[Federal Register Volume 79, Number 118 (Thursday, June 19, 2014)]
[Notices]
[Pages 35205-35206]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-14316]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72385; File No. SR-NYSEArca-2014-41)]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of
Designation of a Longer Period for Commission Action on Proposed Rule
Change, as Modified by Amendment Nos. 1 and 4 Thereto, Relating to
Listing and Trading of Shares of the Reality Shares DIVS Index ETF
Under NYSE Arca Equities Rule 5.2(j)(3)
June 13, 2014.
On April 11, 2014, NYSE Arca, Inc. (``Exchange'') filed with the
Securities and Exchange Commission (``Commission''), pursuant to
Section
[[Page 35206]]
19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule
19b-4 thereunder,\2\ a proposed rule change to list and trade shares of
the Reality Shares DIVS Index ETF (``Fund'') (formerly, Reality Shares
Isolated Dividend Growth Index ETF) under NYSE Arca Equities Rule
5.2(j)(3). The proposed rule change was published for comment in the
Federal Register on April 30, 2014.\3\ On May 6, 2014, the Exchange
filed Amendment No. 1 to the proposed rule change, which amended and
replaced the proposed rule change in its entirety.\4\ On June 6, 2014,
the Exchange filed Amendment No. 4 to the proposed rule change.\5\ The
Commission received no comment letters on the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 72015 (Apr. 24,
2014), 79 FR 24475.
\4\ In Amendment No. 1, the Exchange clarifies the valuation of
investments for purposes of calculating net asset value, provides
additional details regarding the dissemination of the Disclosed
Portfolio, and makes other minor technical edits to the proposed
rule change.
\5\ The Exchange filed Amendment No. 2 on June 4, 2014 and
withdrew it on June 5, 2014, and filed Amendment No. 3 on June 5,
2014 and withdrew it on June 6, 2014. Amendment No. 4 supersedes
both Amendment Nos. 2 and 3. In Amendment No. 4, the Exchange amends
the proposal to reflect a name change to the Fund and the underlying
index. Specifically, the Exchange replaces each reference to
``Reality Shares Isolated Dividend Growth Index ETF'' in the
proposal with ``Reality Shares DIVS Index ETF,'' and replaces each
reference to ``Reality Shares Isolated Dividend Growth Index'' in
the proposal with ``Reality Shares DIVS Index.''
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The proposed rule change would permit the listing and trading of
shares of the Fund, which would seek long-term capital appreciation by
tracking the performance of the Reality Shares DIVS Index (``Index'')
(formerly, Reality Shares Isolated Dividend Growth Index). At least 80%
of the Fund's total assets would be invested in the component
securities of the Index, which would be calculated using a proprietary,
rules-based methodology designed to track market expectations for
dividend growth conveyed in real-time using the mid-point of the bid-
ask spread on U.S. exchange-listed S&P 500 Index options and U.S.
exchange-listed options on exchange traded funds designed to track the
S&P 500 Index. Under the proposal, the Fund would buy (i.e., hold a
``long'' position in) and sell (i.e., hold a ``short'' position in) put
and call options. The strategy of taking both a long position in a
security through its ex-dividend date (the last date an investor can
own the security and receive dividends paid on the security) and a
corresponding short position in the same security immediately
thereafter is designed to allow the Fund to isolate its exposure to the
growth of the level of dividends expected to be paid on such security
while minimizing its exposure to changes in the trading price of such
security.
Section 19(b)(2) of the Act \6\ provides that, within 45 days of
the publication of notice of the filing of a proposed rule change, or
within such longer period up to 90 days as the Commission may designate
if it finds such longer period to be appropriate and publishes its
reasons for so finding or as to which the self-regulatory organization
consents, the Commission shall either approve the proposed rule change,
disapprove the proposed rule change, or institute proceedings to
determine whether the proposed rule change should be disapproved. The
Commission is extending this 45-day time period.
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\6\ 15 U.S.C. 78s(b)(2).
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The Commission finds that it is appropriate to designate a longer
period within which to take action on the proposed rule change so that
it has sufficient time to consider the proposed rule change and the
unique nature of the investment strategy of the proposed Fund.
Accordingly, the Commission, pursuant to Section 19(b)(2) of the
Act,\7\ designates July 29, 2014, as the date by which the Commission
should either approve or disapprove or institute proceedings to
determine whether to disapprove the proposed rule change (File Number
SR-NYSEArca-2014-41).
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\7\ Id.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(31).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-14316 Filed 6-18-14; 8:45 am]
BILLING CODE 8011-01-P