount outstanding and the 
average dollar amount outstanding of index issues.
    The value, components, and percentage weightings of each of the 
Indices will be calculated and disseminated at least once daily and 
will be available from major market data vendors. In addition, the 
portfolio of securities held by the Funds will be disclosed on the 
Funds' Web site at www.iShares.com. The intraday indicative value for 
Shares of the Funds will be disseminated by one or more major market 
data vendors, updated at least every 15 seconds during Regular Trading 
Hours. The Adviser represents that bonds that share similar 
characteristics, as described above, tend to trade similarly to one 
another; therefore, within these categories, the issues may be 
considered fungible from a portfolio management perspective. Within a 
single municipal bond issuer, [sic] Adviser represents that separate 
issues by the same issuer are also likely to trade similarly to one 
another.
    The proposed rule change is designed to promote just and equitable 
principles of trade and to protect investors and the public interest in 
that a large amount of information will be publicly available regarding 
the Funds and the Shares, thereby promoting market transparency. The 
Funds' portfolio holdings will be disclosed on the Funds' Web site 
daily after the close of trading on the Exchange and prior to the 
opening of

[[Page 59709]]

trading on the Exchange the following day. Moreover, the IIV will be 
widely disseminated by one or more major market data vendors at least 
every 15 seconds during Regular Trading Hours. The current value of 
each of the Indices will be disseminated by one or more major market 
data vendors at least once per day. 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, and quotation and last sale information will 
be available via the CTA high-speed line. The Web site for the Funds 
will include the prospectus for the Funds and additional data relating 
to NAV and other applicable quantitative information. Moreover, prior 
to the commencement of trading, the Exchange will inform its Members in 
an information circular of the special characteristics and risks 
associated with trading the Shares. If the Exchange becomes aware that 
the NAV is not being disseminated to all market participants at the 
same time, it will halt trading in the Shares until such time as the 
NAV is available to all market participants. 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 Funds. 
Trading also may be halted because of market conditions or for reasons 
that, in the view of the Exchange, make trading in the Shares 
inadvisable. These may include: (1) the extent to which trading is not 
occurring in the securities and/or the financial instruments composing 
the daily disclosed portfolio of each Fund; or (2) whether other 
unusual conditions or circumstances detrimental to the maintenance of a 
fair and orderly market are present. Trading in the Shares also will be 
subject to Rule 14.11(c)(1)(B)(iv), which sets forth circumstances 
under which Shares of a Fund may be halted. If the IIV of any of the 
Funds or value of the Indices are not being disseminated as required, 
the Exchange may halt trading during the day in which the interruption 
to the dissemination of the IIV or index value occurs.
    The proposed rule change is designed to perfect the mechanism of a 
free and open market and, in general, to protect investors and the 
public interest in that it will facilitate the listing and trading of 
additional types of exchange-traded funds that holds municipal bonds 
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 
and may obtain information in the Shares and the underlying shares in 
exchange-traded investment companies, futures, and options 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, investors will have ready access to information regarding the 
IIV and quotation and last sale information for the Shares.
    For the above reasons, the Exchange believes that the proposed rule 
change is consistent with the requirements of Section 6(b)(5) of the 
Act.

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 
additional exchange-traded products 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

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

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period 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 Exchange consents, the Commission will:
    (a) by order approve or disapprove such 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-BatsBZX-2016-48 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-BatsBZX-2016-48. 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 Web site (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 Web site 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 such filing will also be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-BatsBZX-2016-48 and should 
be submitted on or before September 20, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\51\
---------------------------------------------------------------------------

    \51\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-20735 Filed 8-29-16; 8:45 am]
 BILLING CODE 8011-01-P



                                                  59700                        Federal Register / Vol. 81, No. 168 / Tuesday, August 30, 2016 / Notices

                                                  allow ICE to effectuate the Stock                       The proposed rule change is not                       Commission, and all written
                                                  Dividend would not impact the                           designed to address any competitive                   communications relating to the
                                                  Exchange’s ability to be so organized as                issue but rather is concerned solely with             proposed rule change between the
                                                  to have the capacity to be able to carry                the number of authorized shares of                    Commission and any person, other than
                                                  out the purposes of the Exchange Act.                   Common Stock and shares of capital                    those that may be withheld from the
                                                  In particular, the proposed changes                     stock of the Exchange’s ultimate parent.              public in accordance with the
                                                  would not alter the limitations on voting                                                                     provisions of 5 U.S.C. 552, will be
                                                                                                          C. Self-Regulatory Organization’s
                                                  and ownership set forth in Section V of                                                                       available for Web site viewing and
                                                                                                          Statement on Comments on the
                                                  the ICE Certificate, and so the proposed                                                                      printing in the Commission’s Public
                                                                                                          Proposed Rule Change Received From
                                                  changes would not enable a person to                                                                          Reference Room, 100 F Street NE.,
                                                                                                          Members, Participants, or Others
                                                  ‘‘improperly interfere with or restrict                                                                       Washington, DC 20549, on official
                                                  the ability of the Commission, the                        No written comments were solicited                  business days between the hours of
                                                  Exchange, or its subsidiaries to                        or received with respect to the proposed              10:00 a.m. and 3:00 p.m. Copies of the
                                                  effectively carry out their regulatory                  rule change.                                          filing also will be available for
                                                  oversight responsibilities under the                    III. Date of Effectiveness of the                     inspection and copying at the principal
                                                  Act.’’ 9                                                Proposed Rule Change and Timing for                   office of the Exchange. All comments
                                                     For similar reasons, the proposal is                 Commission Action                                     received will be posted without change;
                                                  consistent with Section 6(b)(5) of the                                                                        the Commission does not edit personal
                                                  Exchange Act,10 because it would not                       Within 45 days of the date of                      identifying information from
                                                  impact the Exchange’s governance or                     publication of this notice in the Federal             submissions. You should submit only
                                                  regulatory structure, which would                       Register or within such longer period                 information that you wish to make
                                                  continue to be designed to prevent                      up to 90 days (i) as the Commission may               available publicly. All submissions
                                                  fraudulent and manipulative acts and                    designate if it finds such longer period              should refer to File Number SR–NYSE–
                                                  practices, to promote just and equitable                to be appropriate and publishes its                   2016–57, and should be submitted on or
                                                  principles of trade, to foster cooperation              reasons for so finding or (ii) as to which            before September 20, 2016.
                                                  and coordination with persons engaged                   the Exchange consents, the Commission
                                                                                                          will:                                                   For the Commission, by the Division of
                                                  in regulating, clearing, settling,                                                                            Trading and Markets, pursuant to delegated
                                                  processing information with respect to,                    A. By order approve or disapprove
                                                                                                                                                                authority.11
                                                  and facilitating transactions in                        such proposed rule change, or
                                                                                                             B. institute proceedings to determine              Robert W. Errett,
                                                  securities, to remove impediments to,                                                                         Deputy Secretary.
                                                  and perfect the mechanism of a free and                 whether the proposed rule change
                                                  open market and a national market                       should be disapproved.                                [FR Doc. 2016–20742 Filed 8–29–16; 8:45 am]
                                                                                                                                                                BILLING CODE 8011–01–P
                                                  system and, in general, to protect                      IV. Solicitation of Comments
                                                  investors and the public interest.
                                                     The Exchange believes that approval                    Interested persons are invited to
                                                                                                          submit written data, views, and                       SECURITIES AND EXCHANGE
                                                  of the proposal would remove
                                                                                                          arguments concerning the foregoing,                   COMMISSION
                                                  impediments to, and perfect the
                                                  mechanism of a free and open market                     including whether the proposed rule
                                                  and a national market system and, in                    change is consistent with the Act.                    [Release No. 34–78666; File No. SR–
                                                  general, protect investors and the public               Comments may be submitted by any of                   BatsBZX–2016–48]
                                                  interest, because by increasing ICE’s                   the following methods:
                                                                                                                                                                Self-Regulatory Organizations; Bats
                                                  authorized shares of Common Stock and                   Electronic Comments                                   BZX Exchange, Inc.; Notice of Filing of
                                                  shares of capital stock sufficient to                     • Use the Commission’s Internet                     a Proposed Rule Change to Rule
                                                  allow ICE to effectuate the Stock                       comment form (http://www.sec.gov/                     14.11(c)(4) To List and Trade Shares of
                                                  Dividend, the proposed rule change will                 rules/sro.shtml); or                                  the iShares iBonds Dec 2023 Term
                                                  facilitate broader ownership of ICE.                      • Send an email to rule-comments@                   Muni Bond ETF and iShares iBonds
                                                     The Exchange believes that amending                  sec.gov. Please include File Number SR–               Dec 2024 Term Muni Bond ETF of the
                                                  Article V, Section A.5, to correct the                  NYSE–2016–57 on the subject line.                     iShares U.S. ETF Trust
                                                  reference to ‘‘this Section A of ARTICLE
                                                  VI’’ to refer to ‘‘this Section A of                    Paper Comments                                        August 24, 2016.
                                                  ARTICLE V’’ would reduce potential                        • Send paper comments in triplicate
                                                  confusion that may result from having                                                                            Pursuant to Section 19(b)(1) of the
                                                                                                          to Secretary, Securities and Exchange                 Securities Exchange Act of 1934
                                                  an incorrect reference in the ICE                       Commission, 100 F Street NE.,
                                                  Certificate. Replacing such incorrect                                                                         (‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                                                                                          Washington, DC 20549–1090.                            notice is hereby given that on August 9,
                                                  reference would further the goal of                     All submissions should refer to File
                                                  transparency and add clarity to the ICE                                                                       2016, Bats BZX Exchange, Inc.
                                                                                                          Number SR–NYSE–2016–57. This file                     (‘‘Exchange’’ or ‘‘BZX’’) filed with the
                                                  Certificate.                                            number should be included on the                      Securities and Exchange Commission
                                                  B. Self-Regulatory Organization’s                       subject line if email is used. To help the            (‘‘Commission’’) the proposed rule
                                                  Statement on Burden on Competition                      Commission process and review your                    change as described in Items I and II
                                                    The Exchange does not believe that                    comments more efficiently, please use                 below, which Items have been prepared
                                                                                                          only one method. The Commission will
mstockstill on DSK3G9T082PROD with NOTICES




                                                  the proposed rule change will impose                                                                          by the Exchange. The Commission is
                                                  any burden on competition that is not                   post all comments on the Commission’s                 publishing this notice to solicit
                                                  necessary or appropriate in furtherance                 Internet Web site (http://www.sec.gov/                comments on the proposed rule change
                                                  of the purposes of the Exchange Act.                    rules/sro.shtml). Copies of the                       from interested persons.
                                                                                                          submission, all subsequent
                                                    9 See Securities Exchange Act Release No. 70210,      amendments, all written statements                      11 17 CFR 200.30–3(a)(12).
                                                  supra note 6, at 51760.                                 with respect to the proposed rule                       1 15 U.S.C. 78s(b)(1).
                                                    10 15 U.S.C. 78f(b)(5).                               change that are filed with the                          2 17 CFR 240.19b–4.




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                                                                               Federal Register / Vol. 81, No. 168 / Tuesday, August 30, 2016 / Notices                                                    59701

                                                  I. Self-Regulatory Organization’s                       The Shares will be offered by the Trust,               replicate as closely as possible, before
                                                  Statement of the Terms of Substance of                  which was established as a Delaware                    fees and expenses, the price and yield
                                                  the Proposed Rule Change                                statutory trust on March 15, 2001. The                 performance of the S&P AMT-Free
                                                     The Exchange filed a proposal to list                Trust is registered with the Commission                Municipal Series Dec 2023 Index (the
                                                  and trade under BZX Rule 14.11(c)(4)                    as an open-end investment company                      ‘‘2023 Index’’). As of July 18, 2016, there
                                                  shares of the iShares iBonds Dec 2023                   and has filed a registration statement on              were 4,612 issues in the 2023 Index.
                                                  Term Muni Bond ETF and iShares                          behalf of the Funds on Form N–1A                       Unless otherwise noted, all statistics
                                                  iBonds Dec 2024 Term Muni Bond ETF                      (‘‘Registration Statement’’) with the                  related to the 2023 Index presented
                                                  (each a ‘‘Fund’’ or, collectively, the                  Commission.5 All statements and                        hereafter were accurate as of July 18,
                                                  ‘‘Funds’’) of the iShares U.S. ETF Trust                representations made in this filing                    2016.
                                                  (the ‘‘Trust’’). The shares of the Funds                regarding (a) the description of the                      To be included in the 2023 Index, a
                                                  are referred to herein as the ‘‘Shares.’’               portfolio, (b) limitations on portfolio                bond must have a rating of at least BBB-
                                                     The text of the proposed rule change                 holdings or reference assets, or (c) the               by S&P, Baa3 by Moody’s, or BBB- by
                                                  is available at the Exchange’s Web site                 applicability of Exchange rules and                    Fitch (except in the case of a pre-
                                                  at www.batstrading.com, at the                          surveillance procedures shall constitute               refunded/escrowed to maturity bond). A
                                                  principal office of the Exchange, and at                continued listing requirements for                     bond must be rated by at least one of the
                                                  the Commission’s Public Reference                       listing the Shares on the Exchange.                    three rating agencies in order to qualify
                                                  Room.                                                                                                          for index inclusion. For the avoidance
                                                                                                          Description of the Shares and the Funds                of doubt, the lowest rating is used in
                                                  II. Self-Regulatory Organization’s                         BlackRock Fund Advisors is the                      determining if a bond is investment
                                                  Statement of the Purpose of, and                        investment adviser (‘‘BFA’’ or                         grade. Potential constituents must have
                                                  Statutory Basis for, the Proposed Rule                  ‘‘Adviser’’) to the Funds.6 State Street               an outstanding par value of at least $2
                                                  Change                                                  Bank and Trust Company is the                          million. The bonds will have a maturity
                                                     In its filing with the Commission, the               administrator, custodian, and transfer                 range of January 1, 2023 to December 1,
                                                  Exchange included statements                            agent (‘‘Administrator,’’ ‘‘Custodian,’’               2023. The following types of bonds are
                                                  concerning the purpose of and basis for                 and ‘‘Transfer Agent,’’ respectively) for              excluded from the 2023 Index: Bonds
                                                  the proposed rule change and discussed                  the Trust. BlackRock Investments, LLC                  subject to the alternative minimum tax,
                                                  any comments it received on the                         serves as the distributor (‘‘Distributor’’)            bonds with early redemption dates
                                                  proposed rule change. The text of these                 for the Trust.                                         (callable provisions), bonds with
                                                  statements may be examined at the                       iShares iBonds Dec 2023 Term Muni                      sinking fund provisions, commercial
                                                  places specified in Item IV below. The                  Bond ETF                                               paper, conduit bonds where the obligor
                                                  Exchange has prepared summaries, set                                                                           is a for-profit institution, derivative
                                                  forth in Sections A, B, and C below, of                   According to the Registration                        securities, non-rated bonds (except pre-
                                                  the most significant parts of such                      Statement, the Fund will seek to                       refunded/escrowed to maturity bonds),
                                                  statements.                                                                                                    notes, taxable municipals, tobacco
                                                                                                          Free Municipal Series under NYSE Arca Rule             bonds, and variable rate debt (except for
                                                  A. Self-Regulatory Organization’s                       5.2(j)(3), Commentary .02); and 75468 (July 16,
                                                                                                          2015), 80 FR 43500 (July 22, 2015) (SR–NYSEArca–       known step-up/down coupon schedule
                                                  Statement of the Purpose of, and                        2015–25) (order approving proposed rule change         bonds). The 2023 Index is calculated
                                                  Statutory Basis for, the Proposed Rule                  relating to the listing and trading of the iShares     using a market value weighting
                                                  Change                                                  iBonds Dec 2021 AMT-Free Muni Bond ETF and             methodology. The composition of the
                                                                                                          iShares iBonds Dec 2022 AMT-Free Muni Bond
                                                  1. Purpose                                              ETF under NYSE Arca Rule 5.2(j)(3), Commentary         2023 Index is rebalanced monthly.
                                                                                                          .02). The Commission also has issued a notice of          The Fund generally invests at least
                                                     The Exchange proposes to list and                    filing and immediate effectiveness of a proposed       90% of its assets in the component
                                                  trade the Shares of the following series                rule change relating to listing and trading on the     securities of the Fund’s benchmark
                                                  of the Trust under BZX Rule                             Exchange of the iShares Taxable Municipal Bond
                                                                                                                                                                 index, except during the last months of
                                                  14.11(c)(4),3 which governs the listing                 Fund. See Securities Exchange Act Release No.
                                                                                                          63176 (October 25, 2010), 75 FR 66815 (October 29,     the Fund’s operations. From time to
                                                  and trading of index fund shares based                  2010) (SR–NYSEArca–2010–94). The Commission            time when conditions warrant, however,
                                                  on fixed income securities indexes.4                    has approved two actively managed funds of the         the Fund may invest at least 80% of its
                                                                                                          PIMCO ETF Trust that hold municipal bonds. See
                                                    3 The Commission approved BZX Rule 14.11(c) in        Securities Exchange Act Release No. 60981
                                                                                                                                                                 assets in the component securities of the
                                                  Securities Exchange Act Release No. 65225 (August       (November 10, 2009), 74 FR 59594 (November 18,         Fund’s benchmark index. The 2023
                                                  30, 2011), 76 FR 55148 (September 6, 2011) (SR–         2009) (SR–NYSEArca–2009–79) (order approving           Index measures the performance of the
                                                  BATS–2011–018).                                         listing and trading of PIMCO ShortTerm Municipal       non-callable investment-grade, tax-
                                                    4 The Commission previously has approved a            Bond Strategy Fund and PIMCO Intermediate              exempt U.S. municipal bonds with
                                                  proposed rule change relating to listing and trading    Municipal Bond Strategy Fund, among others). The
                                                                                                          Commission also has approved listing and trading       specific annual maturities (‘‘Municipal
                                                  of funds based on municipal bond indexes. See
                                                  Securities Exchange Act Release Nos. 78329 (July        on the Exchange of the SPDR Nuveen S&P High            Securities’’). The Fund has adopted a
                                                  14, 2016), 81 FR 47217 (July 20, 2016) (SR–             Yield Municipal Bond Fund. See Securities              non-fundamental investment policy to
                                                  BatsBZX–2016–01) (order approving proposed rule         Exchange Act Release No. 63881 (February 9, 2011),     invest at least 80% of its net assets, plus
                                                  change relating to the listing and trading of VanEck    76 FR 9065 (February 16, 2011) (SR–NYSEArca–
                                                                                                          2010–120).                                             the amount of any borrowings for
                                                  Vectors AMT-Free 6–8 Year Municipal Index ETF,
                                                  VanEck Vectors AMT-Free 8–12 Year Municipal                5 See Registration Statement on Form N–1A for       investment purposes, in securities in the
                                                  Index ETF, and VanEck Vectors AMT-Free 12–17            the Trust, dated October 29, 2015 (File Nos. 333–      Fund’s benchmark index. This policy
                                                  Year Municipal Index ETF); 67985 (October 4,            123257 and 811–10325). The descriptions of the         may be changed without shareholder
                                                  2012), 77 FR 61804 (October 11, 2012) (SR–              Funds and the Shares contained herein are based,
mstockstill on DSK3G9T082PROD with NOTICES




                                                                                                          in part, on information in the Registration
                                                                                                                                                                 approval upon 60 days’ prior written
                                                  NYSEArca–2012–92) (order approving proposed
                                                  rule change relating to the listing and trading of      Statement. The Commission has issued an order          notice to shareholders.7 Municipal
                                                  iShares 2018 S&P AMT-Free Municipal Series and          granting certain exemptive relief to the Trust under
                                                  iShares 2019 S&P AMT-Free Municipal Series              the Investment Company Act of 1940 (15 U.S.C.            7 As noted herein, each Fund’s policy to invest

                                                  under NYSE Arca, Inc. (‘‘NYSE Arca’’) Rule              80a–1) (‘‘1940 Act’’) (the ‘‘Exemptive Order’’). See   80% of its total assets in securities that comprise
                                                  5.2(j)(3), Commentary .02); 72523 (July 2, 2014), 79    Investment Company Act Release No. 28021               the Fund’s benchmark index (the ‘‘80% Investment
                                                  FR 39016 (July 9, 2014) (SR–NYSEArca–2014–37)           (October 24, 2007) (File No. 812–13426).               Policy’’) is non-fundamental and may be changed
                                                  (order approving proposed rule change relating to          6 BFA is an indirect wholly owned subsidiary of     without shareholder approval upon 60 days’ prior
                                                  the listing and trading of iShares 2020 S&P AMT-        BlackRock, Inc.                                                                                   Continued




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                                                  59702                         Federal Register / Vol. 81, No. 168 / Tuesday, August 30, 2016 / Notices

                                                  Securities are fixed and variable rate                   securities,15 structured securities,16 and                 investments will be consistent with its
                                                  securities issued in the U.S. by U.S.                    zero coupon securities.17                                  investment objective and will not be
                                                  states and territories, municipalities and                  In the last months of operation, as the                 used to achieve leveraged returns (i.e.
                                                  other political subdivisions, agencies,                  bonds held by the Fund mature, the                         two times or three times the Fund’s
                                                  authorities, and instrumentalities of                    proceeds will not be reinvested in bonds                   benchmark, as described in the
                                                  states and multi-state agencies and                      but instead will be held in cash and                       Registration Statement).
                                                  authorities and will include only the                    cash equivalents, including, without                          The Fund may also enter into
                                                  following instruments: General                           limitation, shares of money market                         repurchase and reverse repurchase
                                                  obligation bonds,8 limited obligation                    funds advised by BFA or its affiliates                     agreements for Municipal Securities
                                                  bonds (or revenue bonds),9 municipal                     (‘‘BlackRock Cash Funds’’), AMT-free                       (collectively, ‘‘Repurchase
                                                  notes,10 municipal commercial paper,11                   tax-exempt municipal notes, variable                       Agreements’’). Repurchase Agreements
                                                                                                           rate demand notes and obligations,                         involve the sale of securities with an
                                                  tender option bonds,12 variable rate
                                                                                                           tender option bonds and municipal                          agreement to repurchase the securities
                                                  demand obligations (‘‘VRDOs’’),13
                                                                                                           commercial paper. These cash                               at an agreed-upon price, date and
                                                  municipal lease obligations,14 stripped                  equivalents may not be included in the                     interest payment and have the
                                                                                                           Underlying Index. By December 2, 2023,                     characteristics of borrowing as part of
                                                  written notice to shareholders. The Exchange notes       the Underlying Index is expected to
                                                  that, notwithstanding the foregoing, all statements                                                                 the Fund’s principal holdings.19
                                                  and representations made in this filing regarding (a)    consist entirely of cash earned in this
                                                                                                                                                                         The Fund may also invest in short-
                                                  the description of the portfolios, (b) limitations on    manner. Around the same time, the
                                                                                                                                                                      term instruments (‘‘Short-Term
                                                  portfolio holdings or reference assets (including, for   Fund will wind up and terminate, and
                                                  example, each Fund’s 80% Investment Policy), or                                                                     Instruments’’),20 which include
                                                                                                           its net assets will be distributed to then-
                                                  (c) the applicability of Exchange rules and                                                                         exchange traded and non-exchange
                                                                                                           current shareholders.
                                                  surveillance procedures shall constitute continued
                                                                                                              The Fund intends to qualify for and                     traded investment companies (including
                                                  listing requirements for listing the Shares on the                                                                  investment companies advised by BFA
                                                  Exchange. As noted below, the issuer has                 to elect treatment as a regulated
                                                  represented to the Exchange that it will advise the      investment company (a ‘‘RIC’’) under
                                                  Exchange of any failure by a Fund to comply with         Subchapter M of the Internal Revenue                       interest rate swaps, and swaps on Municipal
                                                  the continued listing requirements (or any changes                                                                  Securities indexes. The derivatives will be centrally
                                                  made with respect to a Fund’s 80% Investment
                                                                                                           Code of 1986, as amended. The Fund                         cleared and they will be collateralized. Derivatives
                                                  Policy), and, pursuant to its obligations under          will invest its assets, and otherwise                      are not a principal investment strategy of the Fund.
                                                  Section 19(g)(1) of the Exchange Act, the Exchange       conduct its operations, in a manner that                      19 The Fund’s exposure to reverse repurchase

                                                  will surveil for compliance with the continued           is intended to satisfy the qualifying                      agreements will be covered by liquid assets having
                                                  listing requirements. If the Fund is not in                                                                         a value equal to or greater than such commitments.
                                                                                                           income, diversification and distribution                   The use of reverse repurchase agreements is a form
                                                  compliance with the applicable listing
                                                  requirements, the Exchange will commence                 requirements necessary to establish and                    of leverage because the proceeds derived from
                                                  delisting procedures under Exchange Rule 14.12.          maintain RIC qualification under                           reverse repurchase agreements may be invested in
                                                     8 General obligation bonds are obligations            Subchapter M.                                              additional securities. As further stated below, the
                                                  involving the credit of an issuer possessing taxing                                                                 Fund’s investments will be consistent with its
                                                  power and are payable from such issuer’s general         Other Portfolio Holdings                                   investment objective and will not be used to
                                                  revenues and not from any particular source.                                                                        achieve leveraged returns.
                                                     9 Limited obligation bonds are payable only from
                                                                                                              The Fund may also, to a limited                            20 The Fund may invest in Short-Term

                                                  the revenues derived from a particular facility or
                                                                                                           extent (under normal circumstances,                        Instruments, including money market instruments,
                                                                                                           less than 20% of the Fund’s net assets),                   on an ongoing basis to provide liquidity or for other
                                                  class of facilities or, in some cases, from the
                                                                                                                                                                      reasons. Money market instruments are generally
                                                  proceeds of a special excise or other specific           engage in transactions in futures                          short-term investments that include only the
                                                  revenue source, and also include industrial              contracts, options, or swaps in order to                   following: (i) Shares of money market funds
                                                  development bonds issued pursuant to former U.S.         facilitate trading or to reduce                            (including those advised by BFA or otherwise
                                                  federal tax law. Industrial development bonds                                                                       affiliated with BFA); (ii) obligations issued or
                                                  generally are also revenue bonds and thus are not        transaction costs.18 The Fund’s
                                                                                                                                                                      guaranteed by the U.S. government, its agencies or
                                                  payable from the issuer’s general revenues. The                                                                     instrumentalities (including government-sponsored
                                                  credit and quality of industrial development bonds          15 Stripped securities are created when an issuer
                                                                                                                                                                      enterprises); (iii) negotiable certificates of deposit
                                                  are usually related to the credit of the corporate       separates the interest and principal components of         (‘‘CDs’’), bankers’ acceptances, fixed-time deposits
                                                  user of the facilities. Payment of interest on and       an instrument and sells them as separate securities.       and other obligations of U.S. and non-U.S. banks
                                                  repayment of principal of such bonds is the              In general, one security is entitled to receive the        (including non-U.S. branches) and similar
                                                  responsibility of the corporate user (and/or any         interest payments on the underlying assets and the         institutions; (iv) commercial paper, including asset-
                                                  guarantor).                                              other to receive the principal payments.                   backed commercial paper; (v) non-convertible
                                                     10 Municipal notes are shorter-term municipal            16 Structured securities are privately negotiated
                                                                                                                                                                      corporate debt securities (e.g., bonds and
                                                  debt obligations that may provide interim financing      debt obligations where the principal and/or interest       debentures) with remaining maturities at the date
                                                  in anticipation of tax collection, receipt of grants,    is determined by reference to the performance of an        of purchase of not more than 397 days and that
                                                  bond sales, or revenue receipts.                         underlying investment, index, or reference                 satisfy the rating requirements set forth in Rule 2a–
                                                     11 Municipal commercial paper is generally            obligation, and may be issued by governmental              7 under the 1940 Act; and (vi) short-term U.S.
                                                                                                           agencies. While structured securities are part of the      dollar-denominated obligations of non-U.S. banks
                                                  unsecured debt that is issued to meet short-term
                                                                                                           principal holdings of the Fund, the Issuer                 (including U.S. branches) that, in the opinion of
                                                  financing needs.
                                                     12 Tender option bonds are synthetic floating-rate
                                                                                                           represents that such securities, when combined             BFA, are of comparable quality to obligations of
                                                                                                           with those instruments held as part of the other           U.S. banks which may be purchased by the Fund.
                                                  or variable-rate securities issued when long-term        portfolio holdings described below, will not exceed
                                                  bonds are purchased in the primary or secondary                                                                     All money market securities acquired by the Fund
                                                                                                           20% of the Fund’s net assets.                              will be rated investment grade. The Fund does not
                                                  market and then deposited into a trust. Custodial           17 Zero coupon securities are securities that are
                                                                                                                                                                      intend to invest in any unrated money market
                                                  receipts are then issued to investors, such as the       sold at a discount to par value and do not pay             securities. However, it may do so, to a limited
                                                  Fund, evidencing ownership interests in the trust.       interest during the life of the security. The discount
                                                     13 VRDOs are tax-exempt obligations that contain
                                                                                                                                                                      extent, such as where a rated money market
                                                                                                           approximates the total amount of interest the              security becomes unrated, if such money market
mstockstill on DSK3G9T082PROD with NOTICES




                                                  a floating or variable interest rate adjustment          security will accrue and compound over the period          security is determined by the Adviser to be of
                                                  formula and a right of demand on the part of the         until maturity at a rate of interest reflecting the        comparable quality. BFA may determine that
                                                  holder thereof to receive payment of the unpaid          market rate of the security at the time of issuance.       unrated securities are of comparable quality based
                                                  principal balance plus accrued interest upon a short     Upon maturity, the holder of a zero coupon security        on such credit quality factors that it deems
                                                  notice period not to exceed seven days.                  is entitled to receive the par value of the security.      appropriate, which may include, among other
                                                     14 Municipal lease obligations include certificates      18 Derivatives might be included in the Fund’s          things, performing an analysis similar, to the extent
                                                  of participation issued by government authorities or     investments to serve the investment objectives of          possible, to that performed by a nationally
                                                  entities to finance the acquisition or construction of   the Fund. Such derivatives include only the                recognized statistical rating organization rating
                                                  equipment, land, and/or facilities.                      following: Interest rate futures, interest rate options,   similar securities and issuers.



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                                                                               Federal Register / Vol. 81, No. 168 / Tuesday, August 30, 2016 / Notices                                                     59703

                                                  or its affiliates) that invest in money                 the 2023 Index weight consisted of                    assets in the component securities of the
                                                  market instruments.                                     issues with a rating of AA/Aa2 or                     Fund’s benchmark index. The 2024
                                                                                                          higher.                                               Index measures the performance of the
                                                  Index Overview
                                                                                                             The 2023 Index value, calculated and               non-callable investment-grade, tax-
                                                     The Exchange is submitting this                      disseminated at least once daily, as well             exempt U.S. municipal bonds with
                                                  proposed rule change because the 2023                   as the components of the 2023 Index                   specific annual maturities (‘‘Municipal
                                                  Index for the Fund does not meet all of                 and their percentage weighting, will be               Securities’’). The Fund has adopted a
                                                  the ‘‘generic’’ listing requirements of                 available from major market data                      non-fundamental investment policy to
                                                  Rule 14.11(c)(4) applicable to the listing              vendors. In addition, the portfolio of
                                                  of index fund shares based on fixed                                                                           invest at least 80% of its net assets, plus
                                                                                                          securities held by the Fund will be                   the amount of any borrowings for
                                                  income securities indexes. The 2023                     disclosed on the Fund’s Web site at
                                                  Index meets all such requirements                                                                             investment purposes, in securities in the
                                                                                                          www.iShares.com.
                                                  except for those set forth in Rule                                                                            Fund’s benchmark index. This policy
                                                  14.11(c)(4)(B)(i)(b).21 Specifically, as of             iShares iBonds Dec 2024 Term Muni                     may be changed without shareholder
                                                  July 18, 2016, 5.83% of the weight of the               Bond ETF                                              approval upon 60 days’ prior written
                                                  2023 Index components have a                               According to the Registration                      notice to shareholders.24 Municipal
                                                  minimum original principal amount                       Statement, the Fund will seek to                      Securities are fixed and variable rate
                                                  outstanding of $100 million or more.                    replicate as closely as possible, before              securities issued in the U.S. by U.S.
                                                     As of July 18, 2016, 73.56% of the                   fees and expenses, the price and yield                states and territories, municipalities and
                                                  weight of the 2023 Index components                     performance of the S&P AMT-Free                       other political subdivisions, agencies,
                                                  was comprised of individual maturities                  Municipal Series Dec 2024 Index (the                  authorities, and instrumentalities of
                                                  that were part of an entire municipal                   ‘‘2024 Index’’). As of July 18, 2016, there           states and multi-state agencies and
                                                  bond offering with a minimum original                   were 3,624 issues in the 2024 Index.                  authorities and will include only the
                                                  principal amount outstanding $100                       Unless otherwise noted, all statistics                following instruments: General
                                                  million or more for all maturities of the               related to the 2024 Index presented                   obligation bonds,25 limited obligation
                                                  offering. In addition, the total face                   hereafter were accurate as of July 18,                bonds (or revenue bonds),26 municipal
                                                  amount outstanding of issues in the                     2016.
                                                  2023 Index was approximately $38.5                         To be included in the 2024 Index, a
                                                  billion, the market value was $46.4                     bond must have a rating of at least BBB-                 24 As noted herein, each Fund’s policy to invest
                                                  billion, and the average dollar amount                  by S&P, Baa3 by Moody’s, or BBB- by
                                                  outstanding of issues in the 2023 Index                                                                       80% of its total assets in securities that comprise
                                                                                                          Fitch (except in the case of a pre-                   the Fund’s benchmark index (the ‘‘80% Investment
                                                  was approximately $8.3 million.                         refunded/escrowed to maturity bond). A                Policy’’) is non-fundamental and may be changed
                                                  Further, the most heavily weighted                      bond must be rated by at least one of the             without shareholder approval upon 60 days’ prior
                                                  component represented 1.61% of the                      three rating agencies in order to qualify             written notice to shareholders. The Exchange notes
                                                  weight of the 2023 Index and the five                   for index inclusion. For the avoidance                that, notwithstanding the foregoing, all statements
                                                  most heavily weighted components                        of doubt, the lowest rating is used in                and representations made in this filing regarding (a)
                                                  represented 3.66% of the weight of the                  determining if a bond is investment                   the description of the portfolios, (b) limitations on
                                                  2023 Index.22 Therefore, the Exchange                                                                         portfolio holdings or reference assets (including, for
                                                                                                          grade. Potential constituents must have               example, each Fund’s 80% Investment Policy), or
                                                  believes that, notwithstanding that the                 an outstanding par value of at least $2               (c) the applicability of Exchange rules and
                                                  2023 Index does not satisfy the criterion               million. The bonds will have a maturity               surveillance procedures shall constitute continued
                                                  in Rule 14.11(c)(4)(B)(i)(b), the 2023                  range of January 1, 2024 to December 1,               listing requirements for listing the Shares on the
                                                  Index is sufficiently broad-based to                    2024. The following types of bonds are                Exchange. As noted below, the issuer has
                                                  deter potential manipulation, given that                excluded from the 2024 Index: Bonds                   represented to the Exchange that it will advise the
                                                  it is comprised of approximately 4,612                  subject to the alternative minimum tax,               Exchange of any failure by a Fund to comply with
                                                  issues. In addition, the 2023 Index                     bonds with early redemption dates
                                                                                                                                                                the continued listing requirements (or any changes
                                                  securities are sufficiently liquid to deter                                                                   made with respect to a Fund’s 80% Investment
                                                                                                          (callable provisions), bonds with                     Policy), and, pursuant to its obligations under
                                                  potential manipulation in that a                        sinking fund provisions, commercial                   Section 19(g)(1) of the Exchange Act, the Exchange
                                                  substantial portion (73.56%) of the 2023                paper, conduit bonds where the obligor                will surveil for compliance with the continued
                                                  Index weight is comprised of maturities                 is a for-profit institution, derivative               listing requirements. If the Fund is not in
                                                  that are part of a minimum original                     securities, non-rated bonds (except pre-              compliance with the applicable listing
                                                  principal amount outstanding of $100                    refunded/escrowed to maturity bonds),                 requirements, the Exchange will commence
                                                  million or more, and in view of the                                                                           delisting procedures under Exchange Rule 14.12.
                                                                                                          notes, taxable municipals, tobacco
                                                  substantial total dollar amount                                                                                  25 General obligation bonds are obligations
                                                                                                          bonds, and variable rate debt (except for
                                                  outstanding and the average dollar                                                                            involving the credit of an issuer possessing taxing
                                                                                                          known step-up/down coupon schedule                    power and are payable from such issuer’s general
                                                  amount outstanding of the 2023 Index
                                                                                                          bonds). The 2024 Index is calculated                  revenues and not from any particular source.
                                                  issues, as referenced above.23 48% of
                                                                                                          using a market value weighting                           26 Limited obligation bonds are payable only from

                                                    21 Rule 14.11(c)(4)(B)(i)(b) provides that            methodology. The composition of the                   the revenues derived from a particular facility or
                                                  components that in the aggregate account for at         2024 Index is rebalanced monthly.                     class of facilities or, in some cases, from the
                                                  least 75% of the weight of the index or portfolio          The Fund generally invests at least                proceeds of a special excise or other specific
                                                  each shall have a minimum original principal            90% of its assets in the component                    revenue source, and also include industrial
                                                  amount outstanding of $100 million or more.                                                                   development bonds issued pursuant to former U.S.
                                                    22 Rule 14.11(c)(4)(B)(i)(d) provides that no
                                                                                                          securities of the Fund’s benchmark
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                                                                                                                                                                federal tax law. Industrial development bonds
                                                  component fixed-income security (excluding              index, except during the last months of               generally are also revenue bonds and thus are not
                                                  Treasury Securities, as defined therein) shall          the Fund’s operations. From time to                   payable from the issuer’s general revenues. The
                                                  represent more than 30% of the weight of the index      time when conditions warrant, however,                credit and quality of industrial development bonds
                                                  or portfolio, and the five most heavily weighted
                                                  component fixed-income securities in the index or       the Fund may invest at least 80% of its               are usually related to the credit of the corporate
                                                  portfolio shall not in the aggregate account for more                                                         user of the facilities. Payment of interest on and
                                                  than 65% of the weight of the index or portfolio.       can use executed trade information from all similar   repayment of principal of such bonds is the
                                                    23 The Adviser represents that when bonds are         bonds as pricing inputs for an individual security.   responsibility of the corporate user (and/or any
                                                  close substitutes for one another, pricing vendors      This can make individual securities more liquid.      guarantor).



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                                                  59704                         Federal Register / Vol. 81, No. 168 / Tuesday, August 30, 2016 / Notices

                                                  notes,27 municipal commercial paper,28                   will invest its assets, and otherwise                      exchange traded and non-exchange
                                                  tender option bonds,29 variable rate                     conduct its operations, in a manner that                   traded investment companies (including
                                                  demand obligations (‘‘VRDOs’’),30                        is intended to satisfy the qualifying                      investment companies advised by BFA
                                                  municipal lease obligations,31 stripped                  income, diversification and distribution                   or its affiliates) that invest in money
                                                  securities,32 structured securities,33 and               requirements necessary to establish and                    market instruments.
                                                  zero coupon securities.34                                maintain RIC qualification under
                                                     In the last months of operation, as the                                                                          Index Overview
                                                                                                           Subchapter M.
                                                  bonds held by the Fund mature, the                                                                                    The Exchange is submitting this
                                                  proceeds will not be reinvested in bonds                 Other Portfolio Holdings                                   proposed rule change because the 2024
                                                  but instead will be held in cash and                        The Fund may also, to a limited                         Index for the Fund does not meet all of
                                                  cash equivalents, including, without                     extent (under normal circumstances,                        the ‘‘generic’’ listing requirements of
                                                  limitation, shares of BlackRock Cash                     less than 20% of the Fund’s net assets),                   Rule 14.11(c)(4) applicable to the listing
                                                  Funds, AMT-free tax-exempt municipal                     engage in transactions in futures                          of index fund shares based on fixed
                                                  notes, variable rate demand notes and                    contracts, options, or swaps in order to                   income securities indexes. The 2024
                                                  obligations, tender option bonds and                     facilitate trading or to reduce                            Index meets all such requirements
                                                  municipal commercial paper. These                        transaction costs.35 The Fund’s                            except for those set forth in Rule
                                                  cash equivalents may not be included in                  investments will be consistent with its                    14.11(c)(4)(B)(i)(b).38 Specifically, as of
                                                  the Underlying Index. By December 2,                     investment objective and will not be                       July 18, 2016, 5.72% of the weight of the
                                                  2023, the Underlying Index is expected                   used to achieve leveraged returns (i.e.                    2024 Index components have a
                                                  to consist entirely of cash earned in this               two times or three times the Fund’s                        minimum original principal amount
                                                  manner. Around the same time, the                        benchmark, as described in the                             outstanding of $100 million or more.
                                                  Fund will wind up and terminate, and                     Registration Statement).                                     As of July 18, 2016, 72.27% of the
                                                  its net assets will be distributed to then-                 The Fund may also enter into                            weight of the 2024 Index components
                                                  current shareholders.                                    repurchase and reverse repurchase                          was comprised of individual maturities
                                                     The Fund intends to qualify for and                   agreements for Municipal Securities                        that were part of an entire municipal
                                                  to elect treatment as a RIC under                        (collectively, ‘‘Repurchase                                bond offering with a minimum original
                                                  Subchapter M of the Internal Revenue                     Agreements’’). Repurchase Agreements                       principal amount outstanding $100
                                                  Code of 1986, as amended. The Fund                       involve the sale of securities with an                     million or more for all maturities of the
                                                                                                           agreement to repurchase the securities                     offering. In addition, the total face
                                                     27 Municipal notes are shorter-term municipal
                                                                                                           at an agreed-upon price, date and                          amount outstanding of issues in the
                                                  debt obligations that may provide interim financing
                                                                                                           interest payment and have the                              2024 Index was approximately $29.9
                                                  in anticipation of tax collection, receipt of grants,                                                               billion, the market value is $36.4
                                                  bond sales, or revenue receipts.                         characteristics of borrowing as part of
                                                     28 Municipal commercial paper is generally            the Fund’s principal holdings.36                           billion, and the average dollar amount
                                                  unsecured debt that is issued to meet short-term            The Fund may also invest in short-                      outstanding of issues in the 2024 Index
                                                  financing needs.                                         term instruments (‘‘Short-Term                             was approximately $8.3 million.
                                                     29 Tender option bonds are synthetic floating-rate
                                                                                                           Instruments’’),37 which include                            Further, the most heavily weighted
                                                  or variable-rate securities issued when long-term                                                                   component represented 0.72% of the
                                                  bonds are purchased in the primary or secondary
                                                  market and then deposited into a trust. Custodial           35 Derivatives might be included in the Fund’s          weight of the 2024 Index and the five
                                                  receipts are then issued to investors, such as the       investments to serve the investment objectives of          most heavily weighted components
                                                  Fund, evidencing ownership interests in the trust.       the Fund. Such derivatives include only the                represented 2.74% of the weight of the
                                                     30 VRDOs are tax-exempt obligations that contain      following: Interest rate futures, interest rate options,
                                                                                                           interest rate swaps, and swaps on Municipal
                                                                                                                                                                      2024 Index.39 Therefore, the Exchange
                                                  a floating or variable interest rate adjustment
                                                  formula and a right of demand on the part of the         Securities indexes. The derivatives will be centrally      believes that, notwithstanding that the
                                                  holder thereof to receive payment of the unpaid          cleared and they will be collateralized. Derivatives
                                                  principal balance plus accrued interest upon a short     are not a principal investment strategy of the Fund.       dollar-denominated obligations of non-U.S. banks
                                                  notice period not to exceed seven days.                     36 The Fund’s exposure to reverse repurchase            (including U.S. branches) that, in the opinion of
                                                     31 Municipal lease obligations include certificates   agreements will be covered by liquid assets having         BFA, are of comparable quality to obligations of
                                                  of participation issued by government authorities or     a value equal to or greater than such commitments.         U.S. banks which may be purchased by the Fund.
                                                  entities to finance the acquisition or construction of   The use of reverse repurchase agreements is a form         All money market securities acquired by the Fund
                                                  equipment, land, and/or facilities.                      of leverage because the proceeds derived from              will be rated investment grade. The Fund does not
                                                     32 Stripped securities are created when an issuer     reverse repurchase agreements may be invested in           intend to invest in any unrated money market
                                                  separates the interest and principal components of       additional securities. As further stated below, the        securities. However, it may do so, to a limited
                                                  an instrument and sells them as separate securities.     Fund’s investments will be consistent with its             extent, such as where a rated money market
                                                  In general, one security is entitled to receive the      investment objective and will not be used to               security becomes unrated, if such money market
                                                  interest payments on the underlying assets and the       achieve leveraged returns.                                 security is determined by the Adviser to be of
                                                  other to receive the principal payments.                    37 The Fund may invest in Short-Term                    comparable quality. BFA may determine that
                                                     33 Structured securities are privately negotiated     Instruments, including money market instruments,           unrated securities are of comparable quality based
                                                  debt obligations where the principal and/or interest     on an ongoing basis to provide liquidity or for other      on such credit quality factors that it deems
                                                  is determined by reference to the performance of an      reasons. Money market instruments are generally            appropriate, which may include, among other
                                                  underlying investment, index, or reference               short-term investments that include only the               things, performing an analysis similar, to the extent
                                                  obligation, and may be issued by governmental            following: (i) Shares of money market funds                possible, to that performed by a nationally
                                                  agencies. While structured securities are part of the    (including those advised by BFA or otherwise               recognized statistical rating organization rating
                                                  principal holdings of the Fund, the Issuer               affiliated with BFA); (ii) obligations issued or           similar securities and issuers.
                                                                                                                                                                         38 Rule 14.11(c)(4)(B)(i)(b) provides that
                                                  represents that such securities, when combined           guaranteed by the U.S. government, its agencies or
                                                  with those instruments held as part of the other         instrumentalities (including government-sponsored          components that in the aggregate account for at
                                                  portfolio holdings described below, will not exceed      enterprises); (iii) negotiable certificates of deposit     least 75% of the weight of the index or portfolio
                                                  20% of the Fund’s net assets.                            (‘‘CDs’’), bankers’ acceptances, fixed-time deposits       each shall have a minimum original principal
mstockstill on DSK3G9T082PROD with NOTICES




                                                     34 Zero coupon securities are securities that are     and other obligations of U.S. and non-U.S. banks           amount outstanding of $100 million or more.
                                                  sold at a discount to par value and do not pay           (including non-U.S. branches) and similar                     39 Rule 14.11(c)(4)(B)(i)(d) provides that no

                                                  interest during the life of the security. The discount   institutions; (iv) commercial paper, including asset-      component fixed-income security (excluding
                                                  approximates the total amount of interest the            backed commercial paper; (v) non-convertible               Treasury Securities, as defined therein) shall
                                                  security will accrue and compound over the period        corporate debt securities (e.g., bonds and                 represent more than 30% of the weight of the index
                                                  until maturity at a rate of interest reflecting the      debentures) with remaining maturities at the date          or portfolio, and the five most heavily weighted
                                                  market rate of the security at the time of issuance.     of purchase of not more than 397 days and that             component fixed-income securities in the index or
                                                  Upon maturity, the holder of a zero coupon security      satisfy the rating requirements set forth in Rule 2a–      portfolio shall not in the aggregate account for more
                                                  is entitled to receive the par value of the security.    7 under the 1940 Act; and (vi) short-term U.S.             than 65% of the weight of the index or portfolio.



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                                                                               Federal Register / Vol. 81, No. 168 / Tuesday, August 30, 2016 / Notices                                            59705

                                                  2024 Index does not satisfy the criterion               issuances that have the same rating,                  price in the market where such
                                                  in Rule 14.11(c)(4)(B)(i)(b), the 2024                  structure and maturity, but have                      contracts are principally traded. Swaps
                                                  Index is sufficiently broad-based to                    different CUSIPs; these separate issues               will be valued based on valuations
                                                  deter potential manipulation, given that                by the same issuer are also likely to                 provided by independent, third-party
                                                  it is comprised of approximately 3,624                  trade similarly to one another.                       pricing agents. Securities of non-
                                                  issues. In addition, the 2024 Index                        The Adviser represents that the Funds              exchange-traded investment companies
                                                  securities are sufficiently liquid to deter             are managed utilizing the principle that              will be valued at NAV. Exchange-traded
                                                  potential manipulation in that a                        municipal bond issues are generally                   investment companies will be valued at
                                                  substantial portion (72.27%) of the 2024                fungible in nature when sharing                       the last reported sale price on the
                                                  Index weight is comprised of maturities                 common characteristics, and                           primary exchange on which they are
                                                  that are part of a minimum original                     specifically make use of the four                     traded.
                                                  principal amount outstanding of $100                    categories referred to above. In addition,
                                                  million or more, and in view of the                     this principle is used in, and consistent             Creation and Redemption of Shares
                                                  substantial total dollar amount                         with, the portfolio construction process                 The NAV of the Funds will be
                                                  outstanding and the average dollar                      in order to facilitate the creation and               determined each business day as of the
                                                  amount outstanding of the 2024 Index                    redemption process, and to enhance                    close of trading, (normally 4:00 p.m.
                                                  issues, as referenced above.40 47.71% of                liquidity (among other benefits, such as              Eastern time) on the exchange. The
                                                  the 2024 Index weight consisted of                      reducing transaction costs), while still              Funds currently anticipate that a
                                                  issues with a rating of AA/Aa2 or                       allowing each Fund to closely track its               ‘‘Creation Unit’’ will consist of 50,000
                                                  higher.                                                 reference index.                                      Shares, though this number may change
                                                     The 2024 Index value, calculated and                                                                       from time to time, including prior to the
                                                                                                          Net Asset Value
                                                  disseminated at least once daily, as well                                                                     listing of a Fund. The exact number of
                                                  as the components of the 2024 Index                        According to the Registration
                                                                                                                                                                Shares that will comprise a Creation
                                                  and their percentage weighting, will be                 Statement, the net asset value (‘‘NAV’’)
                                                                                                                                                                Unit will be disclosed in the
                                                  available from major market data                        of each Fund will be determined each
                                                                                                                                                                Registration Statement of each Fund.
                                                  vendors. In addition, the portfolio of                  business day as of the close of trading
                                                                                                                                                                The Trust will issue and sell Shares of
                                                  securities held by the Fund will be                     (ordinarily 4:00 p.m. Eastern time) on
                                                                                                          the Exchange. Any assets or liabilities               the Funds only in Creation Units on a
                                                  disclosed on the Fund’s Web site at                                                                           continuous basis through the
                                                  www.iShares.com.                                        denominated in currencies other than
                                                                                                          the U.S. dollar are converted into U.S.               Distributor, without an initial sales load
                                                  Correlation Among Municipal Bond                        dollars at the current market rates on the            (but subject to transaction fees), at their
                                                  Instruments With Common                                 date of valuation as quoted by one or                 NAV per Share next determined after
                                                  Characteristics                                         more sources.                                         receipt, on any business day, of an order
                                                     With respect to the Funds, the                          The values of each Fund’s portfolio                in proper form.
                                                  Adviser represents that the nature of the               securities are based on the securities’                  The consideration for purchase of a
                                                  municipal bond market and municipal                     closing prices, when available. In the                Creation Unit of a Fund generally will
                                                  bond instruments makes it feasible to                   absence of a last reported sales price, or            consist of either (i) the in-kind deposit
                                                  categorize individual issues represented                if no sales were reported, and for other              of a designated portfolio of fixed income
                                                  by CUSIPs (i.e., the specific identifying               assets for which market quotes are not                securities (the ‘‘Deposit Securities’’) per
                                                  number for a security) into categories                  readily available, values may be based                each Creation Unit and the Cash
                                                  according to common characteristics,                    on quotes obtained from a quotation                   Component (defined below), computed
                                                  specifically, rating, geographical region,              reporting system, established market                  as described below, or (ii) as permitted
                                                  purpose, and maturity. Bonds that share                 makers or by an outside independent                   or required by the Funds, of cash. The
                                                  similar characteristics tend to trade                   pricing service. Municipal Securities,                Cash Component together with the
                                                  similarly to one another; therefore,                    repurchase agreements, reverse                        Deposit Securities, as applicable, are
                                                  within these categories, the issues may                 repurchase agreements, and money                      referred to as the ‘‘Fund Deposit,’’
                                                  be considered fungible from a portfolio                 market instruments with maturities of                 which represents the minimum initial
                                                  management perspective, allowing one                    more than 60 days are normally valued                 and subsequent investment amount for
                                                  CUSIP to be represented by another that                 on the basis of quotes from brokers or                Shares. The Cash Component represents
                                                  shares similar characteristics for                      dealers, established market makers or an              the difference between the NAV of a
                                                  purposes of developing an investment                    outside independent pricing service.                  Creation Unit and the market value of
                                                  strategy. Therefore, while 5.83% of the                 Prices obtained by an outside                         Deposit Securities and may include a
                                                  weight of the 2023 Index and 5.72% of                   independent pricing service may use                   Dividend Equivalent Payment. The
                                                  the 2024 Index components have a                        information provided by market makers                 ‘‘Dividend Equivalent Payment’’ enables
                                                  minimum original principal amount                       or estimates of market values obtained                the Funds to make a complete
                                                  outstanding of $100 million or more, the                from yield data related to investments or             distribution of dividends on the next
                                                  nature of the municipal bond market                     securities with similar characteristics               dividend payment date, and is an
                                                  makes the issues relatively fungible for                and may use a computerized grid matrix                amount equal, on a per Creation Unit
                                                  investment purposes when aggregated                     of securities and its evaluations in                  basis, to the dividends on all the
                                                  into categories such as ratings,                        determining what it believes is the fair              securities held by each of the Funds
                                                  geographical region, purpose and                        value of the portfolio securities. Short-             (‘‘Fund Securities’’) with ex-dividend
                                                  maturity. In addition, within a single                  term investments, including money                     dates within the accumulation period
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                                                  municipal bond issuer, there are often                  market instruments having a maturity of               for such distribution (the
                                                  multiple contemporaneous or sequential                  60 days or less, are valued at amortized              ‘‘Accumulation Period’’), net of
                                                                                                          cost. Futures contracts will be valued at             expenses and liabilities for such period,
                                                    40 The Adviser represents that when bonds are
                                                                                                          the settlement price established each                 as if all of the Fund Securities had been
                                                  close substitutes for one another, pricing vendors      day by the board or exchange on which                 held by the Trust for the entire
                                                  can use executed trade information from all similar
                                                  bonds as pricing inputs for an individual security.     they are traded. Exchange-traded                      Accumulation Period. The
                                                  This can make individual securities more liquid.        options will be valued at the closing                 Accumulation Period begins on the ex-


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                                                  59706                         Federal Register / Vol. 81, No. 168 / Tuesday, August 30, 2016 / Notices

                                                  dividend date for each Fund and ends                     equal to the differential plus the                     distribution of discounts and premiums
                                                  on the next ex-dividend date.                            applicable redemption transaction fee                  of the daily Bid/Ask Price against the
                                                     The Administrator, through the                        will be required to be arranged for by or              NAV, within appropriate ranges, for
                                                  National Securities Clearing Corporation                 on behalf of the redeeming shareholder.                each of the four previous calendar
                                                  (‘‘NSCC’’), makes available on each                      Each Fund reserves the right to honor a                quarters. Daily trading volume
                                                  business day, immediately prior to the                   redemption request by delivering a                     information for the Funds will also be
                                                  opening of business on the Exchange                      basket of securities or cash that differs              available in the financial section of
                                                  (currently 9:30 a.m. Eastern time), the                  from the Fund Securities.42                            newspapers, through subscription
                                                  list of the names and the required                          Orders to redeem Creation Units of                  services such as Bloomberg, Thomson
                                                  number of shares of each Deposit                         the Funds must be delivered through a                  Reuters, and International Data
                                                  Security to be included in the current                   DTC Participant that has executed the                  Corporation, which can be accessed by
                                                  Fund Deposit (based on information at                    Participant Agreement with the                         authorized participants and other
                                                  the end of the previous business day) as                 Distributor and with the Trust. A DTC                  investors, as well as through other
                                                  well as the Cash Component for each                      Participant who wishes to place an                     electronic services, including major
                                                  Fund. Such Fund Deposit is applicable,                   order for redemption of Creation Units                 public Web sites. On each business day,
                                                  subject to any adjustments as described                  of a Fund to be effected need not be a                 before commencement of trading in
                                                  below, in order to effect creations of                   Participating Party, but such orders                   Shares during Regular Trading Hours 43
                                                  Creation Units of each Fund until such                   must state that redemption of Creation                 on the Exchange, each Fund will
                                                  time as the next-announced Fund                          Units of the Fund will instead be                      disclose on its Web site the identities
                                                  Deposit composition is made available.                   effected through transfer of Creation                  and quantities of the portfolio of
                                                     Shares may be redeemed only in                        Units of the Fund directly through DTC.                securities and other assets in the daily
                                                  Creation Units at their NAV next                         An order to redeem Creation Units of a                 disclosed portfolio held by the Funds
                                                  determined after receipt of a redemption                 Fund is deemed received by the                         that formed the basis for each Fund’s
                                                  request in proper form by the                            Administrator on the transmittal date if               calculation of NAV at the end of the
                                                  Distributor,41 only on a business day                    (i) such order is received by the                      previous business day. The daily
                                                  and only through a Participating Party                   Administrator not later than 4:00 p.m.                 disclosed portfolio will include, as
                                                  or DTC Participant who has executed a                    Eastern time on such transmittal date;                 applicable: the ticker symbol; CUSIP
                                                  Participation Agreement.                                 (ii) such order is preceded or                         number or other identifier, if any; a
                                                     The Administrator, through NSCC,                      accompanied by the requisite number of                 description of the holding (including
                                                  makes available immediately prior to                     Shares of Creation Units specified in                  the type of holding, such as the type of
                                                  the opening of business on the Exchange                  such order, which delivery must be                     swap); the identity of the security, index
                                                  (currently 9:30 a.m. Eastern time) on                    made through DTC to the Administrator                  or other asset or instrument underlying
                                                  each day that the Exchange is open for                   no later than 11:00 a.m. Eastern time, on              the holding, if any; for options, the
                                                  business, the Fund Securities that will                  such transmittal date (the ‘‘DTC Cut-Off-              option strike price; quantity held (as
                                                  be applicable (subject to possible                       Time’’); and (iii) all other procedures set            measured by, for example, par value,
                                                  amendment or correction) to                              forth in the Participant Agreement are                 notional value or number of shares,
                                                  redemption requests received in proper                   properly followed.                                     contracts, or units); maturity date, if
                                                  form (as defined below) on that day.                        After the Administrator has deemed                  any; coupon rate, if any; effective date,
                                                     Unless cash redemptions are                           an order for redemption received, the                  if any; market value of the holding; and
                                                  permitted or required for the Fund, the                  Administrator will initiate procedures
                                                  redemption proceeds for a Creation Unit                                                                         the percentage weighting of the holding
                                                                                                           to transfer the requisite Fund Securities              in each Fund’s portfolio. The Web site
                                                  generally consist of Fund Securities as                  (or contracts to purchase such Fund
                                                  announced by the Administrator on the                                                                           and information will be publicly
                                                                                                           Securities) which are expected to be                   available at no charge. The value,
                                                  business day of the request for                          delivered within three business days
                                                  redemption, plus cash in an amount                                                                              components, and percentage weightings
                                                                                                           and the cash redemption payment to the
                                                  equal to the difference between the NAV                                                                         of each of the Indices will be calculated
                                                                                                           redeeming beneficial owner by the third
                                                  of the Shares being redeemed, as next                                                                           and disseminated at least once daily and
                                                                                                           business day following the transmittal
                                                  determined after a receipt of a request                                                                         will be available from major market data
                                                                                                           date on which such redemption order is
                                                  in proper form, and the value of the                                                                            vendors. Rules governing the Indices are
                                                                                                           deemed received by the Administrator.
                                                  Fund Securities, less the redemption                                                                            available on Barclays’ Web site and in
                                                  transaction fee and variable fees                        Availability of Information                            each respective Fund’s prospectus.
                                                                                                              Each Fund’s Web site, which will be                    In addition, for each Fund, an
                                                  described below. Should the Fund
                                                                                                           publicly available prior to the public                 estimated value, defined in BZX Rule
                                                  Securities have a value greater than the
                                                                                                           offering of Shares, will include a form                14.11(c)(6)(A) as the ‘‘Intraday
                                                  NAV of the Shares being redeemed, a
                                                                                                           of the prospectus for the Fund that may                Indicative Value,’’ that reflects an
                                                  compensating cash payment to the Trust
                                                                                                           be downloaded. The Web site will                       estimated intraday value of each Fund’s
                                                     41 To be eligible to place orders with the            include additional quantitative                        portfolio, will be disseminated.
                                                  Distributor to create Creation Units of the Funds, an    information updated on a daily basis,                  Moreover, the Intraday Indicative Value
                                                  entity or person either must be: (1) a ‘‘Participating   including, for the Fund: (1) the prior                 will be based upon the current value for
                                                  Party,’’ i.e., a broker-dealer or other participant in                                                          the components of the daily disclosed
                                                  the Clearing Process through the Continuous Net          business day’s reported NAV, daily
                                                  Settlement System of the NSCC; or (2) a DTC              trading volume, and a calculation of the               portfolio and will be updated and
                                                  Participant (as defined below); and, in either case,     premium and discount of the Bid/Ask                    widely disseminated by one or more
mstockstill on DSK3G9T082PROD with NOTICES




                                                  must have executed an agreement with the                 Price against the NAV; and (2) data in                 major market data vendors at least every
                                                  Distributor and the Transfer Agent (as it may be                                                                15 seconds during the Exchange’s
                                                  amended from time to time in accordance with its         chart format displaying the frequency
                                                  terms) (‘‘Participant Agreement’’). DTC Participants
                                                                                                                                                                  Regular Trading Hours.44 In addition,
                                                  are participants of the Depository Trust Company           42 The Adviser represents that, to the extent that
                                                                                                                                                                    43 Regular Trading Hours are 9:30 a.m. to 4:00
                                                  (‘‘DTC’’) that acts as securities depositary for Index   the Trust permits or requires a ‘‘cash in lieu’’
                                                  Fund Shares. A Participating Party and DTC               amount, such transactions will be effected in the      p.m. Eastern Time.
                                                  Participant are collectively referred to as an           same or equitable manner for all Authorized              44 Currently, it is the Exchange’s understanding

                                                  ‘‘Authorized Participant.’’                              Participants.                                          that several major market data vendors display and/



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                                                                               Federal Register / Vol. 81, No. 168 / Tuesday, August 30, 2016 / Notices                                                   59707

                                                  the quotations of certain of each Fund’s                include: (1) the extent to which trading              addition, the Exchange is able to access,
                                                  holdings may not be updated during                      is not occurring in the securities and/or             as needed, trade information for certain
                                                  U.S. trading hours if updated prices                    the financial instruments composing the               fixed income instruments reported to
                                                  cannot be ascertained.                                  daily disclosed portfolio of the Funds;               FINRA’s Trade Reporting and
                                                     The dissemination of the Intraday                    or (2) whether other unusual conditions               Compliance Engine (‘‘TRACE’’). FINRA
                                                  Indicative Value, together with the daily               or circumstances detrimental to the                   also can access data obtained from the
                                                  disclosed portfolio, will allow investors               maintenance of a fair and orderly                     Municipal Securities Rulemaking Board
                                                  to determine the value of the underlying                market are present. Trading in the                    (‘‘MSRB’’) relating to municipal bond
                                                  portfolio of the Funds on a daily basis                 Shares also will be subject to Rule                   trading activity for surveillance
                                                  and provide a close estimate of that                    14.11(c)(1)(B)(iv), which sets forth                  purposes in connection with trading in
                                                  value throughout the trading day.                       circumstances under which Shares of a                 the Shares. In addition, the Exchange
                                                     Quotation and last sale information                  Fund may be halted.                                   may obtain information regarding
                                                  for the Shares of each Fund will be                                                                           trading in the Shares and the underlying
                                                  available via the CTA high speed line.                  Trading Rules                                         shares in exchange-traded investment
                                                  Quotation information for investment                       The Exchange deems the Shares to be                companies, futures, and options from
                                                  company securities (excluding ETFs)                     equity securities, thus rendering trading             markets or other entities that are
                                                  may be obtained through nationally                      in the Shares subject to the Exchange’s               members of ISG or with which the
                                                  recognized pricing services through                     existing rules governing the trading of               Exchange has in place a comprehensive
                                                  subscription agreements or from brokers                 equity securities. The Exchange will                  surveillance sharing agreement. The
                                                  and dealers who make markets in such                    allow trading in the Shares from 8:00                 Exchange prohibits the distribution of
                                                  securities. Price information regarding                 a.m. until 5:00 p.m. Eastern Time and                 material non-public information by its
                                                  Municipal Securities and non-exchange                   has the appropriate rules to facilitate               employees.
                                                  traded assets, including investment                     transactions in the Shares during all                 Information Circular
                                                  companies, derivatives, money market                    trading sessions. As provided in BZX
                                                  instruments, repurchase agreements,                     Rule 11.11(a), the minimum price                         Prior to the commencement of
                                                  and reverse repurchase agreements is                    variation for quoting and entry of orders             trading, the Exchange will inform its
                                                  available from third party pricing                      in securities traded on the Exchange is               members in an Information Circular of
                                                  services and major market data vendors.                 $0.01, with the exception of securities               the special characteristics and risks
                                                  For exchange-traded assets, including                   that are priced less than $1.00, for                  associated with trading the Shares.
                                                  investment companies, futures, and                      which the minimum price variation for                 Specifically, the Information Circular
                                                  options, such intraday information is                   order entry is $0.0001.                               will discuss the following: (1) the
                                                  available directly from the applicable                                                                        procedures for purchases and
                                                                                                          Surveillance                                          redemptions of Shares in Creation Units
                                                  listing exchange.
                                                     Initial and Continued Listing                           The Exchange believes that its                     (and that Shares are not individually
                                                     The Shares of each Fund will conform                 surveillance procedures are adequate to               redeemable); (2) BZX Rule 3.7, which
                                                  to the initial and continued listing                    properly monitor the trading of the                   imposes suitability obligations on
                                                  criteria under BZX Rule 14.11(c)(4),                    Shares on the Exchange during all                     Exchange members with respect to
                                                  except for those set forth in                           trading sessions and to deter and detect              recommending transactions in the
                                                  14.11(c)(4)(B)(i)(b). The Exchange                      violations of Exchange rules and the                  Shares to customers; (3) how
                                                  represents that, for initial and/or                     applicable federal securities laws.                   information regarding the Intraday
                                                  continued listing, the Funds and the                    Trading of the Shares through the                     Indicative Value is disseminated; (4) the
                                                                                                          Exchange will be subject to the                       risks involved in trading the Shares
                                                  Trust must be in compliance with Rule
                                                                                                          Exchange’s surveillance procedures for                during the Pre-Opening 47 and After
                                                  10A–3 under the Act.45 A minimum of
                                                                                                          derivative products, including Index                  Hours Trading Sessions 48 when an
                                                  50,000 Shares of each Fund will be
                                                                                                          Fund Shares. The issuer has represented               updated Intraday Indicative Value will
                                                  outstanding at the commencement of
                                                                                                          to the Exchange that it will advise the               not be calculated or publicly
                                                  trading on the Exchange. The Exchange
                                                                                                          Exchange of any failure by the Fund to                disseminated; (5) the requirement that
                                                  will obtain a representation from the
                                                                                                          comply with the continued listing                     members deliver a prospectus to
                                                  issuer of the Shares that the NAV per
                                                                                                          requirements, and, pursuant to its                    investors purchasing newly issued
                                                  Share for each Fund will be calculated
                                                                                                          obligations under Section 19(g)(1) of the             Shares prior to or concurrently with the
                                                  daily and will be made available to all
                                                                                                          Exchange Act, the Exchange will surveil               confirmation of a transaction; and (6)
                                                  market participants at the same time.
                                                                                                          for compliance with the continued                     trading information.
                                                  Trading Halts                                           listing requirements. If the Fund is not                 In addition, the Information Circular
                                                                                                          in compliance with the applicable                     will advise members, prior to the
                                                     With respect to trading halts, the
                                                                                                          listing requirements, the Exchange will               commencement of trading, of the
                                                  Exchange may consider all relevant
                                                                                                          commence delisting procedures under                   prospectus delivery requirements
                                                  factors in exercising its discretion to
                                                                                                          Exchange Rule 14.12. The Exchange                     applicable to the Funds. Members
                                                  halt or suspend trading in the Shares of
                                                                                                          may obtain information regarding                      purchasing Shares from the Funds for
                                                  the Funds. The Exchange will halt
                                                                                                          trading in the Shares and the underlying              resale to investors will deliver a
                                                  trading in the Shares under the
                                                                                                          shares in exchange traded equity                      prospectus to such investors. The
                                                  conditions specified in BZX Rule 11.18.
                                                                                                          securities via the ISG, from other                    Information Circular will also discuss
                                                  Trading may be halted because of
                                                                                                                                                                any exemptive, no-action, and
mstockstill on DSK3G9T082PROD with NOTICES




                                                  market conditions or for reasons that, in               exchanges that are members or affiliates
                                                  the view of the Exchange, make trading                  of the ISG, or with which the Exchange
                                                                                                                                                                may trade on markets that are members of ISG or
                                                  in the Shares inadvisable. These may                    has entered into a comprehensive                      with which the Exchange has in place a
                                                                                                          surveillance sharing agreement.46 In                  comprehensive surveillance sharing agreement.
                                                  or make widely available Intraday Indicative Values                                                             47 The Pre-Opening Session is from 8:00 a.m. to

                                                  published via the Consolidated Tape Association           46 For a list of the current members of ISG, see    9:30 a.m. Eastern Time.
                                                  (‘‘CTA’’) or other data feeds.                          www.isgportal.org. The Exchange notes that not all      48 The After Hours Trading Session is from 4:00
                                                     45 See 17 CFR 240.10A–3.                             components of the Disclosed Portfolio for the Fund    p.m. to 5:00 p.m. Eastern Time.



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                                                  59708                           Federal Register / Vol. 81, No. 168 / Tuesday, August 30, 2016 / Notices

                                                  interpretive relief granted by the                         with trading in the Shares. The                       were 3,624 issues; 5.72% of the weight
                                                  Commission from any rules under the                        Exchange is able to access, as needed,                of components had a minimum original
                                                  Act.                                                       trade information for certain fixed                   principal amount outstanding of $100
                                                    In addition, the Information Circular                    income securities held by a Fund                      million or more; 72.27% of the weight
                                                  will reference that each Fund is subject                   reported to FINRA’s TRACE. FINRA                      of components was comprised of
                                                  to various fees and expenses described                     also can access data obtained from the                individual maturities that were part of
                                                  in the Registration Statement. The                         Municipal Securities Rulemaking Board                 an entire municipal bond offering with
                                                  Information Circular will also disclose                    (‘‘MSRB’’) relating to municipal bond                 a minimum original principal amount
                                                  the trading hours of the Shares of the                     trading activity for surveillance                     outstanding of $100 million or more for
                                                  Funds and the applicable NAV                               purposes in connection with trading in                all maturities of the offering; the total
                                                  calculation time for the Shares. The                       the Shares. In addition, the Exchange                 face amount outstanding of issues in the
                                                  Information Circular will disclose that                    may obtain information regarding                      2024 Index was approximately $29.9
                                                  information about the Shares of the                        trading in the Shares and the underlying              billion, the market value is $36.4
                                                  Funds will be publicly available on the                    shares in exchange-traded investment                  billion, and the average dollar amount
                                                  Funds’ Web site. In addition, the                          companies, futures, and options from                  outstanding of issues in the 2024 Index
                                                  Information Circular will reference that                   markets or other entities that are                    was approximately $8.3 million; the
                                                  the Trust is subject to various fees and                   members of ISG or with which the                      most heavily weighted component
                                                  expenses described in each Fund’s                          Exchange has in place a comprehensive                 represented 0.72% of the 2024 Index
                                                  Registration Statement.                                    surveillance sharing agreement.                       and the five most heavily weighted
                                                                                                                The Index Provider is not a broker-                components represented 2.74% of the
                                                  2. Statutory Basis
                                                                                                             dealer, but is affiliated with a broker-              2024 Index. Therefore, the Exchange
                                                     The Exchange believes that the                          dealer and has implemented a ‘‘fire                   believes that, notwithstanding that the
                                                  proposal is consistent with Section 6(b)                   wall’’ with respect to such broker-dealer             2024 Index does not satisfy the criterion
                                                  of the Act 49 in general and Section                       regarding access to information                       in BZX Rule 14.11(c)(4)(B)(i), the 2024
                                                  6(b)(5) of the Act 50 in particular in that                concerning the composition and/or                     Index is sufficiently broad-based to
                                                  it is designed to prevent fraudulent and                   changes to the Indices. The Index                     deter potential manipulation in that a
                                                  manipulative acts and practices, to                        Provider has also implemented                         substantial portion (72.27%) of the 2024
                                                  promote just and equitable principles of                   procedures designed to prevent the use                Index weight is comprised of maturities
                                                  trade, to foster cooperation and                           and dissemination of material, non-                   that are part of a minimum original
                                                  coordination with persons engaged in                       public information regarding the                      principal amount outstanding of $100
                                                  facilitating transactions in securities, to                Indices.                                              million or more, and in view of the
                                                  remove impediments to and perfect the                         As of July 18, 2016, the 2023 Index                substantial total dollar amount
                                                  mechanism of a free and open market                        had the following characteristics: there              outstanding and the average dollar
                                                  and a national market system and, in                       were 4,612 issues; 5.83% of the weight                amount outstanding of index issues.
                                                  general, to protect investors and the                      of components had a minimum original                     The value, components, and
                                                  public interest.                                           principal amount outstanding of $100                  percentage weightings of each of the
                                                     The Exchange believes that the                          million or more; 73.56% of the weight                 Indices will be calculated and
                                                  proposed rule change is designed to                        of components was comprised of                        disseminated at least once daily and
                                                  prevent fraudulent and manipulative                        individual maturities that were part of               will be available from major market data
                                                  acts and practices in that the Shares will                 an entire municipal bond offering with                vendors. In addition, the portfolio of
                                                  be listed and traded on the Exchange                       a minimum original principal amount                   securities held by the Funds will be
                                                  pursuant to the listing criteria in BZX                    outstanding of $100 million or more for               disclosed on the Funds’ Web site at
                                                  Rule 14.11(c). The Exchange believes                       all maturities of the offering; total face            www.iShares.com. The intraday
                                                  that its surveillances, which generally                    amount outstanding of issues in the                   indicative value for Shares of the Funds
                                                  focus on detecting securities trading                      2023 Index was approximately $38.5                    will be disseminated by one or more
                                                  outside of their normal patterns which                     billion, the market value is $46.4                    major market data vendors, updated at
                                                  could be indicative of manipulative or                     billion, and the average dollar amount                least every 15 seconds during Regular
                                                  other violative activity, and associated                   outstanding per issue was                             Trading Hours. The Adviser represents
                                                  surveillance procedures are adequate to                    approximately $8.3 million; the most                  that bonds that share similar
                                                  properly monitor the trading of the                        heavily weighted component                            characteristics, as described above, tend
                                                  Shares on the Exchange during all                          represented 1.61% of the 2023 Index                   to trade similarly to one another;
                                                  trading sessions and to deter and detect                   and the five most heavily weighted                    therefore, within these categories, the
                                                  violations of Exchange rules and the                       components represented 3.66% of the                   issues may be considered fungible from
                                                  applicable federal securities laws. The                    2023 Index. Therefore, the Exchange                   a portfolio management perspective.
                                                  Exchange will communicate as needed                        believes that, notwithstanding that the               Within a single municipal bond issuer,
                                                  regarding trading in the Shares with                       2023 Index does not satisfy the criterion             [sic] Adviser represents that separate
                                                  other markets or other entities that are                   in BZX Rule 14.11(c)(4)(B)(i), the 2023               issues by the same issuer are also likely
                                                  members of the Intermarket                                 Index is sufficiently broad-based to                  to trade similarly to one another.
                                                  Surveillance group (‘‘ISG’’), and may                      deter potential manipulation in that a                   The proposed rule change is designed
                                                  obtain trading information regarding                       substantial portion (73.56%) of the 2023              to promote just and equitable principles
                                                  trading in the Shares from such markets                    Index weight is comprised of maturities               of trade and to protect investors and the
                                                                                                             that are part of a minimum original                   public interest in that a large amount of
mstockstill on DSK3G9T082PROD with NOTICES




                                                  or entities. The Exchange can also
                                                  access data obtained from the Municipal                    principal amount outstanding of $100                  information will be publicly available
                                                  Securities Rulemaking Board relating to                    million or more, and in view of the                   regarding the Funds and the Shares,
                                                  municipal bond trading activity for                        substantial total dollar amount                       thereby promoting market transparency.
                                                  surveillance purposes in connection                        outstanding and the average dollar                    The Funds’ portfolio holdings will be
                                                                                                             amount outstanding of index issues.                   disclosed on the Funds’ Web site daily
                                                    49 15   U.S.C. 78f.                                         As of July 18, 2016, the 2024 Index                after the close of trading on the
                                                    50 15   U.S.C. 78f(b)(5).                                had the following characteristics: there              Exchange and prior to the opening of


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                                                                               Federal Register / Vol. 81, No. 168 / Tuesday, August 30, 2016 / Notices                                                 59709

                                                  trading on the Exchange the following                   surveillance procedures relating to                   Electronic Comments
                                                  day. Moreover, the IIV will be widely                   trading in the Shares and may obtain
                                                  disseminated by one or more major                       information in the Shares and the                       • Use the Commission’s Internet
                                                  market data vendors at least every 15                   underlying shares in exchange-traded                  comment form (http://www.sec.gov/
                                                  seconds during Regular Trading Hours.                   investment companies, futures, and                    rules/sro.shtml); or
                                                  The current value of each of the Indices                options via ISG from other exchanges                    • Send an email to rule-
                                                  will be disseminated by one or more                     that are members of ISG or with which                 comments@sec.gov. Please include File
                                                  major market data vendors at least once                 the Exchange has entered into a                       Number SR–BatsBZX–2016–48 on the
                                                  per day. Information regarding market                   comprehensive surveillance sharing                    subject line.
                                                  price and trading volume of the Shares                  agreement. In addition, investors will
                                                  will be continually available on a real-                have ready access to information                      Paper Comments
                                                  time basis throughout the day on                        regarding the IIV and quotation and last
                                                                                                                                                                  • Send paper comments in triplicate
                                                  brokers’ computer screens and other                     sale information for the Shares.
                                                  electronic services, and quotation and                                                                        to Secretary, Securities and Exchange
                                                                                                             For the above reasons, the Exchange                Commission, 100 F Street NE.,
                                                  last sale information will be available                 believes that the proposed rule change
                                                  via the CTA high-speed line. The Web                                                                          Washington, DC 20549–1090.
                                                                                                          is consistent with the requirements of
                                                  site for the Funds will include the                     Section 6(b)(5) of the Act.                           All submissions should refer to File
                                                  prospectus for the Funds and additional                                                                       Number SR-BatsBZX–2016–48. This file
                                                  data relating to NAV and other                          B. Self-Regulatory Organization’s                     number should be included on the
                                                  applicable quantitative information.                    Statement on Burden on Competition                    subject line if email is used. To help the
                                                  Moreover, prior to the commencement                                                                           Commission process and review your
                                                  of trading, the Exchange will inform its                  The Exchange does not believe that
                                                                                                          the proposed rule change will impose                  comments more efficiently, please use
                                                  Members in an information circular of                                                                         only one method. The Commission will
                                                  the special characteristics and risks                   any burden on competition that is not
                                                                                                          necessary or appropriate in furtherance               post all comments on the Commission’s
                                                  associated with trading the Shares. If the
                                                                                                          of the purpose of the Act. The Exchange               Internet Web site (http://www.sec.gov/
                                                  Exchange becomes aware that the NAV
                                                                                                          notes that the proposed rule change will              rules/sro.shtml). Copies of the
                                                  is not being disseminated to all market
                                                  participants at the same time, it will halt             facilitate the listing and trading of                 submission, all subsequent
                                                  trading in the Shares until such time as                additional exchange-traded products                   amendments, all written statements
                                                  the NAV is available to all market                      that will enhance competition among                   with respect to the proposed rule
                                                  participants. With respect to trading                   market participants, to the benefit of                change that are filed with the
                                                  halts, the Exchange may consider all                    investors and the marketplace.                        Commission, and all written
                                                  relevant factors in exercising its                                                                            communications relating to the
                                                                                                          C. Self-Regulatory Organization’s
                                                  discretion to halt or suspend trading in                Statement on Comments on the                          proposed rule change between the
                                                  the Shares of the Funds. Trading also                   Proposed Rule Change Received From                    Commission and any person, other than
                                                  may be halted because of market                         Members, Participants or Others                       those that may be withheld from the
                                                  conditions or for reasons that, in the                                                                        public in accordance with the
                                                  view of the Exchange, make trading in                     The Exchange has neither solicited                  provisions of 5 U.S.C. 552, will be
                                                  the Shares inadvisable. These may                       nor received written comments on the                  available for Web site viewing and
                                                  include: (1) the extent to which trading                proposed rule change.                                 printing in the Commission’s Public
                                                  is not occurring in the securities and/or                                                                     Reference Room, 100 F Street NE.,
                                                                                                          III. Date of Effectiveness of the
                                                  the financial instruments composing the                                                                       Washington, DC 20549, on official
                                                                                                          Proposed Rule Change and Timing for
                                                  daily disclosed portfolio of each Fund;                                                                       business days between the hours of
                                                                                                          Commission Action
                                                  or (2) whether other unusual conditions                                                                       10:00 a.m. and 3:00 p.m. Copies of such
                                                  or circumstances detrimental to the                       Within 45 days of the date of                       filing will also be available for
                                                  maintenance of a fair and orderly                       publication of this notice in the Federal             inspection and copying at the principal
                                                  market are present. Trading in the                      Register or within such longer period                 office of the Exchange. All comments
                                                  Shares also will be subject to Rule                     up to 90 days (i) as the Commission may               received will be posted without change;
                                                  14.11(c)(1)(B)(iv), which sets forth                    designate if it finds such longer period              the Commission does not edit personal
                                                  circumstances under which Shares of a                   to be appropriate and publishes its                   identifying information from
                                                  Fund may be halted. If the IIV of any of                reasons for so finding or (ii) as to which            submissions. You should submit only
                                                  the Funds or value of the Indices are not               the Exchange consents, the Commission                 information that you wish to make
                                                  being disseminated as required, the                     will:
                                                  Exchange may halt trading during the                                                                          available publicly. All submissions
                                                  day in which the interruption to the                      (a) by order approve or disapprove                  should refer to File Number SR–
                                                  dissemination of the IIV or index value                 such proposed rule change, or                         BatsBZX–2016–48 and should be
                                                  occurs.                                                   (b) institute proceedings to determine              submitted on or before September 20,
                                                                                                          whether the proposed rule change                      2016.
                                                     The proposed rule change is designed
                                                  to perfect the mechanism of a free and                  should be disapproved.                                  For the Commission, by the Division of
                                                  open market and, in general, to protect                 IV. Solicitation of Comments                          Trading and Markets, pursuant to delegated
                                                  investors and the public interest in that                                                                     authority.51
mstockstill on DSK3G9T082PROD with NOTICES




                                                  it will facilitate the listing and trading                Interested persons are invited to                   Robert W. Errett,
                                                  of additional types of exchange-traded                  submit written data, views, and                       Deputy Secretary.
                                                  funds that holds municipal bonds and                    arguments concerning the foregoing,                   [FR Doc. 2016–20735 Filed 8–29–16; 8:45 am]
                                                  that will enhance competition among                     including whether the proposed rule
                                                                                                                                                                BILLING CODE 8011–01–P
                                                  market participants, to the benefit of                  change is consistent with the Act.
                                                  investors and the marketplace. As noted                 Comments may be submitted by any of
                                                  above, the Exchange has in place                        the following methods:                                  51 17   CFR 200.30–3(a)(12).



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Document Created: 2018-02-09 11:42:22
Document Modified: 2018-02-09 11:42:22
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation81 FR 59700 

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