Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, Relating To Listing Four Grail Advisors RP Exchange-Traded Funds, 50853-50855 [E9-23626]

Download as PDF Federal Register / Vol. 74, No. 189 / Thursday, October 1, 2009 / Notices 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–DTC–2009–15 on the subject line. Paper Comments PWALKER on DSK8KYBLC1PROD with NOTICES • 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–DTC–2009–15. 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 such filings also will be available for inspection and copying at the principal office of DTC and on DTC’s Web site at https://www.dtcc.com/ legal/rule_filings/dtc/2009–15.pdf. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–DTC–2009–15 and should be submitted on or before October 22, 2009. For the Commission by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–23623 Filed 9–30–09; 8:45 am] BILLING CODE 8011–01–P 10 17 CFR 200.30–3(a)(12). VerDate Nov<24>2008 20:39 Sep 30, 2009 Jkt 217001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–60710; File No. SR–CBOE– 2009–057] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving Proposed Rule Change Related to Market-Maker and Specialist Orders September 23, 2009. On August 10, 2009, the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’) 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 eliminate Rule 6.73(d) and its requirement to orally identify a Market-Maker or a Specialist order in open outcry before requesting a quote. The proposed rule change was published for comment in the Federal Register on August 19, 2009.3 The Commission received no comments on the proposal. This order approves the proposed rule change. The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.4 In particular, the Commission finds that the proposed rule change is consistent with the provisions of Section 6(b)(5) of the Act,5 which requires, among other things, that the CBOE rules be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts and practices, to remove impediments to and to perfect the mechanism for a free and open market and a national market system, and, in general, to protect investors and the public interest. According to the CBOE, it adopted Rule 6.73(d) to ensure that MarketMaker and Specialist orders were not inadvertently represented as public customer orders, which receive preferential treatment in certain instances under CBOE rules.6 The CBOE proposes to eliminate the requirement 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 60491 (August 12, 2009), 74 FR 41953. 4 In approving this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition and capital formation. See 15 U.S.C. 78c(f). 5 15 U.S.C. 78f(b)(5). 6 See Securities Exchange Act Release No. 46102 (June 21, 2002), 67 FR 43692 (June 28, 2002) (SR– CBOE–2002–33) (immediately effective rule change relating to the identification of Market-Maker and Specialist orders). 2 17 PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 50853 in Rule 6.73(d) to orally identify the Market-Maker and Specialist orders in open outcry and represents that the requirement is superfluous and unnecessary because the preferential treatment afforded to public customer orders was system-enforced through the order marking requirement. In addition, the CBOE represents that it no longer utilizes the RAES trading platform for which the order identification procedure was introduced. In approving the proposed rule change, the Commission notes that it received no comments on the proposed rule change and bases its approval, in part, on the CBOE’s representations that public customer orders will continue to receive appropriate preferential treatment under its Hybrid Trading System and existing rules. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,7 that the proposed rule change (SR–CBOE–2009– 057) be, and it hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.8 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–23624 Filed 9–30–09; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–60717; File No. SR– NYSEArca–2009–74] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, Relating To Listing Four Grail Advisors RP ExchangeTraded Funds September 24, 2009. On August 12, 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 following Grail Advisors actively-managed exchangetraded funds: RP Growth ETF, RP Focused Large Cap Growth ETF, RP Technology ETF and the RP Financials 7 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 8 17 E:\FR\FM\01OCN1.SGM 01OCN1 50854 Federal Register / Vol. 74, No. 189 / Thursday, October 1, 2009 / Notices ETF (each an ‘‘ETF’’ or ‘‘Fund’’ and collectively the ‘‘ETFs or ‘‘Funds’’). The proposed rule change was published in the Federal Register on August 28, 2009.3 The Commission received no comments on the proposal. On September 21, 2009, the Exchange filed Amendment No. 1.4 This order provides notice of the filing of Amendment No. 1, and approves the proposed rule change, as modified by Amendment No. 1, on an accelerated basis. I. Description of the Proposal PWALKER on DSK8KYBLC1PROD with NOTICES The Exchange proposes to list and trade the Shares pursuant to NYSE Arca Equities Rule 8.600, which governs the listing of Managed Fund Shares. The Shares will be offered by Grail Advisors ETF Trust (‘‘Trust’’),5 a statutory trust organized under the laws of the State of Delaware and registered with the Commission as an open-end management investment company. The investment objective of each of the Funds is long-term capital appreciation. The ETFs expect to invest primarily in the securities of US companies, and may also invest in US securities tied economically to foreign investments, such as American Depositary Receipts. None of the Funds will invest in nonU.S. equity securities. The Exchange states that the Shares will conform to the initial and continued listing criteria under NYSE Arca Equities Rule 8.600, and that the Funds will comply with Rule 10A–3 under the Act,6 as provided by NYSE Arca Equities Rule 5.3. Additional information regarding the Funds, the Shares, the Funds’ investment objectives, strategies, policies, and restrictions, 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.7 3 See Securities Exchange Act Release No. 60552 (August 20, 2009), 74 FR 44417 (‘‘Notice’’). 4 Amendment No. 1 reflects the issuer’s decision that the creation and redemption unit size for each Fund would be 50,000 Shares, not 25,000 shares as was stated in the Notice. 5 The Trust is registered under the Investment Company Act of 1940 (15 U.S.C. 80a) (‘‘1940 Act’’). On June 8, 2009, the Trust filed with the Commission post-effective Amendment No. 1 to its registration statement on Form N–1A under the Securities Act of 1933 (15 U.S.C. 77a), and under the 1940 Act relating to the Funds (File Nos. 333– 148082 and 811–22154) (‘‘Registration Statement’’). The description of the operation of the Trust and the Funds herein is based on the Registration Statement. 6 17 CFR 240.10A–3. 7 See, supra, notes 3 and 5. VerDate Nov<24>2008 19:32 Sep 30, 2009 Jkt 217001 finds that it is consistent with the requirements of Section 6 of the Act 8 Interested persons are invited to and the rules and regulations submit written data, views, and thereunder applicable to a national arguments concerning whether securities exchange.9 In particular, the Amendment No. 1 to the proposed rule Commission finds that the proposal is change is consistent with the Act. consistent with Section 6(b)(5) of the Comments may be submitted by any of Act,10 which requires, among other the following methods: things, that the Exchange’s rules be Electronic Comments designed to promote just and equitable principles of trade, to remove • Use the Commission’s Internet impediments to and perfect the comment form (https://www.sec.gov/ mechanism of a free and open market rules/sro.shtml); or and a national market system, and, in • Send an e-mail to rulegeneral, to protect investors and the comments@sec.gov. Please include File Number SR–NYSEArca–2009–74 on the public interest. The Commission notes that the Shares must comply with the subject line. requirements of NYSE Arca Equities Paper Comments Rule 8.600 to be listed and traded on the Exchange. • Send paper comments in triplicate The Commission finds that the to Elizabeth M. Murphy, Secretary, proposal to list and trade the Shares on Securities and Exchange Commission, the Exchange is consistent with Section 100 F Street, NE., Washington, DC 11A(a)(1)(C)(iii) of the Act,11 which sets 20549–1090. forth Congress’ finding that it is in the All submissions should refer to File public interest and appropriate for the Number SR–NYSEArca–2009–74. This protection of investors and the file number should be included on the maintenance of fair and orderly markets subject line if e-mail is used. To help the to assure the availability to brokers, Commission process and review your dealers and investors of information comments more efficiently, please use with respect to quotations for and only one method. The Commission will transactions in securities. Quotation and post all comments on the Commission’s last-sale information for the Shares will Internet Web site (https://www.sec.gov/ be available via the Consolidated Tape rules/sro.shtml). Copies of the Association (‘‘CTA’’) high-speed line, submission, all subsequent and the Exchange will disseminate the amendments, all written statements Portfolio Indicative Value (‘‘PIV’’) at with respect to the proposed rule least every 15 seconds during the Core change that are filed with the Trading Session through the facilities of Commission, and all written the CTA. In addition, the Fund will communications relating to the make available on its Web site on each proposed rule change between the business day the Disclosed Portfolio that Commission and any person, other than will form the basis for its calculation of those that may be withheld from the the net asset value (‘‘NAV’’), which will public in accordance with the be determined as of the close of the provisions of 5 U.S.C. 552, will be regular trading session on the New York available for inspection and copying in Stock Exchange (ordinarily 4 p.m. the Commission’s Public Reference Eastern Time) on each business day. Room, 100 F Street, NE., Washington, The Fund’s Web site will also include DC 20549, on official business days additional quantitative information between the hours of 10 a.m. and 3 p.m. updated on a daily basis relating to Copies of the filing also will be available trading volume, prices, and NAV. for inspection and copying at the Information regarding the market price principal office of the Exchange. All and volume of the Shares will be comments received will be posted continually available on a real-time without change; the Commission does basis throughout the day via electronic not edit personal identifying services, and the previous day’s closing information from submissions. You price and trading volume information should submit only information that for the Shares will be published daily in you wish to make available publicly. All the financial sections of newspapers. The Commission further believes that submissions should refer to File the proposal is reasonably designed to Number SR–NYSEArca–2009–74 and should be submitted on or before 8 15 U.S.C. 78f. October 22, 2009. II. Solicitation of Comments III. Discussion and Commission’s Findings The Commission has carefully reviewed the proposed rule change and PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 9 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). 10 17 U.S.C. 78f(b)(5). 11 15 U.S.C. 78k–1(a)(1)(C)(iii). E:\FR\FM\01OCN1.SGM 01OCN1 Federal Register / Vol. 74, No. 189 / Thursday, October 1, 2009 / Notices 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 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.12 Additionally, if it becomes aware that the NAV or the Disclosed Portfolio is not disseminated daily 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.13 Further, if the PIV is not being disseminated as required, the Exchange may halt trading during the day in which the disruption 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.14 The Exchange represents that the Manager has implemented a ‘‘fire wall’’ between it and its brokerdealer affiliate with respect to access to information concerning the composition and/or changes to the Fund’s portfolio. Similarly, one of the sub-advisors, Wedgewood, a registered broker-dealer, also has implemented such a ‘‘fire wall.’’ 15 Any additional Fund subadvisers affiliated with a brokerdealer will be required to implement a firewall to prevent its broker-dealer affiliate from accessing information concerning the composition and/or changes to the Fund’s portfolio.16 Further, 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 PWALKER on DSK8KYBLC1PROD with NOTICES 12 See NYSE Arca Equities Rule 8.600(d)(1)(B). 13 See NYSE Arca Equities Rule 8.600(d)(2)(D). 14 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. 15 The Exchange also represents that RP, the Fund’s primary sub-adviser, is not affiliated with a broker-dealer, and that any additional Fund subadvisers 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 and/or changes to the portfolio. 16 See Notice, 74 FR at 44420. VerDate Nov<24>2008 19:32 Sep 30, 2009 Jkt 217001 information regarding the actual components of the portfolio.17 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 Circular 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 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 Funds will be in compliance with Rule 10A–3 under the Act. (5) The Funds will not invest in nonU.S. equity securities. 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 the Act and the rules and regulations thereunder applicable to a national securities exchange. The Commission finds good cause, pursuant to Section 19(b)(2) of the Act,18 for approving the proposal prior to the thirtieth day after the date of publication of the Notice in the Federal Register. The Commission notes that it has approved the listing and trading on the Exchange of shares of other actively managed exchange-traded funds based on a portfolio of securities, the characteristics of which are similar to 17 See 18 15 PO 00000 NYSE Arca Equities Rule 8.600(d)(2)(B)(ii). U.S.C. 78s(b)(2). Frm 00094 Fmt 4703 Sfmt 4703 50855 those to be invested by the Fund.19 The Commission also notes that it has received no comments regarding the proposed rule change. Further, the Commission believes that the increased creation and redemption unit sizes for the Funds described in Amendment No. 1 20 do not raise any regulatory concerns. The Commission finds that the proposed rule change does not raise any novel regulatory issues and believes that accelerating approval of this proposal should benefit investors by creating, without undue delay, additional competition in the market for Managed Fund Shares. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,21 that the proposed rule change (SR–NYSEArca– 2009–74), as modified by Amendment No. 1 thereto, be, and it hereby is, approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.22 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–23626 Filed 9–30–09; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–60725, File No. SR–MSRB– 2009–12] Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Order Approving Proposed Rule Change Relating to Amendments to Rule G–11(i) (Settlement of Syndicate or Similar Account), Rule G– 11(j) (Payment of Designations), and Rule G–12(i) (Settlement of Joint or Similar Account) September 28, 2009. On August 6, 2009, the Municipal Securities Rulemaking Board (‘‘MSRB’’), filed with the Securities and Exchange Commission (‘‘Commission’’ or ‘‘SEC’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 19 See, e.g., Securities Exchange Act Release Nos. 58512 (September 11, 2008), 73 FR 53915 (September 17, 2008) (SR–NYSEArca–2008–85) (approving the listing and trading of shares of the PowerShares Active U.S. Real Estate Fund); and 57619 (April 4, 2008), 73 FR 19544 (April 10, 2008) (SR–NYSEArca–2008–25) (approving the listing and trading of shares of the PowerShares Active AlphaQ Fund, PowerShares Active Alpha Multi-Cap Fund, and PowerShares Active Mega-Cap Portfolio, among other funds). 20 See supra note 4. 21 15 U.S.C. 78s(b)(2). 22 17 CFR 200.30–3(a)(12). E:\FR\FM\01OCN1.SGM 01OCN1

Agencies

[Federal Register Volume 74, Number 189 (Thursday, October 1, 2009)]
[Notices]
[Pages 50853-50855]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-23626]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60717; File No. SR-NYSEArca-2009-74]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Amendment No. 1 and Order Granting Accelerated Approval of a 
Proposed Rule Change, as Modified by Amendment No. 1, Relating To 
Listing Four Grail Advisors RP Exchange-Traded Funds

September 24, 2009.
    On August 12, 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 following Grail Advisors actively-managed exchange-
traded funds: RP Growth ETF, RP Focused Large Cap Growth ETF, RP 
Technology ETF and the RP Financials

[[Page 50854]]

ETF (each an ``ETF'' or ``Fund'' and collectively the ``ETFs or 
``Funds''). The proposed rule change was published in the Federal 
Register on August 28, 2009.\3\ The Commission received no comments on 
the proposal. On September 21, 2009, the Exchange filed Amendment No. 
1.\4\ This order provides notice of the filing of Amendment No. 1, and 
approves the proposed rule change, as modified by Amendment No. 1, on 
an accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 60552 (August 20, 
2009), 74 FR 44417 (``Notice'').
    \4\ Amendment No. 1 reflects the issuer's decision that the 
creation and redemption unit size for each Fund would be 50,000 
Shares, not 25,000 shares as was stated in the Notice.
---------------------------------------------------------------------------

I. Description of the Proposal

    The Exchange proposes to list and trade the Shares pursuant to NYSE 
Arca Equities Rule 8.600, which governs the listing of Managed Fund 
Shares. The Shares will be offered by Grail Advisors ETF Trust 
(``Trust''),\5\ a statutory trust organized under the laws of the State 
of Delaware and registered with the Commission as an open-end 
management investment company. The investment objective of each of the 
Funds is long-term capital appreciation. The ETFs expect to invest 
primarily in the securities of US companies, and may also invest in US 
securities tied economically to foreign investments, such as American 
Depositary Receipts. None of the Funds will invest in non-U.S. equity 
securities.
---------------------------------------------------------------------------

    \5\ The Trust is registered under the Investment Company Act of 
1940 (15 U.S.C. 80a) (``1940 Act''). On June 8, 2009, the Trust 
filed with the Commission post-effective Amendment No. 1 to its 
registration statement on Form N-1A under the Securities Act of 1933 
(15 U.S.C. 77a), and under the 1940 Act relating to the Funds (File 
Nos. 333-148082 and 811-22154) (``Registration Statement''). The 
description of the operation of the Trust and the Funds herein is 
based on the Registration Statement.
---------------------------------------------------------------------------

    The Exchange states that the Shares will conform to the initial and 
continued listing criteria under NYSE Arca Equities Rule 8.600, and 
that the Funds will comply with Rule 10A-3 under the Act,\6\ as 
provided by NYSE Arca Equities Rule 5.3.
---------------------------------------------------------------------------

    \6\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    Additional information regarding the Funds, the Shares, the Funds' 
investment objectives, strategies, policies, and restrictions, 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.\7\
---------------------------------------------------------------------------

    \7\ See, supra, notes 3 and 5.
---------------------------------------------------------------------------

II. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning whether Amendment No. 1 to 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-2009-74 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-2009-74. 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 Number SR-NYSEArca-2009-74 and should 
be submitted on or before October 22, 2009.

III. 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 \8\ and the rules and regulations thereunder applicable to a 
national securities exchange.\9\ In particular, the Commission finds 
that the proposal is consistent with Section 6(b)(5) of the Act,\10\ 
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 notes that the Shares must comply with 
the requirements of NYSE Arca Equities Rule 8.600 to be listed and 
traded on the Exchange.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f.
    \9\ 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).
    \10\ 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,\11\ 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 the Disclosed Portfolio that will form the basis for its 
calculation of the net asset value (``NAV''), which will 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 
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.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
---------------------------------------------------------------------------

    The Commission further believes that the proposal is reasonably 
designed to

[[Page 50855]]

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 
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.\12\ Additionally, if it becomes aware that the NAV or the 
Disclosed Portfolio is not disseminated daily 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.\13\ Further, if the PIV is not being disseminated as 
required, the Exchange may halt trading during the day in which the 
disruption 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.\14\ The Exchange 
represents that the Manager has implemented a ``fire wall'' between it 
and its broker-dealer affiliate with respect to access to information 
concerning the composition and/or changes to the Fund's portfolio. 
Similarly, one of the sub-advisors, Wedgewood, a registered broker-
dealer, also has implemented such a ``fire wall.'' \15\ Any additional 
Fund subadvisers affiliated with a broker-dealer will be required to 
implement a firewall to prevent its broker-dealer affiliate from 
accessing information concerning the composition and/or changes to the 
Fund's portfolio.\16\ Further, 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.\17\
---------------------------------------------------------------------------

    \12\ See NYSE Arca Equities Rule 8.600(d)(1)(B).
    \13\ See NYSE Arca Equities Rule 8.600(d)(2)(D).
    \14\ 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.
    \15\ The Exchange also represents that RP, the Fund's primary 
sub-adviser, is not affiliated with a broker-dealer, and that any 
additional Fund sub-advisers 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 and/or changes to the portfolio.
    \16\ See Notice, 74 FR at 44420.
    \17\ 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 Circular 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 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 Funds will be in compliance with Rule 10A-3 under the Act.
    (5) The Funds will not invest in non-U.S. equity securities.
    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 the Act and the rules and regulations 
thereunder applicable to a national securities exchange.
    The Commission finds good cause, pursuant to Section 19(b)(2) of 
the Act,\18\ for approving the proposal prior to the thirtieth day 
after the date of publication of the Notice in the Federal Register. 
The Commission notes that it has approved the listing and trading on 
the Exchange of shares of other actively managed exchange-traded funds 
based on a portfolio of securities, the characteristics of which are 
similar to those to be invested by the Fund.\19\ The Commission also 
notes that it has received no comments regarding the proposed rule 
change. Further, the Commission believes that the increased creation 
and redemption unit sizes for the Funds described in Amendment No. 1 
\20\ do not raise any regulatory concerns. The Commission finds that 
the proposed rule change does not raise any novel regulatory issues and 
believes that accelerating approval of this proposal should benefit 
investors by creating, without undue delay, additional competition in 
the market for Managed Fund Shares.
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    \18\ 15 U.S.C. 78s(b)(2).
    \19\ See, e.g., Securities Exchange Act Release Nos. 58512 
(September 11, 2008), 73 FR 53915 (September 17, 2008) (SR-NYSEArca-
2008-85) (approving the listing and trading of shares of the 
PowerShares Active U.S. Real Estate Fund); and 57619 (April 4, 
2008), 73 FR 19544 (April 10, 2008) (SR-NYSEArca-2008-25) (approving 
the listing and trading of shares of the PowerShares Active AlphaQ 
Fund, PowerShares Active Alpha Multi-Cap Fund, and PowerShares 
Active Mega-Cap Portfolio, among other funds).
    \20\ See supra note 4.
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\21\ that the proposed rule change (SR-NYSEArca-2009-74), as 
modified by Amendment No. 1 thereto, be, and it hereby is, approved on 
an accelerated basis.
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    \21\ 15 U.S.C. 78s(b)(2).
    \22\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-23626 Filed 9-30-09; 8:45 am]
BILLING CODE 8011-01-P
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