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Notice

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding the PIMCO Intermediate Municipal Bond Active Exchange-Traded Fund

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Start Preamble September 24, 2015.

Pursuant to Section 19(b)(1) [1] of the Securities Exchange Act of 1934 (the “Act”) [2] and Rule 19b-4 thereunder,[3] notice is hereby given that, on September 11, 2015, NYSE Arca, Inc. (the “Exchange” or “NYSE Arca”) filed with the Securities and Exchange Commission (the “Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

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

The Exchange proposes to reflect a change to the average portfolio duration of the PIMCO Intermediate Municipal Bond Active Exchange-Traded Fund. The Fund is currently listed and traded on the Exchange under NYSE Arca Equities Rule 8.600. The text of the proposed rule change is available on the Exchange's Web site at www.nyse.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 self-regulatory organization 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 those 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 the Statutory Basis for, the Proposed Rule Change

1. Purpose

The Commission has approved a proposed rule change relating to listing and trading on the Exchange of shares (“Shares”) of the PIMCO Intermediate Municipal Bond Active Exchange-Traded Fund (“Fund”) under NYSE Arca Equities Rule 8.600,[4] which governs the listing and trading of Managed Fund Shares.[5] The Shares are offered by PIMCO ETF Trust (the “Trust”), a statutory trust organized under the laws of the State of Delaware Start Printed Page 58795and registered with the Commission as an open-end management investment company.[6] The investment manager to the Fund is Pacific Investment Management Company LLC (“PIMCO” or the “Adviser”). The Fund's Shares are currently listed and traded on the Exchange under NYSE Arca Equities Rule 8.600.

According to the Registration Statement and the Prior Release, the average portfolio duration of the Fund normally varies from three to eight years, based on PIMCO's forecast for interest rates.[7]

Going forward, the average portfolio duration of the Fund normally would vary within (negative) 2 years to positive 4 years of the portfolio duration of the securities comprising the Barclays 1-15 Year Municipal Bond Index (“Index”), as calculated by PIMCO, which as of June 30, 2015 was 5.11 years.[8] Thus, as of June 30, 2015, average portfolio duration of the Fund normally would vary within approximately 3.11 years and 9.11 years.

The Adviser represents that the proposed change to the average portfolio duration of the Fund is consistent with the Fund's investment objective, and will further assist the Adviser to achieve such investment objective. Except for the change noted above, all other representations made in the Prior Release remain unchanged.[9] The Fund will continue to comply with all initial and continued listing requirements under NYSE Arca Equities Rule 8.600.

The Adviser represents that the investment objective of the Fund is not changing.

2. Statutory Basis

The basis under the Act for this proposed rule change is the requirement under Section 6(b)(5) [10] that an exchange have rules that are designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to, and perfect the mechanism of a free and open market and, in general, to protect investors and the public interest.

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. The Exchange believes that the change to the average portfolio duration of the Fund will not adversely impact investors or Exchange trading. Such change would accommodate a duration that, while generally comparable to the existing average portfolio duration normally of three to eight years, will provide the Fund with additional flexibility in managing the duration of the Fund's holdings using the average portfolio duration of the Barclays 1-15 Year Municipal Bond Index, as calculated by PIMCO, as the benchmark against which the Fund's average portfolio duration would be measured. Further, a more flexible duration bandwidth will allow the Fund to respond more effectively to changing market conditions. The Index's average duration, as calculated by PIMCO, is typically published monthly, while the Fund's average portfolio duration is typically available daily, on the Fund's Web site.

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 believes the proposed rule change will enhance competition among issues of exchange-traded funds that invest in municipal securities.

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

No written comments were solicited or received with respect to the proposed rule change.

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

Because the proposed rule change does not (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act [11] and Rule 19b-4(f)(6) thereunder.[12]

At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) of the Act [13] to determine whether the proposed rule change should be approved or 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

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2015-79. This file number should be included on the subject line if email is used. To help the Start Printed Page 58796Commission 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 Section, 100 F Street NE., Washington, DC 20549 on official business days between 10 a.m. and 3 p.m. Copies of the filing will also be available for inspection and copying at the NYSE's principal office and on its Internet Web site at www.nyse.com. 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-NYSEArca-2015-79 and should be submitted on or before October 21, 2015.

Start Signature

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.[14]

Robert W. Errett,

Deputy Secretary.

End Signature End Preamble

Footnotes

4.  See Securities Exchange Act Release No. 60619 (September 3, 2009), 74 FR 46820 (September 11, 2009) (SR-NYSEArca-2009-79) (notice of filing of proposed rule change relating to listing and trading of Shares of the Fund and four other funds of the PIMCO ETF Trust on the Exchange) (“Prior Notice”); Securities Exchange Act Release No. 60981 (November 10, 2009), 74 FR 59594 (November 11, 2009) (SR-NYSEArca-2009-79) (order approving listing and trading of Shares of the Fund and four other funds of the PIMCO ETF Trust on the Exchange) (“Prior Order” and, together with the Prior Notice, the “Prior Release”).

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5.  A Managed Fund Share is a security that represents an interest in an investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1) (“1940 Act”) organized as an open-end investment company or similar entity that invests in a portfolio of securities selected by its investment adviser consistent with its investment objectives and policies. In contrast, an open-end investment company that issues Investment Company Units, listed and traded on the Exchange under NYSE Arca Equities Rule 5.2(j)(3), seeks to provide investment results that correspond generally to the price and yield performance of a specific foreign or domestic stock index, fixed income securities index or combination thereof.

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6.  The Trust is registered under the Investment Company Act of 1940 (“1940 Act”). On October 27, 2014, the Trust filed with the Commission the most recent post-effective amendment to its registration statement under the Securities Act of 1933 (15 U.S.C. 77a) (“1933 Act”) and under the 1940 Act relating to the Fund (File Nos. 333-155395 and 811-22250) (the “Registration Statement”). The description of the operation of the Trust and the Fund herein is based, in part, on the Registration Statement. A change to the name of the Fund from PIMCO Intermediate Municipal Bond Strategy Fund to PIMCO Intermediate Municipal Bond Exchange-Traded Fund was reflected in an amendment to the Registration Statement, effective October 31, 2012. A change to the name of the Fund from PIMCO Intermediate Municipal Bond Exchange-Traded Fund to PIMCO Intermediate Municipal Bond Active Exchange-Traded Fund was reflected in an amendment to the Registration Statement, effective October 31, 2014. In addition, the Commission has issued an order granting certain exemptive relief to the Trust under the 1940 Act. See Investment Company Act Release No. 28993 (November 10, 2009) (File No. 812-13571) (“Exemptive Order”).

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7.  Duration is a measure used to determine the sensitivity of a security's price to changes in interest rates. The longer a security's duration, the more sensitive it will be to changes in interest rates.

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8.  The Exchange notes that the Commission has approved the listing and trading of other issues of Managed Fund Shares that have applied a comparable average portfolio duration to that proposed for the Fund. See, e.g., the Prior Release, note 4, supra.

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9.  See note 4, supra. All terms referenced but not defined herein are defined in the Prior Release.

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12.  17 CFR 240.19b-4(f)(6). As required under Rule 19b-4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission.

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[FR Doc. 2015-24715 Filed 9-29-15; 8:45 am]

BILLING CODE 8011-01-P