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Federal Register / Vol. 86, No. 155 / Monday, August 16, 2021 / Notices
lotter on DSK11XQN23PROD with NOTICES1

Tracking Basket, and the Fund Portfolio.
The proposed rule change adopts an additional requirement in Rule 14.11m4Aii providing that the Exchange will also obtain a representation from the issuer of each series of Tracking Fund Shares that the issuer and any person acting on behalf of the series of Tracking Fund Shares will comply with Regulation Fair Disclosure under the Securities Exchange Act of 1934 Exchange Act 5, including with respect to any Custom Basket.6
Third, the proposed Rule change adopts new Rule 14.11m4Bii, which provides that, with respect to each Custom Basket utilized by a series of Tracking Fund Shares, each business day, before the opening of trading in Regular Trading Hours as defined in Rule 1.5w, the investment company shall make publicly available on its website the composition of any Custom Basket transacted on the previous business day, except a Custom Basket that differs from the applicable Tracking Basket only with respect to cash.7
Finally, the proposed rule change makes conforming amendments to Rule 14.11m2E and F. In particular, Rule 14.11m2E currently provides that, if the investment adviser to the Investment Company issuing Tracking Fund Shares is registered as a brokerdealer or is affiliated with a brokerdealer, such investment adviser will erect and maintain a fire wall between the investment adviser and personnel of the broker-dealer or brokerdealer affiliate, as applicable, with respect to access to information concerning the composition of and/or changes to the Fund Portfolio and/or the Tracking Basket. Any person related to the investment adviser or Investment Company who makes decisions pertaining to the Investment Companys Fund Portfolio and/or the Tracking Basket or has access to nonpublic information regarding the Fund 5 17 CFR 243.100243.103. Regulation Fair Disclosure provides that whenever an issuer, or any person acting on its behalf, discloses material nonpublic information regarding that issuer or its securities to certain individuals or entities generally, securities market professionals, such as stock analysts, or holders of the issuers securities who may well trade on the basis of the informationthe issuer must make public disclosure of that information.
6 The proposed rule change also delineates each of the three representation requirements, as proposed, as a through c within the text of Rule 14.11m4Aii for ease of reading.
7 As a result of the addition of subparagraph 4Bii, the proposed rule change also updates the subsequent numbering of current subparagraphs 4bii, 4biii, 4biv, 4bv and 4bvi to 4biii, 4biv 4bv, 4bvi and 4bvii respectively.

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Portfolio and/or the Tracking Basket or changes thereto must be subject to procedures designed to prevent the use and dissemination of material nonpublic information regarding the Fund Portfolio and/or the Tracking Basket or changes thereto. The proposed rule change amends 14.11m2E to provide for Custom Baskets to the extent permitted by a funds exemptive relief.
As proposed, Rule 14.11m2E
provides that if the investment adviser to the Investment Company issuing Tracking Fund Shares is registered as a broker-dealer or is affiliated with a broker-dealer, such investment adviser will erect and maintain a fire wall between the investment adviser and personnel of the broker-dealer or brokerdealer affiliate, as applicable, with respect to access to information concerning the composition of and/or changes to the Fund Portfolio, the Tracking Basket, and/or the Custom Basket, as applicable. In addition, proposed Rule 14.11m2E provides that any person related to the investment adviser or Investment Company who makes decisions pertaining to the Investment Companys Fund Portfolio, the Tracking Basket, and/or the Custom Basket or has access to nonpublic information regarding the Fund Portfolio, the Tracking Basket, and/or the Custom Basket, as applicable, or changes thereto must be subject to procedures designed to prevent the use and dissemination of material nonpublic information regarding the Fund Portfolio, the Tracking Basket, and/or the Custom Basket, as applicable, or changes thereto.
Rule 14.11m2F currently provides that any person or entity, including a custodian, Reporting Authority, distributor, or administrator, who has access to nonpublic information regarding the Fund Portfolio or the Tracking Basket or changes thereto, must be subject to procedures designed to prevent the use and dissemination of material nonpublic information regarding the applicable Fund Portfolio or the Tracking Basket or changes thereto.
Moreover, if any such person or entity is registered as a broker-dealer or affiliated with a broker-dealer, such person or entity will erect and maintain a fire wall between the person or entity and the broker-dealer with respect to access to information concerning the composition and/or changes to such Fund Portfolio or Tracking Basket. The proposed rule change similarly amends Rule 14.11m2F to provide for Custom Baskets to the extent permitted by a
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funds exemptive relief. As proposed, Rule 14.11m2F provides that any person or entity, including a custodian, Reporting Authority, distributor, or administrator, who has access to nonpublic information regarding the Fund Portfolio, the Tracking Basket, or the Custom Basket, as applicable, or changes thereto, must be subject to procedures designed to prevent the use and dissemination of material nonpublic information regarding the applicable Fund Portfolio, the Tracking Basket, or the Custom Basket, as applicable, or changes thereto.
Moreover, if any such person or entity is registered as a broker-dealer or affiliated with a broker-dealer, such person or entity will erect and maintain a fire wall between the person or entity and the broker-dealer with respect to access to information concerning the composition and/or changes to such Fund Portfolio, Tracking Basket, or Custom Basket, as applicable.
2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Exchange Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6b of the Exchange Act.8 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6b5 9 requirements that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest.
Additionally, the Exchange believes the proposed rule change is consistent with the Section 6b5 10 requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers.
In particular, the Exchange believes that proposed rule change to provide for the use of Custom Baskets consistent with the applicable exemptive relief applicable to a series of Tracking Fund Shares will perfect the mechanism of a free and open market and, in general, to protect investors and the public interest 8 15

U.S.C. 78fb.
U.S.C. 78fb5.
10 Id.
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