Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change Relating to the Listing and Trading of the PIMCO Global Advantage Inflation-Linked Bond Strategy Fund Under NYSE Arca Equities Rule 8.600, 9281-9287 [2012-3610]

Download as PDF Federal Register / Vol. 77, No. 32 / Thursday, February 16, 2012 / Notices designates the proposed rule change to be operative upon filing with the Commission.12 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 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–BATS– 2012–009 and should be submitted on or before March 8, 2012. IV. Solicitation of Comments For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Kevin M. O’Neill, Deputy Secretary. 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–BATS–2012–009 on the subject line. srobinson on DSK4SPTVN1PROD with NOTICES 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–BATS–2012–009. 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 Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the 12 For the purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). VerDate Mar<15>2010 16:31 Feb 15, 2012 Jkt 226001 [FR Doc. 2012–3609 Filed 2–15–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–66381; File No. SR– NYSEArca–2012–09] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change Relating to the Listing and Trading of the PIMCO Global Advantage Inflation-Linked Bond Strategy Fund Under NYSE Arca Equities Rule 8.600 February 10, 2012. 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 January 27, 2012, NYSE Arca, Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) 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 Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to list and trade the following under NYSE Arca Equities Rule 8.600 (‘‘Managed Fund Shares’’): PIMCO Global Advantage Inflation-Linked Bond Strategy Fund. The text of the proposed rule change is available at the Exchange, the Commission’s Public Reference Room, and www.nyse.com. 13 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 9281 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 Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to list and trade the following Managed Fund Shares 3 (‘‘Shares’’) under NYSE Arca Equities Rule 8.600: PIMCO Global Advantage Inflation-Linked Bond Strategy Fund (‘‘Fund’’).4 The Shares will be offered by PIMCO ETF Trust (‘‘Trust’’), a statutory trust organized under the laws of the State of Delaware and registered with the Commission as an open-end management investment company.5 3 A Managed Fund Share is a security that represents an interest in an investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a–1) (‘‘1940 Act’’) organized as an open-end investment company or similar entity that invests in a portfolio of securities selected by its investment adviser consistent with its investment objectives and policies. In contrast, an open-end investment company that issues Investment Company Units, listed and traded on the Exchange under NYSE Arca Equities Rule 5.2(j)(3), seeks to provide investment results that correspond generally to the price and yield performance of a specific foreign or domestic stock index, fixed income securities index or combination thereof. 4 The Commission has previously approved the listing and trading on the Exchange of other actively managed funds under Rule 8.600. See, e.g., Securities Exchange Act Release Nos. 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); 60460 (August 7, 2009), 74 FR 41468 (August 17, 2009) (SR– NYSEArca–2009–55) (order approving Exchange listing and trading of AdvisorShares Dent Tactical ETF); 60981 (November 10, 2009), 74 FR 59594 (November 18, 2009) (SR–NYSEArca–2009–79) (order approving Exchange listing and trading of five fixed income funds of the PIMCO ETF Trust); 61365 (January 15, 2010), 75 FR 4124 (January 26, 2010) (SR–NYSEArca–2009–114) (order approving Exchange listing and trading of Grail McDonnell Fixed Income ETFs). 5 The Trust is registered under the 1940 Act. On February 14, 2011, the Trust filed with the Commission Post-Effective Amendment No. 25 under the Securities Act of 1933 (15 U.S.C. 77a) (‘‘Securities Act’’) and Amendment No. 27 under Continued E:\FR\FM\16FEN1.SGM 16FEN1 9282 Federal Register / Vol. 77, No. 32 / Thursday, February 16, 2012 / Notices srobinson on DSK4SPTVN1PROD with NOTICES The investment manager to the Fund is Pacific Investment Management Company LLC (‘‘PIMCO’’ or ‘‘Adviser’’). PIMCO Investments LLC serves as the distributor for the Fund (‘‘Distributor’’). State Street Bank & Trust Co. serves as the custodian and transfer agent for the Fund (‘‘Custodian’’ or ‘‘Transfer Agent’’). Commentary .06 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 information concerning the composition and/or changes to such investment company portfolio.6 In addition, Commentary .06 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. The Adviser is affiliated with a brokerdealer and has implemented a ‘‘fire wall’’ with respect to such broker-dealer regarding access to information concerning the composition and/or the 1940 Act to the Trust’s registration statement on Form N–1A relating to the Fund. On October 28, 2011, the Trust filed with the Commission PostEffective Amendment No. 43 under the Securities Act and Amendment No. 45 under the 1940 Act to the Trust’s registration statement on Form N–1A relating to the Fund (File Nos. 333–155395 and 811–22250) (‘‘Registration Statement’’). The description of the operation of the Trust and the Fund herein is based, in part, on the Registration Statement. In addition, the Commission has issued an order granting certain exemptive relief to the Trust under the 1940 Act. See Investment Company Act Release No. 28993 (November 10, 2009) (File No. 812–13571) (‘‘Exemptive Order’’). 6 An investment adviser to an open-end fund is required to be registered under the Investment Advisers Act of 1940 (‘‘Advisers Act’’). As a result, the Adviser and its related personnel are 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. In addition, Rule 206(4)–7 under the Advisers Act makes it unlawful for an investment adviser to provide investment advice to clients unless such investment adviser has (i) adopted and implemented written policies and procedures reasonably designed to prevent violation, by the investment adviser 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. VerDate Mar<15>2010 16:31 Feb 15, 2012 Jkt 226001 changes to the Fund’s portfolio. If PIMCO elects to hire a sub-adviser for the Fund that is also affiliated with a broker-dealer, such sub-adviser will implement a fire wall with respect to such broker-dealer regarding access to information concerning the composition and/or changes to the portfolio. In the event (a) the Adviser or any sub-adviser becomes newly affiliated with a brokerdealer, or (b) any new adviser or subadviser becomes affiliated with a brokerdealer, it will implement a fire wall with respect to such broker-dealer regarding access to information concerning the composition and/or changes to the portfolio, and will be subject to procedures designed to prevent the use and dissemination of material non-public information regarding such portfolio. According to the Registration Statement, the Fund seeks total return which exceeds that of its benchmark indexes, consistent with prudent investment management. The Fund’s primary benchmark index is the Barclays Capital Universal Government Inflation-Linked Bond Index. The Fund’s secondary benchmark index is the PIMCO Global Advantage InflationLinked Bond Index. The Fund seeks to achieve its investment objective by investing under normal circumstances 7 at least 80% of its assets in a portfolio of inflationlinked bonds that is economically tied to at least three developed and/or emerging market countries (one of which may be the United States). The Fund’s holdings may include bonds issued by issuers in both developed and/or emerging market countries and the Fund is expected to hold bonds of issuers that are economically tied 8 to many of the countries represented in the Fund’s primary benchmark index.9 7 The term ‘‘under normal circumstances’’ includes, but is not limited to, the absence of extreme volatility or trading halts in the fixed income markets or the financial markets generally; operational issues causing dissemination of inaccurate market information; or force majeure type events such as systems failure, natural or manmade disaster, act of God, armed conflict, act of terrorism, riot or labor disruption or any similar intervening circumstance. 8 As disclosed in the Trust’s 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. 9 Each country’s approximate weighting within the global inflation-linked bond market, as reflected by the approximate weighting of the Barclays PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 Assets not invested in inflation-linked bonds may be invested in other types of Fixed Income Instruments.10 According to the Registration Statement, inflation-linked bonds are government-issued fixed income securities that are structured to provide protection against inflation. The value of the bond’s principal or the interest income paid on the bond is adjusted to track changes in an official inflation measure. The effective duration of the Fund’s portfolio normally varies within two years (plus or minus) of the effective duration of the PIMCO Global Advantage Inflation-Linked Bond Index which, as of September 30, 2011, as converted, was 4.53 years. Duration is a measure used to determine the sensitivity of a security’s price to changes in interest rates. The longer a security’s duration, the more sensitive it will be to changes in interest rates. Effective duration takes into account that, for certain bonds, expected cash flows will fluctuate as interest rates change and will be defined in nominal yield terms, which is market convention for most bond investors and managers. Because market convention for bonds is to use nominal yields to measure duration, duration for inflation-linked Capital Universal Government Inflation-Linked Bond Index (the Fund’s primary benchmark), as of January 31, 2011, is as follows: U.S. 32%, U.K. 19%, France 11%, Brazil 10%, Italy 7%, Canada 2%, Germany 3%, Japan 3%, Mexico 2%, Sweden 2%, Turkey 2%, Argentina 1%, Australia 1%, Greece 1%, South Africa 1%, Chile <1%, Poland <1%, Colombia <1% and South Korea <1%. Each country’s approximate value of outstanding inflation-linked bonds also as of January 31, 2011, is as follows (in $ billions): U.S. $642.7, U.K. $392.2, France $222.0, Brazil $209.6, Italy $143.2, Canada $49.9, Germany $60.9, Japan $57.0, Mexico $45.7, Sweden $39.1, Turkey $45.9, Argentina $20.0, Australia $17.7, Greece $11.8, South Africa $26.4, Chile $8.2, Poland $5.5, Colombia $2.7 and South Korea $3.4. 10 The term ‘‘Fixed Income Instruments’’ 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 convertible securities and 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 and event-linked bonds; bank capital and trust preferred 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 governmentsponsored enterprises; obligations of non-U.S. governments or their subdivisions, agencies and government-sponsored enterprises; and obligations of international agencies or supranational entities. Securities issued by U.S. Government agencies or government-sponsored enterprises may not be guaranteed by the U.S. Treasury. E:\FR\FM\16FEN1.SGM 16FEN1 Federal Register / Vol. 77, No. 32 / Thursday, February 16, 2012 / Notices srobinson on DSK4SPTVN1PROD with NOTICES bonds, which are based on real yields, are converted to nominal durations through a conversion factor. The resulting nominal duration typically can range from 20% to 90% of the respective real duration. All security holdings will be measured in effective (nominal) duration terms. Similarly, the effective duration of the PIMCO Global Advantage Inflation-Linked Bond Index will be calculated using the same conversion factors. The Fund will invest under normal circumstances at least 80% of its assets in inflation-linked bonds issued by U.S. or foreign governments (or any political subdivision, agency, authority or instrumentality of such government).11 The secondary benchmark includes a liquidity screen to remove inflationlinked bonds issued by governments of countries with cumulative inflationlinked bond issuances below $7 billion local currency equivalent, in addition to liquidity screens at the issue level. The global inflation-linked bond market exceeded $2.25 trillion as of December 31, 2011.12 The Fund primarily will invest in debt securities rated Baa or higher by Moody’s Investors Service, Inc., or equivalently rated by Standard & Poor’s Ratings Services or Fitch, Inc., or, if unrated, determined by PIMCO to be of comparable quality.13 The Fund may obtain foreign currency exposure (from 11 According to the Registration Statement, the value of inflation-linked bonds is expected to change in response to changes in real interest rates. Real interest rates are tied to the relationship between nominal interest rates and the rate of inflation. If nominal interest rates increase at a faster rate than inflation, real interest rates may rise, leading to a decrease in value of inflation-linked bonds. 12 The value of the global inflation-linked bond market is calculated based on the total outstanding value of issues included in the Barclays Capital Universal Government Inflation-Linked Bond Index that are not expiring in less than one year. 13 The Adviser represents that, in selecting securities for the Fund, PIMCO will develop an outlook for interest rates, currency exchange rates and the economy, analyze credit and call risks, and use other security selection techniques. The proportion of the Fund’s assets committed to investment in securities with particular characteristics (such as quality, sector, interest rate or maturity) will vary based on PIMCO’s outlook for the U.S. economy and the economies of other countries in the world, the financial markets and other factors. Sophisticated proprietary software will assist in evaluating sectors, pricing and rating specific securities. Once investment opportunities are identified, PIMCO will shift assets among sectors and securities depending upon changes in relative valuations and credit spreads in a manner consistent with the Fund’s objective and strategies. To the extent the Fund invests in unrated securities that PIMCO determines to be of comparable quality to rated securities that the Fund may purchase, the Fund’s ability to achieve its objective may depend more heavily on PIMCO’s creditworthiness analysis than if the Fund invested exclusively in rated securities. VerDate Mar<15>2010 16:31 Feb 15, 2012 Jkt 226001 non-U.S. dollar denominated debt securities or currencies) without limitation. The Fund may purchase and sell debt securities on a when-issued, delayed delivery or forward commitment basis. 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). The Fund may invest, without limitation, in debt securities and instruments of foreign government issuers, including debt securities and instruments economically tied to emerging market countries. Other Portfolio Holdings The Fund’s portfolio holdings will be disclosed on the Trust’s Web site (www.pimcoetfs.com) daily after the close of trading on the Exchange and prior to the opening of trading on the Exchange the following day. As disclosed in the Trust’s Registration Statement, if PIMCO believes that economic or market conditions are unfavorable to investors, PIMCO may temporarily invest up to 100% of the Fund’s assets in certain defensive strategies, including holding a substantial portion of the Fund’s assets in cash, cash equivalents or other highly rated short-term securities, including securities issued or guaranteed by the U.S. government, its agencies or instrumentalities and affiliated money market and/or short-term bond funds. The Fund may invest in, to the extent permitted by Section 12(d)(1) of the 1940 Act and rules thereunder, other affiliated and unaffiliated funds, such as open-end or closed-end management investment companies, including other exchange traded funds. The Fund may enter into foreign currency transactions (such as currency forwards).14 The Fund may hold in the aggregate up to 15% of its net assets in: (1) Illiquid securities,15 which include delayed 14 The Fund may engage in these transactions primarily to: (1) Protect against uncertainty in the level of future foreign exchange rates in the purchase and sale of securities; or (2) lower currency deviations relative to the Fund’s benchmark indexes. 15 The Commission has stated that long-standing Commission guidelines have required open-end funds to hold no more than 15% of their net assets in illiquid securities and other illiquid assets. See Investment Company Act Release No. 28193 (March 11, 2008), 73 FR 14617 (March 18, 2008), footnote 34. See also Investment Company Act Release No. 5847 (October 21, 1969), 35 FR 19989 (December 31, 1970) (Statement Regarding ‘‘Restricted Securities’’); Investment Company Act Release No. 18612 (March 12, 1992), 57 FR 9828 (March 20, 1992) (Revisions of Guidelines to Form N–1A). A PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 9283 funding loans, revolving credit facilities, fixed- and floating-rate loans and loan participations and assignments, and (2) Rule 144A securities. Certain illiquid securities may require pricing at fair value as determined in good faith under the supervision of the Fund’s Board of Trustees. 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 the Fund has valued the securities. With respect to its equity securities investments, the Fund will invest only in U.S.-registered equity securities and non-U.S.-registered equity securities that trade in markets that are members of the Intermarket Surveillance Group (‘‘ISG’’) or are parties to a comprehensive surveillance sharing agreement with the Exchange.16 Investment Limitations The Fund is subject to the following investment limitations: The Fund may not concentrate its investments in a particular industry, as that term is used in the 1940 Act,17 and as interpreted, modified, or otherwise permitted by regulatory authority having jurisdiction from time to time.18 The Fund will be non-diversified,19 which means that it may invest its assets in a smaller number of issuers than a diversified fund.20 fund’s portfolio security is illiquid if it cannot be disposed of in the ordinary course of business within seven days at approximately the value ascribed to it by the ETF. See Investment Company Act Release No. 14983 (March 12, 1986), 51 FR 9773 (March 21, 1986) (adopting amendments to Rule 2a–7 under the 1940 Act); Investment Company Act Release No. 17452 (April 23, 1990), 55 FR 17933 (April 30, 1990) (adopting Rule 144A under the Securities Act). 16 See note 29, infra. 17 See Form N–1A, Item 9. The Commission has taken the position that a fund is concentrated if it invests more than 25% of the value of its total assets in any one industry. See, e.g., Investment Company Act Release No. 9011 (October 30, 1975), 40 FR 54241 (November 21, 1975). 18 The Fund’s policy with respect to the concentration of investments in a particular industry is disclosed in the Trust’s Registration Statement. 19 A ‘‘non-diversified company’’, as defined in Section 5(b)(2) of the 1940 Act, means any management company other than a diversified company (as defined in Section 5(b)(1) of the 1940 Act). 20 The minimum number of inflation-linked bonds and other Fixed Income Instruments and issuers in which the Fund may invest at any one time depends in part upon the number of securities or issuers comprising the Fund’s benchmark indexes. In seeking to achieve its investment objective, the Fund’s portfolio will consist of at least twenty-five (25) inflation-linked bonds and other Fixed Income Instruments on any given day, but the Fund may regularly invest in fifty (50) or more inflation-linked bonds and other Fixed Income Instruments at a time in seeking to achieve E:\FR\FM\16FEN1.SGM Continued 16FEN1 9284 Federal Register / Vol. 77, No. 32 / Thursday, February 16, 2012 / Notices srobinson on DSK4SPTVN1PROD with NOTICES The Fund intends to qualify annually and elect to be treated as a regulated investment company under Subchapter M of the Internal Revenue Code.21 Consistent with the Exemptive Order, the Fund will not invest in options contracts, futures contracts or swap agreements. The Fund’s investments will be consistent with the Fund’s investment objective and will not be used to enhance leverage. That is, while the Fund will be permitted to borrow as permitted under the 1940 Act, the Fund’s investments will not be used to seek performance that is the multiple or inverse multiple (i.e., 2Xs and 3Xs) of the Fund’s primary broad-based securities benchmark index (as defined in Form N–1A) (i.e., the Barclays Capital Universal Government Inflation-Linked Bond Index). The Shares will conform to the initial and continued listing criteria under NYSE Arca Equities Rule 8.600. The Exchange represents that, for initial and/or continued listing, the Fund will be in compliance with Rule 10A–3 under the Exchange Act,22 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 (‘‘NAV’’) per Share will be calculated daily and that the NAV and the Disclosed Portfolio will be made its investment objective. The Fund’s portfolio will hold issues of at least 13 non-affiliated issuers. 21 26 U.S.C. 851. To qualify as a regulated investment company, the Fund generally must, among other things, (a) derive in each taxable year at least 90% of its gross income from dividends, interest, payments with respect to securities loans, and gains from the sale or other disposition of stock, securities or foreign currencies, net income from certain ‘‘qualified publicly traded partnerships,’’ or other income derived with respect to its business of investing in such stock, securities or currencies (‘‘Qualifying Income Test’’); (b) diversify its holdings so that, at the end of each quarter of the taxable year, (i) at least 50% of the market value of the Fund’s assets is represented by cash, U.S. Government securities, the securities of other regulated investment companies and other securities, with such other securities of any one issuer limited for the purposes of this calculation to an amount not greater than 5% of the value of the Fund’s total assets and 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of its total assets is invested in the securities of any one issuer (other than U.S. Government securities or the securities of other regulated investment companies), the securities of certain controlled issuers in the same or similar trades or businesses, or the securities of one or more ‘‘qualified publicly traded partnerships’’; and (c) distribute each taxable year the sum of (i) at least 90% of its investment company taxable income (which includes dividends, interest and net shortterm capital gains in excess of any net long-term capital losses) and (ii) 90% of its tax exempt interest, net of expenses allocable thereto. 22 17 CFR 240.10A–3. VerDate Mar<15>2010 16:31 Feb 15, 2012 Jkt 226001 available to all market participants at the same time. Creations and Redemptions of Shares According to the Registration Statement, Shares of the Fund that trade in the secondary market will be ‘‘created’’ at NAV 23 by Authorized Participants only in block-size Creation Units of 100,000 Shares or multiples thereof. The Fund will offer and issue Shares at their NAV per Share generally in exchange for a basket of debt securities held by the Fund (‘‘Deposit Securities’’) together with a deposit of a specified cash payment (‘‘Cash Component’’). Alternatively, the Fund may issue Creation Units in exchange for a specified all-cash payment (‘‘Cash Deposit’’). Similarly, Shares can be redeemed only in Creation Units, generally in-kind for a portfolio of debt securities held by the Fund and/or for a specified amount of cash. Except when aggregated in Creation Units, Shares will not be redeemable by the Fund. The prices at which creations and redemptions occur will be 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 will make available on each business day via the National Securities Clearing Corporation (‘‘NSCC’’) or other method of public dissemination, prior to the opening of business (subject to amendments) on the Exchange (currently 9:30 a.m. E.T.), the identity and the required amount of each Deposit Security and the amount of the Cash Component (or Cash Deposit) to be included in the current Fund Deposit 24 (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 participant in the Continuous Net Settlement System of the NSCC or a DTC participant, and in each case, must have executed an agreement with the Distributor and Transfer Agent with respect to creations and redemptions of Creation Unit aggregations. 23 The NAV of the Fund’s Shares generally will be calculated once daily Monday through Friday as of the close of regular trading on the New York Stock Exchange (‘‘NYSE’’), generally 4 p.m. Eastern time (‘‘E.T.’’) (‘‘NAV Calculation Time’’) on any business day. NAV per Share will be calculated by dividing the Fund’s net assets by the number of Fund Shares outstanding. For more information regarding the valuation of Fund investments in calculating the Fund’s NAV, see the Registration Statement. 24 The Deposit Securities and Cash Component or, alternatively, the Cash Deposit, constitute the ‘‘Fund Deposit,’’ which represents the investment amount for a Creation Unit of the Fund. PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 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 Fund that are referred to but not defined in this proposed rule change are defined in the Registration Statement. Availability of Information The Trust’s Web site (www.pimcoetfs.com), which will be publicly available prior to the public offering of Shares, will include a form of the prospectus for the Fund that may be downloaded. The Trust’s Web site will include additional quantitative information updated on a daily basis, including, for the Fund, (1) daily trading volume, the prior business day’s reported closing price, NAV and midpoint of the bid/ask spread at the time of calculation of such NAV (‘‘Bid/Ask Price’’),25 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 (9:30 a.m. E.T. to 4:00 p.m. E.T.) on the Exchange, the Fund will disclose on the Trust’s Web site the Disclosed Portfolio as defined in NYSE Arca Equities Rule 8.600(c)(2) that will form the basis for the Fund’s calculation of NAV at the end of the business day.26 On a daily basis, the Adviser will disclose for each portfolio security or other financial instrument of the Fund the following information: Ticker symbol (if applicable), name of security or financial instrument, number of shares or dollar value of financial instruments held in the portfolio, and percentage weighting of the security or financial instrument in the portfolio. The Web site information will be publicly available at no charge. In addition, price information for the debt 25 The Bid/Ask Price of the 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 Fund’s NAV. The records relating to Bid/Ask Prices will be retained by the Fund and its service providers. 26 Under accounting procedures followed by the Fund, trades made on the prior business day (‘‘T’’) will be booked and reflected in NAV on the current business day (‘‘T+1’’). Accordingly, the 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. E:\FR\FM\16FEN1.SGM 16FEN1 Federal Register / Vol. 77, No. 32 / Thursday, February 16, 2012 / Notices srobinson on DSK4SPTVN1PROD with NOTICES securities held by the Fund will be available through major market data vendors. In addition, a basket composition file, which will include the security names and share quantities, if applicable, required to be delivered in exchange for Fund Shares, together with estimates and actual cash components, will be publicly disseminated daily prior to the opening of the NYSE via the NSCC. The basket represents one Creation Unit of the Fund. The NAV of the Fund will normally be determined as of the close of the regular trading session on the NYSE (ordinarily 4 p.m. E.T.) on each business day. Authorized Participants may refer to the basket composition file for information regarding Fixed Income Instruments, inflation-linked bonds and any other instrument that may comprise the Fund’s basket on a given day. Investors can also obtain the Trust’s Statement of Additional Information (‘‘SAI’’), the Fund’s 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 www.sec.gov. Information regarding market price and trading volume of the Shares will be continually available on a real-time basis throughout the day on brokers’ computer screens and other electronic services. Information regarding the previous day’s closing price and trading volume information for the Shares 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 (‘‘CTA’’) high-speed line. In addition, the Portfolio Indicative Value, as defined in NYSE Arca Equities Rule 8.600(c)(3), will be widely disseminated by one or more major market data vendors at least every 15 seconds during the Core Trading Session.27 The dissemination of the Portfolio Indicative Value, together with the Disclosed Portfolio, will allow investors to determine the value of the underlying portfolio of the Fund on a daily basis and to provide a close estimate of that value throughout the trading day. Trading Halts With respect to trading halts, the Exchange may consider all relevant 27 Currently, it is the Exchange’s understanding that several major market data vendors display and/ or make widely available Portfolio Indicative Values published on CTA or other data feeds. VerDate Mar<15>2010 16:31 Feb 15, 2012 Jkt 226001 factors in exercising its discretion to halt or suspend trading in the Shares of the Fund.28 Trading in Shares of the Fund will be halted if the circuit breaker parameters in NYSE Arca Equities Rule 7.12 have been reached. Trading also 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 and/or the financial instruments comprising the Disclosed Portfolio of the Fund; 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 Fund 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. E.T. 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. As provided in NYSE Arca Equities Rule 7.6, Commentary .03, the minimum price variation (‘‘MPV’’) for quoting and entry of orders in equity securities traded on the NYSE Arca Marketplace is $0.01, with the exception of securities that are priced less than $1.00 for which the MPV for order entry is $0.0001. Surveillance The Exchange intends to utilize its existing surveillance procedures applicable to derivative products (which include 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. 28 See NYSE Arca Equities Rule 7.12, Commentary .04. PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 9285 The Exchange may obtain information via the ISG from other exchanges that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement.29 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 Equity Trading Permit (‘‘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 Fund is 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 4:00 p.m. E.T. 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) 30 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 29 For a list of the current members of ISG, see www.isgportal.org. The Exchange notes that not all components of the Disclosed Portfolio for the Fund may trade on markets that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. 30 15 U.S.C. 78f(b)(5). E:\FR\FM\16FEN1.SGM 16FEN1 srobinson on DSK4SPTVN1PROD with NOTICES 9286 Federal Register / Vol. 77, No. 32 / Thursday, February 16, 2012 / Notices open market and, in general, to protect investors and the public interest. The Exchange believes that the proposed rule change is designed to prevent fraudulent and manipulative acts and practices in that the Shares will be listed and traded on the Exchange pursuant to the initial and continued listing criteria in NYSE Arca Equities Rule 8.600. The Exchange has in place surveillance procedures that are adequate to properly monitor trading in the Shares in all trading sessions and to deter and detect violations of Exchange rules and applicable federal securities laws. The Exchange may obtain information via ISG from other exchanges that are members of ISG or with which the Exchange has entered into a comprehensive surveillance sharing agreement. According to the Registration Statement, the Fund will invest under normal circumstances at least 80% of its assets in inflationlinked bonds issued by U.S. or foreign governments, screened for minimum liquidity levels. The Fund primarily will invest in debt securities rated Baa or higher by Moody’s Investors Service, Inc., or equivalently rated by Standard & Poor’s Ratings Services or Fitch, Inc., or, if unrated, determined by PIMCO to be of comparable quality. The Adviser is affiliated with a broker-dealer and has implemented a ‘‘fire wall’’ with respect to such broker-dealer regarding access to information concerning the composition and/or changes to the Fund’s portfolio. In addition, the Fund will implement and maintain, or be subject to, procedures designed to prevent the use and dissemination of material nonpublic information regarding the Fund’s portfolio holdings. Consistent with the Exemptive Order, the Fund will not invest in options contracts, futures contracts or swap agreements. The Fund’s investments will be consistent with the Fund’s investment objective and will not be used to enhance leverage. That is, while the Fund will be permitted to borrow as permitted under the 1940 Act, the Fund’s investments will not be used to seek performance that is the multiple or inverse multiple (i.e., 2Xs and 3Xs) of the Fund’s primary broad-based securities benchmark index (as defined in Form N–1A) (i.e., the Barclays Capital Universal Government Inflation-Linked Bond Index). The proposed rule change is designed to promote just and equitable principles of trade and to protect investors and the public interest in that the Exchange will obtain a representation from the issuer of the Shares that the NAV per Share will be calculated daily and that the NAV and the Disclosed Portfolio will be made available to all market VerDate Mar<15>2010 16:31 Feb 15, 2012 Jkt 226001 participants at the same time. In addition, a large amount of information is publicly available regarding the Fund and the Shares, thereby promoting market transparency. The Fund’s portfolio holdings will be disclosed on the Trust’s Web site daily after the close of trading on the Exchange and prior to the opening of trading on the Exchange the following day. Moreover, the Portfolio Indicative Value will be widely disseminated by one or more major market data vendors at least every 15 seconds during the Exchange’s Core Trading Session. On each business day, before commencement of trading in Shares in the Core Trading Session on the Exchange, the Fund will disclose on the Trust’s Web site the Disclosed Portfolio that will form the basis for the Fund’s calculation of NAV at the end of the business day. Information regarding market price and trading volume of the Shares will be continually available on a real-time basis throughout the day on brokers’ computer screens and other electronic services, and quotation and last sale information will be available via the CTA high-speed line. The Trust’s Web site will include a form of the prospectus for the Fund and additional data relating to NAV and other applicable quantitative information. Moreover, 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. Trading in Shares of the Fund will be halted if the circuit breaker parameters in NYSE Arca Equities Rule 7.12 have been reached or because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable, and 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 Fund may be halted. In addition, as noted above, investors will have ready access to information regarding the Fund’s holdings, the Portfolio Indicative Value, the Disclosed Portfolio, and quotation and last sale information for the Shares. The proposed rule change is designed to perfect the mechanism of a free and open market and, in general, to protect investors and the public interest in that it will facilitate the listing and trading of an additional type of activelymanaged exchange-traded product that will enhance competition among market participants, to the benefit of investors and the marketplace. As noted above, the Exchange has in place surveillance procedures relating to trading in the Shares and may obtain information via PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 ISG from other exchanges that are members of ISG or with which the Exchange has entered into a comprehensive surveillance sharing agreement. In addition, as noted above, investors will have ready access to information regarding the Fund’s holdings, the Portfolio Indicative Value, the Disclosed Portfolio, and quotation and last sale information for the Shares. 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 45 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 or disapprove such proposed rule change, or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number SR–NYSEArca–2012–09 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. E:\FR\FM\16FEN1.SGM 16FEN1 Federal Register / Vol. 77, No. 32 / Thursday, February 16, 2012 / Notices All submissions should refer to File Number SR–NYSEArca–2012–09. This file number should be included on the subject line if email 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 Web site viewing and printing 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–2012–09 and should be submitted on or before March 8, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.31 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–3610 Filed 2–15–12; 8:45 am] srobinson on DSK4SPTVN1PROD with NOTICES BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–66371; File No. SR– NYSEAmex–2011–101] Self-Regulatory Organizations; NYSE Amex LLC.; Order Granting Approval of Proposed Rule Change Amending NYSE Amex Equities Rules 504 and 509 To Modify the Quoting Requirements Applicable to Designated Market Maker Units Registered in Nasdaq Stock Market Securities Traded on the Exchange Subject to the Unlisted Trading Privileges Pilot Program February 10, 2012. I. Introduction On December 15, 2011, NYSE Amex LLC (‘‘NYSE Amex’’ or ‘‘Exchange’’) 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 modify the quoting requirements applicable to Designated Market Maker (‘‘DMM’’) units registered in Nasdaq Stock Market securities traded on the Exchange pursuant to a grant of unlisted trading privileges (‘‘UTP’’). The proposed rule change was published for comment in the Federal Register on December 30, 2011.3 The Commission received no comment letters on the proposal. This order approves the proposed rule change. II. Description of the Proposal Certain securities listed on Nasdaq may be traded on NYSE Amex pursuant to a grant of unlisted trading privileges as part of a pilot program on the Exchange (‘‘UTP Pilot Program’’).4 NYSE Amex’s proposal seeks to modify the UTP Pilot Program’s obligations imposed on DMM units who quote in such securities. Currently, under NYSE Amex Equities Rule 509(a)(1), DMM units who are registered in securities subject to the UTP Pilot Program must maintain continuous two-sided quotes at the National Best Bid or Offer (‘‘NBBO’’) with reasonable size for each such security for at least 10% of the time during the regular business hours of the 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Securities Exchange Act Release No. 66043 (December 23, 2011), 76 FR 82329 (‘‘Notice’’). 4 The UTP Pilot Program is scheduled to expire on the earlier of Commission approval to make such pilot permanent or July 31, 2012. See Securities Exchange Act Release No. 66040 (December 23, 2011), 76 FR 82324 (December 30, 2011). 2 17 31 17 CFR 200.30–3(a)(12). VerDate Mar<15>2010 16:31 Feb 15, 2012 Jkt 226001 PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 9287 Exchange for each calendar month.5 The proposal would amend NYSE Amex Equities Rule 509(a)(1) to lower a DMM unit’s quoting obligations for ‘‘more active’’ 6 securities in the UTP Pilot Program from at least 10% of the time during the regular trading day to at least 5% of the time during the regular trading day.7 The proposed quoting obligations would continue to apply on a security-by-security basis. The current quoting obligation for ‘‘less active’’ securities, i.e., those with a consolidated average daily volume of less than one million shares per calendar month, would remain unchanged at 10% of the time during the regular trading day. The Exchange also proposes to delete from NYSE Amex Equities Rule 504(b)(1)(A) the text that references NYSE Amex Equities Rule 103B(II), which provides for security allocation eligibility. The Exchange represented that this reference is not necessary within Rule 504(b)(1)(A), and that, despite the proposed deletion, DMM units would remain subject to NYSE Amex Equities Rule 103B(II) with respect to security allocation eligibility. III. Discussion and Commission Findings After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.8 In particular, the proposed change is consistent with Section 6(b)(5) of the Act,9 because it would promote just and equitable principles of trade, and, in general, protect investors and the public interest.10 The Commission also finds that the proposed rule change is consistent with Section 12(f) of the Act,11 because it furthers the goals of maintaining fair and orderly markets, and protecting investors and the public 5 These obligations are also included within current NYSE Amex Equities Rule 504. 6 Under NYSE Amex Equities Rule 103B(II)(C), ‘‘more active’’ securities are those with a consolidated average daily volume equal to or greater than one million shares per calendar month. 7 The Exchange proposed to make conforming changes to NYSE Amex Equities Rule 504(b)(1)(A), which contains a requirement similar to NYSE Amex Equities Rule 509(a)(1) requiring DMM Units to quote at the NBBO on average at least 10% of the trading day. 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). 10 In approving the proposed rule change, the Commission notes that it has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 11 15 U.S.C. 78l(f). E:\FR\FM\16FEN1.SGM 16FEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 77, Number 32 (Thursday, February 16, 2012)]
[Notices]
[Pages 9281-9287]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-3610]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66381; File No. SR-NYSEArca-2012-09]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change Relating to the Listing and Trading of the
PIMCO Global Advantage Inflation-Linked Bond Strategy Fund Under NYSE
Arca Equities Rule 8.600

February 10, 2012.
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 January 27, 2012, NYSE Arca, Inc.
(``Exchange'' or ``NYSE Arca'') 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 Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

The Exchange proposes to list and trade the following under NYSE
Arca Equities Rule 8.600 (``Managed Fund Shares''): PIMCO Global
Advantage Inflation-Linked Bond Strategy Fund. The text of the proposed
rule change is available at the Exchange, the Commission's Public
Reference Room, and www.nyse.com.

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
Statutory Basis for, the Proposed Rule Change

1. Purpose
The Exchange proposes to list and trade the following Managed Fund
Shares \3\ (``Shares'') under NYSE Arca Equities Rule 8.600: PIMCO
Global Advantage Inflation-Linked Bond Strategy Fund (``Fund'').\4\ The
Shares will be offered by PIMCO ETF Trust (``Trust''), a statutory
trust organized under the laws of the State of Delaware and registered
with the Commission as an open-end management investment company.\5\
---------------------------------------------------------------------------

\3\ A Managed Fund Share is a security that represents an
interest in an investment company registered under the Investment
Company Act of 1940 (15 U.S.C. 80a-1) (``1940 Act'') organized as an
open-end investment company or similar entity that invests in a
portfolio of securities selected by its investment adviser
consistent with its investment objectives and policies. In contrast,
an open-end investment company that issues Investment Company Units,
listed and traded on the Exchange under NYSE Arca Equities Rule
5.2(j)(3), seeks to provide investment results that correspond
generally to the price and yield performance of a specific foreign
or domestic stock index, fixed income securities index or
combination thereof.
\4\ The Commission has previously approved the listing and
trading on the Exchange of other actively managed funds under Rule
8.600. See, e.g., Securities Exchange Act Release Nos. 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); 60460 (August 7, 2009), 74 FR 41468
(August 17, 2009) (SR-NYSEArca-2009-55) (order approving Exchange
listing and trading of AdvisorShares Dent Tactical ETF); 60981
(November 10, 2009), 74 FR 59594 (November 18, 2009) (SR-NYSEArca-
2009-79) (order approving Exchange listing and trading of five fixed
income funds of the PIMCO ETF Trust); 61365 (January 15, 2010), 75
FR 4124 (January 26, 2010) (SR-NYSEArca-2009-114) (order approving
Exchange listing and trading of Grail McDonnell Fixed Income ETFs).
\5\ The Trust is registered under the 1940 Act. On February 14,
2011, the Trust filed with the Commission Post-Effective Amendment
No. 25 under the Securities Act of 1933 (15 U.S.C. 77a)
(``Securities Act'') and Amendment No. 27 under the 1940 Act to the
Trust's registration statement on Form N-1A relating to the Fund. On
October 28, 2011, the Trust filed with the Commission Post-Effective
Amendment No. 43 under the Securities Act and Amendment No. 45 under
the 1940 Act to the Trust's registration statement on Form N-1A
relating to the Fund (File Nos. 333-155395 and 811-22250)
(``Registration Statement''). The description of the operation of
the Trust and the Fund herein is based, in part, on the Registration
Statement. In addition, the Commission has issued an order granting
certain exemptive relief to the Trust under the 1940 Act. See
Investment Company Act Release No. 28993 (November 10, 2009) (File
No. 812-13571) (``Exemptive Order'').

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

[[Page 9282]]

The investment manager to the Fund is Pacific Investment Management
Company LLC (``PIMCO'' or ``Adviser''). PIMCO Investments LLC serves as
the distributor for the Fund (``Distributor''). State Street Bank &
Trust Co. serves as the custodian and transfer agent for the Fund
(``Custodian'' or ``Transfer Agent'').
Commentary .06 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 information concerning the composition and/or
changes to such investment company portfolio.\6\ In addition,
Commentary .06 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. The Adviser is
affiliated with a broker-dealer and has implemented a ``fire wall''
with respect to such broker-dealer regarding access to information
concerning the composition and/or changes to the Fund's portfolio. If
PIMCO elects to hire a sub-adviser for the Fund that is also affiliated
with a broker-dealer, such sub-adviser will implement a fire wall with
respect to such broker-dealer regarding access to information
concerning the composition and/or changes to the portfolio. In the
event (a) the Adviser or any sub-adviser becomes newly affiliated with
a broker-dealer, or (b) any new adviser or sub-adviser becomes
affiliated with a broker-dealer, it will implement a fire wall with
respect to such broker-dealer regarding access to information
concerning the composition and/or changes to the portfolio, and will be
subject to procedures designed to prevent the use and dissemination of
material non-public information regarding such portfolio.
---------------------------------------------------------------------------

\6\ An investment adviser to an open-end fund is required to be
registered under the Investment Advisers Act of 1940 (``Advisers
Act''). As a result, the Adviser and its related personnel are
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.
In addition, Rule 206(4)-7 under the Advisers Act makes it unlawful
for an investment adviser to provide investment advice to clients
unless such investment adviser has (i) adopted and implemented
written policies and procedures reasonably designed to prevent
violation, by the investment adviser 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.
---------------------------------------------------------------------------

According to the Registration Statement, the Fund seeks total
return which exceeds that of its benchmark indexes, consistent with
prudent investment management. The Fund's primary benchmark index is
the Barclays Capital Universal Government Inflation-Linked Bond Index.
The Fund's secondary benchmark index is the PIMCO Global Advantage
Inflation-Linked Bond Index.
The Fund seeks to achieve its investment objective by investing
under normal circumstances \7\ at least 80% of its assets in a
portfolio of inflation-linked bonds that is economically tied to at
least three developed and/or emerging market countries (one of which
may be the United States). The Fund's holdings may include bonds issued
by issuers in both developed and/or emerging market countries and the
Fund is expected to hold bonds of issuers that are economically tied
\8\ to many of the countries represented in the Fund's primary
benchmark index.\9\ Assets not invested in inflation-linked bonds may
be invested in other types of Fixed Income Instruments.\10\
---------------------------------------------------------------------------

\7\ The term ``under normal circumstances'' includes, but is not
limited to, the absence of extreme volatility or trading halts in
the fixed income markets or the financial markets generally;
operational issues causing dissemination of inaccurate market
information; or force majeure type events such as systems failure,
natural or man-made disaster, act of God, armed conflict, act of
terrorism, riot or labor disruption or any similar intervening
circumstance.
\8\ As disclosed in the Trust's 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.
\9\ Each country's approximate weighting within the global
inflation-linked bond market, as reflected by the approximate
weighting of the Barclays Capital Universal Government Inflation-
Linked Bond Index (the Fund's primary benchmark), as of January 31,
2011, is as follows: U.S. 32%, U.K. 19%, France 11%, Brazil 10%,
Italy 7%, Canada 2%, Germany 3%, Japan 3%, Mexico 2%, Sweden 2%,
Turkey 2%, Argentina 1%, Australia 1%, Greece 1%, South Africa 1%,
Chile <1%, Poland <1%, Colombia <1% and South Korea <1%. Each
country's approximate value of outstanding inflation-linked bonds
also as of January 31, 2011, is as follows (in $ billions): U.S.
$642.7, U.K. $392.2, France $222.0, Brazil $209.6, Italy $143.2,
Canada $49.9, Germany $60.9, Japan $57.0, Mexico $45.7, Sweden
$39.1, Turkey $45.9, Argentina $20.0, Australia $17.7, Greece $11.8,
South Africa $26.4, Chile $8.2, Poland $5.5, Colombia $2.7 and South
Korea $3.4.
\10\ The term ``Fixed Income Instruments'' 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
convertible securities and 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 and event-linked bonds;
bank capital and trust preferred 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. Securities issued by U.S.
Government agencies or government-sponsored enterprises may not be
guaranteed by the U.S. Treasury.
---------------------------------------------------------------------------

According to the Registration Statement, inflation-linked bonds are
government-issued fixed income securities that are structured to
provide protection against inflation. The value of the bond's principal
or the interest income paid on the bond is adjusted to track changes in
an official inflation measure. The effective duration of the Fund's
portfolio normally varies within two years (plus or minus) of the
effective duration of the PIMCO Global Advantage Inflation-Linked Bond
Index which, as of September 30, 2011, as converted, was 4.53 years.
Duration is a measure used to determine the sensitivity of a security's
price to changes in interest rates. The longer a security's duration,
the more sensitive it will be to changes in interest rates. Effective
duration takes into account that, for certain bonds, expected cash
flows will fluctuate as interest rates change and will be defined in
nominal yield terms, which is market convention for most bond investors
and managers. Because market convention for bonds is to use nominal
yields to measure duration, duration for inflation-linked

[[Page 9283]]

bonds, which are based on real yields, are converted to nominal
durations through a conversion factor. The resulting nominal duration
typically can range from 20% to 90% of the respective real duration.
All security holdings will be measured in effective (nominal) duration
terms. Similarly, the effective duration of the PIMCO Global Advantage
Inflation-Linked Bond Index will be calculated using the same
conversion factors.
The Fund will invest under normal circumstances at least 80% of its
assets in inflation-linked bonds issued by U.S. or foreign governments
(or any political subdivision, agency, authority or instrumentality of
such government).\11\ The secondary benchmark includes a liquidity
screen to remove inflation-linked bonds issued by governments of
countries with cumulative inflation-linked bond issuances below $7
billion local currency equivalent, in addition to liquidity screens at
the issue level. The global inflation-linked bond market exceeded $2.25
trillion as of December 31, 2011.\12\
---------------------------------------------------------------------------

\11\ According to the Registration Statement, the value of
inflation-linked bonds is expected to change in response to changes
in real interest rates. Real interest rates are tied to the
relationship between nominal interest rates and the rate of
inflation. If nominal interest rates increase at a faster rate than
inflation, real interest rates may rise, leading to a decrease in
value of inflation-linked bonds.
\12\ The value of the global inflation-linked bond market is
calculated based on the total outstanding value of issues included
in the Barclays Capital Universal Government Inflation-Linked Bond
Index that are not expiring in less than one year.
---------------------------------------------------------------------------

The Fund primarily will invest in debt securities rated Baa or
higher by Moody's Investors Service, Inc., or equivalently rated by
Standard & Poor's Ratings Services or Fitch, Inc., or, if unrated,
determined by PIMCO to be of comparable quality.\13\ The Fund may
obtain foreign currency exposure (from non-U.S. dollar denominated debt
securities or currencies) without limitation. The Fund may purchase and
sell debt securities on a when-issued, delayed delivery or forward
commitment basis. 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). The Fund may
invest, without limitation, in debt securities and instruments of
foreign government issuers, including debt securities and instruments
economically tied to emerging market countries.
---------------------------------------------------------------------------

\13\ The Adviser represents that, in selecting securities for
the Fund, PIMCO will develop an outlook for interest rates, currency
exchange rates and the economy, analyze credit and call risks, and
use other security selection techniques. The proportion of the
Fund's assets committed to investment in securities with particular
characteristics (such as quality, sector, interest rate or maturity)
will vary based on PIMCO's outlook for the U.S. economy and the
economies of other countries in the world, the financial markets and
other factors. Sophisticated proprietary software will assist in
evaluating sectors, pricing and rating specific securities. Once
investment opportunities are identified, PIMCO will shift assets
among sectors and securities depending upon changes in relative
valuations and credit spreads in a manner consistent with the Fund's
objective and strategies. To the extent the Fund invests in unrated
securities that PIMCO determines to be of comparable quality to
rated securities that the Fund may purchase, the Fund's ability to
achieve its objective may depend more heavily on PIMCO's
creditworthiness analysis than if the Fund invested exclusively in
rated securities.
---------------------------------------------------------------------------

Other Portfolio Holdings
The Fund's portfolio holdings will be disclosed on the Trust's Web
site (www.pimcoetfs.com) daily after the close of trading on the
Exchange and prior to the opening of trading on the Exchange the
following day.
As disclosed in the Trust's Registration Statement, if PIMCO
believes that economic or market conditions are unfavorable to
investors, PIMCO may temporarily invest up to 100% of the Fund's assets
in certain defensive strategies, including holding a substantial
portion of the Fund's assets in cash, cash equivalents or other highly
rated short-term securities, including securities issued or guaranteed
by the U.S. government, its agencies or instrumentalities and
affiliated money market and/or short-term bond funds.
The Fund may invest in, to the extent permitted by Section 12(d)(1)
of the 1940 Act and rules thereunder, other affiliated and unaffiliated
funds, such as open-end or closed-end management investment companies,
including other exchange traded funds.
The Fund may enter into foreign currency transactions (such as
currency forwards).\14\
---------------------------------------------------------------------------

\14\ The Fund may engage in these transactions primarily to: (1)
Protect against uncertainty in the level of future foreign exchange
rates in the purchase and sale of securities; or (2) lower currency
deviations relative to the Fund's benchmark indexes.
---------------------------------------------------------------------------

The Fund may hold in the aggregate up to 15% of its net assets in:
(1) Illiquid securities,\15\ which include delayed funding loans,
revolving credit facilities, fixed- and floating-rate loans and loan
participations and assignments, and (2) Rule 144A securities. Certain
illiquid securities may require pricing at fair value as determined in
good faith under the supervision of the Fund's Board of Trustees. 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 the Fund has valued the
securities.
---------------------------------------------------------------------------

\15\ The Commission has stated that long-standing Commission
guidelines have required open-end funds to hold no more than 15% of
their net assets in illiquid securities and other illiquid assets.
See Investment Company Act Release No. 28193 (March 11, 2008), 73 FR
14617 (March 18, 2008), footnote 34. See also Investment Company Act
Release No. 5847 (October 21, 1969), 35 FR 19989 (December 31, 1970)
(Statement Regarding ``Restricted Securities''); Investment Company
Act Release No. 18612 (March 12, 1992), 57 FR 9828 (March 20, 1992)
(Revisions of Guidelines to Form N-1A). A fund's portfolio security
is illiquid if it cannot be disposed of in the ordinary course of
business within seven days at approximately the value ascribed to it
by the ETF. See Investment Company Act Release No. 14983 (March 12,
1986), 51 FR 9773 (March 21, 1986) (adopting amendments to Rule 2a-7
under the 1940 Act); Investment Company Act Release No. 17452 (April
23, 1990), 55 FR 17933 (April 30, 1990) (adopting Rule 144A under
the Securities Act).
---------------------------------------------------------------------------

With respect to its equity securities investments, the Fund will
invest only in U.S.-registered equity securities and non-U.S.-
registered equity securities that trade in markets that are members of
the Intermarket Surveillance Group (``ISG'') or are parties to a
comprehensive surveillance sharing agreement with the Exchange.\16\
---------------------------------------------------------------------------

\16\ See note 29, infra.
---------------------------------------------------------------------------

Investment Limitations
The Fund is subject to the following investment limitations:
The Fund may not concentrate its investments in a particular
industry, as that term is used in the 1940 Act,\17\ and as interpreted,
modified, or otherwise permitted by regulatory authority having
jurisdiction from time to time.\18\
---------------------------------------------------------------------------

\17\ See Form N-1A, Item 9. The Commission has taken the
position that a fund is concentrated if it invests more than 25% of
the value of its total assets in any one industry. See, e.g.,
Investment Company Act Release No. 9011 (October 30, 1975), 40 FR
54241 (November 21, 1975).
\18\ The Fund's policy with respect to the concentration of
investments in a particular industry is disclosed in the Trust's
Registration Statement.
---------------------------------------------------------------------------

The Fund will be non-diversified,\19\ which means that it may
invest its assets in a smaller number of issuers than a diversified
fund.\20\
---------------------------------------------------------------------------

\19\ A ``non-diversified company'', as defined in Section
5(b)(2) of the 1940 Act, means any management company other than a
diversified company (as defined in Section 5(b)(1) of the 1940 Act).
\20\ The minimum number of inflation-linked bonds and other
Fixed Income Instruments and issuers in which the Fund may invest at
any one time depends in part upon the number of securities or
issuers comprising the Fund's benchmark indexes. In seeking to
achieve its investment objective, the Fund's portfolio will consist
of at least twenty-five (25) inflation-linked bonds and other Fixed
Income Instruments on any given day, but the Fund may regularly
invest in fifty (50) or more inflation-linked bonds and other Fixed
Income Instruments at a time in seeking to achieve its investment
objective. The Fund's portfolio will hold issues of at least 13 non-
affiliated issuers.

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

[[Page 9284]]

The Fund intends to qualify annually and elect to be treated as a
regulated investment company under Subchapter M of the Internal Revenue
Code.\21\
---------------------------------------------------------------------------

\21\ 26 U.S.C. 851. To qualify as a regulated investment
company, the Fund generally must, among other things, (a) derive in
each taxable year at least 90% of its gross income from dividends,
interest, payments with respect to securities loans, and gains from
the sale or other disposition of stock, securities or foreign
currencies, net income from certain ``qualified publicly traded
partnerships,'' or other income derived with respect to its business
of investing in such stock, securities or currencies (``Qualifying
Income Test''); (b) diversify its holdings so that, at the end of
each quarter of the taxable year, (i) at least 50% of the market
value of the Fund's assets is represented by cash, U.S. Government
securities, the securities of other regulated investment companies
and other securities, with such other securities of any one issuer
limited for the purposes of this calculation to an amount not
greater than 5% of the value of the Fund's total assets and 10% of
the outstanding voting securities of such issuer, and (ii) not more
than 25% of the value of its total assets is invested in the
securities of any one issuer (other than U.S. Government securities
or the securities of other regulated investment companies), the
securities of certain controlled issuers in the same or similar
trades or businesses, or the securities of one or more ``qualified
publicly traded partnerships''; and (c) distribute each taxable year
the sum of (i) at least 90% of its investment company taxable income
(which includes dividends, interest and net short-term capital gains
in excess of any net long-term capital losses) and (ii) 90% of its
tax exempt interest, net of expenses allocable thereto.
---------------------------------------------------------------------------

Consistent with the Exemptive Order, the Fund will not invest in
options contracts, futures contracts or swap agreements.
The Fund's investments will be consistent with the Fund's
investment objective and will not be used to enhance leverage. That is,
while the Fund will be permitted to borrow as permitted under the 1940
Act, the Fund's investments will not be used to seek performance that
is the multiple or inverse multiple (i.e., 2Xs and 3Xs) of the Fund's
primary broad-based securities benchmark index (as defined in Form N-
1A) (i.e., the Barclays Capital Universal Government Inflation-Linked
Bond Index).
The Shares will conform to the initial and continued listing
criteria under NYSE Arca Equities Rule 8.600. The Exchange represents
that, for initial and/or continued listing, the Fund will be in
compliance with Rule 10A-3 under the Exchange Act,\22\ 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 (``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.
---------------------------------------------------------------------------

\22\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------

Creations and Redemptions of Shares
According to the Registration Statement, Shares of the Fund that
trade in the secondary market will be ``created'' at NAV \23\ by
Authorized Participants only in block-size Creation Units of 100,000
Shares or multiples thereof. The Fund will offer and issue Shares at
their NAV per Share generally in exchange for a basket of debt
securities held by the Fund (``Deposit Securities'') together with a
deposit of a specified cash payment (``Cash Component'').
Alternatively, the Fund may issue Creation Units in exchange for a
specified all-cash payment (``Cash Deposit''). Similarly, Shares can be
redeemed only in Creation Units, generally in-kind for a portfolio of
debt securities held by the Fund and/or for a specified amount of cash.
---------------------------------------------------------------------------

\23\ The NAV of the Fund's Shares generally will be calculated
once daily Monday through Friday as of the close of regular trading
on the New York Stock Exchange (``NYSE''), generally 4 p.m. Eastern
time (``E.T.'') (``NAV Calculation Time'') on any business day. NAV
per Share will be calculated by dividing the Fund's net assets by
the number of Fund Shares outstanding. For more information
regarding the valuation of Fund investments in calculating the
Fund's NAV, see the Registration Statement.
---------------------------------------------------------------------------

Except when aggregated in Creation Units, Shares will not be
redeemable by the Fund. The prices at which creations and redemptions
occur will be 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 will make
available on each business day via the National Securities Clearing
Corporation (``NSCC'') or other method of public dissemination, prior
to the opening of business (subject to amendments) on the Exchange
(currently 9:30 a.m. E.T.), the identity and the required amount of
each Deposit Security and the amount of the Cash Component (or Cash
Deposit) to be included in the current Fund Deposit \24\ (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 participant in the Continuous Net Settlement System of
the NSCC or a DTC participant, and in each case, must have executed an
agreement with the Distributor and Transfer Agent with respect to
creations and redemptions of Creation Unit aggregations.
---------------------------------------------------------------------------

\24\ The Deposit Securities and Cash Component or,
alternatively, the Cash Deposit, constitute the ``Fund Deposit,''
which represents the investment amount for a Creation Unit of the
Fund.
---------------------------------------------------------------------------

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 Fund that are referred to but not defined in this
proposed rule change are defined in the Registration Statement.
Availability of Information
The Trust's Web site (www.pimcoetfs.com), which will be publicly
available prior to the public offering of Shares, will include a form
of the prospectus for the Fund that may be downloaded. The Trust's Web
site will include additional quantitative information updated on a
daily basis, including, for the Fund, (1) daily trading volume, the
prior business day's reported closing price, NAV and mid-point of the
bid/ask spread at the time of calculation of such NAV (``Bid/Ask
Price''),\25\ 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 (9:30 a.m. E.T. to
4:00 p.m. E.T.) on the Exchange, the Fund will disclose on the Trust's
Web site the Disclosed Portfolio as defined in NYSE Arca Equities Rule
8.600(c)(2) that will form the basis for the Fund's calculation of NAV
at the end of the business day.\26\
---------------------------------------------------------------------------

\25\ The Bid/Ask Price of the 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 Fund's NAV. The records relating
to Bid/Ask Prices will be retained by the Fund and its service
providers.
\26\ Under accounting procedures followed by the Fund, trades
made on the prior business day (``T'') will be booked and reflected
in NAV on the current business day (``T+1''). Accordingly, the 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.
---------------------------------------------------------------------------

On a daily basis, the Adviser will disclose for each portfolio
security or other financial instrument of the Fund the following
information: Ticker symbol (if applicable), name of security or
financial instrument, number of shares or dollar value of financial
instruments held in the portfolio, and percentage weighting of the
security or financial instrument in the portfolio. The Web site
information will be publicly available at no charge. In addition, price
information for the debt

[[Page 9285]]

securities held by the Fund will be available through major market data
vendors.
In addition, a basket composition file, which will include the
security names and share quantities, if applicable, required to be
delivered in exchange for Fund Shares, together with estimates and
actual cash components, will be publicly disseminated daily prior to
the opening of the NYSE via the NSCC. The basket represents one
Creation Unit of the Fund. The NAV of the Fund will normally be
determined as of the close of the regular trading session on the NYSE
(ordinarily 4 p.m. E.T.) on each business day. Authorized Participants
may refer to the basket composition file for information regarding
Fixed Income Instruments, inflation-linked bonds and any other
instrument that may comprise the Fund's basket on a given day.
Investors can also obtain the Trust's Statement of Additional
Information (``SAI''), the Fund's 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 www.sec.gov. Information
regarding market price and trading volume of the Shares will be
continually available on a real-time basis throughout the day on
brokers' computer screens and other electronic services. Information
regarding the previous day's closing price and trading volume
information for the Shares 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
(``CTA'') high-speed line. In addition, the Portfolio Indicative Value,
as defined in NYSE Arca Equities Rule 8.600(c)(3), will be widely
disseminated by one or more major market data vendors at least every 15
seconds during the Core Trading Session.\27\ The dissemination of the
Portfolio Indicative Value, together with the Disclosed Portfolio, will
allow investors to determine the value of the underlying portfolio of
the Fund on a daily basis and to provide a close estimate of that value
throughout the trading day.
---------------------------------------------------------------------------

\27\ Currently, it is the Exchange's understanding that several
major market data vendors display and/or make widely available
Portfolio Indicative Values published on CTA or other data feeds.
---------------------------------------------------------------------------

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 Fund.\28\ Trading in Shares of the Fund
will be halted if the circuit breaker parameters in NYSE Arca Equities
Rule 7.12 have been reached. Trading also 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 and/or the
financial instruments comprising the Disclosed Portfolio of the Fund;
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 Fund may be
halted.
---------------------------------------------------------------------------

\28\ See NYSE Arca Equities Rule 7.12, Commentary .04.
---------------------------------------------------------------------------

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. E.T. 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. As provided in
NYSE Arca Equities Rule 7.6, Commentary .03, the minimum price
variation (``MPV'') for quoting and entry of orders in equity
securities traded on the NYSE Arca Marketplace is $0.01, with the
exception of securities that are priced less than $1.00 for which the
MPV for order entry is $0.0001.
Surveillance
The Exchange intends to utilize its existing surveillance
procedures applicable to derivative products (which include 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 ISG from other
exchanges that are members of ISG or with which the Exchange has in
place a comprehensive surveillance sharing agreement.\29\
---------------------------------------------------------------------------

\29\ For a list of the current members of ISG, see
www.isgportal.org. The Exchange notes that not all components of the
Disclosed Portfolio for the Fund may trade on markets that are
members of ISG or with which the Exchange has in place a
comprehensive surveillance sharing agreement.
---------------------------------------------------------------------------

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
Equity Trading Permit (``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 Fund is 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 4:00 p.m. E.T. 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) \30\ 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

[[Page 9286]]

open market and, in general, to protect investors and the public
interest.
---------------------------------------------------------------------------

\30\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices in that the
Shares will be listed and traded on the Exchange pursuant to the
initial and continued listing criteria in NYSE Arca Equities Rule
8.600. The Exchange has in place surveillance procedures that are
adequate to properly monitor trading in the Shares in all trading
sessions and to deter and detect violations of Exchange rules and
applicable federal securities laws. The Exchange may obtain information
via ISG from other exchanges that are members of ISG or with which the
Exchange has entered into a comprehensive surveillance sharing
agreement. According to the Registration Statement, the Fund will
invest under normal circumstances at least 80% of its assets in
inflation-linked bonds issued by U.S. or foreign governments, screened
for minimum liquidity levels. The Fund primarily will invest in debt
securities rated Baa or higher by Moody's Investors Service, Inc., or
equivalently rated by Standard & Poor's Ratings Services or Fitch,
Inc., or, if unrated, determined by PIMCO to be of comparable quality.
The Adviser is affiliated with a broker-dealer and has implemented a
``fire wall'' with respect to such broker-dealer regarding access to
information concerning the composition and/or changes to the Fund's
portfolio. In addition, the Fund will implement and maintain, or be
subject to, procedures designed to prevent the use and dissemination of
material non-public information regarding the Fund's portfolio
holdings. Consistent with the Exemptive Order, the Fund will not invest
in options contracts, futures contracts or swap agreements. The Fund's
investments will be consistent with the Fund's investment objective and
will not be used to enhance leverage. That is, while the Fund will be
permitted to borrow as permitted under the 1940 Act, the Fund's
investments will not be used to seek performance that is the multiple
or inverse multiple (i.e., 2Xs and 3Xs) of the Fund's primary broad-
based securities benchmark index (as defined in Form N-1A) (i.e., the
Barclays Capital Universal Government Inflation-Linked Bond Index).
The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that the Exchange will obtain a representation from the issuer of the
Shares 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. In addition, a large amount of
information is publicly available regarding the Fund and the Shares,
thereby promoting market transparency. The Fund's portfolio holdings
will be disclosed on the Trust's Web site daily after the close of
trading on the Exchange and prior to the opening of trading on the
Exchange the following day. Moreover, the Portfolio Indicative Value
will be widely disseminated by one or more major market data vendors at
least every 15 seconds during the Exchange's Core Trading Session. On
each business day, before commencement of trading in Shares in the Core
Trading Session on the Exchange, the Fund will disclose on the Trust's
Web site the Disclosed Portfolio that will form the basis for the
Fund's calculation of NAV at the end of the business day. Information
regarding market price and trading volume of the Shares will be
continually available on a real-time basis throughout the day on
brokers' computer screens and other electronic services, and quotation
and last sale information will be available via the CTA high-speed
line. The Trust's Web site will include a form of the prospectus for
the Fund and additional data relating to NAV and other applicable
quantitative information. Moreover, 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. Trading in Shares of the Fund will be halted if the
circuit breaker parameters in NYSE Arca Equities Rule 7.12 have been
reached or because of market conditions or for reasons that, in the
view of the Exchange, make trading in the Shares inadvisable, and
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 Fund may be halted. In addition, as noted above, investors will
have ready access to information regarding the Fund's holdings, the
Portfolio Indicative Value, the Disclosed Portfolio, and quotation and
last sale information for the Shares.
The proposed rule change is designed to perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest in that it will facilitate the listing and trading of
an additional type of actively-managed exchange-traded product that
will enhance competition among market participants, to the benefit of
investors and the marketplace. As noted above, the Exchange has in
place surveillance procedures relating to trading in the Shares and may
obtain information via ISG from other exchanges that are members of ISG
or with which the Exchange has entered into a comprehensive
surveillance sharing agreement. In addition, as noted above, investors
will have ready access to information regarding the Fund's holdings,
the Portfolio Indicative Value, the Disclosed Portfolio, and quotation
and last sale information for the Shares.

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 45 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 or disapprove such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSEArca-2012-09 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.

[[Page 9287]]

All submissions should refer to File Number SR-NYSEArca-2012-09. This
file number should be included on the subject line if email 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 Web site viewing and
printing 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-2012-09 and should
be submitted on or before March 8, 2012.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\31\
---------------------------------------------------------------------------

\31\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-3610 Filed 2-15-12; 8:45 am]
BILLING CODE 8011-01-P

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.