Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change To List and Trade Shares of Manna Core Equity Enhanced Dividend Income Fund Under NYSEArca Equities Rule 8.600, 66973-66980 [2013-26663]

Download as PDF Federal Register / Vol. 78, No. 216 / Thursday, November 7, 2013 / Notices Analysis Agency: Retirement Operations, Retirement Services, Office of Personnel Management. Title: Designation of Beneficiary: Civil Service Retirement System. OMB: 3206–0142. Frequency: On occasion. Affected Public: Individuals or Households. Number of Respondents: 2,000. Estimated Time per Respondent: 15 minutes. Total Burden Hours: 500. U.S. Office of Personnel Management. Elaine Kaplan, Acting Director. OFFICE OF PERSONNEL MANAGEMENT Submission for Review: Representative Payee Survey U.S. Office of Personnel Management. ACTION: 60-Day notice and request for comments. AGENCY: tkelley on DSK3SPTVN1PROD with NOTICES Jkt 232001 [Release No. 34–70798; File No. SR– NYSEArca–2013–111] Interested persons are invited to submit written comments on the proposed information collection to the U.S. Office of Personnel Management, Retirement Services, Union Square Room 370, 1900 E Street NW., Washington, DC 20415–3500, Attention: Alberta Butler, or sent by email to Alberta.Butler@opm.gov. ADDRESSES: The Representative Payee Survey is used to collect information about how the benefits paid to a representative payee have been used or conserved for the benefit of the incompetent annuitant. SUPPLEMENTARY INFORMATION: The Retirement Services, Office of Personnel Management (OPM) offers the general public and other Federal agencies the opportunity to comment on an extension, without change, of a currently approved information collection request (ICR) 3206–0208, Representative Payee Survey. As required by the Paperwork Reduction Act of 1995 (Pub. L. 104–13, 44 U.S.C. chapter 35) as amended by the Clinger-Cohen Act (Pub. L. 104–106), OPM is soliciting comments for this collection. The Office of Management and Budget is particularly interested in comments that: 1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of OPM, including whether the information will have practical utility; 2. Evaluate the accuracy of OPM’s estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; 3. Enhance the quality, utility, and clarity of the information to be collected; and 4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, 16:24 Nov 06, 2013 Comments are encouraged and will be accepted until January 6, 2014. This process is conducted in accordance with 5 CFR 1320.1. DATES: A copy of this ICR with applicable supporting documentation, may be obtained by contacting the Retirement Services Publications Team, Office of Personnel Management, 1900 E Street NW., Room 3316–AC, Washington, DC 20415, Attention: Cyrus S. Benson, or sent by email to Cyrus.Benson@opm.gov or faxed to (202) 606–0910. BILLING CODE 6325–38–P VerDate Mar<15>2010 SECURITIES AND EXCHANGE COMMISSION FOR FURTHER INFORMATION CONTACT: [FR Doc. 2013–26616 Filed 11–6–13; 8:45 am] SUMMARY: e.g., permitting electronic submissions of responses. 66973 Analysis Agency: Retirement Operations, Retirement Services, Office of Personnel Management. Title: Representative Payee Survey. OMB Number: 3206–0208. Frequency: Annually. Affected Public: Individuals or Households. Number of Respondents: 11,000. Estimated Time per Respondent: 20 minutes. Total Burden Hours: 3,667. U.S. Office of Personnel Management. Elaine Kaplan, Acting Director. [FR Doc. 2013–26615 Filed 11–6–13; 8:45 am] BILLING CODE 6325–38–P PO 00000 Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change To List and Trade Shares of Manna Core Equity Enhanced Dividend Income Fund Under NYSEArca Equities Rule 8.600 November 1, 2013. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on October 23, 2013, NYSE Arca, Inc. (the ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the selfregulatory organization. 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 the Substance of the Proposed Rule Change The Exchange proposes to list and trade shares of the following (‘‘Managed Fund Shares’’): Manna Core Equity Enhanced Dividend Income Fund under NYSE Arca Equities Rule 8.600. The text of the proposed rule change is available on the Exchange’s Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. 1 15 U.S.C.78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 Frm 00084 Fmt 4703 Sfmt 4703 E:\FR\FM\07NON1.SGM 07NON1 66974 Federal Register / Vol. 78, No. 216 / Thursday, November 7, 2013 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change tkelley on DSK3SPTVN1PROD with NOTICES 1. Purpose The Exchange proposes to list and trade shares (‘‘Shares’’) of the following under NYSE Arca Equities Rule 8.600, which governs the listing and trading of Managed Fund Shares 4 on the Exchange: Manna Core Equity Enhanced Dividend Income Fund (the ‘‘Fund’’).5 The Shares of the Fund will be offered by ETF Actively Managed Trust (the ‘‘Trust’’). The Trust will be registered with the Securities and Exchange Commission (‘‘Commission’’) as an open-end management investment company.6 ETF Issuer Solutions, Inc. will serve as the investment adviser to the Fund (the ‘‘Adviser’’). ETF Distributors LLC (the ‘‘Distributor’’) will be the principal distributor of the Fund’s Shares. Manna ETFs Management LLC (the ‘‘Sub-Adviser’’) will serve as sub-adviser for the Fund. 4 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. 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 and trading of Dent Tactical ETF); 63076 (October 12, 2010), 75 FR 63874 (October 18, 2010) (SR– NYSEArca–2010–79) (order approving listing and trading of Cambria Global Tactical ETF). 6 The Trust is registered under the 1940 Act. On April 2, 2013, the Trust filed a registration statement on Form N–1A under the Securities Act of 1933 (the ‘‘1933 Act’’) (15 U.S.C. 77a), and under the 1940 Act relating to the Fund (File Nos. 333– 187668 and 811–22819) (the ‘‘Registration Statement’’). The description of the operation of the Trust and the Fund herein is based, in part, on the Registration Statement. The Trust filed an Amended and Restated Application for an Order under Section 6(c) of the 1940 Act for exemptions from various provisions of the 1940 Act and rules thereunder (File No. 812–14080), dated June 19, 2013 (‘‘Exemptive Application’’). The Commission has issued an order granting certain exemptive relief to the Trust under the 1940 Act. See Investment Company Act Release No. 30607 (July 23, 2013) (‘‘Exemptive Order’’). Investments made by the Fund will comply with the conditions set forth in the Exemptive Application and the Exemptive Order. VerDate Mar<15>2010 18:27 Nov 06, 2013 Jkt 232001 The Bank of New York Mellon will serve as the administrator, accountant, custodian and transfer agent for the Fund (‘‘Administrator,’’ ‘‘Accountant,’’ ‘‘Custodian’’ and ‘‘Transfer Agent,’’ respectively). The Fund will be classified as a ‘‘diversified’’ investment company under the 1940 Act.7 The Fund intends to qualify for and to elect treatment as a separate regulated investment company (‘‘RIC’’) under Subchapter M of the Internal Revenue Code.8 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 of and/or changes to such investment company portfolio. 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.9 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 brokerdealer reflects the applicable open-end fund’s portfolio, not an underlying benchmark index, as is the case with 7 The diversification standard is set forth in Section 5(b)(1) of the 1940 Act. 8 26 U.S.C. 851 et seq. 9 An investment adviser to an open-end fund is required to be registered under the Investment Advisers Act of 1940 (the ‘‘Advisers Act’’). As a result, the Adviser and its related personnel are subject to the provisions of Rule 204A–1 under the Advisers Act relating to codes of ethics. This Rule requires investment advisers to adopt a code of ethics that reflects the fiduciary nature of the relationship to clients as well as compliance with other applicable securities laws. Accordingly, procedures designed to prevent the communication and misuse of non-public information by an investment adviser must be consistent with Rule 204A–1 under the Advisers Act. In addition, Rule 206(4)–7 under the Advisers Act makes it unlawful for an investment adviser to provide investment advice to clients unless such investment adviser has (i) adopted and implemented written policies and procedures reasonably designed to prevent violation, by the investment adviser and its supervised persons, of the Advisers Act and the Commission rules adopted thereunder; (ii) implemented, at a minimum, an annual review regarding the adequacy of the policies and procedures established pursuant to subparagraph (i) above and the effectiveness of their implementation; and (iii) designated an individual (who is a supervised person) responsible for administering the policies and procedures adopted under subparagraph (i) above. PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 index-based funds. The Adviser and Sub-Adviser are not registered as a broker-dealer; however the Adviser is affiliated with a broker-dealer and has implemented a fire wall with respect to such broker-dealer regarding access to information concerning the composition and/or changes to the portfolio, and will be subject to procedures designed to prevent the use and dissemination of material non-public information regarding the portfolio. In the event (a) the Adviser or any sub-adviser registers as a broker-dealer or becomes newly affiliated with a broker-dealer, or (b) any new adviser or sub-adviser is a registered broker-dealer or becomes affiliated with a broker-dealer, they will implement a fire wall with respect to their relevant personnel or broker-dealer affiliate 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. Principal Fund Investments According to the Registration Statement, the Fund seeks long-term capital appreciation and income primarily through purchases and short sales of U.S. and international equity securities. The Fund will seek to achieve its investment objective by normally 10 investing up to 100% (but not less than 80%) of its net assets between its Core Position, Dividend Position and Short Position (each as defined below). The Fund expects to invest in a portfolio of U.S. common stocks or exchange traded funds (‘‘ETFs’’) selected by the Sub-Adviser to reflect a broad spectrum (i.e., positions in companies of different market capitalizations) of the U.S. equity market (the ‘‘Core Position’’). The Fund also expects to invest in a portfolio that 10 The term ‘‘normally’’ 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. According to the Registration Statement, in certain adverse market, economic, political, or other conditions, the Fund may temporarily depart from its normal investment policies and strategies provided that the alternative is consistent with the Fund’s investment objective and is in the best interest of the Fund. The Fund may determine that market conditions warrant investing in cash or cash equivalents, such as money market instruments, and to the extent permitted by applicable law and the Fund’s investment restrictions, shares of other investment companies. Under such circumstances, the Fund may invest up to 100% of its assets in these investments. E:\FR\FM\07NON1.SGM 07NON1 Federal Register / Vol. 78, No. 216 / Thursday, November 7, 2013 / Notices tkelley on DSK3SPTVN1PROD with NOTICES may contain U.S. and non-U.S. common stocks, American Depositary Receipts (‘‘ADRs’’), participation notes, or other equity securities listed on U.S. or nonU.S. exchanges or traded over the counter that the Sub-Adviser expects to generate dividend income to the Fund (the ‘‘Dividend Position’’). The Fund also expects to sell short a portfolio of common stocks, index- or sector-based ETFs, other investment companies, exchange traded notes (‘‘ETNs’’) and other exchange traded products (‘‘ETPs’’),11 other securities or index- or sector-based futures contracts all of which trade on U.S. and non-U.S. exchanges selected for the purpose of hedging against country or currency risk associated with the investments in the Dividend Position, or because they are likely to underperform the market or lose value in the near term (the ‘‘Short Position’’). The Fund will be an actively managed ETF and thus does not seek to replicate the performance of a specific index. Instead, the Fund will use an active investment strategy to meet its investment objective. The Sub-Adviser, subject to the oversight of the Adviser and the Board of Trustees of the Trust (the ‘‘Board of Trustees’’), will have discretion on a daily basis to manage the Fund’s portfolio in accordance with the Fund’s investment objective and investment policies. According to the Registration Statement, the Sub-Adviser will typically seek to invest the Core Position in a portfolio of common stocks and ETPs selected by the Sub-Adviser to reflect a broad spectrum (i.e., positions in companies of different market capitalizations) of the U.S. equity market. The Core Position may invest in the common stock of issuers of any market capitalization and there are no requirements as to the number of securities the Core Position must hold. According to the Registration Statement, the Fund may invest in any type of ETF, including index based 11 For purposes of this proposed rule change, ETPs include Investment Company Units (as described in NYSE Arca Equities Rule 5.2(j)(3)); Index-Linked Securities (as described in NYSE Arca Equities Rule 5.2(j)(6)); Portfolio Depositary Receipts (as described in NYSE Arca Equities Rule 8.100); 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); Managed Fund Shares (as described in NYSE Arca Equities Rule 8.600). The ETPs all will be listed and traded in the U.S. on registered exchanges. While the Funds may invest in inverse ETPs, the Funds will not invest in leveraged or inverse leveraged ETPs (e.g., 2X or 3X). VerDate Mar<15>2010 16:24 Nov 06, 2013 Jkt 232001 ETFs, sector based ETFs, and fixedincome ETFs. The Fund may hold ETFs with portfolios comprised of domestic or foreign stocks or bonds or any combination thereof. However, due to legal limitations, the Fund will be prevented from purchasing more than 3% of an ETF’s outstanding shares unless: (i) The ETF or the Fund has received an order for exemptive relief from the 3% limitation from the Commission that is applicable to the Fund; and (ii) the ETF and the Fund take appropriate steps to comply with any conditions in such order. According to the Registration Statement, in order to implement the Dividend Position’s strategy, the SubAdviser will seek to maximize the level of dividend income that the Dividend Position receives, through the purchase of U.S. and non-U.S. securities that the Sub-Adviser expects to generate dividend income for the Dividend Position. To participate in non-U.S. developed or emerging markets, the Dividend Position may invest in debt or equity securities, ADRs, participation notes, and other securities listed on U.S. or non-U.S. exchanges or U.S. securities traded over the counter. The Fund will invest only in foreign securities and ADRs that are traded on an exchange that is a member of the Intermarket Surveillance Group (‘‘ISG’’) or with which the Exchange has in place a comprehensive surveillance sharing agreement. According to the Registration Statement, the Sub-Adviser expects to seek to participate in special dividend situations and engage in dividend capture trading. Special dividend situations may include those where issuers decide to return large cash balances to shareholders as one-time dividend payments.12 According to the Registration Statement, the Fund expects to establish Short Positions, representing up to 30% of the Fund’s principal investments, in securities selected by the Sub-Adviser for the purpose of hedging against country, currency, sector or other risk associated with the investments in the Dividend Position, in an attempt to establish, between the Dividend Position and the Short Positions, a market neutral position with respect to the countries and currency in which the Dividend Position is invested. The Fund 12 In a dividend capture trade, the Fund sells a stock on or after the stock’s dividend date and uses the sale proceeds to purchase one or more other stocks that are expected to pay dividends before the next dividend payment on the stock being sold. Through this rotation practice, the Fund may receive more dividend payments over a given period of time than if it held a single stock. PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 66975 may also invest in Short Positions in securities that the Sub-Adviser believes are likely to underperform the market or lose value in the near term. To implement the Short Positions, the SubAdviser expects to typically sell short a portfolio of equities, index- or sectorbased ETF’s, other investment companies, index- or sector-based futures contracts or other securities that trade on U.S. and non-U.S. exchanges.13 According to the Registration Statement, the proceeds from the Short Positions (i.e., cash received from selling securities short) will typically be used to fund the acquisition of the Fund’s investments in the Dividend Position. Other Fund Investments According to the Registration Statement, although the Fund expects to invest not less than 80% of its assets as described above, the Fund has flexibility to invest in other types of securities when the Sub-Adviser believes they offer more attractive opportunities or to meet liquidity, redemption, and short-term investing needs. According to the Registration Statement, the Fund may invest up to 20% of its assets in securities convertible into common stock. Convertible securities eligible for purchase by the Fund include convertible bonds, convertible preferred stocks, and warrants. The Fund will not invest directly in real estate, but may invest in readily marketable securities issued by companies that invest in real estate or interests therein. The Fund may also invest in readily marketable interests in real estate investment trusts. General Limitations The Fund may hold up to an aggregate amount of 15% of its net assets in illiquid assets (calculated at the time of investment), including Rule 144A securities deemed to be illiquid by the Sub-Adviser. The Fund will monitor its portfolio liquidity on an ongoing basis to determine whether, in light of current circumstances, an adequate level of liquidity is being maintained, and will consider taking appropriate steps in order to maintain adequate liquidity if, through a change in values, net assets, or other circumstances, more than 15% of the Fund’s net assets are held in illiquid assets. Illiquid assets include assets subject to contractual or other 13 To participate in non-U.S. developed or emerging markets, the Fund may invest in ETFs, ADRs, futures contracts and other securities listed on U.S. or non-U.S. exchanges or traded over the counter that are intended to track the non-U.S. equity markets or market sectors in which the SubAdviser seeks exposure. E:\FR\FM\07NON1.SGM 07NON1 66976 Federal Register / Vol. 78, No. 216 / Thursday, November 7, 2013 / Notices tkelley on DSK3SPTVN1PROD with NOTICES restrictions on resale and other instruments that lack readily available markets as determined in accordance with Commission staff guidance.14 The Fund may lend portfolio securities in an amount equal to up to 33% of its total assets to broker-dealers, major banks, or other recognized domestic institutional borrowers of securities which the Sub-Adviser has determined are creditworthy under guidelines established by the Board of Trustees. The Fund may not lend securities to any company affiliated with the Sub-Adviser. Each loan of securities will be collateralized by cash, securities, or letters of credit. The Fund might experience a loss if the borrower defaults on the loan. The Fund will not purchase the securities of issuers conducting their principal business activity in the same industry if, immediately after the purchase and as a result thereof, the value of the Fund’s investments in that industry would equal or exceed 25% of the current value of the Fund’s total assets, provided that this restriction does not limit the Fund’s: (i) Investments in securities of other investment companies, (ii) investments in securities issued or guaranteed by the U.S. government, its agencies or instrumentalities, or (iii) investments in repurchase agreements collateralized by U.S. government securities.15 The Fund will not invest in swaps. The Fund’s investments will be consistent with its respective investment objective. No more than 10% of the net assets of the Fund will be invested in unsponsored ADRs. 14 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 14618 (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 1933 Act). 15 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). VerDate Mar<15>2010 16:24 Nov 06, 2013 Jkt 232001 Creation and Redemption of Shares According to the Registration Statement, the Fund will issue and redeem Shares on a continuous basis at net asset value (‘‘NAV’’) in aggregations of 50,000 Shares (‘‘Creation Units’’). The consideration for purchase of a Creation Unit of the Fund generally consists of an in-kind deposit of a designated portfolio of securities (the ‘‘Deposit Securities’’) per each Creation Unit constituting a substantial replication, or a representation, of the securities included in the Fund’s portfolio and an amount of cash (the ‘‘Cash Component’’). Together, the Deposit Securities and the Cash Component constitute the ‘‘Fund Deposit,’’ which represents the minimum initial and subsequent investment amount for a Creation Unit of the Fund. The Cash Component is an amount equal to the difference between the NAV of the shares (per Creation Unit) and the market value of the Deposit Securities. If the Cash Component is a positive number (i.e., the NAV per Creation Unit exceeds the market value of the Deposit Securities), the Cash Component shall be such positive amount. If the Cash Component is a negative number (i.e., the NAV per Creation Unit is less than the market value of the Deposit Securities), the Cash Component shall be such negative amount and the creator will be entitled to receive cash from the Fund in an amount equal to the Cash Component. The Cash Component serves the function of compensating for any differences between the NAV per Creation Unit and the market value of the Deposit Securities. The Administrator, through the National Securities Clearing Corporation (‘‘NSCC’’), makes available on each business day, immediately prior to the opening of business on the Exchange (currently 9:30 a.m., Eastern Time), 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. Such Fund Deposit is applicable in order to effect creations of Creation Units of the Fund until such time as the next-announced composition of the Deposit Securities is made available. The identity and number of shares of the Deposit Securities required for the Fund Deposit for the Fund changes as rebalancing adjustments and corporate action events are reflected from time to time by the portfolio managers with a view to the investment objective of the Fund. In addition, the Trust reserves the PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 right to permit or require the substitution of an amount of cash to be added to the Cash Component to replace any Deposit Security which may not be available. In addition to the list of names and numbers of securities constituting the current Deposit Securities of the Fund Deposit, the Administrator, through the NSCC, also makes available on each business day, the estimated Cash Component, effective through and including the previous business day, per outstanding Creation Unit of the Fund. All purchase orders must be placed by or through an ‘‘Authorized Participant.’’ An Authorized Participant must be either a broker-dealer or other participant in the Continuous Net Settlement System (‘‘Clearing Process’’) of the NSCC or a participant in The Depository Trust Company (‘‘DTC’’) with access to the DTC system, and must execute an agreement with the Trust, the Distributor and the Administrator that governs transactions in the Fund’s Creation Units. Fund Shares may be redeemed only in Creation Units at their NAV next determined after receipt of a redemption request in proper form by the Distributor and the Fund through the Administrator and only on a business day. The Trust will not redeem shares in amounts less than Creation Units. The redemption proceeds for a Creation Unit generally will consist of securities held by the Fund (the ‘‘Fund Securities’’) (as announced on the Fund’s Web site prior to the commencement of trading on the business day of the request for redemption received in proper form) plus cash in an amount equal to the difference between the NAV of the 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 a redemption transaction fee. In the event that the Fund Securities have a value greater than the NAV of the shares, a compensating cash payment equal to the differential will be required to be made by or through an Authorized Participant by the redeeming shareholder. The right of redemption may be suspended or the date of payment postponed with respect to the Fund (1) for any period during which the Exchange is closed (other than customary weekend and holiday closings); (2) for any period during which trading on the Exchange is suspended or restricted; (3) for any period during which an emergency exists as a result of which disposal of the shares of the Fund or determination E:\FR\FM\07NON1.SGM 07NON1 Federal Register / Vol. 78, No. 216 / Thursday, November 7, 2013 / Notices of the shares’ NAV is not reasonably practicable; 16 or (4) in such other circumstance as is permitted by the Commission. Detailed descriptions of the Fund’s procedures for creating and redeeming Shares, transaction fees and expenses, dividends, distributions, taxes, risks, and reports to be distributed to beneficial owners of the Shares can be found in the Registration Statement or on the Web site for the Fund (www.mannaetfs.com), as applicable. tkelley on DSK3SPTVN1PROD with NOTICES Determination of Net Asset Value According to the Registration Statement, the NAV per Share for the Fund will be computed by dividing the value of the net assets of the Fund (i.e., the value of its total assets less total liabilities) by the total number of Shares outstanding, rounded to the nearest cent. Expenses and fees, including the management fee, will be accrued daily and taken into account for purposes of determining NAV. The NAV of the Fund will be determined as of the close of the regular trading session on the Exchange (ordinarily 4:00 p.m., Eastern time) on each day that such exchange is open. In computing the Fund’s NAV, the value of the Fund’s portfolio holdings is based on such holdings’ closing price on local markets when available. When a portfolio holding’s market price is not readily available or does not otherwise accurately reflect the fair value of such security, the Fund will use such holding’s fair value as determined in good faith in accordance with the Fund’s fair value pricing procedures, which will be approved by the Board of Trustees. Fair value pricing may be used, for example, in situations where (i) portfolio holdings, such as holdings with small capitalizations, are so thinly traded that there have been no transactions for that portfolio holding over an extended period of time; (ii) an event occurs after the close of the exchange on which a portfolio holding is principally traded that is likely to change the value of the portfolio holding prior to the Fund’s NAV calculation; (iii) the exchange on which the portfolio holding is principally traded closes early; or (iv) trading of the particular portfolio holding is halted during the day and does not resume prior to the Fund’s NAV calculation. In addition, the Fund may fair value foreign equity portfolio holdings each day the Fund calculates its NAV. Accordingly, the Fund’s NAV may 16 Pursuant to NYSE Arca Equities Rule 7.34(5), trading in the Shares will be halted if the Fund’s NAV is not calculated. VerDate Mar<15>2010 18:27 Nov 06, 2013 Jkt 232001 reflect certain portfolio holdings’ fair values rather than their market prices. In valuing non-exchange traded securities, the Fund will first use publicly-available pricing sources, including Bloomberg, IDC, and Reuters. Non-exchange traded securities will only be fair valued if their market prices are not readily available. To the extent the assets of the Fund are invested in the other open-end investment companies that are registered under the 1940 Act, the Fund’s NAV is calculated based upon the NAVs reported by such registered open-end investment companies, and the prospectuses for these companies explain the circumstances under which they will use fair value pricing and the effects of using fair value pricing. Availability of Information The Fund’s Web site (www.mannaetfs.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) 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 (the ‘‘Bid/Ask Price’’),17 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 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.18 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 and financial 17 The Bid/Ask Price of the Fund will be determined using the mid-point 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. 18 Under accounting procedures to be 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. PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 66977 instrument, number of shares or dollar value of financial instruments held in the portfolio, and percentage weighting of the security and 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 will represent one Creation Unit of Shares of the Fund. 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 are expected to be published daily in the financial section of newspapers. Quotation and last sale information for the Shares and any underlying ETPs, sponsored ADRs and common stock will be available via the Consolidated Tape Association (‘‘CTA’’) high-speed line. In addition, the Indicative Optimized Portfolio Value (‘‘IOPV’’),19 which is the Portfolio Indicative Value as defined in NYSE Arca Equities Rule 8.600(c)(3), will be widely disseminated at least every 15 seconds during the Core Trading Session by one or more major market data vendors.20 Price information for 19 The IOPV calculations will be estimates of the value of the Fund’s NAV per Share using market data converted into U.S. dollars at the current currency rates. The IOPV price will be based on quotes and closing prices from the securities’ local market and may not reflect events that occur subsequent to the local market’s close. The quotations of certain Fund holdings may not be updated during U.S. trading hours if such holdings do not trade in the United States. Premiums and discounts between the IOPV and the market price may occur. This should not be viewed as a ‘‘realtime’’ update of the NAV per Share of the Fund, which will be calculated only once a day. 20 Currently, it is the Exchange’s understanding that several major market data vendors display and/ or make widely available IOPVs taken from the CTA or other data feeds. E:\FR\FM\07NON1.SGM 07NON1 66978 Federal Register / Vol. 78, No. 216 / Thursday, November 7, 2013 / Notices tkelley on DSK3SPTVN1PROD with NOTICES futures and non-exchange traded securities held by the Fund will be available from publicly-available pricing sources, including Bloomberg, IDC, and Reuters. The IOPV will be calculated by an independent third party calculator and will be calculated based on the same portfolio holdings disclosed on the Fund’s Web site. The dissemination of the IOPV, 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 intra-day, closing and settlement prices of the portfolio securities and other Fund investments will also be readily available from the national securities exchanges trading such securities, automated quotation systems, published or other public sources, or on-line information services such as Bloomberg or Reuters. Additional information regarding the Trust and the Shares, including investment strategies, risks, creation and redemption procedures, fees, portfolio holdings disclosure policies, distributions and taxes is included in the Registration Statement. All terms relating to the Fund that are referred to, but not defined in, this proposed rule change are defined in the Registration Statement. 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.21 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 may be halted. Trading Rules The Exchange deems the Shares to be equity securities, thus rendering trading 21 See NYSE Arca Equities Rule 7.12, Commentary .04. VerDate Mar<15>2010 16:24 Nov 06, 2013 Jkt 232001 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 4:00 a.m. to 8:00 p.m. Eastern time in accordance with NYSE Arca Equities Rule 7.34 (Opening, Core, and Late Trading Sessions). The Exchange has appropriate rules to facilitate transactions in the Shares during all trading sessions. 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. 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 22 under the Act, 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 as defined in NYSE Arca Equities Rule 8.600(c)(2) will be made available to all market participants at the same time. Surveillance The Exchange represents that trading in the Shares will be subject to the existing trading surveillances, administered by the Financial Industry Regulatory Authority (‘‘FINRA’’) on behalf of the Exchange, which are designed to detect violations of Exchange rules and applicable federal securities laws.23 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 surveillances referred to above generally focus on detecting securities trading outside their normal patterns, which could be indicative of manipulative or other violative activity. When such situations are detected, surveillance analysis follows and investigations are opened, where appropriate, to review the behavior of 22 17 CFR 240.10A–3. 23 FINRA surveils trading on the Exchange pursuant to a regulatory services agreement. The Exchange is responsible for FINRA’s performance under this regulatory services agreement. PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 all relevant parties for all relevant trading violations. FINRA, on behalf of the Exchange, will communicate as needed regarding trading in the Shares and exchangetraded securities held by the Fund with other markets that are members of the ISG and FINRA, on behalf of the Exchange, may obtain trading information regarding trading in the Shares and exchange-traded securities held by the Fund from such markets or other entities. In addition, the Exchange may obtain information regarding trading in the Shares and exchangetraded securities held by the Fund from markets and other entities that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement.24 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 IOPV will not be calculated or publicly disseminated; (4) how information regarding the IOPV 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 Act. The Bulletin will also disclose that the NAV for the Shares will be 24 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. E:\FR\FM\07NON1.SGM 07NON1 Federal Register / Vol. 78, No. 216 / Thursday, November 7, 2013 / Notices calculated after 4:00 p.m. Eastern time each trading day. tkelley on DSK3SPTVN1PROD with NOTICES 2. Statutory Basis The basis under the Act for this proposed rule change is the requirement under Section 6(b)(5) 25 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 Shares will be subject to the existing trading surveillances, administered by FINRA on behalf of the Exchange, which are designed to detect violations of Exchange rules and applicable federal securities laws. The Adviser is affiliated with a broker-dealer and has implemented a fire wall with respect to such broker-dealer regarding access to information concerning the composition and/or changes to the portfolio, and will be subject to procedures designed to prevent the use and dissemination of material nonpublic information regarding 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 is a registered broker-dealer or becomes affiliated with a broker-dealer, they will implement a ‘‘fire wall’’ with respect to their relevant personnel or broker-dealer affiliate regarding access to information concerning the composition and/or changes to the Fund’s portfolio. FINRA, on behalf of 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. It is expected that not more than 10% of the net assets of the Fund will be invested in unsponsored ADRs. The Fund will invest only in foreign securities and ADRs that are traded on an exchange that is a member of the ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. The Fund may invest up to 15% of its net assets in illiquid securities (calculated at the time of investment), including Rule 144A 25 15 U.S.C. 78f(b)(5). VerDate Mar<15>2010 16:24 Nov 06, 2013 Jkt 232001 securities deemed illiquid by the SubAdviser. 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 IOPV 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. 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 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 IOPV, the Disclosed Portfolio, and quotation and last sale information for the Shares. The proposed rule change is designed to perfect the mechanism of a free and open market and, in general, to protect investors and the public interest in that it will facilitate the listing and trading of an additional type of activelymanaged exchange-traded product that will enhance competition among market participants, to the benefit of investors PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 66979 and the marketplace. As noted above, the Shares will be subject to the existing trading surveillances, administered by FINRA on behalf of the Exchange, which are designed to detect violations of Exchange rules and applicable federal securities laws and FINRA, on behalf of 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. In addition, as noted above, investors will have ready access to information regarding the Fund’s holdings, the IOPV, the Disclosed Portfolio, and quotation and last sale information for the Shares. The Fund’s investments will be consistent with its investment objective and will not be used to enhance leverage. 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 purpose of the Act. The Exchange notes that the proposed rule change 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. 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 E:\FR\FM\07NON1.SGM 07NON1 66980 Federal Register / Vol. 78, No. 216 / Thursday, November 7, 2013 / Notices 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 (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSEArca–2013–111 on the subject line. tkelley on DSK3SPTVN1PROD with NOTICES Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEArca–2013–111. 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 (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR– NYSEArca–2013–111, and should be submitted on or before November 29, 2013.26 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–26663 Filed 11–6–13; 8:45 am] BILLING CODE 8011–01–P 26 17 CFR 200.30–3(a)(12). VerDate Mar<15>2010 18:27 Nov 06, 2013 Jkt 232001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70797; File No. SR–BOX– 2013–43] Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Designation of Longer Period for Commission Action on Proposed Rule Change To Permit Complex Orders To Participate in Price Improvement Periods either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change (File No. SR–BOX–2013– 43). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–26662 Filed 11–6–13; 8:45 am] BILLING CODE 8011–01–P November 1, 2013. On September 5, 2013, BOX Options Exchange LLC (‘‘Exchange’’ or ‘‘BOX’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to add new BOX Rule 7245 to permit Complex Orders to participate in Price Improvement Periods (the ‘‘COPIP’’) and to make certain other conforming and clarifying changes to accommodate the new COPIP Rule. The proposed rule change was published for comment in the Federal Register on September 23, 2013.3 The Commission has received no comment letters on the proposal. Section 19(b)(2) of the Act 4 provides that within 45 days of the publication of notice of the filing of a proposed rule change, or within such longer period up to 90 days as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or as to which the self-regulatory organization consents, the Commission shall either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether these proposed rule changes should be disapproved. The 45th day for this filing is November 7, 2013. The Commission is extending the 45day time period for Commission action on the proposed rule change. The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider and take action on the Exchange’s proposed rule change. Accordingly, pursuant to Section 19(b)(2)(A)(ii)(I) of the Act 5 and for the reasons stated above, the Commission designates December 20, 2013, as the date by which the Commission should 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 70427 (September 17, 2013), 78 FR 58364. 4 15 U.S.C. 78s(b)(2). 5 15 U.S.C. 78s(b)(2)(A)(ii)(I). SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70799; File No. SR– NYSEMKT–2013–87] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of Proposed Rule Change Regarding Elimination of the Cancellation Fee From the NYSE Amex Options Fee Schedule November 1, 2013. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on October 29, 2013, NYSE MKT LLC (the ‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. 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 the Substance of the Proposed Rule Change The Exchange proposes to eliminate the Cancellation Fee from the NYSE Amex Options Fee Schedule (‘‘Fee Schedule’’). The Exchange proposes to implement the fee change effective November 1, 2013. The text of the proposed rule change is available on the Exchange’s Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, 2 17 PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 6 17 CFR 200.30–3(a)(31). U.S.C.78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 E:\FR\FM\07NON1.SGM 07NON1

Agencies

[Federal Register Volume 78, Number 216 (Thursday, November 7, 2013)]
[Notices]
[Pages 66973-66980]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-26663]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70798; File No. SR-NYSEArca-2013-111]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change To List and Trade Shares of Manna Core Equity 
Enhanced Dividend Income Fund Under NYSEArca Equities Rule 8.600

November 1, 2013.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on October 23, 2013, NYSE Arca, Inc. (the ``Exchange'' or 
``NYSE Arca'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange proposes to list and trade shares of the following 
(``Managed Fund Shares''): Manna Core Equity Enhanced Dividend Income 
Fund under NYSE Arca Equities Rule 8.600. The text of the proposed rule 
change is available on the Exchange's Web site at www.nyse.com, at the 
principal office of the Exchange, and at the Commission's Public 
Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

[[Page 66974]]

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 shares (``Shares'') of the 
following under NYSE Arca Equities Rule 8.600, which governs the 
listing and trading of Managed Fund Shares \4\ on the Exchange: Manna 
Core Equity Enhanced Dividend Income Fund (the ``Fund'').\5\ The Shares 
of the Fund will be offered by ETF Actively Managed Trust (the 
``Trust''). The Trust will be registered with the Securities and 
Exchange Commission (``Commission'') as an open-end management 
investment company.\6\ ETF Issuer Solutions, Inc. will serve as the 
investment adviser to the Fund (the ``Adviser''). ETF Distributors LLC 
(the ``Distributor'') will be the principal distributor of the Fund's 
Shares. Manna ETFs Management LLC (the ``Sub-Adviser'') will serve as 
sub-adviser for the Fund. The Bank of New York Mellon will serve as the 
administrator, accountant, custodian and transfer agent for the Fund 
(``Administrator,'' ``Accountant,'' ``Custodian'' and ``Transfer 
Agent,'' respectively).
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    \4\ 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.
    \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 and 
trading of Dent Tactical ETF); 63076 (October 12, 2010), 75 FR 63874 
(October 18, 2010) (SR-NYSEArca-2010-79) (order approving listing 
and trading of Cambria Global Tactical ETF).
    \6\ The Trust is registered under the 1940 Act. On April 2, 
2013, the Trust filed a registration statement on Form N-1A under 
the Securities Act of 1933 (the ``1933 Act'') (15 U.S.C. 77a), and 
under the 1940 Act relating to the Fund (File Nos. 333-187668 and 
811-22819) (the ``Registration Statement''). The description of the 
operation of the Trust and the Fund herein is based, in part, on the 
Registration Statement. The Trust filed an Amended and Restated 
Application for an Order under Section 6(c) of the 1940 Act for 
exemptions from various provisions of the 1940 Act and rules 
thereunder (File No. 812-14080), dated June 19, 2013 (``Exemptive 
Application''). The Commission has issued an order granting certain 
exemptive relief to the Trust under the 1940 Act. See Investment 
Company Act Release No. 30607 (July 23, 2013) (``Exemptive Order''). 
Investments made by the Fund will comply with the conditions set 
forth in the Exemptive Application and the Exemptive Order.
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    The Fund will be classified as a ``diversified'' investment company 
under the 1940 Act.\7\
---------------------------------------------------------------------------

    \7\ The diversification standard is set forth in Section 5(b)(1) 
of the 1940 Act.
---------------------------------------------------------------------------

    The Fund intends to qualify for and to elect treatment as a 
separate regulated investment company (``RIC'') under Subchapter M of 
the Internal Revenue Code.\8\
---------------------------------------------------------------------------

    \8\ 26 U.S.C. 851 et seq.
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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 of and/or 
changes to such investment company portfolio. 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.\9\ 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 and 
Sub-Adviser are not registered as a broker-dealer; however the Adviser 
is affiliated with a broker-dealer and has implemented a fire wall with 
respect to such broker-dealer regarding access to information 
concerning the composition and/or changes to the portfolio, and will be 
subject to procedures designed to prevent the use and dissemination of 
material non-public information regarding the portfolio. In the event 
(a) the Adviser or any sub-adviser registers as a broker-dealer or 
becomes newly affiliated with a broker-dealer, or (b) any new adviser 
or sub-adviser is a registered broker-dealer or becomes affiliated with 
a broker-dealer, they will implement a fire wall with respect to their 
relevant personnel or broker-dealer affiliate 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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    \9\ An investment adviser to an open-end fund is required to be 
registered under the Investment Advisers Act of 1940 (the ``Advisers 
Act''). As a result, the Adviser and its related personnel are 
subject to the provisions of Rule 204A-1 under the Advisers Act 
relating to codes of ethics. This Rule requires investment advisers 
to adopt a code of ethics that reflects the fiduciary nature of the 
relationship to clients as well as compliance with other applicable 
securities laws. Accordingly, procedures designed to prevent the 
communication and misuse of non-public information by an investment 
adviser must be consistent with Rule 204A-1 under the Advisers Act. 
In addition, Rule 206(4)-7 under the Advisers Act makes it unlawful 
for an investment adviser to provide investment advice to clients 
unless such investment adviser has (i) adopted and implemented 
written policies and procedures reasonably designed to prevent 
violation, by the investment adviser and its supervised persons, of 
the Advisers Act and the Commission rules adopted thereunder; (ii) 
implemented, at a minimum, an annual review regarding the adequacy 
of the policies and procedures established pursuant to subparagraph 
(i) above and the effectiveness of their implementation; and (iii) 
designated an individual (who is a supervised person) responsible 
for administering the policies and procedures adopted under 
subparagraph (i) above.
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Principal Fund Investments
    According to the Registration Statement, the Fund seeks long-term 
capital appreciation and income primarily through purchases and short 
sales of U.S. and international equity securities. The Fund will seek 
to achieve its investment objective by normally \10\ investing up to 
100% (but not less than 80%) of its net assets between its Core 
Position, Dividend Position and Short Position (each as defined below). 
The Fund expects to invest in a portfolio of U.S. common stocks or 
exchange traded funds (``ETFs'') selected by the Sub-Adviser to reflect 
a broad spectrum (i.e., positions in companies of different market 
capitalizations) of the U.S. equity market (the ``Core Position''). The 
Fund also expects to invest in a portfolio that

[[Page 66975]]

may contain U.S. and non-U.S. common stocks, American Depositary 
Receipts (``ADRs''), participation notes, or other equity securities 
listed on U.S. or non-U.S. exchanges or traded over the counter that 
the Sub-Adviser expects to generate dividend income to the Fund (the 
``Dividend Position''). The Fund also expects to sell short a portfolio 
of common stocks, index- or sector-based ETFs, other investment 
companies, exchange traded notes (``ETNs'') and other exchange traded 
products (``ETPs''),\11\ other securities or index- or sector-based 
futures contracts all of which trade on U.S. and non-U.S. exchanges 
selected for the purpose of hedging against country or currency risk 
associated with the investments in the Dividend Position, or because 
they are likely to underperform the market or lose value in the near 
term (the ``Short Position'').
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    \10\ The term ``normally'' 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. According to the 
Registration Statement, in certain adverse market, economic, 
political, or other conditions, the Fund may temporarily depart from 
its normal investment policies and strategies provided that the 
alternative is consistent with the Fund's investment objective and 
is in the best interest of the Fund. The Fund may determine that 
market conditions warrant investing in cash or cash equivalents, 
such as money market instruments, and to the extent permitted by 
applicable law and the Fund's investment restrictions, shares of 
other investment companies. Under such circumstances, the Fund may 
invest up to 100% of its assets in these investments.
    \11\ For purposes of this proposed rule change, ETPs include 
Investment Company Units (as described in NYSE Arca Equities Rule 
5.2(j)(3)); Index-Linked Securities (as described in NYSE Arca 
Equities Rule 5.2(j)(6)); Portfolio Depositary Receipts (as 
described in NYSE Arca Equities Rule 8.100); 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); Managed Fund Shares (as described in NYSE Arca 
Equities Rule 8.600). The ETPs all will be listed and traded in the 
U.S. on registered exchanges. While the Funds may invest in inverse 
ETPs, the Funds will not invest in leveraged or inverse leveraged 
ETPs (e.g., 2X or 3X).
---------------------------------------------------------------------------

    The Fund will be an actively managed ETF and thus does not seek to 
replicate the performance of a specific index. Instead, the Fund will 
use an active investment strategy to meet its investment objective. The 
Sub-Adviser, subject to the oversight of the Adviser and the Board of 
Trustees of the Trust (the ``Board of Trustees''), will have discretion 
on a daily basis to manage the Fund's portfolio in accordance with the 
Fund's investment objective and investment policies.
    According to the Registration Statement, the Sub-Adviser will 
typically seek to invest the Core Position in a portfolio of common 
stocks and ETPs selected by the Sub-Adviser to reflect a broad spectrum 
(i.e., positions in companies of different market capitalizations) of 
the U.S. equity market. The Core Position may invest in the common 
stock of issuers of any market capitalization and there are no 
requirements as to the number of securities the Core Position must 
hold.
    According to the Registration Statement, the Fund may invest in any 
type of ETF, including index based ETFs, sector based ETFs, and fixed-
income ETFs. The Fund may hold ETFs with portfolios comprised of 
domestic or foreign stocks or bonds or any combination thereof. 
However, due to legal limitations, the Fund will be prevented from 
purchasing more than 3% of an ETF's outstanding shares unless: (i) The 
ETF or the Fund has received an order for exemptive relief from the 3% 
limitation from the Commission that is applicable to the Fund; and (ii) 
the ETF and the Fund take appropriate steps to comply with any 
conditions in such order.
    According to the Registration Statement, in order to implement the 
Dividend Position's strategy, the Sub-Adviser will seek to maximize the 
level of dividend income that the Dividend Position receives, through 
the purchase of U.S. and non-U.S. securities that the Sub-Adviser 
expects to generate dividend income for the Dividend Position. To 
participate in non-U.S. developed or emerging markets, the Dividend 
Position may invest in debt or equity securities, ADRs, participation 
notes, and other securities listed on U.S. or non-U.S. exchanges or 
U.S. securities traded over the counter. The Fund will invest only in 
foreign securities and ADRs that are traded on an exchange that is a 
member of the Intermarket Surveillance Group (``ISG'') or with which 
the Exchange has in place a comprehensive surveillance sharing 
agreement.
    According to the Registration Statement, the Sub-Adviser expects to 
seek to participate in special dividend situations and engage in 
dividend capture trading. Special dividend situations may include those 
where issuers decide to return large cash balances to shareholders as 
one-time dividend payments.\12\
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    \12\ In a dividend capture trade, the Fund sells a stock on or 
after the stock's dividend date and uses the sale proceeds to 
purchase one or more other stocks that are expected to pay dividends 
before the next dividend payment on the stock being sold. Through 
this rotation practice, the Fund may receive more dividend payments 
over a given period of time than if it held a single stock.
---------------------------------------------------------------------------

    According to the Registration Statement, the Fund expects to 
establish Short Positions, representing up to 30% of the Fund's 
principal investments, in securities selected by the Sub-Adviser for 
the purpose of hedging against country, currency, sector or other risk 
associated with the investments in the Dividend Position, in an attempt 
to establish, between the Dividend Position and the Short Positions, a 
market neutral position with respect to the countries and currency in 
which the Dividend Position is invested. The Fund may also invest in 
Short Positions in securities that the Sub-Adviser believes are likely 
to underperform the market or lose value in the near term. To implement 
the Short Positions, the Sub-Adviser expects to typically sell short a 
portfolio of equities, index- or sector-based ETF's, other investment 
companies, index- or sector-based futures contracts or other securities 
that trade on U.S. and non-U.S. exchanges.\13\ According to the 
Registration Statement, the proceeds from the Short Positions (i.e., 
cash received from selling securities short) will typically be used to 
fund the acquisition of the Fund's investments in the Dividend 
Position.
---------------------------------------------------------------------------

    \13\ To participate in non-U.S. developed or emerging markets, 
the Fund may invest in ETFs, ADRs, futures contracts and other 
securities listed on U.S. or non-U.S. exchanges or traded over the 
counter that are intended to track the non-U.S. equity markets or 
market sectors in which the Sub-Adviser seeks exposure.
---------------------------------------------------------------------------

Other Fund Investments
    According to the Registration Statement, although the Fund expects 
to invest not less than 80% of its assets as described above, the Fund 
has flexibility to invest in other types of securities when the Sub-
Adviser believes they offer more attractive opportunities or to meet 
liquidity, redemption, and short-term investing needs.
    According to the Registration Statement, the Fund may invest up to 
20% of its assets in securities convertible into common stock. 
Convertible securities eligible for purchase by the Fund include 
convertible bonds, convertible preferred stocks, and warrants. The Fund 
will not invest directly in real estate, but may invest in readily 
marketable securities issued by companies that invest in real estate or 
interests therein. The Fund may also invest in readily marketable 
interests in real estate investment trusts.
General Limitations
    The Fund may hold up to an aggregate amount of 15% of its net 
assets in illiquid assets (calculated at the time of investment), 
including Rule 144A securities deemed to be illiquid by the Sub-
Adviser. The Fund will monitor its portfolio liquidity on an ongoing 
basis to determine whether, in light of current circumstances, an 
adequate level of liquidity is being maintained, and will consider 
taking appropriate steps in order to maintain adequate liquidity if, 
through a change in values, net assets, or other circumstances, more 
than 15% of the Fund's net assets are held in illiquid assets. Illiquid 
assets include assets subject to contractual or other

[[Page 66976]]

restrictions on resale and other instruments that lack readily 
available markets as determined in accordance with Commission staff 
guidance.\14\
---------------------------------------------------------------------------

    \14\ 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 
14618 (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 1933 Act).
---------------------------------------------------------------------------

    The Fund may lend portfolio securities in an amount equal to up to 
33% of its total assets to broker-dealers, major banks, or other 
recognized domestic institutional borrowers of securities which the 
Sub-Adviser has determined are creditworthy under guidelines 
established by the Board of Trustees. The Fund may not lend securities 
to any company affiliated with the Sub-Adviser. Each loan of securities 
will be collateralized by cash, securities, or letters of credit. The 
Fund might experience a loss if the borrower defaults on the loan.
    The Fund will not purchase the securities of issuers conducting 
their principal business activity in the same industry if, immediately 
after the purchase and as a result thereof, the value of the Fund's 
investments in that industry would equal or exceed 25% of the current 
value of the Fund's total assets, provided that this restriction does 
not limit the Fund's: (i) Investments in securities of other investment 
companies, (ii) investments in securities issued or guaranteed by the 
U.S. government, its agencies or instrumentalities, or (iii) 
investments in repurchase agreements collateralized by U.S. government 
securities.\15\
---------------------------------------------------------------------------

    \15\ 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 will not invest in swaps. The Fund's investments will be 
consistent with its respective investment objective.
    No more than 10% of the net assets of the Fund will be invested in 
unsponsored ADRs.
Creation and Redemption of Shares
    According to the Registration Statement, the Fund will issue and 
redeem Shares on a continuous basis at net asset value (``NAV'') in 
aggregations of 50,000 Shares (``Creation Units'').
    The consideration for purchase of a Creation Unit of the Fund 
generally consists of an in-kind deposit of a designated portfolio of 
securities (the ``Deposit Securities'') per each Creation Unit 
constituting a substantial replication, or a representation, of the 
securities included in the Fund's portfolio and an amount of cash (the 
``Cash Component''). Together, the Deposit Securities and the Cash 
Component constitute the ``Fund Deposit,'' which represents the minimum 
initial and subsequent investment amount for a Creation Unit of the 
Fund.
    The Cash Component is an amount equal to the difference between the 
NAV of the shares (per Creation Unit) and the market value of the 
Deposit Securities. If the Cash Component is a positive number (i.e., 
the NAV per Creation Unit exceeds the market value of the Deposit 
Securities), the Cash Component shall be such positive amount. If the 
Cash Component is a negative number (i.e., the NAV per Creation Unit is 
less than the market value of the Deposit Securities), the Cash 
Component shall be such negative amount and the creator will be 
entitled to receive cash from the Fund in an amount equal to the Cash 
Component. The Cash Component serves the function of compensating for 
any differences between the NAV per Creation Unit and the market value 
of the Deposit Securities.
    The Administrator, through the National Securities Clearing 
Corporation (``NSCC''), makes available on each business day, 
immediately prior to the opening of business on the Exchange (currently 
9:30 a.m., Eastern Time), 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. Such Fund Deposit is applicable in order to effect 
creations of Creation Units of the Fund until such time as the next-
announced composition of the Deposit Securities is made available.
    The identity and number of shares of the Deposit Securities 
required for the Fund Deposit for the Fund changes as rebalancing 
adjustments and corporate action events are reflected from time to time 
by the portfolio managers with a view to the investment objective of 
the Fund. In addition, the Trust reserves the right to permit or 
require the substitution of an amount of cash to be added to the Cash 
Component to replace any Deposit Security which may not be available. 
In addition to the list of names and numbers of securities constituting 
the current Deposit Securities of the Fund Deposit, the Administrator, 
through the NSCC, also makes available on each business day, the 
estimated Cash Component, effective through and including the previous 
business day, per outstanding Creation Unit of the Fund.
    All purchase orders must be placed by or through an ``Authorized 
Participant.'' An Authorized Participant must be either a broker-dealer 
or other participant in the Continuous Net Settlement System 
(``Clearing Process'') of the NSCC or a participant in The Depository 
Trust Company (``DTC'') with access to the DTC system, and must execute 
an agreement with the Trust, the Distributor and the Administrator that 
governs transactions in the Fund's Creation Units.
    Fund Shares may be redeemed only in Creation Units at their NAV 
next determined after receipt of a redemption request in proper form by 
the Distributor and the Fund through the Administrator and only on a 
business day. The Trust will not redeem shares in amounts less than 
Creation Units.
    The redemption proceeds for a Creation Unit generally will consist 
of securities held by the Fund (the ``Fund Securities'') (as announced 
on the Fund's Web site prior to the commencement of trading on the 
business day of the request for redemption received in proper form) 
plus cash in an amount equal to the difference between the NAV of the 
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 a redemption transaction fee. In the event 
that the Fund Securities have a value greater than the NAV of the 
shares, a compensating cash payment equal to the differential will be 
required to be made by or through an Authorized Participant by the 
redeeming shareholder.
    The right of redemption may be suspended or the date of payment 
postponed with respect to the Fund (1) for any period during which the 
Exchange is closed (other than customary weekend and holiday closings); 
(2) for any period during which trading on the Exchange is suspended or 
restricted; (3) for any period during which an emergency exists as a 
result of which disposal of the shares of the Fund or determination

[[Page 66977]]

of the shares' NAV is not reasonably practicable; \16\ or (4) in such 
other circumstance as is permitted by the Commission.
---------------------------------------------------------------------------

    \16\ Pursuant to NYSE Arca Equities Rule 7.34(5), trading in the 
Shares will be halted if the Fund's NAV is not calculated.
---------------------------------------------------------------------------

    Detailed descriptions of the Fund's procedures for creating and 
redeeming Shares, transaction fees and expenses, dividends, 
distributions, taxes, risks, and reports to be distributed to 
beneficial owners of the Shares can be found in the Registration 
Statement or on the Web site for the Fund (www.mannaetfs.com), as 
applicable.
Determination of Net Asset Value
    According to the Registration Statement, the NAV per Share for the 
Fund will be computed by dividing the value of the net assets of the 
Fund (i.e., the value of its total assets less total liabilities) by 
the total number of Shares outstanding, rounded to the nearest cent. 
Expenses and fees, including the management fee, will be accrued daily 
and taken into account for purposes of determining NAV. The NAV of the 
Fund will be determined as of the close of the regular trading session 
on the Exchange (ordinarily 4:00 p.m., Eastern time) on each day that 
such exchange is open.
    In computing the Fund's NAV, the value of the Fund's portfolio 
holdings is based on such holdings' closing price on local markets when 
available. When a portfolio holding's market price is not readily 
available or does not otherwise accurately reflect the fair value of 
such security, the Fund will use such holding's fair value as 
determined in good faith in accordance with the Fund's fair value 
pricing procedures, which will be approved by the Board of Trustees. 
Fair value pricing may be used, for example, in situations where (i) 
portfolio holdings, such as holdings with small capitalizations, are so 
thinly traded that there have been no transactions for that portfolio 
holding over an extended period of time; (ii) an event occurs after the 
close of the exchange on which a portfolio holding is principally 
traded that is likely to change the value of the portfolio holding 
prior to the Fund's NAV calculation; (iii) the exchange on which the 
portfolio holding is principally traded closes early; or (iv) trading 
of the particular portfolio holding is halted during the day and does 
not resume prior to the Fund's NAV calculation. In addition, the Fund 
may fair value foreign equity portfolio holdings each day the Fund 
calculates its NAV. Accordingly, the Fund's NAV may reflect certain 
portfolio holdings' fair values rather than their market prices.
    In valuing non-exchange traded securities, the Fund will first use 
publicly-available pricing sources, including Bloomberg, IDC, and 
Reuters. Non-exchange traded securities will only be fair valued if 
their market prices are not readily available.
    To the extent the assets of the Fund are invested in the other 
open-end investment companies that are registered under the 1940 Act, 
the Fund's NAV is calculated based upon the NAVs reported by such 
registered open-end investment companies, and the prospectuses for 
these companies explain the circumstances under which they will use 
fair value pricing and the effects of using fair value pricing.
Availability of Information
    The Fund's Web site (www.mannaetfs.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) 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 (the ``Bid/Ask Price''),\17\ 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 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.\18\
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    \17\ The Bid/Ask Price of the Fund will be determined using the 
mid-point 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.
    \18\ Under accounting procedures to be 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 and financial instrument, number of shares or dollar value 
of financial instruments held in the portfolio, and percentage 
weighting of the security and 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 will represent one Creation Unit of Shares of the 
Fund.
    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 are expected to be published daily in the 
financial section of newspapers. Quotation and last sale information 
for the Shares and any underlying ETPs, sponsored ADRs and common stock 
will be available via the Consolidated Tape Association (``CTA'') high-
speed line. In addition, the Indicative Optimized Portfolio Value 
(``IOPV''),\19\ which is the Portfolio Indicative Value as defined in 
NYSE Arca Equities Rule 8.600(c)(3), will be widely disseminated at 
least every 15 seconds during the Core Trading Session by one or more 
major market data vendors.\20\ Price information for

[[Page 66978]]

futures and non-exchange traded securities held by the Fund will be 
available from publicly-available pricing sources, including Bloomberg, 
IDC, and Reuters.
---------------------------------------------------------------------------

    \19\ The IOPV calculations will be estimates of the value of the 
Fund's NAV per Share using market data converted into U.S. dollars 
at the current currency rates. The IOPV price will be based on 
quotes and closing prices from the securities' local market and may 
not reflect events that occur subsequent to the local market's 
close. The quotations of certain Fund holdings may not be updated 
during U.S. trading hours if such holdings do not trade in the 
United States. Premiums and discounts between the IOPV and the 
market price may occur. This should not be viewed as a ``real-time'' 
update of the NAV per Share of the Fund, which will be calculated 
only once a day.
    \20\ Currently, it is the Exchange's understanding that several 
major market data vendors display and/or make widely available IOPVs 
taken from the CTA or other data feeds.
---------------------------------------------------------------------------

    The IOPV will be calculated by an independent third party 
calculator and will be calculated based on the same portfolio holdings 
disclosed on the Fund's Web site.
    The dissemination of the IOPV, 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 intra-day, 
closing and settlement prices of the portfolio securities and other 
Fund investments will also be readily available from the national 
securities exchanges trading such securities, automated quotation 
systems, published or other public sources, or on-line information 
services such as Bloomberg or Reuters.
    Additional information regarding the Trust and the Shares, 
including investment strategies, risks, creation and redemption 
procedures, fees, portfolio holdings disclosure policies, distributions 
and taxes is included in the Registration Statement. All terms relating 
to the Fund that are referred to, but not defined in, this proposed 
rule change are defined in the Registration Statement.
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.\21\ 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 may be halted.
---------------------------------------------------------------------------

    \21\ 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 4:00 a.m. to 8:00 p.m. Eastern time in 
accordance with NYSE Arca Equities Rule 7.34 (Opening, Core, and Late 
Trading Sessions). The Exchange has appropriate rules to facilitate 
transactions in the Shares during all trading sessions. 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.
    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 \22\ under the Act, 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 as defined in NYSE Arca Equities Rule 
8.600(c)(2) will be made available to all market participants at the 
same time.
---------------------------------------------------------------------------

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

Surveillance
    The Exchange represents that trading in the Shares will be subject 
to the existing trading surveillances, administered by the Financial 
Industry Regulatory Authority (``FINRA'') on behalf of the Exchange, 
which are designed to detect violations of Exchange rules and 
applicable federal securities laws.\23\ 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.
---------------------------------------------------------------------------

    \23\ FINRA surveils trading on the Exchange pursuant to a 
regulatory services agreement. The Exchange is responsible for 
FINRA's performance under this regulatory services agreement.
---------------------------------------------------------------------------

    The surveillances referred to above generally focus on detecting 
securities trading outside their normal patterns, which could be 
indicative of manipulative or other violative activity. 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.
    FINRA, on behalf of the Exchange, will communicate as needed 
regarding trading in the Shares and exchange-traded securities held by 
the Fund with other markets that are members of the ISG and FINRA, on 
behalf of the Exchange, may obtain trading information regarding 
trading in the Shares and exchange-traded securities held by the Fund 
from such markets or other entities. In addition, the Exchange may 
obtain information regarding trading in the Shares and exchange-traded 
securities held by the Fund from markets and other entities that are 
members of ISG or with which the Exchange has in place a comprehensive 
surveillance sharing agreement.\24\
---------------------------------------------------------------------------

    \24\ 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.
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    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 IOPV will not be calculated or publicly 
disseminated; (4) how information regarding the IOPV 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 Act. The 
Bulletin will also disclose that the NAV for the Shares will be

[[Page 66979]]

calculated after 4:00 p.m. Eastern time each trading day.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \25\ 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.
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    \25\ 15 U.S.C. 78f(b)(5).
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    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 Shares will be subject to the existing trading 
surveillances, administered by FINRA on behalf of the Exchange, which 
are designed to detect violations of Exchange rules and applicable 
federal securities laws. The Adviser is affiliated with a broker-dealer 
and has implemented a fire wall with respect to such broker-dealer 
regarding access to information concerning the composition and/or 
changes to the portfolio, and will be subject to procedures designed to 
prevent the use and dissemination of material non-public information 
regarding 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 is a registered broker-dealer or becomes 
affiliated with a broker-dealer, they will implement a ``fire wall'' 
with respect to their relevant personnel or broker-dealer affiliate 
regarding access to information concerning the composition and/or 
changes to the Fund's portfolio. FINRA, on behalf of 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. It is expected that not more than 10% 
of the net assets of the Fund will be invested in unsponsored ADRs. The 
Fund will invest only in foreign securities and ADRs that are traded on 
an exchange that is a member of the ISG or with which the Exchange has 
in place a comprehensive surveillance sharing agreement. The Fund may 
invest up to 15% of its net assets in illiquid securities (calculated 
at the time of investment), including Rule 144A securities deemed 
illiquid by the Sub-Adviser.
    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 IOPV 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. 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 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 
IOPV, 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 Shares will be 
subject to the existing trading surveillances, administered by FINRA on 
behalf of the Exchange, which are designed to detect violations of 
Exchange rules and applicable federal securities laws and FINRA, on 
behalf of 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. In 
addition, as noted above, investors will have ready access to 
information regarding the Fund's holdings, the IOPV, the Disclosed 
Portfolio, and quotation and last sale information for the Shares. The 
Fund's investments will be consistent with its investment objective and 
will not be used to enhance leverage.

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 purpose of the Act. The Exchange notes that the 
proposed rule change 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.

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

[[Page 66980]]

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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2013-111 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-2013-111. 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 (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEArca-2013-111, and 
should be submitted on or before November 29, 2013.\26\
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    \26\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-26663 Filed 11-6-13; 8:45 am]
BILLING CODE 8011-01-P