Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Approval of a Proposed Rule Change To List and Trade Shares of the Dent Tactical ETF, 41468-41470 [E9-19570]

Download as PDF 41468 Federal Register / Vol. 74, No. 157 / Monday, August 17, 2009 / Notices currently represent less than 0.04% of Phlx’s total contract volume.27 The Commission believes that, given the small percentage of Phlx’s total contract volume represented by these seven products, the inclusion of data on these products in Phlx’s TOPO product will not confer market power on Phlx to compel market participants to purchase the entire Phlx data feed. The Commission therefore believes that the inclusion of top-of-book data for these products in Phlx’s TOPO product does not undermine the finding that Phlx was subject to significant competitive forces in setting the terms of its proposal. In addition to the need to attract order flow, the availability of alternatives to TOPO product significantly affect the terms on which Phlx can distribute this market data.28 In setting the fees for its TOPO product, Phlx must consider the extent to which market participants would choose one or more alternatives instead of purchasing its data.29 The most basic source of information concerning the top-of-book generally available at an exchange is the complete record of an exchange’s transactions that is provided in the core data feeds.30 In this respect, the core data feeds that include an exchange’s own transaction information are a significant alternative to the exchange’s market data product.31 Further, other options exchanges can produce their own top-of-book products, and thus are sources of potential competition for Phlx.32 The Commission believes that there are a number of alternative sources of information that impose significant competitive pressures on Phlx in setting the terms for distributing its TOPO product. The Commission believes that the availability of those alternatives, as well as Phlx’s compelling need to attract order flow, imposed significant competitive pressure on Phlx to act equitably, fairly, and reasonably in setting the terms of its proposal. Because Phlx was subject to significant competitive forces in setting 27 Id. 28 See 29 Id. NYSE Arca Order, supra note 11, at 74784. at 74783. mstockstill on DSKH9S0YB1PROD with NOTICES 30 Id. 31 Id. Information on transactions executed on Phlx is available through OPRA. 32 In its filing, Phlx states that ‘‘ISE and CBOE are potential competitors because each exchange enjoys greater market share and thus the ability to offer a top-of-book product that would compete favorably with TOPO.’’ See Notice, supra, note 4, at 32677. Phlx also notes that although the TOPO data feed is separate from the core data feed made available by OPRA, all of the information made available in TOPO is included in the core data feed. Phlx states that the OPRA data is widely distributed and relatively inexpensive, thus constraining Phlx’s ability to price TOPO. See Notice, supra, note 4, at 32677. VerDate Nov<24>2008 17:55 Aug 14, 2009 Jkt 217001 the terms of the proposal, the Commission will approve the proposal in the absence of a substantial countervailing basis to find that the terms of the proposal fail to meet the applicable requirements of the Act or the rules thereunder. The Commission did not receive any comments on the proposal. Further, an analysis of the proposal does not provide such a basis. The Commission notes that the proposed fees for TOPO are lower for Internal Distributors than for External Distributors. Because Internal Distributors are by definition more limited in the scope of their distribution of TOPO data than External Distributors, it is reasonable to expect that Internal Distributors will provide TOPO data to a smaller number of internal subscribers.33 The fees therefore do not unreasonably discriminate among types of subscribers, such as by favoring participants in the Phlx market or penalizing participants in other markets. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act, that the proposed rule change (SR–Phlx–2009– 54), be and hereby is approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.34 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–19569 Filed 8–14–09; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–60460; File No. SR– NYSEArca–2009–55] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Approval of a Proposed Rule Change To List and Trade Shares of the Dent Tactical ETF August 7, 2009. On June 18, 2009, NYSE Arca, Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’), through its wholly owned subsidiary, NYSE Arca Equities, Inc. (‘‘NYSE Arca Equities’’), filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a 33 Conversely, External Distributors can reasonably be expected to distribute the TOPO data to a higher number of subscribers because they do not have the same limitation. Accordingly, the Exchange will charge a higher fee to External Distributors than to Internal Distributors. See id. 34 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 proposed rule change to list and trade shares (‘‘Shares’’) of the Dent Tactical ETF (‘‘Fund’’) under NYSE Arca Equities Rule 8.600. The proposed rule change was published in the Federal Register on July 8, 2009.3 The Commission received no comments on the proposal. This order grants approval of the proposed rule change. I. Description of the Proposal The Exchange proposes to list and trade the Shares of the Fund under NYSE Arca Equities Rule 8.600, which governs the listing of Managed Fund Shares.4 The Shares will be offered by AdvisorShares Trust (‘‘Trust’’), a statutory trust organized under the laws of the State of Delaware and registered with the Commission as an open-end management investment company.5 The investment advisor to the Fund is AdvisorShares Investments, LLC (‘‘Advisor’’), and the day-to-day portfolio management of the Fund is provided by the sub-advisor to the Fund, HS Dent Investment Management, LLC (‘‘Sub-Advisor’’).6 The Exchange represents that the Shares will conform to the initial and continued listing criteria under NYSE Arca Equities Rule 8.600 and that the Fund will be in compliance with Rule 10A–3 under the Act,7 as provided by NYSE Arca Equities Rule 5.3. The Fund is a ‘‘fund of funds,’’ which means that the Fund seeks to invest primarily in other exchange-traded funds that are registered under the 1940 Act and certain other exchange-traded products that are not registered as investment companies under the 1940 Act (collectively, ‘‘Underlying ETPs’’).8 The Fund seeks to achieve its investment objective of long-term growth of capital by identifying, through 3 See Securities Exchange Act Release No. 60195 (June 30, 2009), 74 FR 32678 (‘‘Notice’’). 4 See NYSE Arca Equities Rule 8.600. 5 The Trust is registered under the Investment Company Act of 1940 (‘‘1940 Act’’). On June 9, 2009, the Trust filed with the Commission a registration statement on Form N–1A (File Nos. 333–157876 and 811–22110) (‘‘Registration Statement’’). 6 The Exchange represents that neither the Advisor nor the Sub-Advisor is affiliated with a broker-dealer. See Commentary .07 to NYSE Arca Equities Rule 8.600. 7 17 CFR 240.10A–3. 8 Underlying ETPs include Investment Company Units (NYSE Arca Equities Rule 5.2(j)(3)); IndexLinked Securities (NYSE Arca Equities Rule 5.2(j)(6)); Portfolio Depositary Receipts (NYSE Arca Equities Rule 8.100); Trust Issued Receipts (NYSE Arca Equities Rule 8.200); Commodity-Based Trust Shares (NYSE Arca Equities Rule 8.201); Currency Trust Shares (NYSE Arca Equities Rule 8.202); Commodity Index Trust Shares (NYSE Arca Equities Rule 8.203); Trust Units (NYSE Arca Equities Rule 8.500); and Managed Fund Shares (NYSE Arca Equities Rule 8.600). E:\FR\FM\17AUN1.SGM 17AUN1 Federal Register / Vol. 74, No. 157 / Monday, August 17, 2009 / Notices mstockstill on DSKH9S0YB1PROD with NOTICES proprietary economic and demographic analysis, the overall trend of the U.S. and global economies, and then implementing investment strategies in asset classes that the Sub-Advisor believes will benefit from these trends. The Sub-Advisor will follow its model to determine how offensive or defensive the Fund portfolio will be, and then will select the securities to buy or sell. Except for Underlying ETPs that may hold non-U.S. issues, the Fund will not otherwise invest in non-U.S. issues. Additional information regarding the Fund, the Shares, the Fund’s investment objective, strategies, methodology, and restrictions, the investment Advisor and Sub-Advisor, risks, fees and expenses, creations and redemptions of Shares, availability of information, trading rules and halts, and surveillance procedures, among other things, can be found in the Registration Statement and in the Notice, as applicable. II. Discussion and Commission’s Findings The Commission has carefully reviewed the proposed rule change and finds that it is consistent with the requirements of Section 6 of the Act 9 and the rules and regulations thereunder applicable to a national securities exchange.10 In particular, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act,11 which requires, among other things, that the Exchange’s rules be designed to promote just and equitable principles of trade, 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. The Commission finds that the proposal to list and trade the Shares on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the Act, which sets forth Congress’ finding that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure the availability to brokers, dealers and investors of information with respect to quotations for and transactions in securities. Quotation and last-sale information for the Shares will be available via the Consolidated Tape Association (‘‘CTA’’) high-speed line, and the Exchange will disseminate the Portfolio Indicative Value (‘‘PIV’’) at least every 15 seconds during the Core 9 15 U.S.C. 78f. approving this proposed rule change the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 11 17 U.S.C. 78f(b)(5). 10 In VerDate Nov<24>2008 17:55 Aug 14, 2009 Jkt 217001 Trading Session through the facilities of the CTA. In addition, the Fund will make available on its Web site on each business day before commencement of the Core Trading Session the Disclosed Portfolio that will form the basis for the Fund’s calculation of the net asset value (‘‘NAV’’).12 A basket composition file, which includes the security names and share quantities required to be delivered in exchange for Fund shares, together with estimates and actual cash components, will be publicly disseminated daily prior to the opening of the New York Stock Exchange via the National Securities Clearing Corporation. The Fund’s Web site will also include additional quantitative information updated on a daily basis relating to trading volume, prices, and NAV. Information regarding the market price and volume of the Shares will be continually available on a real-time basis throughout the day via electronic services, and the previous day’s closing price and trading volume information for the Shares will be published daily in the financial sections of newspapers. The Commission further believes that the proposal to list and trade the Shares is reasonably designed to promote fair disclosure of information that may be necessary to price the Shares appropriately and to prevent trading when a reasonable degree of transparency cannot be assured. The Commission notes that the Advisor and Sub-Advisor to the Fund are not affiliated with a broker-dealer.13 The Commission also notes that the Exchange will obtain a representation from the Fund that the NAV per Share will be calculated daily and that the NAV and the Disclosed Portfolio will be made available to all market participants at the same time.14 Additionally, if it becomes aware that 12 The Advisor will disclose for each portfolio security or other financial instrument of the Fund the following information: Ticker symbol (if applicable), name of security or financial instrument, number of shares or dollar value of financial instruments held in the portfolio, and percentage weighting of the security or financial instrument in the portfolio. The NAV of the Fund will normally be determined as of the close of the regular trading session on the New York Stock Exchange (ordinarily 4 p.m. Eastern Time) on each business day. 13 See Commentary .07 to NYSE Arca Equities Rule 8.600. The Commission notes that any additional sub-advisers to the Fund that are affiliated with a broker-dealer will be required to implement a fire-wall with respect to such brokerdealer regarding access to information concerning the composition of the portfolio. Commentary .07 to NYSE Arca Equities Rule 8.600 also requires that any personnel who make decisions on the Fund’s portfolio composition must be subject to procedures designed to prevent the use and dissemination of material non-public information regarding the portfolio. 14 See NYSE Arca Equities Rule 8.600(d)(1)(B). PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 41469 the NAV or the Disclosed Portfolio is not disseminated to all market participants at the same time, the Exchange will halt trading in the Shares until such information is available to all market participants. Further, if the PIV is not being disseminated as required, the Exchange may halt trading during the day in which the interruption occurs; if the interruption persists past the day in which it occurred, the Exchange will halt trading no later than the beginning of the trading day following the interruption.15 Finally, the Commission notes that the Reporting Authority that provides the Disclosed Portfolio must implement and maintain, or be subject to, procedures designed to prevent the use and dissemination of material non-public information regarding the actual components of the portfolio.16 The Exchange has represented that the Shares are equity securities subject to the Exchange’s rules governing the trading of equity securities. In support of this proposal, the Exchange has made representations, including: (1) The Shares will conform to the initial and continued listing criteria under NYSE Arca Equities Rule 8.600. (2) The Exchange’s surveillance procedures are adequate to properly monitor Exchange trading of the Shares in all trading sessions and to deter and detect violations of Exchange rules and applicable federal securities laws. (3) Prior to the commencement of trading, the Exchange will inform its ETP Holders in an Information Bulletin of the special characteristics and risks associated with trading the Shares. Specifically, the Information Bulletin will discuss the following: (a) The procedures for purchases and redemptions of Shares and that Shares are not individually redeemable; (b) NYSE Arca Equities Rule 9.2(a), which imposes a duty of due diligence on its ETP Holders to learn the essential facts relating to every customer prior to trading the Shares; (c) the risks involved in trading the Shares during the Opening and Late Trading Sessions when an updated PIV will not be calculated or publicly disseminated; (d) how information regarding the PIV is disseminated; (e) the requirement that 15 See NYSE Arca Equities Rule 8.600(d)(2)(D). Trading in the Shares may also 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 comprising the Disclosed Portfolio and/or the financial instruments of the Fund; or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. 16 See NYSE Arca Equities Rule 8.600(d)(2)(B)(ii). E:\FR\FM\17AUN1.SGM 17AUN1 41470 Federal Register / Vol. 74, No. 157 / Monday, August 17, 2009 / Notices ETP Holders deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; and (f) trading information. (4) The Fund will be in compliance with Rule 10A–3 under the Act.17 (5) Except for Underlying ETPs that may hold non-U.S. issues, the Fund will not otherwise invest in non-U.S. issues. This approval order is based on the Exchange’s representations. For the foregoing reasons, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act 18 and the rules and regulations thereunder applicable to a national securities exchange. III. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,19 that the proposed rule change (SR–NYSEArca– 2009–55) be, and it hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.20 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–19570 Filed 8–14–09; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–60462; File No. SR–FINRA– 2009–050] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of Proposed Rule Change Relating to FINRA Rule 8312 (FINRA BrokerCheck Disclosure) mstockstill on DSKH9S0YB1PROD with NOTICES August 7, 2009. 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 July 24, 2009, Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by FINRA. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. supra note 7. 18 15 U.S.C. 78f(b)(5). 19 15 U.S.C. 78s(b)(2). 20 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 17:55 Aug 14, 2009 FINRA is proposing to amend FINRA Rule 8312 (FINRA BrokerCheck Disclosure) to retain and make publicly available in BrokerCheck certain information about former associated persons of a member who were the subject of a final regulatory action as defined in Form U4 that has been reported to the Central Registration Depository (‘‘CRD®’’ or ‘‘CRD System’’) via a uniform registration form.3 The text of the proposed rule change is available on FINRA’s Web site at https://www.finra.org, at the principal office of FINRA 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, FINRA 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. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose FINRA Rule 8312 governs the information FINRA releases to the public via BrokerCheck. FINRA established BrokerCheck (then known as the Public Disclosure Program) in 1988 to provide the public with information on the professional background, business practices, and conduct of FINRA members and their associated persons. Via BrokerCheck, FINRA releases to the public certain information reported on uniform registration forms to the CRD System. The primary purpose of BrokerCheck is to help investors make informed choices about the individuals and firms with which they may wish to do business. Currently, as described in FINRA Rule 8312, BrokerCheck provides information 3 The uniform registration forms are Form BD (Uniform Application for Broker-Dealer Registration), Form BDW (Uniform Request for Broker-Dealer Withdrawal), Form U4 (Uniform Application for Securities Industry Registration or Transfer), Form U5 (Uniform Termination Notice for Securities Industry Registration), and Form U6 (Uniform Disciplinary Action Reporting Form). 17 See VerDate Nov<24>2008 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Jkt 217001 PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 regarding current and former members, as well as current associated persons and persons who were associated with a member within the preceding two years. The proposed rule change would expand BrokerCheck with respect to former associated persons to provide public access to certain information about such persons, regardless of when they were associated with a member, if they were the subject of any final regulatory action as defined in Form U4 that has been reported to CRD via a uniform registration form.4 For purposes of the proposed rule change, a final regulatory action as defined in Form U4 may include any final action, including any action that is on appeal, by the SEC, Commodity Futures Trading Commission, a federal banking agency, the National Credit Union Administration, another federal regulatory agency, a state regulatory agency, a foreign financial regulatory authority, or a self-regulatory organization (as those terms are used in Form U4).5 To illustrate, actions that are delineated in current Form U4 Questions 14C, 14D, or 14E would be considered ‘‘final regulatory actions.’’ Similarly, actions that are detailed in current Form U5 Question 7D, and have a status of ‘‘final’’ or ‘‘on appeal,’’ would be considered ‘‘final regulatory actions’’ as such actions are also addressed in Form U4.6 The proposed rule change would allow the public access to information about formerly registered persons who, although no longer in the securities industry in a registered capacity, may work in other investment-related industries or attain other positions of trust and about whom investors may wish to learn relevant disciplinary information. Specifically, FINRA would disclose through BrokerCheck 4 Because the information disclosed through BrokerCheck is derived from the CRD System, BrokerCheck will only disclose information regarding regulatory actions that have been reported to CRD via a uniform registration form. 5 A final regulatory action would not include any action limited to the revocation or suspension of an individual’s authorization to act as an attorney, accountant or federal contractor (current Form U4 Question 14F). 6 FINRA staff also will review responses to all Regulatory Action Disclosure questions and Disclosure Review Pages on the Forms U4 and U5 (including the predecessor questions in this area), as well as information filed on Form U6 to determine whether a former associated person is subject to a final regulatory action and should therefore be included in BrokerCheck pursuant to the proposed rule change. Under the proposed rule change, FINRA may disclose a final action that is reported by a regulator on a Form U6 even if that action has not been reported by an individual on a Form U4 because, for example, the individual was not registered at the time the final regulatory action was reported. E:\FR\FM\17AUN1.SGM 17AUN1

Agencies

[Federal Register Volume 74, Number 157 (Monday, August 17, 2009)]
[Notices]
[Pages 41468-41470]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-19570]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60460; File No. SR-NYSEArca-2009-55]


Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting 
Approval of a Proposed Rule Change To List and Trade Shares of the Dent 
Tactical ETF

August 7, 2009.
    On June 18, 2009, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange''), 
through its wholly owned subsidiary, NYSE Arca Equities, Inc. (``NYSE 
Arca Equities''), filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 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 (``Shares'') of the Dent 
Tactical ETF (``Fund'') under NYSE Arca Equities Rule 8.600. The 
proposed rule change was published in the Federal Register on July 8, 
2009.\3\ The Commission received no comments on the proposal. This 
order grants approval of the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 60195 (June 30, 
2009), 74 FR 32678 (``Notice'').
---------------------------------------------------------------------------

I. Description of the Proposal

    The Exchange proposes to list and trade the Shares of the Fund 
under NYSE Arca Equities Rule 8.600, which governs the listing of 
Managed Fund Shares.\4\ The Shares will be offered by AdvisorShares 
Trust (``Trust''), a statutory trust organized under the laws of the 
State of Delaware and registered with the Commission as an open-end 
management investment company.\5\ The investment advisor to the Fund is 
AdvisorShares Investments, LLC (``Advisor''), and the day-to-day 
portfolio management of the Fund is provided by the sub-advisor to the 
Fund, HS Dent Investment Management, LLC (``Sub-Advisor'').\6\ The 
Exchange represents that the Shares will conform to the initial and 
continued listing criteria under NYSE Arca Equities Rule 8.600 and that 
the Fund will be in compliance with Rule 10A-3 under the Act,\7\ as 
provided by NYSE Arca Equities Rule 5.3.
---------------------------------------------------------------------------

    \4\ See NYSE Arca Equities Rule 8.600.
    \5\ The Trust is registered under the Investment Company Act of 
1940 (``1940 Act''). On June 9, 2009, the Trust filed with the 
Commission a registration statement on Form N-1A (File Nos. 333-
157876 and 811-22110) (``Registration Statement'').
    \6\ The Exchange represents that neither the Advisor nor the 
Sub-Advisor is affiliated with a broker-dealer. See Commentary .07 
to NYSE Arca Equities Rule 8.600.
    \7\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    The Fund is a ``fund of funds,'' which means that the Fund seeks to 
invest primarily in other exchange-traded funds that are registered 
under the 1940 Act and certain other exchange-traded products that are 
not registered as investment companies under the 1940 Act 
(collectively, ``Underlying ETPs'').\8\ The Fund seeks to achieve its 
investment objective of long-term growth of capital by identifying, 
through

[[Page 41469]]

proprietary economic and demographic analysis, the overall trend of the 
U.S. and global economies, and then implementing investment strategies 
in asset classes that the Sub-Advisor believes will benefit from these 
trends. The Sub-Advisor will follow its model to determine how 
offensive or defensive the Fund portfolio will be, and then will select 
the securities to buy or sell. Except for Underlying ETPs that may hold 
non-U.S. issues, the Fund will not otherwise invest in non-U.S. issues.
---------------------------------------------------------------------------

    \8\ Underlying ETPs include Investment Company Units (NYSE Arca 
Equities Rule 5.2(j)(3)); Index-Linked Securities (NYSE Arca 
Equities Rule 5.2(j)(6)); Portfolio Depositary Receipts (NYSE Arca 
Equities Rule 8.100); Trust Issued Receipts (NYSE Arca Equities Rule 
8.200); Commodity-Based Trust Shares (NYSE Arca Equities Rule 
8.201); Currency Trust Shares (NYSE Arca Equities Rule 8.202); 
Commodity Index Trust Shares (NYSE Arca Equities Rule 8.203); Trust 
Units (NYSE Arca Equities Rule 8.500); and Managed Fund Shares (NYSE 
Arca Equities Rule 8.600).
---------------------------------------------------------------------------

    Additional information regarding the Fund, the Shares, the Fund's 
investment objective, strategies, methodology, and restrictions, the 
investment Advisor and Sub-Advisor, risks, fees and expenses, creations 
and redemptions of Shares, availability of information, trading rules 
and halts, and surveillance procedures, among other things, can be 
found in the Registration Statement and in the Notice, as applicable.

II. Discussion and Commission's Findings

    The Commission has carefully reviewed the proposed rule change and 
finds that it is consistent with the requirements of Section 6 of the 
Act \9\ and the rules and regulations thereunder applicable to a 
national securities exchange.\10\ In particular, the Commission finds 
that the proposal is consistent with Section 6(b)(5) of the Act,\11\ 
which requires, among other things, that the Exchange's rules be 
designed to promote just and equitable principles of trade, 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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f.
    \10\ In approving this proposed rule change the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \11\ 17 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission finds that the proposal to list and trade the Shares 
on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the 
Act, which sets forth Congress' finding that it is in the public 
interest and appropriate for the protection of investors and the 
maintenance of fair and orderly markets to assure the availability to 
brokers, dealers and investors of information with respect to 
quotations for and transactions in securities. Quotation and last-sale 
information for the Shares will be available via the Consolidated Tape 
Association (``CTA'') high-speed line, and the Exchange will 
disseminate the Portfolio Indicative Value (``PIV'') at least every 15 
seconds during the Core Trading Session through the facilities of the 
CTA. In addition, the Fund will make available on its Web site on each 
business day before commencement of the Core Trading Session the 
Disclosed Portfolio that will form the basis for the Fund's calculation 
of the net asset value (``NAV'').\12\ A basket composition file, which 
includes the security names and share quantities required to be 
delivered in exchange for Fund shares, together with estimates and 
actual cash components, will be publicly disseminated daily prior to 
the opening of the New York Stock Exchange via the National Securities 
Clearing Corporation. The Fund's Web site will also include additional 
quantitative information updated on a daily basis relating to trading 
volume, prices, and NAV. Information regarding the market price and 
volume of the Shares will be continually available on a real-time basis 
throughout the day via electronic services, and the previous day's 
closing price and trading volume information for the Shares will be 
published daily in the financial sections of newspapers.
---------------------------------------------------------------------------

    \12\ The Advisor will disclose for each portfolio security or 
other financial instrument of the Fund the following information: 
Ticker symbol (if applicable), name of security or financial 
instrument, number of shares or dollar value of financial 
instruments held in the portfolio, and percentage weighting of the 
security or financial instrument in the portfolio. The NAV of the 
Fund will normally be determined as of the close of the regular 
trading session on the New York Stock Exchange (ordinarily 4 p.m. 
Eastern Time) on each business day.
---------------------------------------------------------------------------

    The Commission further believes that the proposal to list and trade 
the Shares is reasonably designed to promote fair disclosure of 
information that may be necessary to price the Shares appropriately and 
to prevent trading when a reasonable degree of transparency cannot be 
assured. The Commission notes that the Advisor and Sub-Advisor to the 
Fund are not affiliated with a broker-dealer.\13\ The Commission also 
notes that the Exchange will obtain a representation from the Fund that 
the NAV per Share will be calculated daily and that the NAV and the 
Disclosed Portfolio will be made available to all market participants 
at the same time.\14\ Additionally, if it becomes aware that the NAV or 
the Disclosed Portfolio is not disseminated to all market participants 
at the same time, the Exchange will halt trading in the Shares until 
such information is available to all market participants. Further, if 
the PIV is not being disseminated as required, the Exchange may halt 
trading during the day in which the interruption occurs; if the 
interruption persists past the day in which it occurred, the Exchange 
will halt trading no later than the beginning of the trading day 
following the interruption.\15\ Finally, the Commission notes that the 
Reporting Authority that provides the Disclosed Portfolio must 
implement and maintain, or be subject to, procedures designed to 
prevent the use and dissemination of material non-public information 
regarding the actual components of the portfolio.\16\
---------------------------------------------------------------------------

    \13\ See Commentary .07 to NYSE Arca Equities Rule 8.600. The 
Commission notes that any additional sub-advisers to the Fund that 
are affiliated with a broker-dealer will be required to implement a 
fire-wall with respect to such broker-dealer regarding access to 
information concerning the composition of the portfolio. Commentary 
.07 to NYSE Arca Equities Rule 8.600 also requires that any 
personnel who make decisions on the Fund's portfolio composition 
must be subject to procedures designed to prevent the use and 
dissemination of material non-public information regarding the 
portfolio.
    \14\ See NYSE Arca Equities Rule 8.600(d)(1)(B).
    \15\ See NYSE Arca Equities Rule 8.600(d)(2)(D). Trading in the 
Shares may also 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 comprising the Disclosed 
Portfolio and/or the financial instruments of the Fund; or (2) 
whether other unusual conditions or circumstances detrimental to the 
maintenance of a fair and orderly market are present.
    \16\ See NYSE Arca Equities Rule 8.600(d)(2)(B)(ii).
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    The Exchange has represented that the Shares are equity securities 
subject to the Exchange's rules governing the trading of equity 
securities. In support of this proposal, the Exchange has made 
representations, including:
    (1) The Shares will conform to the initial and continued listing 
criteria under NYSE Arca Equities Rule 8.600.
    (2) The Exchange's surveillance procedures are adequate to properly 
monitor Exchange trading of the Shares in all trading sessions and to 
deter and detect violations of Exchange rules and applicable federal 
securities laws.
    (3) Prior to the commencement of trading, the Exchange will inform 
its ETP Holders in an Information Bulletin of the special 
characteristics and risks associated with trading the Shares. 
Specifically, the Information Bulletin will discuss the following: (a) 
The procedures for purchases and redemptions of Shares and that Shares 
are not individually redeemable; (b) NYSE Arca Equities Rule 9.2(a), 
which imposes a duty of due diligence on its ETP Holders to learn the 
essential facts relating to every customer prior to trading the Shares; 
(c) the risks involved in trading the Shares during the Opening and 
Late Trading Sessions when an updated PIV will not be calculated or 
publicly disseminated; (d) how information regarding the PIV is 
disseminated; (e) the requirement that

[[Page 41470]]

ETP Holders deliver a prospectus to investors purchasing newly issued 
Shares prior to or concurrently with the confirmation of a transaction; 
and (f) trading information.
    (4) The Fund will be in compliance with Rule 10A-3 under the 
Act.\17\
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    \17\ See supra note 7.
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    (5) Except for Underlying ETPs that may hold non-U.S. issues, the 
Fund will not otherwise invest in non-U.S. issues.
    This approval order is based on the Exchange's representations.
    For the foregoing reasons, the Commission finds that the proposed 
rule change is consistent with Section 6(b)(5) of the Act \18\ and the 
rules and regulations thereunder applicable to a national securities 
exchange.
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    \18\ 15 U.S.C. 78f(b)(5).
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III. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\19\ that the proposed rule change (SR-NYSEArca-2009-55) be, and it 
hereby is, approved.
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    \19\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
Florence E. Harmon,
Deputy Secretary.
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    \20\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E9-19570 Filed 8-14-09; 8:45 am]
BILLING CODE 8010-01-P
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