83 FR 47657 - Exact Sciences Corporation

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 183 (September 20, 2018)

Page Range		47657-47659
FR Document		2018-20408
Federal Register, Volume 83 Issue 183 (Thursday, September 20, 2018)
[Federal Register Volume 83, Number 183 (Thursday, September 20, 2018)]
[Notices]
[Pages 47657-47659]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-20408]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33228; File No. 812-14875]


Exact Sciences Corporation

September 14, 2018.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    Notice of application for an order under Section 3(b)(2) of the 
Investment Company Act of 1940 (``Act'').
    Applicant: Exact Sciences Corporation.
    Summary of Application: Applicant seeks an order under Section 
3(b)(2) of the Act declaring it to be primarily engaged in a business 
other than that of investing, reinvesting, owning, holding or trading 
in securities. Applicant is in the business of producing and developing 
screening and diagnostic tests for the early detection and prevention 
of certain cancers.
    Filing Dates: The application was filed on January 30, 2018 and 
amended on June 1, 2018, July 6, 2018 and August 24, 2018.
    Hearing or Notification of Hearing: An order granting the requested 
relief will be issued unless the Commission orders a hearing. 
Interested persons may request a hearing by writing to the Commission's 
Secretary and serving applicant with a copy of the request, personally 
or by mail. Hearing requests should be received by the Commission by 
5:30 p.m. on October 10, 2018 and should be accompanied by proof of 
service on Applicant, in the form of an affidavit or, for lawyers, a 
certificate of service. Hearing requests should state the nature of the 
writer's interest, the reason for the request, and the issues 
contested. Persons who wish to be notified of a hearing may request 
notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street 
NE, Washington, DC 20549-1090. Applicant, 441 Charmany Drive, Madison, 
Wisconsin 53719.

FOR FURTHER INFORMATION CONTACT: Rochelle Kauffman Plesset, Senior 
Counsel, at (202) 551-6840, or Nadya B. Roytblat, Assistant Chief 
Counsel, at (202) 551-6825 (Division of Investment Management, Chief 
Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's website by searching for the file number, or applicant 
using the Company name box, at http://www.sec.gov/search/search.htm or 
by calling (202) 551-8090.

Applicant's Representations

    1. Formed in 1995, Applicant is a Delaware corporation that is in 
the business of developing, clinical testing, marketing and 
commercializing cancer and pre-cancer screening and diagnostic tests. 
Applicant currently manufactures a non-invasive, patient-friendly 
screening test called Cologuard and provides it to patients on a 
prescription-only basis through its clinical laboratory. Applicant is 
also currently working on the development of additional tests for other 
types of cancers.
    2. Applicant states that companies in the heathcare sector such as 
itself generally need significant liquid capital to finance their 
operations and meet high production, commercialization and regulatory 
costs. Such companies often spend a significant proportion of their 
revenues on research and development (``R&D'') in order to bring a 
product to market and to bring products through the Food and Drug 
Administration's (``FDA'') approval process.
    3. Applicant states that it currently depends on raised capital to 
finance operations and continued growth but ultimately seeks to 
generate cash from its operations to support its business. Applicant 
states that it has successfully raised capital to finance its 
operations and commercialization of Cologuard in large part through 
various public offerings of its debt and equity securities. Applicant 
seeks to preserve its capital and maintain liquidity, pending the use 
of such capital to support its business operations, by investing in 
short-term investment grade and liquid fixed income and money market 
instruments that earn competitive market returns and provide a low 
level of credit risk (``Capital Preservation Investments''). Applicant 
also, to a limited extent, makes strategic investments in companies 
that are complementary to its core business. Applicant's board of 
directors oversees Applicant's investment practices and defines the 
parameters for investment activities. Applicant does not invest in 
securities for short-term speculative purposes.

Applicant's Legal Analysis

    1. Applicant seeks an order under Section 3(b)(2) of the Act 
declaring that it is primarily engaged in a business other than that of 
investing, reinvesting, owning, holding or trading in securities and 
therefore is not an investment company as defined in the Act.
    2. Section 3(a)(l)(A) of the Act defines the term ``investment 
company'' to include an issuer that is or holds itself out as being 
engaged primarily, or proposes to engage primarily, in the business of 
investing, reinvesting or trading in securities. Section 3(a)(l)(C) of 
the Act further defines an investment company as an issuer that is 
engaged or proposes to engage in the business of investing, 
reinvesting, owning, holding or trading in securities, and owns or 
proposes to acquire investment securities having a value in excess of 
40% of the value of the issuer's total assets (exclusive of Government 
securities and cash items) on an unconsolidated basis. Section 3(a)(2) 
of the Act defines ``investment securities'' to include all securities 
except Government securities, securities issued by employees' 
securities companies, and securities issued by majority-owned 
subsidiaries of the owner which (a) are not investment companies and 
(b) are not relying on the exclusions from the definition of investment 
company in Section 3(c)(1) or Section 3(c)(7) of the Act. While 
Applicant states that it does not hold itself out as being engaged 
primarily in the business of investing, reinvesting or trading in 
securities, Applicant states that it consistently holds investment 
securities that exceed 40% of its total assets on an unconsolidated 
basis (exclusive of Government securities and cash items). Applicant 
states that it therefore falls within the definition of investment 
company under Section 3(a)(l)(C) of the Act.
    3. Rule 3a-8 under the Act provides an exclusion from the 
definition of investment company if, among other factors, a company's 
R&D expenses are a substantial percentage of its total expenses for the 
last four fiscal quarters combined. While Applicant believes that it 
complies with the conditions of Rule 3a-8, Applicant is concerned that 
its R&D expenses, while substantial in absolute terms, may not be 
substantial as a ratio of overall expenses, particularly given the 
expense increase in connection with the commercialization of Cologuard. 
Applicant's R&D expenses as a ratio of

[[Page 47658]]

total expenses have declined from a high of 74% of total expenses in 
2012 to approximately 11% of total expenses for year-end 2017 and 12% 
as of March 31, 2018. Applicant explains that since the FDA's approval 
of Cologuard, Applicant has devoted more resources to sales and 
marketing. Although Applicant's R&D expenses have generally increased 
or remained steady overtime, its overall expenses have 
disproportionately increased, causing a decline in the ratio of R&D 
expenses to overall expenses. While Applicant expects to increase 
funding for R&D for other products, it also expects to increase funding 
with respect to the commercialization of Cologuard. Thus, Applicant 
does not expect its additional funding for R&D to cause a significant 
increase in the ratio of R&D funding to overall expenses.
    4. Section 3(b)(2) of the Act provides that, notwithstanding 
Section 3(a)(l)(C) of the Act, the Commission may issue an order 
declaring an issuer to be primarily engaged in a business other than 
that of investing, reinvesting, owning, holding, or trading in 
securities directly, through majority-owned subsidiaries, or controlled 
companies conducting similar types of businesses. Applicant requests an 
order under Section 3(b)(2) of the Act declaring that it is primarily 
engaged in a business other than that of investing, reinvesting, 
owning, holding or trading in securities, and therefore is not an 
investment company as defined in the Act.
    5. In determining whether an issuer is ``primarily engaged'' in a 
non-investment company business under Section 3(b)(2) of the Act, the 
Commission considers the following factors: (a) The company's 
historical development, (b) its public representations of policy, (c) 
the activities of its officers and directors, (d) the nature of its 
present assets, and (e) the sources of its present income.\1\
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    \1\ Tonopah Mining Company of Nevada, 26 SEC 426, 427 (1947).
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    6. Applicant submits that it satisfies the criteria for issuance of 
an order under Section 3(b)(2) of the Act because Applicant is 
primarily engaged in the business of developing, testing, marketing and 
commercializing cancer and pre-cancer diagnostic screening tests and 
not in the business of investing, reinvesting, owning, holding or 
trading in securities.
    a. Historical Development. Applicant states that since its 
inception in 1995 it has operated in the healthcare sector to develop 
and commercialize cancer and pre-cancer screening and diagnostic tests. 
Applicant has focused its strategic opportunities in developing a 
screening test for colorectal cancer, culminating in the development of 
Cologuard, which received FDA approval in 2014. Since 2014, Applicant 
has been engaged in sales and marketing Cologuard and has begun 
research and development on testing related to other types of cancers. 
Applicant has nine wholly-owned subsidiaries, each of which is an 
operating company integrally related to Applicant's business. Applicant 
has never sold any of its subsidiaries since inception.
    b. Public Representations of Policy. Applicant states it has never 
made any public representations that would indicate that it is in any 
business other than developing and commercializing cancer screening 
technologies. Applicant represents that it has never held and does not 
now hold itself out as an investment company within the meaning of the 
Act. Applicant states that all annual reports, web postings, press 
releases and written communications issued by Applicant have related to 
its business as a cancer screening and diagnostics company. Applicant 
further states that its public representations make clear that 
shareholders invest in the Applicant's securities with the expectation 
of realizing gains from Applicant's development and commercialization 
of cancer-screening and diagnostic technologies and not from returns on 
an investment portfolio. Applicant's only public representations 
regarding its investment securities are those required to be disclosed 
in public filings with the Commission.
    c. Activities of Officers and Directors. Applicant represents that 
its board of directors and officers devote substantially all of their 
time managing Applicant's business as a cancer screening and 
diagnostics company. Applicant states that its management and corporate 
governance structure is comprised of professionals with expertise in 
technology, science, medicine, life science/biotechnology, and 
government. Applicant states that day-to-day management of the Capital 
Preservation Investments is handled by external asset managers 
consistent with investment guidelines adopted by the Applicant's board 
of directors on an annual basis. Applicant states that while the board 
of directors may review strategic investments in companies that are 
complementary to the Applicant's business, these reviews are made for 
long-term business, not speculative investment strategies. None of the 
members of management or the board of directors, even when reviewing 
strategic investments, spends or proposes to spend more than 1% of his 
or her time on any securities investment activities on behalf of the 
Applicant. They, along with the Applicant's approximately 1,268 full-
time employees, are dedicated to the production and commercialization 
of Cologuard and the development of new cancer screening and diagnostic 
products.
    d. Nature of Assets. Applicant states that as of March 31, 2018, 
Applicant's investment securities constituted approximately 79% of its 
total assets (excluding Government securities and cash items) on an 
unconsolidated basis.\2\ Furthermore, more than 99% of its investment 
securities consisted of Capital Preservation Investments. Applicant's 
remaining investment securities consist of a strategic investment in a 
company whose business is complementary to the Applicant's business. 
Applicant anticipates that its investment securities other than Capital 
Preservation Investments will not exceed 10% of its total 
unconsolidated assets (excluding Government securities and cash items) 
in the future. Applicant uses current assets, including its Capital 
Preservation Investments, to finance its continued R&D program and 
operations in connection with the commercialization of Cologuard.
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    \2\ Applicant states that none of its subsidiaries owns 
investment securities.
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    e. Sources of Income and Revenue. Applicant represents that since 
its inception it has had net operating losses. It does, however, derive 
income from its investment securities.
    Applicant states that, particularly given its commercialization of 
Cologuard, a review of its current sources of revenues provides a more 
accurate picture of its operating company status. Applicant states 
that, for the year ended December 31, 2017, Applicant had approximately 
$266 million of revenues attributable to Cologuard. For the three 
months ended March 31, 2018, Cologuard revenues were approximately 
$90.3 million. In contrast, Applicant earned $3.9 million in net 
investment income in 2017, and $3.7 million for the three months ended 
March 31, 2018, all derived from Capital Preservation Investments.\3\ 
Applicant states that if investment income were compared to its 
revenues from Cologuard, it would account for less than 2%. Applicant 
states it does not expect its net investment income to exceed 2% of its 
revenues over the long term.
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    \3\ Applicant states that it has not, and does not expect to, 
earn investment income from its strategic investment.

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[[Page 47659]]

    7. Applicant asserts that its historical development, its public 
representations of policy, the activities of its officers and 
directors, the nature of its assets and its sources of income and 
revenue, as discussed in the application, demonstrate that it is 
engaged primarily in a business other than that of investing, 
reinvesting, owning, holding or trading securities. Applicant thus 
asserts that it satisfies the criteria for issuing an order under 
Section 3(b)(2) of the Act.

Applicant's Conditions

    Applicant agrees that any order granted pursuant to the application 
will be subject to the following conditions:
    1. Applicant will continue to allocate and use its accumulated cash 
and investment securities for bona fide business purposes; and
    2. Applicant will refrain from investing or trading in securities 
for short-term speculative purposes.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-20408 Filed 9-19-18; 8:45 am]
 BILLING CODE 8011-01-P
47658 Federal Register / Vol. 83, No. 183 / Thursday, September 20, 2018 / Notices

total expenses have declined from a opportunities in developing a screening spend more than 1% of his or her time
high of 74% of total expenses in 2012 test for colorectal cancer, culminating in on any securities investment activities
to approximately 11% of total expenses the development of Cologuard, which on behalf of the Applicant. They, along
for year-end 2017 and 12% as of March received FDA approval in 2014. Since with the Applicant’s approximately
31, 2018. Applicant explains that since 2014, Applicant has been engaged in 1,268 full-time employees, are dedicated
the FDA’s approval of Cologuard, sales and marketing Cologuard and has to the production and
Applicant has devoted more resources begun research and development on commercialization of Cologuard and the
to sales and marketing. Although testing related to other types of cancers. development of new cancer screening
Applicant’s R&D expenses have Applicant has nine wholly-owned and diagnostic products.
generally increased or remained steady subsidiaries, each of which is an d. Nature of Assets. Applicant states
overtime, its overall expenses have operating company integrally related to that as of March 31, 2018, Applicant’s
disproportionately increased, causing a Applicant’s business. Applicant has investment securities constituted
decline in the ratio of R&D expenses to never sold any of its subsidiaries since approximately 79% of its total assets
overall expenses. While Applicant inception. (excluding Government securities and
expects to increase funding for R&D for b. Public Representations of Policy. cash items) on an unconsolidated basis.2
other products, it also expects to Applicant states it has never made any Furthermore, more than 99% of its
increase funding with respect to the public representations that would investment securities consisted of
commercialization of Cologuard. Thus, indicate that it is in any business other Capital Preservation Investments.
Applicant does not expect its additional than developing and commercializing Applicant’s remaining investment
funding for R&D to cause a significant cancer screening technologies. securities consist of a strategic
increase in the ratio of R&D funding to Applicant represents that it has never investment in a company whose
overall expenses. held and does not now hold itself out business is complementary to the
4. Section 3(b)(2) of the Act provides as an investment company within the Applicant’s business. Applicant
that, notwithstanding Section 3(a)(l)(C) meaning of the Act. Applicant states anticipates that its investment securities
of the Act, the Commission may issue that all annual reports, web postings, other than Capital Preservation
an order declaring an issuer to be press releases and written Investments will not exceed 10% of its
primarily engaged in a business other communications issued by Applicant total unconsolidated assets (excluding
than that of investing, reinvesting, have related to its business as a cancer Government securities and cash items)
owning, holding, or trading in securities screening and diagnostics company. in the future. Applicant uses current
directly, through majority-owned Applicant further states that its public assets, including its Capital Preservation
subsidiaries, or controlled companies representations make clear that Investments, to finance its continued
conducting similar types of businesses. shareholders invest in the Applicant’s R&D program and operations in
Applicant requests an order under securities with the expectation of connection with the commercialization
Section 3(b)(2) of the Act declaring that realizing gains from Applicant’s of Cologuard.
it is primarily engaged in a business development and commercialization of e. Sources of Income and Revenue.
other than that of investing, reinvesting, cancer-screening and diagnostic Applicant represents that since its
owning, holding or trading in securities, technologies and not from returns on an inception it has had net operating
and therefore is not an investment investment portfolio. Applicant’s only losses. It does, however, derive income
company as defined in the Act. public representations regarding its from its investment securities.
5. In determining whether an issuer is investment securities are those required
Applicant states that, particularly
‘‘primarily engaged’’ in a non- to be disclosed in public filings with the
given its commercialization of
investment company business under Commission.
c. Activities of Officers and Directors. Cologuard, a review of its current
Section 3(b)(2) of the Act, the sources of revenues provides a more
Commission considers the following Applicant represents that its board of
directors and officers devote accurate picture of its operating
factors: (a) The company’s historical company status. Applicant states that,
development, (b) its public substantially all of their time managing
Applicant’s business as a cancer for the year ended December 31, 2017,
representations of policy, (c) the Applicant had approximately $266
activities of its officers and directors, (d) screening and diagnostics company.
Applicant states that its management million of revenues attributable to
the nature of its present assets, and (e) Cologuard. For the three months ended
the sources of its present income.1 and corporate governance structure is
comprised of professionals with March 31, 2018, Cologuard revenues
6. Applicant submits that it satisfies
expertise in technology, science, were approximately $90.3 million. In
the criteria for issuance of an order
medicine, life science/biotechnology, contrast, Applicant earned $3.9 million
under Section 3(b)(2) of the Act because
and government. Applicant states that in net investment income in 2017, and
Applicant is primarily engaged in the
day-to-day management of the Capital $3.7 million for the three months ended
business of developing, testing,
Preservation Investments is handled by March 31, 2018, all derived from Capital
marketing and commercializing cancer
external asset managers consistent with Preservation Investments.3 Applicant
and pre-cancer diagnostic screening
investment guidelines adopted by the states that if investment income were
tests and not in the business of
Applicant’s board of directors on an compared to its revenues from
investing, reinvesting, owning, holding
annual basis. Applicant states that while Cologuard, it would account for less
or trading in securities.
a. Historical Development. Applicant the board of directors may review than 2%. Applicant states it does not
states that since its inception in 1995 it strategic investments in companies that expect its net investment income to
amozie on DSK3GDR082PROD with NOTICES1

has operated in the healthcare sector to are complementary to the Applicant’s exceed 2% of its revenues over the long
develop and commercialize cancer and business, these reviews are made for term.
pre-cancer screening and diagnostic long-term business, not speculative
2 Applicant states that none of its subsidiaries
tests. Applicant has focused its strategic investment strategies. None of the
owns investment securities.
members of management or the board of 3 Applicant states that it has not, and does not
1 Tonopah Mining Company of Nevada, 26 SEC directors, even when reviewing strategic expect to, earn investment income from its strategic
426, 427 (1947). investments, spends or proposes to investment.

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Federal Register / Vol. 83, No. 183 / Thursday, September 20, 2018 / Notices 47659

7. Applicant asserts that its historical March 21, 2018.3 On April 25, 2018, the has received no comments on the
development, its public representations Commission extended the time period proposed rule change. This order grants
of policy, the activities of its officers within which to approve the proposed approval of the proposed rule change, as
and directors, the nature of its assets rule change, disapprove the proposed modified by Amendment No. 3.
and its sources of income and revenue, rule change, or institute proceedings to
II. The Exchange’s Description of the
as discussed in the application, determine whether to approve or
Proposal, as Modified by Amendment
demonstrate that it is engaged primarily disapprove the proposed rule change.4
No. 3 10
in a business other than that of Also on April 25, 2018, the Exchange
investing, reinvesting, owning, holding filed Amendment No. 1 to the proposed The Exchange proposes to list and
or trading securities. Applicant thus rule change.5 On May 17, 2018, the trade the Shares under Exchange Rule
asserts that it satisfies the criteria for Exchange filed Amendment No. 2 to the 14.11(i), which governs the listing and
issuing an order under Section 3(b)(2) of proposed rule change.6 On June 19, trading of Managed Fund Shares. The
the Act. 2018, the Commission instituted Funds are a series of, and the Shares
proceedings under Section 19(b)(2)(B) of will be offered by, the Trust.11 Precidian
Applicant’s Conditions the Act 7 to determine whether to Funds LLC (‘‘Adviser’’) will serve as the
Applicant agrees that any order approve or disapprove the proposed investment adviser to the Funds.12
granted pursuant to the application will rule change.8 On August 14, 2018, the A. Description of the ADRPLUS Funds
be subject to the following conditions: Exchange filed Amendment No. 3 to the
1. Applicant will continue to allocate proposed rule change.9 The Commission According to the Exchange, each
and use its accumulated cash and Fund seeks to provide investment
investment securities for bona fide 3 See Securities Exchange Act Release No. 82881 results that correspond generally, before
business purposes; and (March 15, 2018), 83 FR 12449. fees and expenses, to the price and yield
2. Applicant will refrain from
4 See Securities Exchange Act Release No. 83102,
performance of a particular American
83 FR 19126 (May 1, 2018). Depositary Receipt, hedged against
investing or trading in securities for 5 Amendment No. 1, which amended and

short-term speculative purposes. replaced the proposed rule change in its entirety,
is available at: https://www.sec.gov/comments/sr- reported to the Trade Reporting and Compliance
For the Commission, by the Division of cboebzx-2018-019/cboebzx2018019-3551361- Engine (‘‘TRACE’’); (j) clarified a criterion regarding
Investment Management, under delegated 162325.pdf. when an order to redeem creation units of a Fund
authority. 6 Amendment No. 2, which amended and would be deemed received by the distributor; (k)
replaced the proposed rule change in its entirety, specified that the Information Circular (as discussed
Eduardo A. Aleman, herein) will discuss how information regarding the
is available at: https://www.sec.gov/comments/sr-
Assistant Secretary. cboebzx-2018-019/cboebzx2018019-3665011- Disclosed Portfolio (as defined in Exchange Rule
[FR Doc. 2018–20408 Filed 9–19–18; 8:45 am] 162423.pdf. 14.11(i)(3)(B)) is disseminated; and (l) made other
7 15 U.S.C. 78s(b)(2)(B). non-substantive, technical, and clarifying
BILLING CODE 8011–01–P corrections to the proposal. Because Amendment
8 See Securities Exchange Act Release No. 83467,
No. 3 clarifies the derivatives in which the Funds
83 FR 29589 (June 25, 2018).
9 In Amendment No. 3, which amended and
may invest, adds specificity to certain requirements,
SECURITIES AND EXCHANGE made additional representations, and otherwise
replaced, in its entirety, the proposed rule change does not materially alter the substance of the
COMMISSION as modified by Amendment No. 2, the Exchange: (a) proposed rule change or raise unique or novel
Specified that the derivatives in which the Funds regulatory issues under the Act, Amendment No. 3
[Release No. 34–84143; File No. SR– may invest are over-the-counter (‘‘OTC’’) currency is not subject to notice and comment. Amendment
CboeBZX–2018–019] swaps; (b) corrected references to, and specified
No. 3 to the proposed rule change is available at:
with greater particularity, the Exchange
https://www.sec.gov/comments/sr-cboebzx-2018-
requirements the Funds would not meet; (c) deleted
Self-Regulatory Organizations; Cboe a representation that the Funds may not meet the
019/cboebzx2018019-4290642-173190.pdf.
BZX Exchange, Inc.; Order Granting requirement of Exchange Rule 14.11(i)(4)(C)(iv)(b)
10 Additional information regarding the Funds,

Approval of a Proposed Rule Change, that the aggregate gross notional value of listed the Trust, and the Shares can be found in
derivatives based on any single underlying Amendment No. 3 and the Registration Statement.
as Modified by Amendment No. 3, To See supra note 9 and infra note 11.
reference asset shall not exceed 30% of the weight
List and Trade Shares of Eighteen of the portfolio (including gross notional
11 The Trust is registered under the Investment

ADRPLUS Funds of the Precidian ETFs exposures); (d) modified a trading halt Company Act of 1940 (‘‘1940 Act’’). See
Trust Under Rule 14.11(i), Managed representation to state that the Exchange will also Registration Statement on Form N–1A for the Trust,
halt trading in the Shares where a market-wide dated June 14, 2017 (File Nos. 333–171987 and
Fund Shares 811–22524) (‘‘Registration Statement’’). In addition,
trading halt is declared in the associated Unhedged
ADR (as defined herein) and that trading in the the Exchange states that the Commission has issued
September 14, 2018. an order granting certain exemptive relief to the
Shares will remain halted until trading in the
I. Introduction Unhedged ADR resumes; (e) represented that Shares Trust under the 1940 Act. See Investment Company
of the Funds would meet and be subject to Act Release No. 32622 (May 2, 2017) (File No. 812–
On March 5, 2018, Cboe BZX Exchange Rule 14.11(i)(2)(C); (f) stated that each 14584).
Fund expects to invest in excess of 95% of its net 12 The Exchange represents that the Adviser is not
Exchange, Inc. (‘‘Exchange’’ or ‘‘BZX’’)
assets in the Unhedged ADRs, and each Fund a registered broker-dealer and is not affiliated with
filed with the Securities and Exchange expects that the gross notional value of the a broker-dealer. In addition, Adviser personnel who
Commission (‘‘Commission’’), pursuant Currency Hedge (as defined herein) would be equal make decisions regarding a Fund’s portfolio are
to Section 19(b)(1) of the Securities to the value of the Unhedged ADRs, which would subject to procedures designed to prevent the use
Exchange Act of 1934 (‘‘Act’’) 1 and Rule be approximately 50% of the weight of the portfolio and dissemination of material nonpublic
(including gross notional exposures); (g) addressed information regarding the Fund’s portfolio. The
19b–4 thereunder,2 a proposed rule policy concerns related to the Currency Hedge held Exchange states that in the event that (a) the
change to list and trade shares by the Funds in excess of the limit as provided in Adviser becomes registered as a broker-dealer or
(‘‘Shares’’) of eighteen ADRPLUS Funds the Exchange Rule 14.11(i)(4)(C)(v); (h) modified a newly affiliated with a broker-dealer, or (b) any new
of the Precidian ETFs Trust (‘‘Trust’’), representation to state that the Exchange will adviser or sub-adviser is a registered broker-dealer
amozie on DSK3GDR082PROD with NOTICES1

suspend trading and commence delisting or becomes affiliated with a broker-dealer, it will
under Exchange Rule 14.11(i) proceedings pursuant to Exchange Rule 14.12 for implement and maintain a fire wall with respect to
(‘‘Managed Fund Shares’’). The the Shares if the Unhedged ADR held by a Fund its relevant personnel or such broker-dealer
proposed rule change was published for has been suspended from trading or delisted by the affiliate, as applicable, regarding access to
comment in the Federal Register on Unhedged ADR’s listing exchange; (i) stated that the information concerning the composition and/or
Exchange or Financial Industry Regulatory changes to the portfolio, and will be subject to
Authority, Inc. (‘‘FINRA’’), on behalf of the procedures designed to prevent the use and
1 15 U.S.C. 78s(b)(1). Exchange, are able to access, as needed, trade dissemination of material non-public information
2 17 CFR 240.19b–4. information for certain fixed income instruments regarding such portfolio.

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Document Created: 2018-09-20 02:09:34
Document Modified: 2018-09-20 02:09:34
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Notice.
Dates		The application was filed on January 30, 2018 and amended on June 1, 2018, July 6, 2018 and August 24, 2018.
Contact		Rochelle Kauffman Plesset, Senior Counsel, at (202) 551-6840, or Nadya B. Roytblat, Assistant Chief Counsel, at (202) 551-6825 (Division of Investment Management, Chief Counsel's Office).
FR Citation		83 FR 47657