Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change Relating To the Listing and Trading of the First Trust North American Infrastructure Fund Under NYSE Arca Equities Rule 8.600, 20079-20086 [2012-7894]

Download as PDF 20079 Federal Register / Vol. 77, No. 64 / Tuesday, April 3, 2012 / Notices NRC IMPORT LICENSE APPLICATION [Description of material] Name of applicant Date of application Date received application No. docket No. Perma-Fix Northwest Richland, Inc., February 14, 2012, February 16, 2012, IW031, 11005985. Material type Total quantity End use Radioactive waste consisting of various radioactively contaminated materials for thermal destruction. Up to 500 tons of combustible and noncombustible materials. Total combined activity level for all radionuclides not to exceed 17.3 TBq. Special nuclear material not to exceed 350 grams U235. Source material not to exceed 5000 kilograms. Thermal destruction for volume reduction at Perma-Fix Northwest in Richland, WA. The resultant ash and nonincinerable/non-conforming material will be returned to Mexico under XW019. For the Nuclear Regulatory Commission. Dated this 28th day of March 2012 at Rockville, Maryland. Stephen Dembek, Acting Deputy Director, Office of International Programs. [FR Doc. 2012–7945 Filed 4–2–12; 8:45 am] BILLING CODE 7590–01–P Dated: March 29, 2012. Elizabeth M. Murphy, Secretary. SECURITIES AND EXCHANGE COMMISSION [FR Doc. 2012–8063 Filed 3–30–12; 11:15 am] mstockstill on DSK4VPTVN1PROD with NOTICES Sunshine Act Meeting BILLING CODE 8011–01–P Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Public Law 94–409, that the Securities and Exchange Commission will hold a Closed Meeting on Thursday, April 5, 2012 at 2 p.m. Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the Closed Meeting. Certain staff members who have an interest in the matters also may be present. The General Counsel of the Commission, or his designee, has certified that, in his opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) and 17 CFR 200.402(a)(3), (5), (7), 9(ii) and (10), permit consideration of the scheduled matters at the Closed Meeting. Commissioner Walter, as duty officer, voted to consider the items listed for the Closed Meeting in a closed session. The subject matter of the Closed Meeting scheduled for Thursday, April 5, 2012 will be: Institution and settlement of injunctive actions; Institution and settlement of administrative proceedings; An adjudicatory matter; and Other matters relating to enforcement proceedings. VerDate Mar<15>2010 16:19 Apr 02, 2012 At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at (202) 551–5400. Jkt 226001 SECURITIES AND EXCHANGE COMMISSION [Release No. 66667; March 28, 2012] Securities Exchange Act of 1934; In the Matter of the NASDAQ Stock Market LLC; Order Granting Petition for Review and Scheduling Filing of Statements Pursuant to Rule 431 of the Rules of Practice,1 it is ordered that the petition of The NASDAQ Stock Market LLC for review of the order disapproving by delegated authority File No. SR– NASDAQ–2011–010 2 is granted. It is ordered, pursuant to Rule 431 that any party or other person may file a statement in support of or in opposition to the action made by delegated authority on or before April 18, 2012. By the Commission. Elizabeth M. Murphy, Secretary. [FR Doc. 2012–7901 Filed 4–2–12; 8:45 am] CFR 201.431. Securities Exchange Act Release No. 65362 (September 20, 2011), 76 FR 59466 (September 26, 2011). [Release No. 34–66669; File No. SR– NYSEArca–2012–21] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change Relating To the Listing and Trading of the First Trust North American Infrastructure Fund Under NYSE Arca Equities Rule 8.600 March 28, 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 March 13, 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, II, and III below, which Items have been substantially 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 shares of the following under NYSE Arca Equities Rule 8.600 (‘‘Managed Fund Shares’’): First Trust North American Infrastructure Fund. The text of the proposed rule change is available at the Exchange, the Commission’s Public Reference Room, and www.nyse.com. 1 17 PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 Mexico. SECURITIES AND EXCHANGE COMMISSION BILLING CODE 8011–01–P 2 See Country from 1 15 2 17 E:\FR\FM\03APN1.SGM U.S.C.78s(b)(1). CFR 240.19b–4. 03APN1 20080 Federal Register / Vol. 77, No. 64 / Tuesday, April 3, 2012 / Notices 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 mstockstill on DSK4VPTVN1PROD with NOTICES 1. Purpose The Exchange proposes to list and trade the shares (‘‘Shares’’) of the First Trust North American Infrastructure Fund (‘‘Fund’’) under NYSE Arca Equities Rule 8.600, which governs the listing and trading of Managed Fund Shares.3 The Shares will be offered by First Trust Exchange-Traded Fund IV (‘‘Trust’’), which is organized as a Massachusetts business trust and is registered with the Commission as an open-end management investment company.4 The investment adviser to the Fund will be First Trust Advisors L.P. (‘‘Adviser’’ or ‘‘First Trust’’). Energy Income Partners LLC will serve as investment sub-adviser to the Fund (‘‘Sub-Adviser’’) and provide day-to-day portfolio management of the Fund. First Trust Portfolios L.P. (‘‘Distributor’’) will be the principal underwriter and 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 Trust is registered under the 1940 Act. On July 19, 2011, the Trust filed with the Commission a registration statement on Form N–1A under the Securities Act of 1933 (15 U.S.C. 77a) and under the 1940 Act relating to the Fund (File Nos. 333– 174332 and 811–22559) (‘‘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. 28468 (October 27, 2008) (File No. 812–13477) (‘‘Exemptive Order’’). VerDate Mar<15>2010 16:19 Apr 02, 2012 Jkt 226001 distributor of the Fund’s Shares. Bank of New York Mellon (‘‘Administrator’’ or ‘‘BNY’’) will serve as administrator, custodian, and transfer agent for the Fund.5 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. 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.6 Commentary .06 to Rule 8.600 is similar to Commentary .03(a)(i) and (iii) to NYSE Arca Equities Rule 5.2(j)(3); however, Commentary .06 in connection with the establishment of a ‘‘fire wall’’ between the investment adviser and the broker-dealer reflects 5 The Commission has previously approved listing and trading on the Exchange of a number of 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 listing of Dent Tactical ETF); 62502 (July 15, 2010), 75 FR 42471 (July 21, 2010) (SR–NYSEArca–2010–57) (order approving listing of AdviserShares WCM/ BNY Mellon Focused Growth ADR ETF); 63076 (October 12, 2010), 75 FR 63874 (October 18, 2010) (SR–NYSEArca–2010–79) (order approving listing of Cambria Global Tactical ETF). 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 Sub-Adviser and their 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. PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 the applicable open-end fund’s portfolio, not an underlying benchmark index, as is the case with index-based funds. The Adviser is affiliated with First Trust Portfolios L.P., a brokerdealer, and has implemented a fire wall with respect to its broker-dealer affiliate regarding access to information concerning the composition and/or changes to the portfolio. In addition, the Sub-Adviser is affiliated with a brokerdealer and has implemented a fire wall with respect to such broker-dealer affiliate regarding access to information concerning the composition and/or changes to the portfolio. In the event (a) the Adviser or the 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 nonpublic information regarding such portfolio. According to the Registration Statement, the Fund’s investment objective is to seek total return with an emphasis on current distributions and dividends paid to shareholders. Under normal market conditions,7 the Fund will invest at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in exchangetraded equity securities of companies domiciled in the United States or Canada and deemed to be engaged in the energy infrastructure segment of the energy and utilities sectors. Equity securities include common stocks; preferred securities; warrants to purchase common stocks or preferred securities; securities convertible into common stocks or preferred securities; and other securities with equity characteristics. Such securities may include depositary receipts, master limited partnerships (‘‘MLPs’’), MLP Ishares (‘‘I–Shares’’) (as described below), MLP subordinated units (as described below), securities of pipeline and power utility companies, and securities of Canadian energy infrastructure companies and Canadian 7 The term ‘‘under normal market conditions’’ includes, but is not limited to, the absence of extreme volatility or trading halts in the equity 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. E:\FR\FM\03APN1.SGM 03APN1 Federal Register / Vol. 77, No. 64 / Tuesday, April 3, 2012 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES Energy Infrastructure Trusts 8 (‘‘CEITs’’). According to the Registration Statement, the Sub-Adviser’s priority will be to focus on steady fee-for-service income and will limit the cyclical energy exposure of the portfolio in order to reduce the volatility of returns. The Fund may invest in U.S. dollardenominated, exchange-listed depositary receipts and U.S. dollardenominated foreign (primarily Canadian) equity securities.9 The Fund’s investments may include American Depositary Receipts (‘‘ADRs’’), Global Depositary Receipts (‘‘GDRs’’), European Depositary Receipts (‘‘EDRs’’) or other depositary receipts (collectively ‘‘Depositary Receipts’’), or New York Shares or Global shares.10 8 CEITs are Canadian trusts that own or invest in companies engaged in activities in the energy infrastructure sector, including the exploration, mining, production, processing, transportation and storage of energy-related resources. According to the Registration Statement, an investment in units of CEITs involves risks which differ from an investment in common stock of a corporation. CEITs generally pass revenue on to unit holders rather than reinvesting in the business, which may lead to the sacrifice of potential growth. CEITs generally do not guarantee minimum distributions or return of capital. If the assets underlying a CEIT do not perform as expected, the CEIT may reduce or eliminate distributions. The declaration of such distributions generally depends upon various factors, including the operating performance and financial condition of the CEITs and general economic conditions. 9 The foreign equity securities in which the Fund may invest, including any Depositary Receipts (as defined herein) and/or New York Shares and Global shares, as described herein, will be limited to securities that trade in markets that are members of the Intermarket Surveillance Group (‘‘ISG’’), which includes all U.S. national securities exchanges and certain foreign exchanges, or are parties to a comprehensive surveillance sharing agreement with the Exchange. See note 27, infra. 10 According to the Registration Statement, ADRs are receipts typically issued by an American bank or trust company that evidence ownership of underlying securities issued by a foreign corporation. EDRs are receipts issued by a European bank or trust company evidencing ownership of securities issued by a foreign corporation. New York Shares are typically issued by a company incorporated in the Netherlands and represent a direct interest in the company. GDRs are receipts issued throughout the world that evidence a similar arrangement. ADRs, EDRs, and GDRs may trade in foreign currencies that differ from the currency the underlying security for each ADR, EDR, or GDR principally trades in. Generally, ADRs and New York Shares, in registered form, are designed for use in the U.S. securities markets. EDRs, in registered form, are used to access European markets. GDRs, in registered form, are traded both in the United States and in Europe and are designed for use throughout the world. Global shares are the actual (ordinary) shares of a non-U.S. company which trade both in the home market and the United States. Global shares are represented by the same share certificate in the United States and the home market. Separate registrars in the United States and the home country are maintained. In most cases, purchases occurring on a U.S. exchange would be reflected on the U.S. registrar. Global shares may also be eligible to list on exchanges in addition to the United States and the home country. VerDate Mar<15>2010 16:19 Apr 02, 2012 Jkt 226001 20081 The Fund may invest in MLPs, which are limited partnerships whose shares (or common units) are listed and traded on a U.S. securities exchange. To qualify to be treated as a partnership for federal income tax purposes, such an MLP must receive at least 90% of its income from qualifying sources such as natural resource activities. Natural resource activities include the exploration, development, mining, production, processing, refining, transportation, storage, and marketing of mineral or natural resources.11 The Fund may invest in Energy MLPs, which can generally be classified as Midstream MLPs, Propane MLPs, and Coal MLPs. Midstream MLP natural gas services include the treating, gathering, compression, processing, transmission, and storage of natural gas and the transportation, fractionation, and storage of natural gas liquids (‘‘NGLs’’) (primarily propane, ethane, butane, and natural gasoline). Midstream MLP crude oil services include the gathering, transportation, storage, and terminalling of crude oil. Midstream MLP refined petroleum product services include the transportation (usually via pipelines, barges, rail cars, and trucks), storage, and terminalling of refined petroleum products (primarily gasoline, diesel fuel, and jet fuel) and other hydrocarbon byproducts. Midstream MLPs may also operate ancillary businesses, including the marketing of the products and logistical services. Propane MLP services include the distribution of propane to homeowners for space and water heating and to commercial, industrial, and agricultural customers. Propane serves approximately 3% of the household energy needs in the United States, largely for homes beyond the geographic reach of natural gas distribution pipelines. Volumes are weather dependent, and a majority of annual cash flow is earned during the winter heating season (October through March). Coal MLP services include the owning, leasing, managing, production, and sale of coal and coal reserves. Electricity generation is the primary use of coal in the United States. Demand for electricity and supply of alternative fuels to generators are the primary drivers of coal demand. The Fund may invest in MLP subordinated units, which are typically issued by MLPs to their original sponsors, such as their founders, corporate general partners of MLPs, entities that sell assets to the MLP, and institutional investors. The Fund may invest in I–Shares, which represent an ownership interest issued by an affiliated party of an MLP. The MLP affiliate uses the proceeds from the sale of I–Shares to purchase limited partnership interests in the MLP in the form of i-units. I-units have similar features as MLP common units in terms of voting rights, liquidation preference, and distributions. However, rather than receiving cash, the MLP affiliate receives additional i-units in an amount equal to the cash distributions received by MLP common units. Similarly, holders of I–Shares will receive additional I–Shares, in the same proportion as the MLP affiliates’ receipt of i-units, rather than cash distributions. I–Shares themselves have limited voting rights, which are similar to those applicable to MLP common units. I– Shares are listed and traded on the New York Stock Exchange LLC (‘‘NYSE’’) and NYSE Amex LLC. The Fund may invest in securities of other U.S. and Canadian-listed and traded open-end or closed-end investment companies, including exchange-traded funds that are registered under the 1940 Act (‘‘ETFs’’), such as ETFs listed on the Exchange under NYSE Arca Equities Rules 5.2(j)(3) and 8.600, that invest primarily in securities of the types in which the Fund may invest directly. The Fund also may invest in other types of U.S. exchange-traded products, such as exchange traded notes (‘‘ETNs’’) and exchange-traded pooled investment vehicles (collectively, with ETNs, ‘‘Underlying ETPs’’).12 The Fund may invest in the securities of ETFs in excess of the limits imposed under the 1940 Act pursuant to exemptive orders obtained by such ETFs and their sponsors from the Commission. Securities of other investment companies may be leveraged; such investments will not be 11 According to the Registration Statement, MLPs generally have two classes of owners, the general partner and limited partners. The general partner, which is generally a major energy company, investment fund, or the management of the MLP, typically controls the MLP through a 2% general partner equity interest in the MLP plus common units and subordinated units. Limited partners own the remainder of the partnership, through ownership of common units, and have a limited role in the partnership’s operations and management. 12 Underlying ETPs, which will be listed on a national securities exchange, include the following: Index-Linked Securities (as described in NYSE Arca Equities Rule 5.2(j)(6)); Trust Issued Receipts (as described in NYSE Arca Equities Rule 8.200); Commodity-Based Trust Shares (as described in NYSE Arca Equities Rule 8.201); Currency Trust Shares (as described in NYSE Arca Equities Rule 8.202); Commodity Index Trust Shares (as described in NYSE Arca Equities Rule 8.203); Trust Units (as described in NYSE Arca Equities Rule 8.500); and closed-end funds. PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 E:\FR\FM\03APN1.SGM 03APN1 20082 Federal Register / Vol. 77, No. 64 / Tuesday, April 3, 2012 / Notices used to enhance leverage and will be consistent with the Fund’s investment objective. Under normal market conditions, the Fund will invest substantially all of its assets to meet its investment objective. The Fund may invest the remainder of its assets in securities with maturities of less than one year or cash equivalents, or it may hold cash, as described below. The percentage of the Fund invested in such holdings will vary and depend on several factors, including market conditions. mstockstill on DSK4VPTVN1PROD with NOTICES Other Investments Cash Equivalents and Short-Term Investments According to the Registration Statement, for temporary defensive purposes and during periods of high cash inflows or outflows, the Fund may depart from its principal investment strategies and invest part or all of its assets in securities with maturities of less than one year or cash or cash equivalents. The Fund may adopt a defensive strategy when the portfolio managers believe securities in which the Fund normally invests have elevated risks due to political or economic factors and in other extraordinary circumstances. The Fund may, without limit as to percentage of assets, purchase U.S. Government securities or shortterm debt securities to keep cash on hand fully invested or for temporary defensive purposes. Short-term debt securities are securities from issuers having a long-term debt rating of at least A by Standard & Poor’s Ratings Group (‘‘S&P Ratings’’), Moody’s Investors Service, Inc. (‘‘Moody’s’’), or Fitch, Inc. (‘‘Fitch’’) and having a maturity of one year or less. According to the Registration Statement, short-term debt securities are defined to include, without limitation, the following: 1. U.S. Government securities, including bills, notes, and bonds differing as to maturity and rates of interest, which are either issued or guaranteed by the U.S. Treasury or by U.S. Government agencies or instrumentalities, as described further in the Registration Statement. 2. Certificates of deposit issued against funds deposited in a bank or savings and loan association. 3. Bankers’ acceptances, which are short-term credit instruments used to finance commercial transactions. 4. Repurchase agreements, which involve purchases of debt securities.13 13 In such an action, at the time the Fund purchases the security, it will simultaneously agree to resell and redeliver the security to the seller, who VerDate Mar<15>2010 16:19 Apr 02, 2012 Jkt 226001 5. Bank time deposits, which are monies kept on deposit with banks or savings and loan associations for a stated period of time at a fixed rate of interest. There may be penalties for the early withdrawal of such time deposits, in which case the yields of these investments will be reduced. 6. Commercial paper, which are shortterm unsecured promissory notes. The Fund will not invest in any master demand notes. The use of temporary investments will not be a part of a principal investment strategy of the Fund. The Fund may invest in shares of money market funds to the extent permitted by the 1940 Act. Investments in Derivatives In accordance with the Exemptive Order, the Fund may invest up to 35% of its net assets in futures (‘‘Futures’’ or ‘‘Futures Contracts’’), interest rate swaps, total return swaps, non-U.S. currency swaps, credit default swaps, options, and other derivative instruments to seek to enhance return, to hedge some of the risks of their investments in securities, as a substitute for a position in the underlying asset, to reduce transaction costs, to maintain full market exposure (which means to adjust the characteristics of their investments to more closely approximate those of the markets in which they invest), to manage cash flows, to limit exposure to losses due to changes to non-U.S. currency exchange rates, or to preserve capital. Notwithstanding the Exemptive Order, the Fund, under normal market conditions, will not invest more than 20% of its net assets in such instruments. In connection with hedging activities in which the Fund may engage, First Trust may cause the Fund to utilize a variety of financial also simultaneously will agree to buy back the security at a fixed price and time. The Fund may enter into repurchase agreements only with respect to obligations of the U.S. Government, its agencies, or instrumentalities; certificates of deposit; or bankers acceptances in which the Fund may invest. In addition, the Fund may only enter into repurchase agreements where the market value of the purchased securities/collateral equals at least 100% of principal including accrued interest and is marked-to-market daily. The Fund intends to enter into repurchase agreements only with financial institutions and dealers believed by First Trust to present minimal credit risks in accordance with criteria established by the Trust’s Board of Trustees (‘‘Board’’). First Trust will review and monitor the creditworthiness of such institutions. First Trust will monitor the value of the collateral at the time the action is entered into and at all times during the term of the repurchase agreement. First Trust will do so in an effort to determine that the value of the collateral always equals or exceeds the agreed-upon repurchase price to be paid to the Fund. PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 instruments, including options, forward contracts, Futures Contracts, and options on Futures Contracts to attempt to hedge the Fund’s holdings.14 The use of Futures is not a part of a principal investment strategy of the Fund.15 The Fund may use derivative investments to hedge against interest rate and market risks. The Fund may engage in various interest rate and currency hedging transactions, including buying or selling options or entering into other transactions including forward contracts, swaps and other derivatives transactions. The Fund may also engage in certain transactions intended to hedge its exposure to currency risks due to foreign currency denominated investments. The Fund may sell covered calls on equity positions in the portfolio in order to enhance its income. The Fund may purchase stock index options, sell stock index options in order to close out existing positions, and/or write covered options on stock indices for hedging purposes. Stock index options are put options and call options on various stock indices. The Fund may enter into Futures Contracts, including index Futures as a hedge against movements in the equity markets, in order to hedge against changes on securities held or intended to be acquired by the Fund or for other purposes permissible under the Commodity Exchange Act (‘‘CEA’’).16 The Fund’s hedging may include sales of Futures as an offset against the effect of expected declines in stock prices and purchases of Futures as an offset against the effect of expected increases in stock prices. The Fund will not enter into Futures Contracts which are prohibited under the CEA and will, to the extent required by regulatory authorities, enter only into Futures Contracts that are 14 According to the Registration Statement, the Trust has filed a notice of eligibility for exclusion from the definition of the term ‘‘commodity pool operator’’ with the National Futures Association. The Fund will not enter into Futures and options transactions if the sum of the initial margin deposits and premiums paid for unexpired options exceeds 5% of the Fund’s total assets. 15 Hedging or derivative instruments on securities generally will be used to hedge against price movements in one or more particular securities positions that the Fund owns or intends to acquire. Such instruments may also be used to ‘‘lock-in’’ realized but unrecognized gains in the value of portfolio securities. Hedging instruments on stock indices, in contrast, generally are used to hedge against price movements in broad equity market sectors in which the Fund has invested or expects to invest. The use of hedging instruments is subject to applicable regulations of the Commission, the several options and Futures exchanges upon which they are traded, the Commodity Futures Trading Commission (‘‘CFTC’’) and various state regulatory authorities. 16 7 U.S.C. 1 et seq. E:\FR\FM\03APN1.SGM 03APN1 Federal Register / Vol. 77, No. 64 / Tuesday, April 3, 2012 / Notices traded on national Futures exchanges and are standardized as to maturity date and underlying financial instrument. The principal interest rate Futures exchanges in the United States are the Chicago Board of Trade and the Chicago Mercantile Exchange. The Fund may also purchase or write put and call options on Futures Contracts and enter into closing transactions with respect to such options to terminate an existing position. The Fund may use options on Futures Contracts in connection with hedging strategies. Generally, these strategies would be applied under the same market and market sector conditions in which the Fund uses put and call options on securities or indices. The Fund may invest in companies that are considered to be ‘‘passive foreign investment companies’’ (‘‘PFICs’’), which are generally certain non-U.S. corporations that receive at least 75% of their annual gross income from passive sources (such as interest, dividends, certain rents and royalties or capital gains) or that hold at least 50% of their assets in investments producing such passive income.17 The Fund may not invest 25% or more of the value of its total assets in securities of issuers in any one industry or group of industries. This restriction does not apply to securities issued by energy infrastructure companies or obligations issued or guaranteed by the U.S. Government, its agencies, or instrumentalities. Accordingly, the Fund will concentrate its investments in energy infrastructure companies.18 The Fund may hold illiquid securities (i.e., securities that are not readily marketable).19 For purposes of this 17 See note 9, supra, and note 27, infra. 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). 19 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 fund. 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 of 1933). mstockstill on DSK4VPTVN1PROD with NOTICES 18 See VerDate Mar<15>2010 16:19 Apr 02, 2012 Jkt 226001 restriction, illiquid securities include, but are not limited to, restricted securities (securities the disposition of which is restricted under the federal securities laws), securities that may only be resold pursuant to Rule 144A under the Securities Act of 1933, and repurchase agreements with maturities in excess of seven days. However, the Fund will not hold illiquid securities if, as a result, such securities would comprise more than 15% of the value of the Fund’s net assets. The Fund intends to qualify annually and to elect to be treated as a regulated investment company (‘‘RIC’’) under the Internal Revenue Code of 1986, as amended.20 Creations and Redemptions The Fund will issue and redeem Shares on a continuous basis, at net asset value (‘‘NAV’’), only in large specified blocks each consisting of 50,000 Shares (each such block of Shares, called a ‘‘Creation Unit’’). Each group of Creation Units is referred to as a ‘‘Creation Unit Aggregation.’’ The Creation Units will be issued and redeemed for securities in which the Fund invests, cash or both securities and cash. The consideration for purchase of Creation Unit Aggregations of the Fund may consist of (i) cash in lieu of all or a portion of the Deposit Securities, as 20 26 U.S.C. 851. According to the Registration Statement, to qualify for the favorable U.S. federal income tax treatment generally accorded to RICs, the Fund 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 or other income derived with respect to its business of investing in such stock, securities or currencies, or net income derived from interests in certain publicly traded partnerships; (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 and cash items (including receivables), U.S. Government securities, the securities of other RICs and other securities, with such other securities of any one issuer generally limited for the purposes of this calculation to an amount not greater than 5% of the value of the Fund’s total assets and not greater than 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 (other than U.S. Government securities or the securities of other RICs) of any one issuer, or two or more issuers which the Fund controls which are engaged in the same, similar or related trades or businesses, or the securities of one or more of certain publicly traded partnerships; and (c) distribute at least 90% of its investment company taxable income (which includes, among other items, dividends, interest and net short-term capital gains in excess of net long-term capital losses) and at least 90% of its net tax-exempt interest income each taxable year. There are certain exceptions for failure to qualify if the failure is for reasonable cause or its de minimis, and certain action is taken and certain tax payments are made by the Fund. PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 20083 defined below, and/or (ii) a designated portfolio of equity securities determined by First Trust or the Sub-Adviser—the ‘‘Deposit Securities’’—per each Creation Unit Aggregation (‘‘Fund Securities’’) and generally an amount of cash—the ‘‘Cash Component.’’ Together, the Deposit Securities and the Cash Component (including the cash in lieu amount) constitute the ‘‘Fund Deposit,’’ which represents the minimum initial and subsequent investment amount for a Creation Unit Aggregation of the Fund. BNY, through the National Securities Clearing Corporation (‘‘NSCC’’) (as discussed below), will make available on each business day, prior to the opening of business of the NYSE (currently 9:30 a.m., Eastern time (‘‘E.T.’’)), the list of the names and the required number of shares of each Deposit Security to be included in the current Fund Deposit (based on information at the end of the previous business day) for the Fund. In addition to the list of names and numbers of securities constituting the current Deposit Securities of a Fund Deposit, BNY, through the NSCC, also will make available on each business day, the estimated Cash Component, effective through and including the previous business day, per outstanding Creation Unit Aggregation of the Fund. All orders to create Creation Unit Aggregations must be received by the transfer agent no later than the closing time of the regular trading session on the NYSE (‘‘Closing Time’’) (ordinarily 4 p.m., E.T.) in each case on the date such order is placed in order for creation of Creation Unit Aggregations to be effected based on the NAV of Shares of the Fund as next determined on such date after receipt of the order in proper form. Fund Shares may be redeemed only in Creation Unit Aggregations at their NAV next determined after receipt of a redemption request in proper form by the Fund through the transfer agent and only on a business day. The Fund will not redeem Shares in amounts less than Creation Unit Aggregations. Beneficial owners must accumulate enough Shares in the secondary market to constitute a Creation Unit Aggregation in order to have such Shares redeemed by the Trust. With respect to the Fund, BNY, through the NSCC, will make available prior to the opening of business on the NYSE (currently 9:30 a.m., E.T.) on each business day, the identity of the Fund Securities that will be applicable (subject to possible amendment or correction) to redemption requests received in proper form (as described below) on that day. Fund Securities received on redemption may not be E:\FR\FM\03APN1.SGM 03APN1 20084 Federal Register / Vol. 77, No. 64 / Tuesday, April 3, 2012 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES identical to Deposit Securities that are applicable to creations of Creation Unit Aggregations. Unless cash redemptions are available or specified for the Fund, the redemption proceeds for a Creation Unit Aggregation generally will consist of Fund Securities—as announced on the business day of the request for redemption received in proper form— plus or minus cash in an amount equal to the difference between the NAV of the Fund Shares being redeemed, as next determined after a receipt of a request in proper form, and the value of the Fund Securities (the ‘‘Cash Redemption Amount’’), less the applicable redemption transaction fee as described in the Registration Statement and, if applicable, any operational processing and brokerage costs, transfer fees, or stamp taxes. 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,21 as provided by NYSE Arca Equities Rule 5.3. A minimum of 100,000 Shares for the Fund 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 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. Availability of Information The Fund’s Web site (www.ftportfolios.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 Fund’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’’),22 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 21 17 CFR 240.10A–3. Bid/Ask Price of the Fund will be 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. 22 The VerDate Mar<15>2010 16:19 Apr 02, 2012 Jkt 226001 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. to 4 p.m., E.T.) on the Exchange, the Fund will disclose on its 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.23 On a daily basis, the Adviser will disclose for each portfolio security or other financial instrument of the Fund the following information on the Fund’s Web site: Ticker symbol (if applicable), name of security or financial instrument, number of shares or dollar value of securities and 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, a basket composition file, which includes the security names and share quantities required to be delivered in exchange for the Fund’s Shares, together with estimates and actual cash components, will be publicly disseminated daily prior to the opening of the NYSE via NSCC. The basket represents one Creation Unit of the Fund. In addition, the Portfolio Indicative Value (‘‘PIV’’), as defined in NYSE Arca Equities Rule 8.600(c)(3), will be widely disseminated by one or more major market data vendors during the Core Trading Session.24 The dissemination of the PIV, 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. The PIV should not be viewed as a ‘‘realtime’’ update of the NAV per Share of the Fund because the PIV may not be calculated in the same manner as the NAV, which is computed once a day, generally at the end of the business day. The price of a non-U.S. security that is primarily traded on a non-U.S. exchange shall be updated, using the last sale price, every 15 seconds throughout the trading day, provided that, upon the closing of such non-U.S. exchange, the closing price of the security, after being converted to U.S. dollars, will be used. 23 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. 24 Currently, it is the Exchange’s understanding that several major market data vendors widely disseminate PIVs taken from the Consolidated Tape Association (‘‘CTA’’) or other data feeds. PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 Furthermore, in calculating the PIV of the Fund’s Shares, exchange rates may be used throughout the day (9 a.m. to 4:15 p.m., E.T.) that may differ from those used to calculate the NAV per Share of the Fund and, consequently, may result in differences between the NAV and the PIV. Investors can also obtain the Trust’s Statement of Additional Information (‘‘SAI’’), the Fund’s Shareholder Reports, and the Trust’s 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 CTA high-speed line. The intra-day, closing, and settlement prices of the portfolio securities will also be readily available from the securities exchanges trading such securities, automated quotation systems, published or other public sources, or on-line information services such as Bloomberg or Reuters. The Fund’s NAV will be determined as of the close of trading (normally 4 p.m., E.T.) on each day the NYSE is open for business. NAV will be calculated for the Fund by taking the market price of the Fund’s total assets, including interest or dividends accrued but not yet collected, less all liabilities, and dividing such amount by the total number of Shares outstanding. The result, rounded to the nearest cent, will be the NAV per Share. All valuations will be subject to review by the Trust’s Board or its delegate.25 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 25 The Fund’s investments will be valued at market value or, in the absence of market value with respect to any portfolio securities, at fair value in accordance with valuation procedures adopted by the Board and in accordance with the 1940 Act. E:\FR\FM\03APN1.SGM 03APN1 Federal Register / Vol. 77, No. 64 / Tuesday, April 3, 2012 / Notices change are defined in the Registration Statement. 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.26 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. mstockstill on DSK4VPTVN1PROD with NOTICES 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 26 See NYSE Arca Equities Rule 7.12, Commentary .04. VerDate Mar<15>2010 16:19 Apr 02, 2012 Jkt 226001 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.27 As noted above, the equity securities in which the Fund will invest will trade in markets that are ISG members or are parties to comprehensive surveillance sharing agreements with the Exchange.28 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 PIV will not be calculated or publicly disseminated; (4) how information regarding the PIV 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 p.m., E.T. each trading day. 27 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. 28 See note 9, supra. PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 20085 2. Statutory Basis The basis under the Exchange Act for this proposed rule change is the requirement under Section 6(b)(5) 29 that an exchange have rules that are designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to, and perfect the mechanism of a free and open market and, in general, to protect investors and the public interest. The Exchange believes that the proposed rule change 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 Adviser and Sub-Adviser have implemented a fire wall with respect to their respective broker-dealer affiliate regarding access to information concerning the composition and/or changes to the portfolio. 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. Under normal market conditions, the Fund will invest at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in exchangetraded equity securities of companies domiciled in the United States or Canada and deemed to be engaged in the energy infrastructure segment of the energy and utilities sectors. The Fund, under normal market conditions, will not invest more than 20% of its net assets in futures, interest rate swaps, total return swaps, non-U.S. currency swaps, credit default swaps, options, and other derivative instruments. While the Fund may invest in securities of other investment companies that are leveraged, such investments will not be use to enhance leverage and will be consistent with the Fund’s investment objective. The Fund will not hold illiquid securities if, as a result, such securities would comprise more than 15% of the value of the Fund’s net assets. The equity securities in which the Fund will invest will trade in markets that are ISG members or are parties to comprehensive surveillance sharing agreements with the Exchange. 29 15 E:\FR\FM\03APN1.SGM U.S.C. 78f(b)(5). 03APN1 mstockstill on DSK4VPTVN1PROD with NOTICES 20086 Federal Register / Vol. 77, No. 64 / Tuesday, April 3, 2012 / Notices 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. Moreover, the PIV 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 its Web site the Disclosed Portfolio that will form the basis for the Fund’s calculation of NAV at the end of the business day. The intra-day, closing, and settlement prices of the portfolio securities will also be readily available from the securities exchanges trading such securities, automated quotation systems, published or other public sources, or on-line information services. 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 Web site for the Fund 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 PIV, 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 VerDate Mar<15>2010 16:19 Apr 02, 2012 Jkt 226001 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 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 PIV, 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 the 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: • Send an email to rulecomments@sec.gov. Please include File Number SR–NYSEArca–2012–21 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEArca–2012–21. 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 Section, 100 F Street NE., Washington, DC 20549–1090, on official business days between 10 a.m. and 3 p.m. Copies of the filing will also be available for inspection and copying at the NYSE’s principal office and on its Internet Web site at www.nyse.com. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NYSEArca–2012–21 and should be submitted on or before April 24, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.30 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–7894 Filed 4–2–12; 8:45 am] BILLING CODE 8011–01–P Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or PO 00000 Frm 00092 Fmt 4703 Sfmt 9990 30 17 E:\FR\FM\03APN1.SGM CFR 200.30–3(a)(12). 03APN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 77, Number 64 (Tuesday, April 3, 2012)]
[Notices]
[Pages 20079-20086]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-7894]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66669; File No. SR-NYSEArca-2012-21]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change Relating To the Listing and Trading of the
First Trust North American Infrastructure Fund Under NYSE Arca Equities
Rule 8.600

March 28, 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 March 13, 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, II,
and III below, which Items have been substantially 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

The Exchange proposes to list and trade shares of the following
under NYSE Arca Equities Rule 8.600 (``Managed Fund Shares''): First
Trust North American Infrastructure Fund. The text of the proposed rule
change is available at the Exchange, the Commission's Public Reference
Room, and www.nyse.com.

[[Page 20080]]

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 shares (``Shares'') of
the First Trust North American Infrastructure Fund (``Fund'') under
NYSE Arca Equities Rule 8.600, which governs the listing and trading of
Managed Fund Shares.\3\ The Shares will be offered by First Trust
Exchange-Traded Fund IV (``Trust''), which is organized as a
Massachusetts business trust and is registered with the Commission as
an open-end management investment company.\4\ The investment adviser to
the Fund will be First Trust Advisors L.P. (``Adviser'' or ``First
Trust''). Energy Income Partners LLC will serve as investment sub-
adviser to the Fund (``Sub-Adviser'') and provide day-to-day portfolio
management of the Fund. First Trust Portfolios L.P. (``Distributor'')
will be the principal underwriter and distributor of the Fund's Shares.
Bank of New York Mellon (``Administrator'' or ``BNY'') will serve as
administrator, custodian, and transfer agent for the Fund.\5\
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\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 Trust is registered under the 1940 Act. On July 19,
2011, the Trust filed with the Commission a registration statement
on Form N-1A under the Securities Act of 1933 (15 U.S.C. 77a) and
under the 1940 Act relating to the Fund (File Nos. 333-174332 and
811-22559) (``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. 28468 (October 27, 2008)
(File No. 812-13477) (``Exemptive Order'').
\5\ The Commission has previously approved listing and trading
on the Exchange of a number of 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 listing of
Dent Tactical ETF); 62502 (July 15, 2010), 75 FR 42471 (July 21,
2010) (SR-NYSEArca-2010-57) (order approving listing of
AdviserShares WCM/BNY Mellon Focused Growth ADR ETF); 63076 (October
12, 2010), 75 FR 63874 (October 18, 2010) (SR-NYSEArca-2010-79)
(order approving listing of Cambria Global Tactical ETF).
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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. 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.\6\ Commentary .06 to Rule
8.600 is similar to Commentary .03(a)(i) and (iii) to NYSE Arca
Equities Rule 5.2(j)(3); however, Commentary .06 in connection with the
establishment of a ``fire wall'' between the investment adviser and the
broker-dealer reflects the applicable open-end fund's portfolio, not an
underlying benchmark index, as is the case with index-based funds. The
Adviser is affiliated with First Trust Portfolios L.P., a broker-
dealer, and has implemented a fire wall with respect to its broker-
dealer affiliate regarding access to information concerning the
composition and/or changes to the portfolio. In addition, the Sub-
Adviser is affiliated with a broker-dealer and has implemented a fire
wall with respect to such broker-dealer affiliate regarding access to
information concerning the composition and/or changes to the portfolio.
In the event (a) the Adviser or the 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.
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\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 Sub-Adviser and their 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.
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According to the Registration Statement, the Fund's investment
objective is to seek total return with an emphasis on current
distributions and dividends paid to shareholders. Under normal market
conditions,\7\ the Fund will invest at least 80% of its net assets
(plus the amount of any borrowings for investment purposes) in
exchange-traded equity securities of companies domiciled in the United
States or Canada and deemed to be engaged in the energy infrastructure
segment of the energy and utilities sectors. Equity securities include
common stocks; preferred securities; warrants to purchase common stocks
or preferred securities; securities convertible into common stocks or
preferred securities; and other securities with equity characteristics.
Such securities may include depositary receipts, master limited
partnerships (``MLPs''), MLP I-shares (``I-Shares'') (as described
below), MLP subordinated units (as described below), securities of
pipeline and power utility companies, and securities of Canadian energy
infrastructure companies and Canadian

[[Page 20081]]

Energy Infrastructure Trusts \8\ (``CEITs''). According to the
Registration Statement, the Sub-Adviser's priority will be to focus on
steady fee-for-service income and will limit the cyclical energy
exposure of the portfolio in order to reduce the volatility of returns.
---------------------------------------------------------------------------

\7\ The term ``under normal market conditions'' includes, but is
not limited to, the absence of extreme volatility or trading halts
in the equity 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\ CEITs are Canadian trusts that own or invest in companies
engaged in activities in the energy infrastructure sector, including
the exploration, mining, production, processing, transportation and
storage of energy-related resources. According to the Registration
Statement, an investment in units of CEITs involves risks which
differ from an investment in common stock of a corporation. CEITs
generally pass revenue on to unit holders rather than reinvesting in
the business, which may lead to the sacrifice of potential growth.
CEITs generally do not guarantee minimum distributions or return of
capital. If the assets underlying a CEIT do not perform as expected,
the CEIT may reduce or eliminate distributions. The declaration of
such distributions generally depends upon various factors, including
the operating performance and financial condition of the CEITs and
general economic conditions.
---------------------------------------------------------------------------

The Fund may invest in U.S. dollar-denominated, exchange-listed
depositary receipts and U.S. dollar-denominated foreign (primarily
Canadian) equity securities.\9\ The Fund's investments may include
American Depositary Receipts (``ADRs''), Global Depositary Receipts
(``GDRs''), European Depositary Receipts (``EDRs'') or other depositary
receipts (collectively ``Depositary Receipts''), or New York Shares or
Global shares.\10\
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\9\ The foreign equity securities in which the Fund may invest,
including any Depositary Receipts (as defined herein) and/or New
York Shares and Global shares, as described herein, will be limited
to securities that trade in markets that are members of the
Intermarket Surveillance Group (``ISG''), which includes all U.S.
national securities exchanges and certain foreign exchanges, or are
parties to a comprehensive surveillance sharing agreement with the
Exchange. See note 27, infra.
\10\ According to the Registration Statement, ADRs are receipts
typically issued by an American bank or trust company that evidence
ownership of underlying securities issued by a foreign corporation.
EDRs are receipts issued by a European bank or trust company
evidencing ownership of securities issued by a foreign corporation.
New York Shares are typically issued by a company incorporated in
the Netherlands and represent a direct interest in the company. GDRs
are receipts issued throughout the world that evidence a similar
arrangement. ADRs, EDRs, and GDRs may trade in foreign currencies
that differ from the currency the underlying security for each ADR,
EDR, or GDR principally trades in. Generally, ADRs and New York
Shares, in registered form, are designed for use in the U.S.
securities markets. EDRs, in registered form, are used to access
European markets. GDRs, in registered form, are traded both in the
United States and in Europe and are designed for use throughout the
world. Global shares are the actual (ordinary) shares of a non-U.S.
company which trade both in the home market and the United States.
Global shares are represented by the same share certificate in the
United States and the home market. Separate registrars in the United
States and the home country are maintained. In most cases, purchases
occurring on a U.S. exchange would be reflected on the U.S.
registrar. Global shares may also be eligible to list on exchanges
in addition to the United States and the home country.
---------------------------------------------------------------------------

The Fund may invest in MLPs, which are limited partnerships whose
shares (or common units) are listed and traded on a U.S. securities
exchange. To qualify to be treated as a partnership for federal income
tax purposes, such an MLP must receive at least 90% of its income from
qualifying sources such as natural resource activities. Natural
resource activities include the exploration, development, mining,
production, processing, refining, transportation, storage, and
marketing of mineral or natural resources.\11\
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\11\ According to the Registration Statement, MLPs generally
have two classes of owners, the general partner and limited
partners. The general partner, which is generally a major energy
company, investment fund, or the management of the MLP, typically
controls the MLP through a 2% general partner equity interest in the
MLP plus common units and subordinated units. Limited partners own
the remainder of the partnership, through ownership of common units,
and have a limited role in the partnership's operations and
management.
---------------------------------------------------------------------------

The Fund may invest in Energy MLPs, which can generally be
classified as Midstream MLPs, Propane MLPs, and Coal MLPs.
Midstream MLP natural gas services include the treating, gathering,
compression, processing, transmission, and storage of natural gas and
the transportation, fractionation, and storage of natural gas liquids
(``NGLs'') (primarily propane, ethane, butane, and natural gasoline).
Midstream MLP crude oil services include the gathering, transportation,
storage, and terminalling of crude oil. Midstream MLP refined petroleum
product services include the transportation (usually via pipelines,
barges, rail cars, and trucks), storage, and terminalling of refined
petroleum products (primarily gasoline, diesel fuel, and jet fuel) and
other hydrocarbon by-products. Midstream MLPs may also operate
ancillary businesses, including the marketing of the products and
logistical services.
Propane MLP services include the distribution of propane to
homeowners for space and water heating and to commercial, industrial,
and agricultural customers. Propane serves approximately 3% of the
household energy needs in the United States, largely for homes beyond
the geographic reach of natural gas distribution pipelines. Volumes are
weather dependent, and a majority of annual cash flow is earned during
the winter heating season (October through March).
Coal MLP services include the owning, leasing, managing,
production, and sale of coal and coal reserves. Electricity generation
is the primary use of coal in the United States. Demand for electricity
and supply of alternative fuels to generators are the primary drivers
of coal demand.
The Fund may invest in MLP subordinated units, which are typically
issued by MLPs to their original sponsors, such as their founders,
corporate general partners of MLPs, entities that sell assets to the
MLP, and institutional investors.
The Fund may invest in I-Shares, which represent an ownership
interest issued by an affiliated party of an MLP. The MLP affiliate
uses the proceeds from the sale of I-Shares to purchase limited
partnership interests in the MLP in the form of i-units. I-units have
similar features as MLP common units in terms of voting rights,
liquidation preference, and distributions. However, rather than
receiving cash, the MLP affiliate receives additional i-units in an
amount equal to the cash distributions received by MLP common units.
Similarly, holders of I-Shares will receive additional I-Shares, in the
same proportion as the MLP affiliates' receipt of i-units, rather than
cash distributions. I-Shares themselves have limited voting rights,
which are similar to those applicable to MLP common units. I-Shares are
listed and traded on the New York Stock Exchange LLC (``NYSE'') and
NYSE Amex LLC.
The Fund may invest in securities of other U.S. and Canadian-listed
and traded open-end or closed-end investment companies, including
exchange-traded funds that are registered under the 1940 Act
(``ETFs''), such as ETFs listed on the Exchange under NYSE Arca
Equities Rules 5.2(j)(3) and 8.600, that invest primarily in securities
of the types in which the Fund may invest directly. The Fund also may
invest in other types of U.S. exchange-traded products, such as
exchange traded notes (``ETNs'') and exchange-traded pooled investment
vehicles (collectively, with ETNs, ``Underlying ETPs'').\12\
---------------------------------------------------------------------------

\12\ Underlying ETPs, which will be listed on a national
securities exchange, include the following: Index-Linked Securities
(as described in NYSE Arca Equities Rule 5.2(j)(6)); Trust Issued
Receipts (as described in NYSE Arca Equities Rule 8.200); Commodity-
Based Trust Shares (as described in NYSE Arca Equities Rule 8.201);
Currency Trust Shares (as described in NYSE Arca Equities Rule
8.202); Commodity Index Trust Shares (as described in NYSE Arca
Equities Rule 8.203); Trust Units (as described in NYSE Arca
Equities Rule 8.500); and closed-end funds.
---------------------------------------------------------------------------

The Fund may invest in the securities of ETFs in excess of the
limits imposed under the 1940 Act pursuant to exemptive orders obtained
by such ETFs and their sponsors from the Commission. Securities of
other investment companies may be leveraged; such investments will not
be

[[Page 20082]]

used to enhance leverage and will be consistent with the Fund's
investment objective.
Under normal market conditions, the Fund will invest substantially
all of its assets to meet its investment objective. The Fund may invest
the remainder of its assets in securities with maturities of less than
one year or cash equivalents, or it may hold cash, as described below.
The percentage of the Fund invested in such holdings will vary and
depend on several factors, including market conditions.
Other Investments
Cash Equivalents and Short-Term Investments
According to the Registration Statement, for temporary defensive
purposes and during periods of high cash inflows or outflows, the Fund
may depart from its principal investment strategies and invest part or
all of its assets in securities with maturities of less than one year
or cash or cash equivalents. The Fund may adopt a defensive strategy
when the portfolio managers believe securities in which the Fund
normally invests have elevated risks due to political or economic
factors and in other extraordinary circumstances. The Fund may, without
limit as to percentage of assets, purchase U.S. Government securities
or short-term debt securities to keep cash on hand fully invested or
for temporary defensive purposes. Short-term debt securities are
securities from issuers having a long-term debt rating of at least A by
Standard & Poor's Ratings Group (``S&P Ratings''), Moody's Investors
Service, Inc. (``Moody's''), or Fitch, Inc. (``Fitch'') and having a
maturity of one year or less.
According to the Registration Statement, short-term debt securities
are defined to include, without limitation, the following:
1. U.S. Government securities, including bills, notes, and bonds
differing as to maturity and rates of interest, which are either issued
or guaranteed by the U.S. Treasury or by U.S. Government agencies or
instrumentalities, as described further in the Registration Statement.
2. Certificates of deposit issued against funds deposited in a bank
or savings and loan association.
3. Bankers' acceptances, which are short-term credit instruments
used to finance commercial transactions.
4. Repurchase agreements, which involve purchases of debt
securities.\13\
---------------------------------------------------------------------------

\13\ In such an action, at the time the Fund purchases the
security, it will simultaneously agree to resell and redeliver the
security to the seller, who also simultaneously will agree to buy
back the security at a fixed price and time. The Fund may enter into
repurchase agreements only with respect to obligations of the U.S.
Government, its agencies, or instrumentalities; certificates of
deposit; or bankers acceptances in which the Fund may invest. In
addition, the Fund may only enter into repurchase agreements where
the market value of the purchased securities/collateral equals at
least 100% of principal including accrued interest and is marked-to-
market daily. The Fund intends to enter into repurchase agreements
only with financial institutions and dealers believed by First Trust
to present minimal credit risks in accordance with criteria
established by the Trust's Board of Trustees (``Board''). First
Trust will review and monitor the creditworthiness of such
institutions. First Trust will monitor the value of the collateral
at the time the action is entered into and at all times during the
term of the repurchase agreement. First Trust will do so in an
effort to determine that the value of the collateral always equals
or exceeds the agreed-upon repurchase price to be paid to the Fund.
---------------------------------------------------------------------------

5. Bank time deposits, which are monies kept on deposit with banks
or savings and loan associations for a stated period of time at a fixed
rate of interest. There may be penalties for the early withdrawal of
such time deposits, in which case the yields of these investments will
be reduced.
6. Commercial paper, which are short-term unsecured promissory
notes. The Fund will not invest in any master demand notes.
The use of temporary investments will not be a part of a principal
investment strategy of the Fund. The Fund may invest in shares of money
market funds to the extent permitted by the 1940 Act.
Investments in Derivatives
In accordance with the Exemptive Order, the Fund may invest up to
35% of its net assets in futures (``Futures'' or ``Futures
Contracts''), interest rate swaps, total return swaps, non-U.S.
currency swaps, credit default swaps, options, and other derivative
instruments to seek to enhance return, to hedge some of the risks of
their investments in securities, as a substitute for a position in the
underlying asset, to reduce transaction costs, to maintain full market
exposure (which means to adjust the characteristics of their
investments to more closely approximate those of the markets in which
they invest), to manage cash flows, to limit exposure to losses due to
changes to non-U.S. currency exchange rates, or to preserve capital.
Notwithstanding the Exemptive Order, the Fund, under normal market
conditions, will not invest more than 20% of its net assets in such
instruments. In connection with hedging activities in which the Fund
may engage, First Trust may cause the Fund to utilize a variety of
financial instruments, including options, forward contracts, Futures
Contracts, and options on Futures Contracts to attempt to hedge the
Fund's holdings.\14\ The use of Futures is not a part of a principal
investment strategy of the Fund.\15\
---------------------------------------------------------------------------

\14\ According to the Registration Statement, the Trust has
filed a notice of eligibility for exclusion from the definition of
the term ``commodity pool operator'' with the National Futures
Association. The Fund will not enter into Futures and options
transactions if the sum of the initial margin deposits and premiums
paid for unexpired options exceeds 5% of the Fund's total assets.
\15\ Hedging or derivative instruments on securities generally
will be used to hedge against price movements in one or more
particular securities positions that the Fund owns or intends to
acquire. Such instruments may also be used to ``lock-in'' realized
but unrecognized gains in the value of portfolio securities. Hedging
instruments on stock indices, in contrast, generally are used to
hedge against price movements in broad equity market sectors in
which the Fund has invested or expects to invest. The use of hedging
instruments is subject to applicable regulations of the Commission,
the several options and Futures exchanges upon which they are
traded, the Commodity Futures Trading Commission (``CFTC'') and
various state regulatory authorities.
---------------------------------------------------------------------------

The Fund may use derivative investments to hedge against interest
rate and market risks. The Fund may engage in various interest rate and
currency hedging transactions, including buying or selling options or
entering into other transactions including forward contracts, swaps and
other derivatives transactions. The Fund may also engage in certain
transactions intended to hedge its exposure to currency risks due to
foreign currency denominated investments. The Fund may sell covered
calls on equity positions in the portfolio in order to enhance its
income.
The Fund may purchase stock index options, sell stock index options
in order to close out existing positions, and/or write covered options
on stock indices for hedging purposes. Stock index options are put
options and call options on various stock indices. The Fund may enter
into Futures Contracts, including index Futures as a hedge against
movements in the equity markets, in order to hedge against changes on
securities held or intended to be acquired by the Fund or for other
purposes permissible under the Commodity Exchange Act (``CEA'').\16\
The Fund's hedging may include sales of Futures as an offset against
the effect of expected declines in stock prices and purchases of
Futures as an offset against the effect of expected increases in stock
prices. The Fund will not enter into Futures Contracts which are
prohibited under the CEA and will, to the extent required by regulatory
authorities, enter only into Futures Contracts that are

[[Page 20083]]

traded on national Futures exchanges and are standardized as to
maturity date and underlying financial instrument. The principal
interest rate Futures exchanges in the United States are the Chicago
Board of Trade and the Chicago Mercantile Exchange.
---------------------------------------------------------------------------

\16\ 7 U.S.C. 1 et seq.
---------------------------------------------------------------------------

The Fund may also purchase or write put and call options on Futures
Contracts and enter into closing transactions with respect to such
options to terminate an existing position.
The Fund may use options on Futures Contracts in connection with
hedging strategies. Generally, these strategies would be applied under
the same market and market sector conditions in which the Fund uses put
and call options on securities or indices.
The Fund may invest in companies that are considered to be
``passive foreign investment companies'' (``PFICs''), which are
generally certain non-U.S. corporations that receive at least 75% of
their annual gross income from passive sources (such as interest,
dividends, certain rents and royalties or capital gains) or that hold
at least 50% of their assets in investments producing such passive
income.\17\
---------------------------------------------------------------------------

\17\ See note 9, supra, and note 27, infra.
---------------------------------------------------------------------------

The Fund may not invest 25% or more of the value of its total
assets in securities of issuers in any one industry or group of
industries. This restriction does not apply to securities issued by
energy infrastructure companies or obligations issued or guaranteed by
the U.S. Government, its agencies, or instrumentalities. Accordingly,
the Fund will concentrate its investments in energy infrastructure
companies.\18\
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\18\ 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).
---------------------------------------------------------------------------

The Fund may hold illiquid securities (i.e., securities that are
not readily marketable).\19\ For purposes of this restriction, illiquid
securities include, but are not limited to, restricted securities
(securities the disposition of which is restricted under the federal
securities laws), securities that may only be resold pursuant to Rule
144A under the Securities Act of 1933, and repurchase agreements with
maturities in excess of seven days. However, the Fund will not hold
illiquid securities if, as a result, such securities would comprise
more than 15% of the value of the Fund's net assets.
---------------------------------------------------------------------------

\19\ 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 fund. 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 of 1933).
---------------------------------------------------------------------------

The Fund intends to qualify annually and to elect to be treated as
a regulated investment company (``RIC'') under the Internal Revenue
Code of 1986, as amended.\20\
---------------------------------------------------------------------------

\20\ 26 U.S.C. 851. According to the Registration Statement, to
qualify for the favorable U.S. federal income tax treatment
generally accorded to RICs, the Fund 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 or other income derived with respect to its
business of investing in such stock, securities or currencies, or
net income derived from interests in certain publicly traded
partnerships; (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 and cash items (including
receivables), U.S. Government securities, the securities of other
RICs and other securities, with such other securities of any one
issuer generally limited for the purposes of this calculation to an
amount not greater than 5% of the value of the Fund's total assets
and not greater than 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 (other than U.S. Government
securities or the securities of other RICs) of any one issuer, or
two or more issuers which the Fund controls which are engaged in the
same, similar or related trades or businesses, or the securities of
one or more of certain publicly traded partnerships; and (c)
distribute at least 90% of its investment company taxable income
(which includes, among other items, dividends, interest and net
short-term capital gains in excess of net long-term capital losses)
and at least 90% of its net tax-exempt interest income each taxable
year. There are certain exceptions for failure to qualify if the
failure is for reasonable cause or its de minimis, and certain
action is taken and certain tax payments are made by the Fund.
---------------------------------------------------------------------------

Creations and Redemptions
The Fund will issue and redeem Shares on a continuous basis, at net
asset value (``NAV''), only in large specified blocks each consisting
of 50,000 Shares (each such block of Shares, called a ``Creation
Unit''). Each group of Creation Units is referred to as a ``Creation
Unit Aggregation.'' The Creation Units will be issued and redeemed for
securities in which the Fund invests, cash or both securities and cash.
The consideration for purchase of Creation Unit Aggregations of the
Fund may consist of (i) cash in lieu of all or a portion of the Deposit
Securities, as defined below, and/or (ii) a designated portfolio of
equity securities determined by First Trust or the Sub-Adviser--the
``Deposit Securities''--per each Creation Unit Aggregation (``Fund
Securities'') and generally an amount of cash--the ``Cash Component.''
Together, the Deposit Securities and the Cash Component (including the
cash in lieu amount) constitute the ``Fund Deposit,'' which represents
the minimum initial and subsequent investment amount for a Creation
Unit Aggregation of the Fund.
BNY, through the National Securities Clearing Corporation
(``NSCC'') (as discussed below), will make available on each business
day, prior to the opening of business of the NYSE (currently 9:30 a.m.,
Eastern time (``E.T.'')), the list of the names and the required number
of shares of each Deposit Security to be included in the current Fund
Deposit (based on information at the end of the previous business day)
for the Fund.
In addition to the list of names and numbers of securities
constituting the current Deposit Securities of a Fund Deposit, BNY,
through the NSCC, also will make available on each business day, the
estimated Cash Component, effective through and including the previous
business day, per outstanding Creation Unit Aggregation of the Fund.
All orders to create Creation Unit Aggregations must be received by
the transfer agent no later than the closing time of the regular
trading session on the NYSE (``Closing Time'') (ordinarily 4 p.m.,
E.T.) in each case on the date such order is placed in order for
creation of Creation Unit Aggregations to be effected based on the NAV
of Shares of the Fund as next determined on such date after receipt of
the order in proper form.
Fund Shares may be redeemed only in Creation Unit Aggregations at
their NAV next determined after receipt of a redemption request in
proper form by the Fund through the transfer agent and only on a
business day. The Fund will not redeem Shares in amounts less than
Creation Unit Aggregations. Beneficial owners must accumulate enough
Shares in the secondary market to constitute a Creation Unit
Aggregation in order to have such Shares redeemed by the Trust. With
respect to the Fund, BNY, through the NSCC, will make available prior
to the opening of business on the NYSE (currently 9:30 a.m., E.T.) on
each business day, the identity of the Fund Securities that will be
applicable (subject to possible amendment or correction) to redemption
requests received in proper form (as described below) on that day. Fund
Securities received on redemption may not be

[[Page 20084]]

identical to Deposit Securities that are applicable to creations of
Creation Unit Aggregations.
Unless cash redemptions are available or specified for the Fund,
the redemption proceeds for a Creation Unit Aggregation generally will
consist of Fund Securities--as announced on the business day of the
request for redemption received in proper form--plus or minus cash in
an amount equal to the difference between the NAV of the Fund Shares
being redeemed, as next determined after a receipt of a request in
proper form, and the value of the Fund Securities (the ``Cash
Redemption Amount''), less the applicable redemption transaction fee as
described in the Registration Statement and, if applicable, any
operational processing and brokerage costs, transfer fees, or stamp
taxes.
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,\21\ as provided by
NYSE Arca Equities Rule 5.3. A minimum of 100,000 Shares for the Fund
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 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.
---------------------------------------------------------------------------

\21\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------

Availability of Information
The Fund's Web site (www.ftportfolios.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 Fund'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''),\22\ 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. to 4 p.m.,
E.T.) on the Exchange, the Fund will disclose on its 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.\23\
---------------------------------------------------------------------------

\22\ The Bid/Ask Price of the Fund will be 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.
\23\ 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 on the Fund's Web site: Ticker symbol (if applicable), name
of security or financial instrument, number of shares or dollar value
of securities and 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, a basket composition file, which includes the security
names and share quantities required to be delivered in exchange for the
Fund's Shares, together with estimates and actual cash components, will
be publicly disseminated daily prior to the opening of the NYSE via
NSCC. The basket represents one Creation Unit of the Fund.
In addition, the Portfolio Indicative Value (``PIV''), as defined
in NYSE Arca Equities Rule 8.600(c)(3), will be widely disseminated by
one or more major market data vendors during the Core Trading
Session.\24\ The dissemination of the PIV, 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. The PIV should
not be viewed as a ``real-time'' update of the NAV per Share of the
Fund because the PIV may not be calculated in the same manner as the
NAV, which is computed once a day, generally at the end of the business
day. The price of a non-U.S. security that is primarily traded on a
non-U.S. exchange shall be updated, using the last sale price, every 15
seconds throughout the trading day, provided that, upon the closing of
such non-U.S. exchange, the closing price of the security, after being
converted to U.S. dollars, will be used. Furthermore, in calculating
the PIV of the Fund's Shares, exchange rates may be used throughout the
day (9 a.m. to 4:15 p.m., E.T.) that may differ from those used to
calculate the NAV per Share of the Fund and, consequently, may result
in differences between the NAV and the PIV.
---------------------------------------------------------------------------

\24\ Currently, it is the Exchange's understanding that several
major market data vendors widely disseminate PIVs taken from the
Consolidated Tape Association (``CTA'') or other data feeds.
---------------------------------------------------------------------------

Investors can also obtain the Trust's Statement of Additional
Information (``SAI''), the Fund's Shareholder Reports, and the Trust's
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 CTA high-speed line. The intra-day,
closing, and settlement prices of the portfolio securities will also be
readily available from the securities exchanges trading such
securities, automated quotation systems, published or other public
sources, or on-line information services such as Bloomberg or Reuters.
The Fund's NAV will be determined as of the close of trading
(normally 4 p.m., E.T.) on each day the NYSE is open for business. NAV
will be calculated for the Fund by taking the market price of the
Fund's total assets, including interest or dividends accrued but not
yet collected, less all liabilities, and dividing such amount by the
total number of Shares outstanding. The result, rounded to the nearest
cent, will be the NAV per Share. All valuations will be subject to
review by the Trust's Board or its delegate.\25\
---------------------------------------------------------------------------

\25\ The Fund's investments will be valued at market value or,
in the absence of market value with respect to any portfolio
securities, at fair value in accordance with valuation procedures
adopted by the Board and in accordance with the 1940 Act.
---------------------------------------------------------------------------

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

[[Page 20085]]

change are defined in the Registration Statement.
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.\26\ 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.
---------------------------------------------------------------------------

\26\ 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.\27\ As noted
above, the equity securities in which the Fund will invest will trade
in markets that are ISG members or are parties to comprehensive
surveillance sharing agreements with the Exchange.\28\
---------------------------------------------------------------------------

\27\ 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.
\28\ See note 9, supra.
---------------------------------------------------------------------------

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 PIV will not be calculated or publicly
disseminated; (4) how information regarding the PIV 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 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) \29\ that an exchange have rules
that are designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to remove
impediments to, and perfect the mechanism of a free and open market
and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

\29\ 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 Adviser and Sub-Adviser have
implemented a fire wall with respect to their respective broker-dealer
affiliate regarding access to information concerning the composition
and/or changes to the portfolio. 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. Under normal market conditions, the Fund will invest at
least 80% of its net assets (plus the amount of any borrowings for
investment purposes) in exchange-traded equity securities of companies
domiciled in the United States or Canada and deemed to be engaged in
the energy infrastructure segment of the energy and utilities sectors.
The Fund, under normal market conditions, will not invest more than 20%
of its net assets in futures, interest rate swaps, total return swaps,
non-U.S. currency swaps, credit default swaps, options, and other
derivative instruments. While the Fund may invest in securities of
other investment companies that are leveraged, such investments will
not be use to enhance leverage and will be consistent with the Fund's
investment objective. The Fund will not hold illiquid securities if, as
a result, such securities would comprise more than 15% of the value of
the Fund's net assets. The equity securities in which the Fund will
invest will trade in markets that are ISG members or are parties to
comprehensive surveillance sharing agreements with the Exchange.

[[Page 20086]]

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. Moreover, the PIV 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 its Web site the
Disclosed Portfolio that will form the basis for the Fund's calculation
of NAV at the end of the business day. The intra-day, closing, and
settlement prices of the portfolio securities will also be readily
available from the securities exchanges trading such securities,
automated quotation systems, published or other public sources, or on-
line information services. 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 Web site for the Fund 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 PIV, 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 PIV, 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 the 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-2012-21 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2012-21. 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 Section, 100 F Street
NE., Washington, DC 20549-1090, on official business days between 10
a.m. and 3 p.m. Copies of the filing will also be available for
inspection and copying at the NYSE's principal office and on its
Internet Web site at www.nyse.com. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NYSEArca-2012-21 and should be submitted on or before
April 24, 2012.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\30\
---------------------------------------------------------------------------

\30\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-7894 Filed 4-2-12; 8:45 am]
BILLING CODE 8011-01-P

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