Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change Relating to Listing of Five Fixed Income Funds of the PIMCO ETF Trust, 46820-46825 [E9-21908]

Download as PDF 46820 Federal Register / Vol. 74, No. 175 / Friday, September 11, 2009 / Notices you wish to make available publicly. All submissions should refer to File Number SR–NYSEArca–2009–77 and should be submitted on or before October 2, 2009. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.8 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–21886 Filed 9–10–09; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–60619; File No. SR– NYSEArca–2009–79] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change Relating to Listing of Five Fixed Income Funds of the PIMCO ETF Trust September 3, 2009. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that, on August 27, 2009, NYSE Arca, Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. cprice-sewell on DSKGBLS3C1PROD with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Pursuant to the provisions of Section 19(b)(1) of the Exchange Act, NYSE Arca, through its wholly-owned subsidiary NYSE Arca Equities, Inc. (‘‘NYSE Arca Equities’’ or the ‘‘Corporation’’), proposes to list and trade the shares of the following funds of the PIMCO ETF Trust (the ‘‘Trust’’) under NYSE Arca Equities Rule 8.600 (Managed Fund Shares): PIMCO Enhanced Short Maturity Strategy Fund, PIMCO Government Limited Maturity Strategy Fund, PIMCO Intermediate Municipal Bond Strategy Fund, PIMCO Prime Limited Maturity Strategy Fund, and PIMCO Short Term Municipal Bond Strategy Fund, (each a ‘‘Fund’’ and, collectively, the ‘‘Funds’’). The shares of 8 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Nov<24>2008 15:23 Sep 10, 2009 Jkt 217001 the Funds are collectively referred to herein as the ‘‘Shares.’’ The text of the proposed rule change is available on the Exchange’s Web site at https://www.nyx.com, at the Exchange’s principal office 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 Exchange proposes to list and trade the Shares of the Funds under NYSE Arca Equities Rule 8.600, which governs the listing and trading of Managed Fund Shares on the Exchange.3 Each of the Funds will be an actively managed exchange traded fund. The Shares will be offered by the Trust, which is a Delaware statutory trust. The Trust is registered with the Commission as an investment company.4 3 The Commission approved NYSE Arca Equities Rule 8.600 and the listing and trading of certain funds of the PowerShares Actively Managed Funds Trust on the Exchange pursuant to Rule 8.600 in Securities Exchange Act Release No. 57619 (April 4, 2008) 73 FR 19544 (April 10, 2008) (SR– NYSEArca–2008–25). The Commission also previously approved listing and trading on the Exchange, or trading on the Exchange pursuant to unlisted trading privileges (‘‘UTP’’) of the following actively managed funds under Rule 8.600: Securities Exchange Act Release No. 57626 (April 4, 2008), 73 FR 19923 (April 11, 2008) (SR– NYSEArca–2008–28) (order approving trading on the Exchange pursuant to UTP of Bear Stearns Active ETF); Securities Exchange Act Release No. 57801 (May 8, 2008), 73 FR 27878 (May 14, 2008) (SR–NYSEArca–2008–31) (order approving Exchange listing and trading of twelve activelymanaged funds of the WisdomTree Trust); Securities Exchange Act Release No. 59826 (April 28, 2009), 74 FR 20512 (May 4, 2009) (SR– NYSEArca–2009–22) (order approving Exchange listing and trading of Grail American Beacon Large Cap Value ETF); Securities Exchange Act Release No. 60460 (August 7, 2009), 74 FR 41468 (August 17, 2009) (SR–NYSEArca–2009–55) (order approving Exchange listing and trading of Dent Tactical ETF). 4 See Registration Statement on Form N–1A for the Trust filed with the Securities and Exchange Commission on July 22, 2009 (File Nos. 333–155395 and 811–22250) (the ‘‘Registration Statement’’). The PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 Description of the Shares and the Funds Pacific Investment Management Company LLC (‘‘PIMCO’’) is the investment adviser (‘‘Adviser’’) to each Fund.5 State Street Bank & Trust Co. is the custodian and transfer agent for the Funds. The Trust’s Distributor is Allianz Global Investors Distributors LLC (the ‘‘Distributor’’), an indirect subsidiary of Allianz Global Investors of America L.P. (‘‘AGI’’), PIMCO’s parent company. The Distributor is a registered brokerdealer.6 Commentary .07 to Rule 8.600 provides that, if the investment adviser to the Investment Company issuing Managed Fund Shares is affiliated with a broker-dealer, such investment adviser shall erect a ‘‘fire wall’’ between the investment adviser and the brokerdealer with respect to access to descriptions of the Funds and the Shares contained herein are based on information in the Registration Statement. 5 The Exchange represents that the Adviser, as the investment adviser of the Funds, and its related personnel, are subject to Investment Advisers Act Rule 204A–1. This Rule specifically requires the adoption of a code of ethics by an investment advisor to include, at a minimum: (i) Standards of business conduct that reflect the firm’s/personnel fiduciary obligations; (ii) provisions requiring supervised persons to comply with applicable Federal securities laws; (iii) provisions that require all access persons to report, and the firm to review, their personal securities transactions and holdings periodically as specifically set forth in Rule 204A– 1; (iv) provisions requiring supervised persons to report any violations of the code of ethics promptly to the chief compliance officer (‘‘CCO’’) or, provided the CCO also receives reports of all violations, to other persons designated in the code of ethics; and (v) provisions requiring the investment advisor to provide each of the supervised persons with a copy of the code of ethics with an acknowledgement by said supervised persons. In addition, Rule 206(4)–7 under the Advisers Act makes it unlawful for an investment advisor to provide investment advice to clients unless such investment advisor has (i) adopted and implemented written policies and procedures reasonably designed to prevent violation, by the investment advisor and its supervised persons, of the Advisers Act and the Commission rules adopted thereunder; (ii) implemented, at a minimum, an annual review regarding the adequacy of the policies and procedures established pursuant to subparagraph (i) above and the effectiveness of their implementation; and (iii) designated an individual (who is a supervised person) responsible for administering the policies and procedures adopted under subparagraph (i) above. 6 The Funds have made application for an order granting certain exemptive relief to the Trust under the Investment Company Act of 1940 (15 U.S.C. 80a–1) (‘‘1940 Act’’). In compliance with Commentary .05 to NYSE Arca Equities Rule 8.600, which applies to Managed Fund Shares based on an international or global portfolio, the Trust’s application for exemptive relief under the 1940 Act states that the Funds will comply with the Federal securities laws in accepting securities for deposits and satisfying redemptions with redemption securities, including that the securities accepted for deposits and the securities used to satisfy redemption requests are sold in transactions that would be exempt from registration under the Securities Act of 1933 (15 U.S.C. 77a). E:\FR\FM\11SEN1.SGM 11SEN1 Federal Register / Vol. 74, No. 175 / Friday, September 11, 2009 / Notices information concerning the composition and/or changes to such Investment Company portfolio.7 In addition, Commentary .07 further requires that personnel who make decisions on the open-end fund’s portfolio composition must be subject to procedures designed to prevent the use and dissemination of material nonpublic information regarding the open-end fund’s portfolio. Commentary .07 to Rule 8.600 is similar to Commentary .03(a)(i) and (iii) to NYSE Arca Equities Rule 5.2(j)(3); however, Commentary .07 in connection with the establishment of a ‘‘fire wall’’ between the investment adviser and the broker-dealer reflects the applicable open-end fund’s portfolio, not an underlying benchmark index, as is the case with index-based funds. The Adviser is affiliated with a brokerdealer, Allianz Global Investors Distributors LLC, and has implemented a fire wall with respect to such brokerdealer regarding access to information concerning the composition and/or changes to a portfolio. None of the Funds will invest in nonU.S. equity securities. cprice-sewell on DSKGBLS3C1PROD with NOTICES PIMCO Enhanced Short Maturity Strategy Fund According to the Registration Statement, the Fund’s investment objective is to seek maximum current income, consistent with preservation of capital and daily liquidity.8 The Fund seeks to achieve its investment objective by investing under normal circumstances at least 65% of its total assets in a diversified portfolio of Fixed Income Instruments 9 of varying 7 An investment adviser to an open-end fund is required to be registered under the Investment Advisers Act of 1940 (the ‘‘Advisers Act’’). As a result, the investment adviser is subject to the provisions of Rule 204A–1 under the Advisers Act relating to codes of ethics. This Rule requires investment advisers to adopt a code of ethics that reflects the fiduciary nature of the relationship to clients as well as compliance with other applicable securities laws. Accordingly, procedures designed to prevent the communication and misuse of nonpublic information by an investment adviser must be consistent with Rule 204A–1 under the Advisers Act. 8 The investment objective of each Fund is nonfundamental and may be changed by the Board of Trustees without shareholder approval. 9 According to the Registration Statement, ‘‘Fixed Income Instruments,’’ as used generally in the Registration Statement, includes: • Securities issued or guaranteed by the U.S. Government, its agencies or government-sponsored enterprises (‘‘U.S. Government Securities’’); • Corporate debt securities of U.S. and non-U.S. issuers, including corporate commercial paper; • Mortgage-backed and other asset-backed securities; • Inflation-indexed bonds issued both by governments and corporations; • Structured notes, including hybrid or ‘‘indexed’’ securities; VerDate Nov<24>2008 15:23 Sep 10, 2009 Jkt 217001 maturities, which may be represented by forwards or derivatives such as options, futures contracts or swap agreements. The average portfolio duration of this Fund will vary based on PIMCO’s forecast for interest rates and will normally not exceed one year. The dollar-weighted average portfolio maturity of the Fund is normally not expected to exceed three years. According to the Registration Statement, the Fund primarily invests in U.S. dollar-denominated investment grade debt securities, rated Baa or higher by Moody’s, or equivalently rated by S&P or Fitch, or, if unrated, determined by PIMCO to be of comparable quality. The Fund may invest, without limitation, in U.S. dollar-denominated fixed income securities and instruments that are economically tied to foreign (non-U.S.) countries.10 The Fund may invest up to 5% of its total assets in U.S. dollardenominated fixed-income securities and instruments that are economically tied to emerging market countries. The Fund may invest, without limitation, in derivative instruments, such as options, futures contracts or swap agreements, or in mortgage- or asset-backed securities. The Fund may, without limitation, seek to obtain market exposure to the fixed income securities in which it primarily invests by entering into a series of purchase and • Loan participations and assignments; • Delayed funding loans and revolving credit facilities; • Bank certificates of deposit, fixed time deposits and bankers’ acceptances; • Repurchase agreements on Fixed Income Instruments and reverse repurchase agreements on Fixed Income Instruments; • Debt securities issued by States or local governments and their agencies, authorities and other government-sponsored enterprises; • Obligations of non-U.S. governments or their subdivisions, agencies and government-sponsored enterprises; and • Obligations of international agencies or supranational entities. 10 According to the Registration Statement, PIMCO generally considers an instrument to be economically tied to a non-U.S. country if the issuer is a foreign government (or any political subdivision, agency, authority or instrumentality of such government), or if the issuer is organized under the laws of a non-U.S. country. In the case of certain money market instruments, such instruments will be considered economically tied to a non-U.S. country if either the issuer or the guarantor of such money market instrument is organized under the laws of a non-U.S. country. With respect to derivative instruments, PIMCO generally considers such instruments to be economically tied to non-U.S. countries if the underlying assets are foreign currencies (or baskets or indexes of such currencies), or instruments or securities that are issued by foreign governments or issuers organized under the laws of a non-U.S. country (or if the underlying assets are certain money market instruments, if either the issuer or the guarantor of such money market instruments is organized under the laws of a non-U.S. country). PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 46821 sale contracts or by using other investment techniques (such as buy backs or dollar rolls). As described in the Registration Statement, the Enhanced Short Maturity Strategy Fund also may invest in the following: up to 5% of its total assets in any combination of mortgage-related or other asset-backed interest-only, principal-only or inverse floater securities; fixed- and floating-rate loans, which investments generally will be in the form of loan participations and assignments of portions of such loans; U.S. dollar-denominated fixed income securities and instruments; and Brady Bonds, which are securities created through the exchange of existing commercial bank loans to sovereign entities for new obligations in connection with a debt restructuring. The Fund may, but is not required to, use derivative instruments for risk management purposes or as part of its investment strategies. According to the Registration Statement, generally, derivatives are financial contracts whose value depends upon, or is derived from, the value of an underlying asset, reference rate or index, and may relate to stocks, bonds, interest rates, currencies or currency exchange rates, commodities, and related indexes. Examples of derivative instruments include options contracts, futures contracts, options on futures contracts and swap agreements (including, but not limited to, credit default swaps and swaps on exchange traded funds). PIMCO Government Limited Maturity Strategy Fund According to the Registration Statement, the Fund’s investment objective is to seek maximum current income, consistent with preservation of capital and daily liquidity. The Fund seeks to achieve its investment objective by investing under normal circumstances at least 80% of its assets in a diversified portfolio of fixed income securities that are issued or guaranteed by the U.S. Government, its agencies or government-sponsored enterprises (‘‘U.S. Government Securities’’). Assets not invested in U.S. Government Securities may be invested in other types of Fixed Income Instruments. According to the Registration Statement, the Fund’s investments in Fixed Income Instruments are limited to those of investment grade U.S. dollardenominated securities of U.S. issuers that are rated Aa or higher by Moody’s, or equivalently rated by S&P or Fitch, or, if unrated, determined by PIMCO to be of comparable quality. The average portfolio duration of this Fund will vary based on PIMCO’s forecast for interest E:\FR\FM\11SEN1.SGM 11SEN1 46822 Federal Register / Vol. 74, No. 175 / Friday, September 11, 2009 / Notices cprice-sewell on DSKGBLS3C1PROD with NOTICES rates and will normally not exceed one year. The Fund may only invest in securities that mature within two years from the date of purchase. The Fund may, without limitation, seek to obtain market exposure to the fixed income securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as buy backs or dollar rolls). PIMCO Intermediate Municipal Bond Strategy Fund According to the Registration Statement, the Fund’s investment objective is to seek attractive tax-exempt income, consistent with preservation of capital. The Fund seeks to achieve its investment objective by investing under normal circumstances at least 80% of its assets in a diversified portfolio of debt securities whose interest is, in the opinion of bond counsel for the issuer at the time of issuance, exempt from Federal income tax (‘‘Municipal Bonds’’). Municipal Bonds generally are issued by or on behalf of States and local governments and their agencies, authorities and other instrumentalities. According to the Registration Statement, the Fund does not intend to invest in securities whose interest is subject to the Federal alternative minimum tax. The Fund may only invest in U.S. dollar-denominated investment grade debt securities. The Fund may invest 25% or more of its total assets in Municipal Bonds that finance similar projects, such as those relating to education, health care, housing, transportation, and utilities, and 25% or more of its total assets in industrial development bonds. The average portfolio duration of this Fund normally varies from three to eight years, based on PIMCO’s forecast for interest rates. The portfolio manager focuses on bonds with the potential to offer attractive current income, typically looking for bonds that can provide consistently attractive current yields or that are trading at competitive market prices. The Fund may, without limitation, seek to obtain market exposure to the fixed income securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as buy backs or dollar rolls). PIMCO Prime Limited Maturity Strategy Fund According to the Registration Statement, the Fund’s investment objective is to seek maximum current income, consistent with preservation of capital and daily liquidity. The Fund VerDate Nov<24>2008 15:23 Sep 10, 2009 Jkt 217001 seeks to achieve its investment objective by investing under normal circumstances at least 65% of its total assets in a diversified portfolio of fixed income securities of varying maturities. The Fund may only invest in U.S. dollar-denominated securities that mature within 397 days from the date of purchase or floating rate U.S. government agency securities that mature within two years from the date of purchase. The average portfolio duration of this Fund will vary based on PIMCO’s forecast for interest rates and will normally not exceed 90 days. According to the Registration Statement, the Fund primarily invests in U.S. dollar-denominated investment grade debt securities, rated A or higher by Moody’s, or equivalently rated by S&P or Fitch, or, if unrated, determined by PIMCO to be of comparable quality. The Fund may, without limitation, seek to obtain market exposure to the fixed income securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as buy backs or dollar rolls). PIMCO Short Term Municipal Bond Strategy Fund According to the Registration Statement, the Fund’s investment objective is to seek attractive tax-exempt income, consistent with preservation of capital. The Fund seeks to achieve its investment objective by investing under normal circumstances at least 80% of its assets in a diversified portfolio of Municipal Bonds. According to the Registration Statement, the Fund does not intend to invest in securities whose interest is subject to the Federal alternative minimum tax. The Fund may only invest in U.S. dollar-denominated investment grade debt securities. The Fund may invest 25% or more of its total assets in Municipal Bonds that finance similar projects, such as those relating to education, health care, housing, transportation, and utilities, and 25% or more of its total assets in industrial development bonds. The average portfolio duration of this Fund varies based on PIMCO’s forecast for interest rates and under normal market conditions is not expected to exceed three years. The dollar-weighted average portfolio maturity of the Fund is normally not expected to exceed three years. The portfolio manager focuses on bonds with the potential to offer attractive current income, typically looking for bonds that can provide consistently attractive current yields or that are trading at competitive market prices. PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 The Fund may, without limitation, seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as buy backs or dollar rolls). Each Fund may enter into repurchase agreements, in which the Fund purchases a security from a bank or broker-dealer, which agrees to repurchase the security at the Fund’s cost plus interest within a specified time. In addition, each Fund may enter into reverse repurchase agreements and dollar rolls; may purchase securities which it is eligible to purchase on a when-issued basis; may purchase and sell such securities for delayed delivery and may make contracts to purchase such securities for a fixed price at a future date beyond normal settlement time (forward commitments); may invest in, to the extent permitted by Section 12(d)(1) of the 1940 Act, other affiliated and unaffiliated funds, such as open-end or closed-end management investment companies, including other exchange traded funds; may invest securities lending collateral in one or more money market funds to the extent permitted by Rule 12d1–1 under the 1940 Act; and may invest up to 15% of its net assets in illiquid securities.11 The Shares According to the Registration Statement, Shares of a Fund that trade in the secondary market are ‘‘created’’ at NAV 12 by Authorized Participants only in block-size Creation Units of 100,000 shares or multiples thereof. Each Authorized Participant enters into an authorized participant agreement with the Funds’ Distributor. A creation transaction, which is subject to acceptance by the transfer agent, takes place when an Authorized Participant deposits into a Fund a specified amount of cash and/or a portfolio of securities specified by such Fund in exchange for a specified number of Creation Units. Similarly, Shares can be redeemed only in Creation Units, generally in-kind 11 According to the Registration Statement, the term ‘‘illiquid securities’’ for this purpose means securities that cannot be disposed of within seven days in the ordinary course of business at approximately the amount at which a Fund has valued the securities. 12 The NAV of each Fund’s shares generally is calculated once daily Monday through Friday as of the close of regular trading on the New York Stock Exchange, generally 4:00 p.m. Eastern time (the ‘‘NAV Calculation Time’’) on any Business Day as defined in the Registration Statement. NAV per share is calculated by dividing a Fund’s net assets by the number of Fund shares outstanding. For more information regarding the valuation of Fund investments in calculating a Fund’s NAV, see the Registration Statement. E:\FR\FM\11SEN1.SGM 11SEN1 Federal Register / Vol. 74, No. 175 / Friday, September 11, 2009 / Notices cprice-sewell on DSKGBLS3C1PROD with NOTICES for a portfolio of securities held by a Fund and/or for a specified amount of cash. Except when aggregated in Creation Units, Shares are not redeemable by a Fund. The prices at which creations and redemptions occur are based on the next calculation of NAV after an order is received. Requirements as to the timing and form of orders are described in the authorized participant agreement. PIMCO, through the National Securities Clearing Corporation (‘‘NSCC’’), makes available on each Business Day, prior to the opening of business (subject to amendments) on the Exchange (currently 9:30 a.m., Eastern time), the identity and the required number of shares of each Deposit Security and the amount of the Cash Component to be included in the current Fund Deposit (based on information at the end of the previous Business Day). Creations and redemptions must be made by an Authorized Participant or through a firm that is either a member of the Continuous Net Settlement System of the NSCC or a DTC participant, and in each case, must have executed an agreement with the Distributor with respect to creations and redemptions of Creation Unit aggregations. Additional information regarding the Trust and the Shares, including investment strategies, risks, creation and redemption procedures, fees, portfolio holdings, disclosure policies, distributions and taxes is included in the Registration Statement. All terms relating to the Funds that are referred to, but not defined in, this proposed rule change are defined in the Registration Statement. Availability of Information The Funds’ Web site (https:// www.pimcoetfs.com), which will be publicly available prior to the public offering of Shares, will include a form of the Prospectus for each Fund that may be downloaded. The Web site will include additional quantitative information updated on a daily basis, including, for the Funds: (1) The prior business day’s reported NAV, mid-point of the bid/ask spread at the time of calculation of such NAV (the ‘‘Bid/Ask Price’’),13 and a calculation of the premium and discount of the Bid/Ask Price against the NAV; and (2) data in chart format displaying the frequency 13 The Bid/Ask Price of each Fund is determined using the midpoint of the highest bid and the lowest offer on the Exchange as of the time of calculation of the NAV. The records relating to Bid/ Ask Prices will be retained by each Fund and its service providers. VerDate Nov<24>2008 15:23 Sep 10, 2009 Jkt 217001 distribution of discounts and premiums of the daily Bid/Ask Price against the NAV, within appropriate ranges, for each of the four previous calendar quarters. On each business day, before commencement of trading in Shares in the Core Trading Session 14 on the Exchange, the Trust will disclose on its Web site the identities and quantities of the portfolio of securities and other assets (the ‘‘Disclosed Portfolio’’) held by the Funds that will form the basis for the Funds’ calculation of NAV at the end of the business day.15 The Web site and information will be publicly available at no charge. In addition, for each Fund, an estimated value, defined in NYSE Arca Equities Rule 8.600 as the ‘‘Portfolio Indicative Value,’’ that reflects an estimated intraday value of the Fund’s portfolio, will be disseminated. The Portfolio Indicative Value will be based upon the current value for the components of the Disclosed Portfolio and will be updated and disseminated by the Exchange at least every 15 seconds during the Core Trading Session on the Exchange through the facilities of the Consolidated Tape Association. The dissemination of the Portfolio Indicative Value, together with the Disclosed Portfolio, will allow investors to determine the value of the underlying portfolio of a Fund on a daily basis and to provide a close estimate of that value throughout the trading day. Information regarding market price and volume of the Shares is and will be continually available on a real-time basis throughout the day on brokers’ computer screens and other electronic services. The previous day’s closing price and trading volume information will be published daily in the financial section of newspapers. Quotation and last sale information for the Shares will be available via the Consolidated Tape Association high-speed line. Investors can also obtain the Trust’s Statement of Additional Information (‘‘SAI’’), the Funds’ Shareholder Reports, and its Form N–CSR and Form N–SAR, filed twice a year. The Trust’s SAI and Shareholder Reports are available free upon request from the 14 The Core Trading Session is 9:30 a.m. to 4 p.m. Eastern time. 15 Under accounting procedures followed by the Funds, trades made on the prior business day (‘‘T’’) will be booked and reflected in NAV on the current business day (‘‘T+1’’). Notwithstanding the foregoing, portfolio trades that are executed prior to the opening of the Exchange on any business day may be booked and reflected in NAV on such business day. Accordingly, each Fund will be able to disclose at the beginning of the business day the portfolio that will form the basis for the NAV calculation at the end of the business day. PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 46823 Trust, and those documents and the Form N–CSR and Form N–SAR may be viewed on-screen or downloaded from the Commission’s Web site at https:// www.sec.gov. Initial and Continued Listing The Shares will be subject to NYSE Arca Equities Rule 8.600(d), which sets forth the initial and continued listing criteria applicable to Managed Fund Shares. The Exchange represents that, for initial and/or continued listing, the Shares must be in compliance with Rule 10A–3 16 under the Exchange Act, as provided by NYSE Arca Equities Rule 5.3. A minimum of 100,000 Shares will be outstanding at the commencement of trading on the Exchange. The Exchange will obtain a representation from the issuer of the Shares that the net asset value per Share will be calculated daily and that the net asset value and the Disclosed Portfolio will be made available to all market participants at the same time. Trading Halts With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares of the Funds. Shares of the Funds will be halted if the ‘‘circuit breaker’’ parameters in NYSE Arca Equities Rule 7.12 are reached. Trading may 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 Funds; or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. Trading in the Shares will be subject to NYSE Arca Equities Rule 8.600(d)(2)(D), which sets forth circumstances under which Shares of the Funds may be halted. Trading Rules The Exchange deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange’s existing rules governing the trading of equity securities. Shares will trade on the NYSE Arca Marketplace from 4 a.m. to 8 p.m. Eastern time in accordance with NYSE Arca Equities Rule 7.34 (Opening, Core, and Late Trading Sessions). The Exchange has appropriate rules to facilitate transactions in the Shares during all trading sessions. The minimum trading 16 See E:\FR\FM\11SEN1.SGM 17 CFR 240.10A–3. 11SEN1 46824 Federal Register / Vol. 74, No. 175 / Friday, September 11, 2009 / Notices increment for Shares on the Exchange will be $0.01. cprice-sewell on DSKGBLS3C1PROD with NOTICES Surveillance The Exchange intends to utilize its existing surveillance procedures applicable to derivative products (which includes Managed Fund Shares) to monitor trading in the Shares. The Exchange represents that these 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. The Exchange’s current trading surveillance focuses on detecting securities trading outside their normal patterns. When such situations are detected, surveillance analysis follows and investigations are opened, where appropriate, to review the behavior of all relevant parties for all relevant trading violations. The Exchange may obtain information via the Intermarket Surveillance Group (‘‘ISG’’) from other exchanges who are members of ISG.17 In addition, the Exchange also has a general policy prohibiting the distribution of material, non-public information by its employees. Information Bulletin Prior to the commencement of trading, the Exchange will inform its ETP Holders in an Information Bulletin (‘‘Bulletin’’) of the special characteristics and risks associated with trading the Shares. Specifically, the Bulletin will discuss the following: (1) The procedures for purchases and redemptions of Shares in Creation Unit aggregations (and that Shares are not individually redeemable); (2) 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; (3) the risks involved in trading the Shares during the Opening and Late Trading Sessions when an updated Portfolio Indicative Value will not be calculated or publicly disseminated; (4) how information regarding the Portfolio Indicative Value is disseminated; (5) the requirement that ETP Holders deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; and (6) trading information. In addition, the Bulletin will reference that the Funds are subject to 17 For a list of the current members of ISG, see https://www.isgportal.org. The Exchange notes that not all of the components of the Disclosed Portfolio for the Funds may trade on exchanges that are members of ISG. VerDate Nov<24>2008 15:23 Sep 10, 2009 Jkt 217001 various fees and expenses described in the Registration Statement. The Bulletin will discuss any exemptive, no-action, and interpretive relief granted by the Commission from any rules under the Exchange Act. The Bulletin will also disclose that the NAV for the Shares will be calculated after 4 p.m. Eastern time each trading day. 2. Statutory Basis The basis under the Exchange Act for this proposed rule change is the requirement under Section 6(b)(5) 18 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 Exchange believes that the proposed rule change will facilitate the listing and trading of additional types of exchangetraded products that will enhance competition among market participants, to the benefit of investors and the marketplace. In addition, the listing and trading criteria set forth in NYSE Arca Equities Rule 8.600 are intended to protect investors and the public interest. 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 purposes of the Act. 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 Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: A. By order approve the proposed rule change, or B. Institute proceedings to determine whether the proposed rule change should be disapproved. 18 15 PO 00000 U.S.C. 78f(b)(5). Frm 00092 Fmt 4703 Sfmt 4703 The Exchange has requested accelerated approval of this proposed rule change prior to the 30th day after the date of publication of notice in the Federal Register. The Commission is considering granting accelerated approval of the proposed rule change at the end of a 15-day comment period. 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 • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NYSEArca–2009–79 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEArca–2009–79. This file number should be included on the subject line if e-mail is used. To help the Commission 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 (https://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 inspection and copying in the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. 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 E:\FR\FM\11SEN1.SGM 11SEN1 Federal Register / Vol. 74, No. 175 / Friday, September 11, 2009 / Notices Number SR–NYSEArca–2009–79 and should be submitted on or before September 28, 2009. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–21908 Filed 9–10–09; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–60625; File No. SR–CBOE– 2009–066] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Permit CBOE To List Series That Are Restricted to Closing Transactions if Such Series Are Listed and Restricted To Closing Transactions on Another Exchange September 4, 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 September 3, 2009, Chicago Board Options Exchange, Incorporated (‘‘Exchange’’ or ‘‘CBOE’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange filed the proposal as a ‘‘non-controversial’’ proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b–4(f)(6) thereunder.4 The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. cprice-sewell on DSKGBLS3C1PROD with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change CBOE proposes to amend Interpretation and Policy .12 to Rule 5.4 to permit the Exchange to list series that are restricted to closing transactions if such series are listed and restricted to closing transactions on another exchange. The text of the rule proposal is available on the Exchange’s Web site (https://www.cboe.org/legal), at the Exchange’s Office of the Secretary and at the Commission. CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(6). 1 15 VerDate Nov<24>2008 15:23 Sep 10, 2009 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. to series that no longer meet the Exchange’s criteria for continued listing, (i) opening transactions by market makers executed to accommodate closing transactions of other market participants, and (ii) opening transactions by CBOE member organizations to facilitate the closing transactions of public customers executed as crosses pursuant to and in accordance with CBOE Rule 6.74(b) or (d) will be permitted in any restricted series listed pursuant to Rule 5.4.12(b).7 No restrictions will be in place with respect to the exercise of any restricted series. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 2. Statutory Basis 1. Purpose The purpose of this proposed rule change is to amend Interpretation and Policy .12 to Rule 5.4 to permit the Exchange to list series that are restricted to closing transactions if such series are listed and restricted to closing transactions on another exchange. The impetus for this filing is a customer request for the Exchange to list a series that was previously delisted by the Exchange so that the customer may close an existing position in the delisted series. Specifically, on August 27, 2009, CBOE delisted the January 2010 7 El Paso, Corp. (EPY) strike.5 Currently, that series is listed on one other exchange and is restricted to closing transactions only. On September 1, 2009, the Exchange received a customer request to re-list the January 2010 7 EPY strike because the customer wants to close out their position on CBOE, and not on the other exchange that currently lists the restricted January 2010 7 EPY strike. The Exchange wants to accommodate the customer and is therefore proposing to amend Interpretation and Policy .12 to Rule 5.4. Specifically, the Exchange proposes to add new subparagraph (b) to Interpretation and Policy .12 to Rule 5.4. to provide that if an option series is listed but restricted to closing transactions on another national securities exchange, the Exchange may list such series (even if such series would not otherwise be eligible for listing under the Exchange’s Rules), which shall also be restricted to closing transactions on the Exchange.6 Similar 5 This series was inadvertently listed within $0.50 of an existing strike and was therefore delisted. See Rule 5.5.01(a)(2). 6 The parenthetical text is being proposed to eliminate ambiguity about the Exchange’s ability to list a restricted series pursuant to proposed Rule 19 17 Jkt 217001 46825 PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 The Exchange believes that the proposed rule change is consistent with the requirements provided under Section 6(b)(5) of the Act,8 that the rules of an exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts and, in general, to protect investors and the public interest. Permitting the Exchange to accommodate a customer request will encourage competition and not harm investors or the public interest. B. Self-Regulatory Organization’s Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. 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 prior to 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) 5.4.12(b) in the event other Exchange Rules would otherwise prohibit the listing of that series. 7 See Rule 5.4. 8 15 U.S.C. 78f(b)(5). E:\FR\FM\11SEN1.SGM 11SEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 74, Number 175 (Friday, September 11, 2009)]
[Notices]
[Pages 46820-46825]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-21908]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60619; File No. SR-NYSEArca-2009-79]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change Relating to Listing of Five Fixed Income Funds
of the PIMCO ETF Trust

September 3, 2009.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that, on August 27, 2009, NYSE Arca, Inc. (``NYSE
Arca'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

Pursuant to the provisions of Section 19(b)(1) of the Exchange Act,
NYSE Arca, through its wholly-owned subsidiary NYSE Arca Equities, Inc.
(``NYSE Arca Equities'' or the ``Corporation''), proposes to list and
trade the shares of the following funds of the PIMCO ETF Trust (the
``Trust'') under NYSE Arca Equities Rule 8.600 (Managed Fund Shares):
PIMCO Enhanced Short Maturity Strategy Fund, PIMCO Government Limited
Maturity Strategy Fund, PIMCO Intermediate Municipal Bond Strategy
Fund, PIMCO Prime Limited Maturity Strategy Fund, and PIMCO Short Term
Municipal Bond Strategy Fund, (each a ``Fund'' and, collectively, the
``Funds''). The shares of the Funds are collectively referred to herein
as the ``Shares.''
The text of the proposed rule change is available on the Exchange's
Web site at https://www.nyx.com, at the Exchange's principal office 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 Exchange proposes to list and trade the Shares of the Funds
under NYSE Arca Equities Rule 8.600, which governs the listing and
trading of Managed Fund Shares on the Exchange.\3\ Each of the Funds
will be an actively managed exchange traded fund. The Shares will be
offered by the Trust, which is a Delaware statutory trust. The Trust is
registered with the Commission as an investment company.\4\
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\3\ The Commission approved NYSE Arca Equities Rule 8.600 and
the listing and trading of certain funds of the PowerShares Actively
Managed Funds Trust on the Exchange pursuant to Rule 8.600 in
Securities Exchange Act Release No. 57619 (April 4, 2008) 73 FR
19544 (April 10, 2008) (SR-NYSEArca-2008-25). The Commission also
previously approved listing and trading on the Exchange, or trading
on the Exchange pursuant to unlisted trading privileges (``UTP'') of
the following actively managed funds under Rule 8.600: Securities
Exchange Act Release No. 57626 (April 4, 2008), 73 FR 19923 (April
11, 2008) (SR-NYSEArca-2008-28) (order approving trading on the
Exchange pursuant to UTP of Bear Stearns Active ETF); Securities
Exchange Act Release No. 57801 (May 8, 2008), 73 FR 27878 (May 14,
2008) (SR-NYSEArca-2008-31) (order approving Exchange listing and
trading of twelve actively-managed funds of the WisdomTree Trust);
Securities Exchange Act Release No. 59826 (April 28, 2009), 74 FR
20512 (May 4, 2009) (SR-NYSEArca-2009-22) (order approving Exchange
listing and trading of Grail American Beacon Large Cap Value ETF);
Securities Exchange Act Release No. 60460 (August 7, 2009), 74 FR
41468 (August 17, 2009) (SR-NYSEArca-2009-55) (order approving
Exchange listing and trading of Dent Tactical ETF).
\4\ See Registration Statement on Form N-1A for the Trust filed
with the Securities and Exchange Commission on July 22, 2009 (File
Nos. 333-155395 and 811-22250) (the ``Registration Statement''). The
descriptions of the Funds and the Shares contained herein are based
on information in the Registration Statement.
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Description of the Shares and the Funds
Pacific Investment Management Company LLC (``PIMCO'') is the
investment adviser (``Adviser'') to each Fund.\5\ State Street Bank &
Trust Co. is the custodian and transfer agent for the Funds. The
Trust's Distributor is Allianz Global Investors Distributors LLC (the
``Distributor''), an indirect subsidiary of Allianz Global Investors of
America L.P. (``AGI''), PIMCO's parent company. The Distributor is a
registered broker-dealer.\6\
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\5\ The Exchange represents that the Adviser, as the investment
adviser of the Funds, and its related personnel, are subject to
Investment Advisers Act Rule 204A-1. This Rule specifically requires
the adoption of a code of ethics by an investment advisor to
include, at a minimum: (i) Standards of business conduct that
reflect the firm's/personnel fiduciary obligations; (ii) provisions
requiring supervised persons to comply with applicable Federal
securities laws; (iii) provisions that require all access persons to
report, and the firm to review, their personal securities
transactions and holdings periodically as specifically set forth in
Rule 204A-1; (iv) provisions requiring supervised persons to report
any violations of the code of ethics promptly to the chief
compliance officer (``CCO'') or, provided the CCO also receives
reports of all violations, to other persons designated in the code
of ethics; and (v) provisions requiring the investment advisor to
provide each of the supervised persons with a copy of the code of
ethics with an acknowledgement by said supervised persons. In
addition, Rule 206(4)-7 under the Advisers Act makes it unlawful for
an investment advisor to provide investment advice to clients unless
such investment advisor has (i) adopted and implemented written
policies and procedures reasonably designed to prevent violation, by
the investment advisor and its supervised persons, of the Advisers
Act and the Commission rules adopted thereunder; (ii) implemented,
at a minimum, an annual review regarding the adequacy of the
policies and procedures established pursuant to subparagraph (i)
above and the effectiveness of their implementation; and (iii)
designated an individual (who is a supervised person) responsible
for administering the policies and procedures adopted under
subparagraph (i) above.
\6\ The Funds have made application for an order granting
certain exemptive relief to the Trust under the Investment Company
Act of 1940 (15 U.S.C. 80a-1) (``1940 Act''). In compliance with
Commentary .05 to NYSE Arca Equities Rule 8.600, which applies to
Managed Fund Shares based on an international or global portfolio,
the Trust's application for exemptive relief under the 1940 Act
states that the Funds will comply with the Federal securities laws
in accepting securities for deposits and satisfying redemptions with
redemption securities, including that the securities accepted for
deposits and the securities used to satisfy redemption requests are
sold in transactions that would be exempt from registration under
the Securities Act of 1933 (15 U.S.C. 77a).
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Commentary .07 to Rule 8.600 provides that, if the investment
adviser to the Investment Company issuing Managed Fund Shares is
affiliated with a broker-dealer, such investment adviser shall erect a
``fire wall'' between the investment adviser and the broker-dealer with
respect to access to

[[Page 46821]]

information concerning the composition and/or changes to such
Investment Company portfolio.\7\ In addition, Commentary .07 further
requires that personnel who make decisions on the open-end fund's
portfolio composition must be subject to procedures designed to prevent
the use and dissemination of material nonpublic information regarding
the open-end fund's portfolio. Commentary .07 to Rule 8.600 is similar
to Commentary .03(a)(i) and (iii) to NYSE Arca Equities Rule 5.2(j)(3);
however, Commentary .07 in connection with the establishment of a
``fire wall'' between the investment adviser and the broker-dealer
reflects the applicable open-end fund's portfolio, not an underlying
benchmark index, as is the case with index-based funds. The Adviser is
affiliated with a broker-dealer, Allianz Global Investors Distributors
LLC, and has implemented a fire wall with respect to such broker-dealer
regarding access to information concerning the composition and/or
changes to a portfolio.
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\7\ An investment adviser to an open-end fund is required to be
registered under the Investment Advisers Act of 1940 (the ``Advisers
Act''). As a result, the investment adviser is subject to the
provisions of Rule 204A-1 under the Advisers Act relating to codes
of ethics. This Rule requires investment advisers to adopt a code of
ethics that reflects the fiduciary nature of the relationship to
clients as well as compliance with other applicable securities laws.
Accordingly, procedures designed to prevent the communication and
misuse of non-public information by an investment adviser must be
consistent with Rule 204A-1 under the Advisers Act.
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None of the Funds will invest in non-U.S. equity securities.
PIMCO Enhanced Short Maturity Strategy Fund
According to the Registration Statement, the Fund's investment
objective is to seek maximum current income, consistent with
preservation of capital and daily liquidity.\8\
---------------------------------------------------------------------------

\8\ The investment objective of each Fund is non-fundamental and
may be changed by the Board of Trustees without shareholder
approval.
---------------------------------------------------------------------------

The Fund seeks to achieve its investment objective by investing
under normal circumstances at least 65% of its total assets in a
diversified portfolio of Fixed Income Instruments \9\ of varying
maturities, which may be represented by forwards or derivatives such as
options, futures contracts or swap agreements. The average portfolio
duration of this Fund will vary based on PIMCO's forecast for interest
rates and will normally not exceed one year. The dollar-weighted
average portfolio maturity of the Fund is normally not expected to
exceed three years.
---------------------------------------------------------------------------

\9\ According to the Registration Statement, ``Fixed Income
Instruments,'' as used generally in the Registration Statement,
includes:
Securities issued or guaranteed by the U.S. Government,
its agencies or government-sponsored enterprises (``U.S. Government
Securities'');
Corporate debt securities of U.S. and non-U.S. issuers,
including corporate commercial paper;
Mortgage-backed and other asset-backed securities;
Inflation-indexed bonds issued both by governments and
corporations;
Structured notes, including hybrid or ``indexed''
securities;
Loan participations and assignments;
Delayed funding loans and revolving credit facilities;
Bank certificates of deposit, fixed time deposits and
bankers' acceptances;
Repurchase agreements on Fixed Income Instruments and
reverse repurchase agreements on Fixed Income Instruments;
Debt securities issued by States or local governments
and their agencies, authorities and other government-sponsored
enterprises;
Obligations of non-U.S. governments or their
subdivisions, agencies and government-sponsored enterprises; and
Obligations of international agencies or supranational
entities.
---------------------------------------------------------------------------

According to the Registration Statement, the Fund primarily invests
in U.S. dollar-denominated investment grade debt securities, rated Baa
or higher by Moody's, or equivalently rated by S&P or Fitch, or, if
unrated, determined by PIMCO to be of comparable quality. The Fund may
invest, without limitation, in U.S. dollar-denominated fixed income
securities and instruments that are economically tied to foreign (non-
U.S.) countries.\10\ The Fund may invest up to 5% of its total assets
in U.S. dollar-denominated fixed-income securities and instruments that
are economically tied to emerging market countries.
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\10\ According to the Registration Statement, PIMCO generally
considers an instrument to be economically tied to a non-U.S.
country if the issuer is a foreign government (or any political
subdivision, agency, authority or instrumentality of such
government), or if the issuer is organized under the laws of a non-
U.S. country. In the case of certain money market instruments, such
instruments will be considered economically tied to a non-U.S.
country if either the issuer or the guarantor of such money market
instrument is organized under the laws of a non-U.S. country. With
respect to derivative instruments, PIMCO generally considers such
instruments to be economically tied to non-U.S. countries if the
underlying assets are foreign currencies (or baskets or indexes of
such currencies), or instruments or securities that are issued by
foreign governments or issuers organized under the laws of a non-
U.S. country (or if the underlying assets are certain money market
instruments, if either the issuer or the guarantor of such money
market instruments is organized under the laws of a non-U.S.
country).
---------------------------------------------------------------------------

The Fund may invest, without limitation, in derivative instruments,
such as options, futures contracts or swap agreements, or in mortgage-
or asset-backed securities. The Fund may, without limitation, seek to
obtain market exposure to the fixed income securities in which it
primarily invests by entering into a series of purchase and sale
contracts or by using other investment techniques (such as buy backs or
dollar rolls).
As described in the Registration Statement, the Enhanced Short
Maturity Strategy Fund also may invest in the following: up to 5% of
its total assets in any combination of mortgage-related or other asset-
backed interest-only, principal-only or inverse floater securities;
fixed- and floating-rate loans, which investments generally will be in
the form of loan participations and assignments of portions of such
loans; U.S. dollar-denominated fixed income securities and instruments;
and Brady Bonds, which are securities created through the exchange of
existing commercial bank loans to sovereign entities for new
obligations in connection with a debt restructuring.
The Fund may, but is not required to, use derivative instruments
for risk management purposes or as part of its investment strategies.
According to the Registration Statement, generally, derivatives are
financial contracts whose value depends upon, or is derived from, the
value of an underlying asset, reference rate or index, and may relate
to stocks, bonds, interest rates, currencies or currency exchange
rates, commodities, and related indexes. Examples of derivative
instruments include options contracts, futures contracts, options on
futures contracts and swap agreements (including, but not limited to,
credit default swaps and swaps on exchange traded funds).
PIMCO Government Limited Maturity Strategy Fund
According to the Registration Statement, the Fund's investment
objective is to seek maximum current income, consistent with
preservation of capital and daily liquidity. The Fund seeks to achieve
its investment objective by investing under normal circumstances at
least 80% of its assets in a diversified portfolio of fixed income
securities that are issued or guaranteed by the U.S. Government, its
agencies or government-sponsored enterprises (``U.S. Government
Securities''). Assets not invested in U.S. Government Securities may be
invested in other types of Fixed Income Instruments.
According to the Registration Statement, the Fund's investments in
Fixed Income Instruments are limited to those of investment grade U.S.
dollar-denominated securities of U.S. issuers that are rated Aa or
higher by Moody's, or equivalently rated by S&P or Fitch, or, if
unrated, determined by PIMCO to be of comparable quality. The average
portfolio duration of this Fund will vary based on PIMCO's forecast for
interest

[[Page 46822]]

rates and will normally not exceed one year. The Fund may only invest
in securities that mature within two years from the date of purchase.
The Fund may, without limitation, seek to obtain market exposure to
the fixed income securities in which it primarily invests by entering
into a series of purchase and sale contracts or by using other
investment techniques (such as buy backs or dollar rolls).
PIMCO Intermediate Municipal Bond Strategy Fund
According to the Registration Statement, the Fund's investment
objective is to seek attractive tax-exempt income, consistent with
preservation of capital. The Fund seeks to achieve its investment
objective by investing under normal circumstances at least 80% of its
assets in a diversified portfolio of debt securities whose interest is,
in the opinion of bond counsel for the issuer at the time of issuance,
exempt from Federal income tax (``Municipal Bonds''). Municipal Bonds
generally are issued by or on behalf of States and local governments
and their agencies, authorities and other instrumentalities.
According to the Registration Statement, the Fund does not intend
to invest in securities whose interest is subject to the Federal
alternative minimum tax. The Fund may only invest in U.S. dollar-
denominated investment grade debt securities. The Fund may invest 25%
or more of its total assets in Municipal Bonds that finance similar
projects, such as those relating to education, health care, housing,
transportation, and utilities, and 25% or more of its total assets in
industrial development bonds. The average portfolio duration of this
Fund normally varies from three to eight years, based on PIMCO's
forecast for interest rates. The portfolio manager focuses on bonds
with the potential to offer attractive current income, typically
looking for bonds that can provide consistently attractive current
yields or that are trading at competitive market prices.
The Fund may, without limitation, seek to obtain market exposure to
the fixed income securities in which it primarily invests by entering
into a series of purchase and sale contracts or by using other
investment techniques (such as buy backs or dollar rolls).
PIMCO Prime Limited Maturity Strategy Fund
According to the Registration Statement, the Fund's investment
objective is to seek maximum current income, consistent with
preservation of capital and daily liquidity. The Fund seeks to achieve
its investment objective by investing under normal circumstances at
least 65% of its total assets in a diversified portfolio of fixed
income securities of varying maturities. The Fund may only invest in
U.S. dollar-denominated securities that mature within 397 days from the
date of purchase or floating rate U.S. government agency securities
that mature within two years from the date of purchase. The average
portfolio duration of this Fund will vary based on PIMCO's forecast for
interest rates and will normally not exceed 90 days.
According to the Registration Statement, the Fund primarily invests
in U.S. dollar-denominated investment grade debt securities, rated A or
higher by Moody's, or equivalently rated by S&P or Fitch, or, if
unrated, determined by PIMCO to be of comparable quality.
The Fund may, without limitation, seek to obtain market exposure to
the fixed income securities in which it primarily invests by entering
into a series of purchase and sale contracts or by using other
investment techniques (such as buy backs or dollar rolls).
PIMCO Short Term Municipal Bond Strategy Fund
According to the Registration Statement, the Fund's investment
objective is to seek attractive tax-exempt income, consistent with
preservation of capital. The Fund seeks to achieve its investment
objective by investing under normal circumstances at least 80% of its
assets in a diversified portfolio of Municipal Bonds.
According to the Registration Statement, the Fund does not intend
to invest in securities whose interest is subject to the Federal
alternative minimum tax. The Fund may only invest in U.S. dollar-
denominated investment grade debt securities. The Fund may invest 25%
or more of its total assets in Municipal Bonds that finance similar
projects, such as those relating to education, health care, housing,
transportation, and utilities, and 25% or more of its total assets in
industrial development bonds. The average portfolio duration of this
Fund varies based on PIMCO's forecast for interest rates and under
normal market conditions is not expected to exceed three years. The
dollar-weighted average portfolio maturity of the Fund is normally not
expected to exceed three years. The portfolio manager focuses on bonds
with the potential to offer attractive current income, typically
looking for bonds that can provide consistently attractive current
yields or that are trading at competitive market prices.
The Fund may, without limitation, seek to obtain market exposure to
the securities in which it primarily invests by entering into a series
of purchase and sale contracts or by using other investment techniques
(such as buy backs or dollar rolls).
Each Fund may enter into repurchase agreements, in which the Fund
purchases a security from a bank or broker-dealer, which agrees to
repurchase the security at the Fund's cost plus interest within a
specified time. In addition, each Fund may enter into reverse
repurchase agreements and dollar rolls; may purchase securities which
it is eligible to purchase on a when-issued basis; may purchase and
sell such securities for delayed delivery and may make contracts to
purchase such securities for a fixed price at a future date beyond
normal settlement time (forward commitments); may invest in, to the
extent permitted by Section 12(d)(1) of the 1940 Act, other affiliated
and unaffiliated funds, such as open-end or closed-end management
investment companies, including other exchange traded funds; may invest
securities lending collateral in one or more money market funds to the
extent permitted by Rule 12d1-1 under the 1940 Act; and may invest up
to 15% of its net assets in illiquid securities.\11\
---------------------------------------------------------------------------

\11\ According to the Registration Statement, the term
``illiquid securities'' for this purpose means securities that
cannot be disposed of within seven days in the ordinary course of
business at approximately the amount at which a Fund has valued the
securities.
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The Shares
According to the Registration Statement, Shares of a Fund that
trade in the secondary market are ``created'' at NAV \12\ by Authorized
Participants only in block-size Creation Units of 100,000 shares or
multiples thereof. Each Authorized Participant enters into an
authorized participant agreement with the Funds' Distributor. A
creation transaction, which is subject to acceptance by the transfer
agent, takes place when an Authorized Participant deposits into a Fund
a specified amount of cash and/or a portfolio of securities specified
by such Fund in exchange for a specified number of Creation Units.
---------------------------------------------------------------------------

\12\ The NAV of each Fund's shares generally is calculated once
daily Monday through Friday as of the close of regular trading on
the New York Stock Exchange, generally 4:00 p.m. Eastern time (the
``NAV Calculation Time'') on any Business Day as defined in the
Registration Statement. NAV per share is calculated by dividing a
Fund's net assets by the number of Fund shares outstanding. For more
information regarding the valuation of Fund investments in
calculating a Fund's NAV, see the Registration Statement.
---------------------------------------------------------------------------

Similarly, Shares can be redeemed only in Creation Units, generally
in-kind

[[Page 46823]]

for a portfolio of securities held by a Fund and/or for a specified
amount of cash. Except when aggregated in Creation Units, Shares are
not redeemable by a Fund. The prices at which creations and redemptions
occur are based on the next calculation of NAV after an order is
received. Requirements as to the timing and form of orders are
described in the authorized participant agreement.
PIMCO, through the National Securities Clearing Corporation
(``NSCC''), makes available on each Business Day, prior to the opening
of business (subject to amendments) on the Exchange (currently 9:30
a.m., Eastern time), the identity and the required number of shares of
each Deposit Security and the amount of the Cash Component to be
included in the current Fund Deposit (based on information at the end
of the previous Business Day).
Creations and redemptions must be made by an Authorized Participant
or through a firm that is either a member of the Continuous Net
Settlement System of the NSCC or a DTC participant, and in each case,
must have executed an agreement with the Distributor with respect to
creations and redemptions of Creation Unit aggregations.
Additional information regarding the Trust and the Shares,
including investment strategies, risks, creation and redemption
procedures, fees, portfolio holdings, disclosure policies,
distributions and taxes is included in the Registration Statement. All
terms relating to the Funds that are referred to, but not defined in,
this proposed rule change are defined in the Registration Statement.
Availability of Information
The Funds' Web site (https://www.pimcoetfs.com), which will be
publicly available prior to the public offering of Shares, will include
a form of the Prospectus for each Fund that may be downloaded. The Web
site will include additional quantitative information updated on a
daily basis, including, for the Funds: (1) The prior business day's
reported NAV, mid-point of the bid/ask spread at the time of
calculation of such NAV (the ``Bid/Ask Price''),\13\ and a calculation
of the premium and discount of the Bid/Ask Price against the NAV; and
(2) data in chart format displaying the frequency distribution of
discounts and premiums of the daily Bid/Ask Price against the NAV,
within appropriate ranges, for each of the four previous calendar
quarters. On each business day, before commencement of trading in
Shares in the Core Trading Session \14\ on the Exchange, the Trust will
disclose on its Web site the identities and quantities of the portfolio
of securities and other assets (the ``Disclosed Portfolio'') held by
the Funds that will form the basis for the Funds' calculation of NAV at
the end of the business day.\15\ The Web site and information will be
publicly available at no charge.
---------------------------------------------------------------------------

\13\ The Bid/Ask Price of each Fund is determined using the
midpoint of the highest bid and the lowest offer on the Exchange as
of the time of calculation of the NAV. The records relating to Bid/
Ask Prices will be retained by each Fund and its service providers.
\14\ The Core Trading Session is 9:30 a.m. to 4 p.m. Eastern
time.
\15\ Under accounting procedures followed by the Funds, trades
made on the prior business day (``T'') will be booked and reflected
in NAV on the current business day (``T+1''). Notwithstanding the
foregoing, portfolio trades that are executed prior to the opening
of the Exchange on any business day may be booked and reflected in
NAV on such business day. Accordingly, each Fund will be able to
disclose at the beginning of the business day the portfolio that
will form the basis for the NAV calculation at the end of the
business day.
---------------------------------------------------------------------------

In addition, for each Fund, an estimated value, defined in NYSE
Arca Equities Rule 8.600 as the ``Portfolio Indicative Value,'' that
reflects an estimated intraday value of the Fund's portfolio, will be
disseminated. The Portfolio Indicative Value will be based upon the
current value for the components of the Disclosed Portfolio and will be
updated and disseminated by the Exchange at least every 15 seconds
during the Core Trading Session on the Exchange through the facilities
of the Consolidated Tape Association. The dissemination of the
Portfolio Indicative Value, together with the Disclosed Portfolio, will
allow investors to determine the value of the underlying portfolio of a
Fund on a daily basis and to provide a close estimate of that value
throughout the trading day.
Information regarding market price and volume of the Shares is and
will be continually available on a real-time basis throughout the day
on brokers' computer screens and other electronic services. The
previous day's closing price and trading volume information will be
published daily in the financial section of newspapers. Quotation and
last sale information for the Shares will be available via the
Consolidated Tape Association high-speed line.
Investors can also obtain the Trust's Statement of Additional
Information (``SAI''), the Funds' Shareholder Reports, and its Form N-
CSR and Form N-SAR, filed twice a year. The Trust's SAI and Shareholder
Reports are available free upon request from the Trust, and those
documents and the Form N-CSR and Form N-SAR may be viewed on-screen or
downloaded from the Commission's Web site at https://www.sec.gov.
Initial and Continued Listing
The Shares will be subject to NYSE Arca Equities Rule 8.600(d),
which sets forth the initial and continued listing criteria applicable
to Managed Fund Shares. The Exchange represents that, for initial and/
or continued listing, the Shares must be in compliance with Rule 10A-3
\16\ under the Exchange Act, as provided by NYSE Arca Equities Rule
5.3. A minimum of 100,000 Shares will be outstanding at the
commencement of trading on the Exchange. The Exchange will obtain a
representation from the issuer of the Shares that the net asset value
per Share will be calculated daily and that the net asset value and the
Disclosed Portfolio will be made available to all market participants
at the same time.
---------------------------------------------------------------------------

\16\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

Trading Halts
With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares of the Funds. Shares of the Funds will be halted
if the ``circuit breaker'' parameters in NYSE Arca Equities Rule 7.12
are reached. Trading may 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 Funds; or (2) whether other unusual
conditions or circumstances detrimental to the maintenance of a fair
and orderly market are present. Trading in the Shares will be subject
to NYSE Arca Equities Rule 8.600(d)(2)(D), which sets forth
circumstances under which Shares of the Funds may be halted.
Trading Rules
The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. Shares will trade on
the NYSE Arca Marketplace from 4 a.m. to 8 p.m. Eastern time in
accordance with NYSE Arca Equities Rule 7.34 (Opening, Core, and Late
Trading Sessions). The Exchange has appropriate rules to facilitate
transactions in the Shares during all trading sessions. The minimum
trading

[[Page 46824]]

increment for Shares on the Exchange will be $0.01.
Surveillance
The Exchange intends to utilize its existing surveillance
procedures applicable to derivative products (which includes Managed
Fund Shares) to monitor trading in the Shares. The Exchange represents
that these 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.
The Exchange's current trading surveillance focuses on detecting
securities trading outside their normal patterns. When such situations
are detected, surveillance analysis follows and investigations are
opened, where appropriate, to review the behavior of all relevant
parties for all relevant trading violations.
The Exchange may obtain information via the Intermarket
Surveillance Group (``ISG'') from other exchanges who are members of
ISG.\17\
---------------------------------------------------------------------------

\17\ For a list of the current members of ISG, see https://www.isgportal.org. The Exchange notes that not all of the components
of the Disclosed Portfolio for the Funds may trade on exchanges that
are members of ISG.
---------------------------------------------------------------------------

In addition, the Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.
Information Bulletin
Prior to the commencement of trading, the Exchange will inform its
ETP Holders in an Information Bulletin (``Bulletin'') of the special
characteristics and risks associated with trading the Shares.
Specifically, the Bulletin will discuss the following: (1) The
procedures for purchases and redemptions of Shares in Creation Unit
aggregations (and that Shares are not individually redeemable); (2)
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; (3) the risks involved in trading
the Shares during the Opening and Late Trading Sessions when an updated
Portfolio Indicative Value will not be calculated or publicly
disseminated; (4) how information regarding the Portfolio Indicative
Value is disseminated; (5) the requirement that ETP Holders deliver a
prospectus to investors purchasing newly issued Shares prior to or
concurrently with the confirmation of a transaction; and (6) trading
information.
In addition, the Bulletin will reference that the Funds are subject
to various fees and expenses described in the Registration Statement.
The Bulletin will discuss any exemptive, no-action, and interpretive
relief granted by the Commission from any rules under the Exchange Act.
The Bulletin will also disclose that the NAV for the Shares will be
calculated after 4 p.m. Eastern time each trading day.
2. Statutory Basis
The basis under the Exchange Act for this proposed rule change is
the requirement under Section 6(b)(5) \18\ 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
Exchange believes that the proposed rule change will facilitate the
listing and trading of additional types of exchange-traded products
that will enhance competition among market participants, to the benefit
of investors and the marketplace. In addition, the listing and trading
criteria set forth in NYSE Arca Equities Rule 8.600 are intended to
protect investors and the public interest.
---------------------------------------------------------------------------

\18\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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 purposes of the Act.

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

Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
A. By order approve the proposed rule change, or
B. Institute proceedings to determine whether the proposed rule
change should be disapproved.
The Exchange has requested accelerated approval of this proposed
rule change prior to the 30th day after the date of publication of
notice in the Federal Register. The Commission is considering granting
accelerated approval of the proposed rule change at the end of a 15-day
comment period.

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

Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NYSEArca-2009-79 on the subject line.

Paper Comments

Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2009-79. This
file number should be included on the subject line if e-mail is used.
To help the Commission 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 (https://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 inspection
and copying in the Commission's Public Reference Room, 100 F Street,
NE., Washington, DC 20549, on official business days between the hours
of 10 a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. 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

[[Page 46825]]

Number SR-NYSEArca-2009-79 and should be submitted on or before
September 28, 2009.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
---------------------------------------------------------------------------

\19\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-21908 Filed 9-10-09; 8:45 am]
BILLING CODE 8010-01-P

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