Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To List and Trade Shares of the ETSpreads HY Long Credit Fund, the ETSpreads HY Short Credit Fund, the ETSpreads IG Long Credit Fund, and the ETSpreads IG Short Credit Fund Under NYSE Arca Equities Rule 8.600, 21981-21986 [2014-08791]

Download as PDF Federal Register / Vol. 79, No. 75 / Friday, April 18, 2014 / Notices Exchange also believes that its pricing for removing liquidity is appropriately ` competitive vis-a-vis the Exchange’s competitors, with at least one such competitor, NASDAQ BX, offering a similar pricing model. In a competitive environment, the Exchange must continually adjust its fees to remain competitive with other exchanges and alternative liquidity sources. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited. Further, the modifications described herein are a direct response to competition, which should be viewed as a positive signal that a competitive market exists. If the changes are unattractive to market participants, it is likely that the Exchange will lose market share as a result. Accordingly, the Exchange does not believe that the proposed changes will impair the ability of Members or competing order execution venues to maintain their competitive standing in the financial markets. The Exchange believes that continuing to incentivize the entry of aggressively priced, displayed liquidity fosters intra-market competition to the benefit of all market participants that enter orders to the Exchange. Finally, the Exchange does not believe that any of the changes represent a significant departure from previous pricing offered by the Exchange or pricing offered by the Exchange’s competitors. 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. mstockstill on DSK4VPTVN1PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 11 and paragraph (f) of Rule 19b–4 thereunder.12 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 11 15 12 17 IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml ); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– BYX–2014–004 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–BYX–2014–004. 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–BYX– 2014–004 and should be submitted on or before May 9, 2014. U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f). VerDate Mar<15>2010 16:54 Apr 17, 2014 Jkt 232001 PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 21981 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Jill M. Peterson, Assistant Secretary. [FR Doc. 2014–08825 Filed 4–17–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–71938; File No. SR– NYSEArca–2013–144] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To List and Trade Shares of the ETSpreads HY Long Credit Fund, the ETSpreads HY Short Credit Fund, the ETSpreads IG Long Credit Fund, and the ETSpreads IG Short Credit Fund Under NYSE Arca Equities Rule 8.600 April 14, 2014. I. Introduction On December 27, 2013, NYSE Arca, Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to list and trade shares (‘‘Shares’’) of the ETSpreads HY Long Credit Fund, the ETSpreads HY Short Credit Fund, the ETSpreads IG Long Credit Fund, and the ETSpreads IG Short Credit Fund (each a ‘‘Fund’’ and, collectively, ‘‘Funds’’) under NYSE Arca Equities Rule 8.600. The proposed rule change was published for comment in the Federal Register on January 15, 2014.3 On February 26, 2014, the Commission issued a notice of designation of a longer period for Commission action on the proposed rule change.4 On April 11, 2014, the Exchange filed Amendment 13 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 71266 (January 9, 2014), 79 FR 2705 (‘‘Notice’’). 4 See Securities Exchange Act Release No. 71618, 79 FR 12254 (March 4, 2014). Pursuant to Section 19(b)(2) of the Act, the Commission determined that it was appropriate to designate a longer period within which to take action on the proposed rule change. Accordingly, the Commission designated April 15, 2014, as the date by which the Commission should either approve or disapprove or institute proceedings to determine whether to disapprove the proposed rule change. 1 15 E:\FR\FM\18APN1.SGM 18APN1 21982 Federal Register / Vol. 79, No. 75 / Friday, April 18, 2014 / Notices No. 1 to the proposed rule change.5 The Commission received no comments on the proposal. The Commission is publishing this notice to solicit comments on Amendment No. 1 from interested persons, and is approving the proposed rule change, as modified by Amendment No. 1 thereto, on an accelerated basis. mstockstill on DSK4VPTVN1PROD with NOTICES II. Description of the Proposal The Exchange proposes to list and trade the Shares of each Fund under NYSE Arca Equities Rule 8.600, which governs the listing and trading of Managed Fund Shares. The Shares will be offered by Exchange Traded Spreads Trust (‘‘Trust’’), a statutory trust organized under the laws of the State of Delaware and registered with the Commission as an open-end management investment company.6 ETSpreads, LLC (‘‘Adviser’’) is the investment adviser for each Fund and is a registered investment adviser under the Investment Advisers Act of 1940 (‘‘Advisers Act’’). ALPS Distributors, Inc. will serve as the principal underwriter and distributor for each Fund. The Exchange represents that the Adviser is not registered as a brokerdealer, but is affiliated with a brokerdealer and has implemented a ‘‘fire wall’’ with respect to such broker-dealer regarding access to information concerning the composition or changes to the Funds’ portfolios.7 5 In Amendment No. 1, the Exchange expands the information that would be included in the Funds’ Disclosed Portfolios. Specifically, the investment adviser to the Funds would include the following information (as applicable) in the Disclosed Portfolios, which would be updated daily on the Funds’ Web site: ticker symbol, CUSIP number or other identifier, if any; a description of the holding (including the type of holding, such as the type of swap); the identity of the security, commodity, index, Reference Entity(ies) or other asset or instrument underlying the holding, if any; for options, the option strike price; quantity held (as measured by, for example, par value, notional value or number of shares, contracts or units); maturity date, if any; coupon rate, if any; effective date, if any; market value of the holding; and the percentage weighting of the holding in a Fund’s portfolio. 6 The Trust is registered under the Investment Company Act of 1940 (‘‘1940 Act’’). According to the Exchange, on April 9, 2013, the Trust filed with the Commission an amendment to the registration statement for the Funds on Form N–1A under the Securities Act of 1933 and under the 1940 Act relating to the Funds (File Nos. 333–148886 and 811–22177) (‘‘Registration Statement’’). The Exchange also states that the Trust has obtained certain exemptive relief from the Commission under the 1940 Act. See Investment Company Act Release No. 30378 (February 5, 2013) (‘‘Exemptive Order’’). The Exchange represents that the investments made by the Funds will comply with the conditions set forth in the Exemptive Order. 7 See Commentary .06 to NYSE Arca Equities Rule 8.600. The Exchange further represents that in the event (a) the Adviser becomes newly affiliated with a broker-dealer, or (b) any new adviser or sub- VerDate Mar<15>2010 16:54 Apr 17, 2014 Jkt 232001 The Exchange has made the following representations and statements in describing the Funds and their respective investment strategies, including other portfolio holdings and investment restrictions.8 Description of the Funds Each Fund will seek to provide exposure to a long or short position with respect to a specific segment of the North American corporate credit markets.9 The strategy of each of the Funds involves buying and selling credit default swaps (‘‘CDS’’) to outperform, before fees and expenses, either a long or short position tied to its benchmark index. Currently, each Fund will use either the Markit CDX North American Investment Grade 5-year Total Return Index or the Markit CDX North American High Yield 5-year Total Return Index (each an ‘‘Index’’ or ‘‘CDX Index,’’ and collectively, ‘‘Indices’’) as its benchmark.10 None of the Funds will use leverage, and each Fund will maintain sufficient assets at all times so that it can meet its payment, margin, or other obligations without borrowing.11 adviser, if any, is a registered broker-dealer or becomes affiliated with a broker-dealer, it will implement a fire wall with respect to its relevant personnel or its broker-dealer affiliate regarding access to information concerning the composition or changes to a portfolio, and will be subject to procedures designed to prevent the use and dissemination of material, non-public information regarding such portfolio. 8 The Commission notes that additional information regarding the Trust, the Funds, and the Shares, including information on swaps, in general, and credit default swaps (‘‘CDS’’), in particular, methodology and construction of the Indices (as defined below), investment strategies, risks, net asset value (‘‘NAV’’) calculation, creation and redemption procedures, fees, portfolio holdings, disclosure policies, distributions, and taxes, among other information, is included in the Notice and the Registration Statement, as applicable. See Notice and Registration Statement, supra notes 3 and 6, respectively. 9 With respect to a particular credit market, a ‘‘long position’’ means that an investor expects that the issuers of debt securities in a particular debt market will be able to meet their obligations in accordance with the terms of such debt securities in full and on-time. With respect to a particular credit market, a ‘‘short position’’ means that an investor expects there will be an increased likelihood that the issuers of debt securities in a particular debt market will not be able to meet their obligations in accordance with the terms of such debt securities in full or on-time. 10 The Markit CDX North American Investment Grade 5-year Total Return Index is designed to track the credit quality of 125 investment grade North American debt issuers or the unsubordinated debt obligations of such debt issuers. The Markit CDX North American High Yield 5-year Total Return Index is designed to track the credit quality of 100 high yield North American debt issuers or the unsubordinated debt obligations of such debt issuers. 11 In general, no leverage means that, for each $100 million of assets under management, the relevant Fund will be a net buyer or seller PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 While actual percentages will vary, it is generally expected that less than 20% of a Fund’s assets will be in CDS and nonprincipal investments (as described below), and the balance of a Fund’s assets will be U.S. Treasury securities, money market instruments, and cash. A. Principal Investments To meet its respective investment objective, under normal market conditions,12 each Fund intends to invest substantially all of its assets in: (1) CDS that are cleared by a clearing organization 13 and which are either (a) CDS index swaps, including swaps based on the CDX Index (‘‘CDX Index swaps’’), based on multiple CDS relating to the debt issued by different Reference Entities,14 or (b) ‘‘Single Name CDS,’’ which are CDS that relate only to the debt issued by a single Reference Entity; 15 (2) futures contracts based on CDS or other similar futures contracts; and (3) obligations of, or those guaranteed by, the United States government with a maturity of less than six years (‘‘U.S. Treasury securities’’), money market instruments, and cash. Each of the Funds’ investments, including derivatives, will be consistent with its investment objective. 1. ETSpreads IG Long Credit Fund The investment objective of the Fund is to provide long exposure to the credit of a diversified portfolio of North (consistent with its investment objective) of protection on $100 million. 12 The term ‘‘under normal market conditions’’ includes, but is not limited to, the absence of extreme volatility or trading halts in the fixed income markets or the financial markets generally; events or circumstances causing a disruption in market liquidity or orderly markets; 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. 13 The Funds intend to use ICE Clear Credit LLC and CME Clearing as the clearing organizations for their cleared CDS. ICE Clear Credit LLC is a subsidiary of the IntercontinentalExchange, Inc. ICE Clear Credit LLC is registered with the Commodity Futures Trading Commission (‘‘CFTC’’) as a clearing house for credit default swaps, including CDX Index swaps. CME Clearing is a division of Chicago Mercantile Exchange Inc. (‘‘CME’’), which is a subsidiary of the CME Group Inc. CME is registered with the CFTC as a clearing house for CDS, including CDX Index swaps. 14 The Exchange states that a ‘‘Reference Entity’’ is the entity whose debt underlies a Single Name CDS. A Reference Entity can be a corporation, government, or other legal entity that issues debt of any kind. The Exchange also states that CDX Index swaps are based on a particular index that includes Single Name CDS of several Reference Entities. 15 Fund transactions in CDS cleared through a clearing organization that have been designated by the CFTC or the Commission as ‘‘made available to trade’’ will be executed on exchanges or on a swap execution facility subject to CFTC or Commission oversight or regulation. E:\FR\FM\18APN1.SGM 18APN1 Federal Register / Vol. 79, No. 75 / Friday, April 18, 2014 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES American investment grade debt issuers. With respect to a particular credit market, a ‘‘long position’’ means that an investor expects that the issuers of debt securities in a particular debt market will be able to meet their obligations in accordance with the terms of such debt securities in full and on-time. The Fund will invest, under normal market conditions, substantially all of its assets in (i) CDS cleared by a clearing organization which are either (a) CDS index swaps based on multiple CDS relating to the debt issued by different Reference Entities, or (b) Single Name CDS based on CDS relating to the debt issued by a single Reference Entity; (ii) futures contracts based on CDS or other similar futures contracts; and (iii) U.S. Treasury securities, money market instruments, and cash. In order to gain exposure to the investment grade credit market, the Fund will normally be a net protection seller under its CDS, and will be required to make payments to the protection buyer when a specified adverse credit event occurs relating to a Reference Entity. If the Fund is successful in meeting its objective, its NAV should generally increase when the North American investment grade credit market is improving. Conversely, its NAV should generally decrease when the North American investment grade credit market is deteriorating. 2. ETSpreads IG Short Credit Fund The investment objective of the Fund is to provide short exposure to the credit of a diversified portfolio of North American investment grade debt issuers. The Fund will invest, under normal market conditions, substantially all of its assets in (i) CDS cleared by a clearing organization which are either (a) CDS index swaps based on multiple CDS relating to the debt issued by different Reference Entities, or (b) Single Name CDS based on CDS relating to the debt issued by a single Reference Entity; (ii) futures contracts based on CDS or other similar futures contracts; and (iii) U.S. Treasury securities, money market instruments, and cash. To gain short exposure to the investment grade credit market, the Fund will normally be a net protection buyer under its CDS, and therefore will be required to make the ongoing payments specified under such contracts that represent the cost of purchasing protection from adverse credit events relating to a Reference Entity. If the Fund is successful in meeting its objective, its NAV should generally decrease as the North American investment grade credit market is improving. Conversely, its NAV should VerDate Mar<15>2010 16:54 Apr 17, 2014 Jkt 232001 generally increase as the North American investment grade credit market is deteriorating. 3. ETSpreads HY Long Credit Fund The investment objective of the Fund is to provide long exposure to the credit of a diversified portfolio of North American high yield debt issuers. The Fund will invest, under normal market conditions, substantially all of its assets in (i) CDS cleared by a clearing organization which are either (a) CDS index swaps based on multiple CDS relating to the debt issued by different Reference Entities, or (b) Single Name CDS based on CDS relating to the debt issued by a single Reference Entity; (ii) futures contracts based on CDS or other similar futures contracts; and (iii) U.S. Treasury securities, money market instruments, and cash. To gain exposure to the high yield credit market, the Fund will normally be a net protection seller under its CDS, i.e., it will be required to make payments to the protection buyer when a specified adverse credit event occurs relating to a Reference Entity. If the Fund is successful in meeting its objective, its NAV should generally increase when the North American high yield credit market is rallying, which means that credit quality is improving and differences or ‘‘spreads’’ between the returns on high yield debt securities generally and the returns on debt securities with comparable maturities that are essentially free of credit risk (such as U.S. Treasury securities) are decreasing or ‘‘tightening.’’ Conversely, its NAV should generally decrease when the North American high yield credit market is falling (going down), credit quality is deteriorating, and spreads are increasing or ‘‘widening.’’ 4. ETSpreads HY Short Credit Fund The investment objective of the Fund is to provide short exposure to the credit of a diversified portfolio of North American high yield debt issuers. The Fund will invest substantially all of its assets in (i) CDS cleared by a clearing organization which are either (a) CDS index swaps based on multiple CDS relating to the debt issued by different Reference Entities, or (b) Single Name CDS based on CDS relating to the debt issued by a single Reference Entity; (ii) futures contracts based on CDS or other similar futures contracts; and (iii) U.S. Treasury securities, money market instruments, and cash. To gain short exposure to the high yield credit market, the Fund will normally be a net protection buyer under its CDS, i.e., it will be required to make the ongoing payments specified under such contracts that represent the cost of PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 21983 purchasing protection from adverse credit events relating to a Reference Entity. If the Fund is successful in meeting its objective, its NAV should generally decrease when the North American high yield credit market is improving. Conversely, its NAV should generally increase as the North American high yield credit market is deteriorating. B. Non-Principal Investments of the Funds While each Fund will invest, under normal market conditions, substantially all of its assets as described above under each Fund’s principal investment strategies, each Fund may invest in, to the extent that CDS cleared by a clearing organization are not available, fully collateralized non-cleared CDS transactions,16 and (1) to the extent available, options that are cleared through a clearing organization regulated or subject to the oversight of the CFTC or the Commission 17 and (2) if options cleared through a clearing organization are not available, fully collateralized non-cleared OTC options, in each case, relating to the following: options on CDS, options on CDS futures, options on CDS indexes and options on U.S. Treasury securities.18 16 To reduce the credit risk that arises in connection with investments in non-cleared swaps, each of the Funds generally will enter into an agreement with each counterparty based on a Master Agreement published by the International Swaps and Derivatives Association, Inc. that provides for the netting of its overall exposure to its counterparty. The Adviser will assess or review, as appropriate, the creditworthiness of each potential or existing counterparty to an over-thecounter (‘‘OTC’’) contract pursuant to guidelines approved by the Adviser. Furthermore, the Adviser on behalf of the Funds will only enter into OTC contracts with counterparties who are, or are affiliates of, (a) banks regulated by a United States federal bank regulator, (b) swap dealers or securities based swap dealers regulated by the CFTC and/or the Commission, (c) broker-dealers regulated by the Commission, or (d) insurance companies domiciled in the United States. Existing counterparties will be reviewed periodically by the Adviser. The Funds also may require that the counterparty be highly rated or provide collateral or other credit support. 17 Fund transactions in options cleared through a clearing organization that have been designated by the CFTC or the Commission as ‘‘made available to trade’’ will be executed by the Funds on an exchange or on a swap execution facility subject to CFTC or Commission oversight or regulation. 18 The Exchange states that each of the Funds’ CDS transactions, whether cleared or uncleared, and the options described above will be subject to CFTC or Commission reporting, including the reporting of detailed transaction data to swap data repositories subject to CFTC or the Commission oversight or regulation. According to the Exchange, all swap transaction data, including data on options, will be available to the CFTC and the Commission and certain bank or other regulators. In addition, with certain exceptions (e.g., delays for large block trades), a portion of each CDS transaction’s data will be available to major market E:\FR\FM\18APN1.SGM Continued 18APN1 21984 Federal Register / Vol. 79, No. 75 / Friday, April 18, 2014 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES Each Fund also may utilize other types of swap agreements, including but not limited to: total return swaps on debt, equity or CDS or indexes relating to the foregoing; bond or corporate credit index swaps; and interest rate swaps. A Fund may utilize these swap agreements in an attempt to gain exposure to the investments used to meet its investment objective in a market without actually purchasing those investments, or to hedge a position. Each Fund may invest in the securities of other investment companies, consistent with the requirements of Section 12(d)(1) of the 1940 Act, or any rule, regulation or order of the Commission or interpretation thereof. Each Fund may enter into repurchase agreements with financial institutions, which may be deemed to be loans. Each Fund follows certain procedures designed to minimize the risks inherent in such agreements. These procedures include effecting repurchase transactions only with large, wellcapitalized, and well-established financial institutions whose condition will be continually monitored by the Adviser. In addition, the value of the collateral underlying the repurchase agreement will always be at least equal to the repurchase price, including any accrued interest earned on the repurchase agreement. C. The Funds’ Investment Restrictions Each of the Funds may hold up to an aggregate amount of 15% of its net assets in illiquid investments (calculated at the time of investment) in accordance with Commission staff guidance. The Funds will monitor their portfolio liquidity on an ongoing basis to determine whether, in light of current circumstances, an adequate level of liquidity is being maintained, and will take appropriate steps in order to maintain adequate liquidity if, through a change in values, net assets, or other circumstances, more than 15% of a Fund’s net assets are held in illiquid investments. Illiquid investments include investments subject to contractual or other restrictions on resale and other instruments that lack readily available markets as determined in accordance with Commission staff guidance. The Funds will not invest in any equity securities except for investment company securities, and will be nondiversified, which means that a Fund may invest its assets in a smaller data vendors on a real time, though anonymous, basis. VerDate Mar<15>2010 16:54 Apr 17, 2014 Jkt 232001 number of issuers than a diversified fund. In addition, the Funds intend to invest only in futures contracts traded on exchanges that are subject to CFTC or Commission oversight or regulation. III. Discussion and Commission Findings After careful review, the Commission finds that the Exchange’s proposal to list and trade the Shares is consistent with the Exchange Act and the rules and regulations thereunder applicable to a national securities exchange.19 In particular, the Commission finds that the proposed rule change, as modified by Amendment No. 1 thereto, is consistent with Section 6(b)(5) of the Exchange Act,20 which requires, among other things, that the Exchange’s rules be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The Commission notes that the Funds and the Shares must comply with the requirements of NYSE Arca Equities Rule 8.600 for the Shares to be listed and traded on the Exchange. The Commission finds that the proposal to list and trade the Shares on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the Exchange Act,21 which sets forth Congress’ finding that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure the availability to brokers, dealers, and investors of information with respect to quotations for and transactions in securities. Quotation and last-sale information for the Shares and exchange-traded investment company securities will be available via the Consolidated Tape Association (‘‘CTA’’) high-speed line. Information regarding market price and trading volume of the Shares will be continually available on a real-time basis throughout the day on brokers’ computer screens and other electronic services. Information regarding the previous day’s closing price and trading volume information for the Shares will be published daily in the financial section of newspapers. The Commission also believes that the proposal to list and trade the Shares is reasonably designed to promote fair disclosure of information that may be necessary to price the Shares 19 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 20 15 U.S.C. 78f(b)(5). 21 15 U.S.C. 78k–1(a)(1)(C)(iii). PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 appropriately and to prevent trading when a reasonable degree of transparency cannot be assured. On each business day, before commencement of trading in Shares in the Core Trading Session (9:30 a.m. to 4:00 p.m. Eastern Time) on the Exchange, the Funds will disclose on their Web site the Disclosed Portfolio, as defined in NYSE Arca Equities Rule 8.600(c)(2), that will form the basis for the Funds’ calculation of NAV at the end of the business day.22 The Web site information will be publicly available at no charge. The NAV per Share of each Fund will be calculated by The Bank of New York Mellon and determined as of the close of regular trading on the Exchange (ordinarily 4:00 p.m. Eastern Time) on each day that the Exchange is open. 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. According to the Exchange, market participants, particularly large institutional investors, regularly receive executable and indicative quotations on CDS from dealers. In addition, intra-day and end-of-day prices for all Single Name CDS, CDS index swaps, or other financial instruments held by a Fund will be available through major market data vendors or broker-dealers or on the exchanges on which they are traded. Major market vendors which provide intra-day and end-of-day prices for both Single Name CDS and CDS index swaps include Markit, Credit Market Analysis Ltd., and Bloomberg L.P. Bloomberg L.P., Thomson Reuters Corporation, and similar data vendors provide intra-day and end-of-day pricing data for U.S. Treasury securities and money market instruments. Exchanges which provide intraday and end-of-day prices for futures and options on futures include ICE Futures and CME Group. Brokerdealers provide intraday and end-of-day prices for non-cleared swaps and options, including options on Single Name CDS and options on CDS index swaps. The Exchange further states that ICE Clear Credit LLC and CME Clearing provide daily price and transaction information for swaps that it or its affiliate clears by subscription to its members and other market participants. 22 Under accounting procedures followed by the Funds, trades made on the prior business day (T) will be booked and reflected in NAV on the current business day (T+1). Accordingly, the Funds will be able to disclose at the beginning of the business day the portfolio that will form the basis for the NAV calculation at the end of the business day. E:\FR\FM\18APN1.SGM 18APN1 mstockstill on DSK4VPTVN1PROD with NOTICES Federal Register / Vol. 79, No. 75 / Friday, April 18, 2014 / Notices Additionally, pricing intraday regarding various CDS index swaps is provided free to the public, with a fifteen minute delay, on the Markit Web site (https:// source.markit.com). Daily trading volume of cleared swaps transacted via the ICE Clear Credit LLC and CME Clearing clearing organizations is also available through their respective Web sites. According to the Exchange, another source of intra-day information about Single Name CDS prices is the market for OTC corporate bonds on which the CDS are based. Because CDS represent the credit risk component of corporate bonds, and the effect of interest rate changes on the prices of corporate bonds is readily calculable, market professionals are able to obtain substantial information about the intraday value of CDS based on data on the intra-day value of the underlying corporate bonds (short-term variations between the bond and CDS markets do arise, and may occur more frequently when such markets are volatile). One source of bond price information is the Financial Industry Regulatory Authority’s (‘‘FINRA’’) Trace Reporting and Compliance System (‘‘TRACE’’). TRACE reports executed prices on corporate bonds, including high-yield bond transactions. TRACE reported prices are available without charge on the FINRA Web site on a ‘‘real time’’ basis (subject to a fifteen minute delay) and also are available by subscription from various information providers. In addition, authorized participants and other market participants, particularly those that regularly deal or trade in corporate bonds, have access to intraday corporate bond prices from a variety of sources other than TRACE, such as Thomson Reuters, Interactive Data and MarketAxess. The Exchange states that the intraday, closing, and settlement prices of U.S. Treasury securities, money market instruments, and repurchase agreements will be readily available from published or other public sources, or major market data vendors such as Bloomberg and Thomson Reuters. Price information regarding exchange-traded options is available from the exchanges on which such instruments are traded and from Market Data Express’s (an affiliate of Chicago Board Options Exchange) Customized Option Pricing Service. Price information regarding OTC options is available from major market data vendors. Intra-day and closing price information for shares of exchange-listed investment company securities are available from the exchange on which such securities are principally traded and from major VerDate Mar<15>2010 16:54 Apr 17, 2014 Jkt 232001 market data vendors. The NAV of any investment company security investment will be readily available on the Web site of the relevant investment company and from major market data vendors. Major market data vendors also provide intra-day and end-of-day prices for total return swaps, bond, or corporate credit index swaps, and interest rate swaps. The Exchange states that the Portfolio Indicative Value of the Funds, as defined in NYSE Arca Equities Rule 8.600(c)(3), will be widely disseminated by one or more major market data vendors at least every 15 seconds during the Core Trading Session.23 In addition, the Web site for the Funds will include a form of the prospectus for the Funds and additional data relating to NAV and other applicable quantitative information. The Exchange represents that trading in Shares of the Funds 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,24 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 Funds may be halted. The Exchange states that it has a general policy prohibiting the distribution of material, non-public information by its employees. The Commission notes that, consistent with NYSE Arca Equities Rule 8.600(d)(2)(B)(ii), the Reporting Authority, must implement and maintain, or be subject to, procedures designed to prevent the use and dissemination of material, non-public information regarding the actual components of each Fund’s portfolio.25 The Exchange states that the Adviser has implemented a ‘‘fire wall’’ with respect to its broker-dealer affiliate regarding access to information concerning the composition or changes to the Funds’ portfolios.26 Prior to the 23 According to the Exchange, several major market data vendors display or make widely available Portfolio Indicative Values taken from the CTA or other data feeds. 24 These reasons may include: (1) the extent to which trading is not occurring in the securities or the financial instruments comprising the Disclosed Portfolio of a Fund; or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. The Exchange represents that it may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares of a Fund. 25 See NYSE Arca Equities Rule 8.600(d)(2)(D). 26 See supra note 7 and accompanying text. The Exchange states that an investment adviser to an open-end fund is required to be registered under the PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 21985 commencement of trading, the Exchange will inform its Equity Trading Permit Holders in an Information Bulletin of the special characteristics and risks associated with trading the Shares. FINRA, on behalf of the Exchange,27 will communicate as needed regarding trading in the Shares, futures, exchangelisted options, and exchange-listed investment company securities with other markets and other entities that are members of the Intermarket Surveillance Group (‘‘ISG’’).28 The Exchange also states that FINRA, on behalf of the Exchange, may obtain trading information regarding trading in the Shares, futures, exchange-listed options, and exchange-listed investment company securities from such markets and other entities. In addition, the Exchange may obtain information regarding trading in the Shares, futures, exchange-listed options, and exchangelisted investment company securities from markets and other entities that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. FINRA, on behalf of the Exchange, also is able to access, as needed, trade information for certain fixed-income securities held by the Funds reported to FINRA’s TRACE. 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. In support of this proposal, the Exchange has made representations, including: (1) The Exchange has appropriate rules to facilitate transactions in the Shares during all trading sessions (Opening, Core, and Late Trading Sessions). (2) The Shares will conform to the initial and continuing listing criteria under NYSE Arca Equities Rule 8.600. (3) Trading in 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 that these procedures are adequate to properly monitor Exchange trading of the Shares in all trading sessions and to detect and help deter violations of Exchange rules 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. 27 The Exchange states that 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. 28 For a list of the current members of ISG, see www.isgportal.org. E:\FR\FM\18APN1.SGM 18APN1 21986 Federal Register / Vol. 79, No. 75 / Friday, April 18, 2014 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES and federal securities laws applicable to trading on the Exchange. (4) Prior to the commencement of trading, the Exchange will inform its Equity Trading Permit Holders in an Information Bulletin of the special characteristics and risks associated with trading the Shares. Specifically, the Information Bulletin will discuss the following: (a) the procedures for purchases and redemptions of Shares in creation unit aggregations (and that Shares are not individually redeemable); (b) NYSE Arca Equities Rule 9.2(a), which imposes a duty of due diligence on its Equity Trading Permit Holders to learn the essential facts relating to every customer prior to trading the Shares; (c) the risks involved in trading the Shares during the Opening and Late Trading Sessions when an updated Portfolio Indicative Value will not be calculated or publicly disseminated; (d) how information regarding the Portfolio Indicative Value is disseminated; (e) the requirement that Equity Trading Permit Holders deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; and (f) trading information. (5) For initial and continued listing, the Funds will be in compliance with Rule 10A–3 under the Exchange Act,29 as provided by NYSE Arca Equities Rule 5.3. (6) Each Fund’s investments, including derivatives, will be consistent with its respective investment objective. (7) A Fund may hold up to an aggregate amount of 15% of its net assets in illiquid investments (calculated at the time of investment). (8) A minimum of 100,000 Shares for each Fund will be outstanding at the commencement of trading on the Exchange. This approval order is based on all of the Exchange’s representations, including those set forth above and in the Notice, and the Exchange’s description of the Funds. For the foregoing reasons, the Commission finds that the proposed rule change, as modified by Amendment No. 1 thereto, is consistent with Section 6(b)(5) of the Act 30 and the rules and regulations thereunder applicable to a national securities exchange. IV. Solicitation of Comments on Amendment No. 1 Interested persons are invited to submit written data, views, and arguments concerning the foregoing, 29 17 30 15 CFR 240.10A–3. U.S.C. 78f(b)(5). VerDate Mar<15>2010 16:54 Apr 17, 2014 Jkt 232001 including whether Amendment No. 1 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–2013–144 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, Station Place, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEArc–2013–144. 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 the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NYSEArca–2013–144 and should be submitted on or before May 9, 2014. V. Accelerated Approval of Proposed Rule Change As Modified by Amendment No. 1 The Commission finds good cause to approve the proposed rule change, as modified by Amendment No. 1, prior to the thirtieth day after the date of publication of notice in the Federal Register. The proposed Amendment PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 supplements the proposed rule change by expanding the amount of disclosure regarding the Funds’ holdings. The Commission believes that this additional information will benefit market participants. Accordingly, the Commission finds good cause, pursuant to Section 19(b)(2) of the Act,31 to approve the proposed rule change, as modified by Amendment No. 1, on an accelerated basis. VI. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,32 that the proposed rule change (SR–NYSEArca– 2013–144), as modified by Amendment No. 1 thereto, be, and it hereby is, approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.33 Jill M. Peterson, Assistant Secretary. [FR Doc. 2014–08791 Filed 4–17–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–71941; File No. SR–BATS– 2014–011] Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to Fees for Use of BATS Exchange, Inc. April 14, 2014. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on April 1, 2014, BATS Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BATS’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Exchange has designated the proposed rule change as one establishing or changing a member due, fee, or other charge imposed by the Exchange under Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b–4(f)(2) thereunder,4 which renders the proposed rule change effective upon filing with the Commission. The Commission is publishing this notice to solicit 31 15 U.S.C. 78s(b)(2). U.S.C. 78s(b)(2). 33 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 32 15 E:\FR\FM\18APN1.SGM 18APN1

Agencies

[Federal Register Volume 79, Number 75 (Friday, April 18, 2014)]
[Notices]
[Pages 21981-21986]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-08791]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71938; File No. SR-NYSEArca-2013-144]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Amendment No. 1 and Order Granting Accelerated Approval of a 
Proposed Rule Change, as Modified by Amendment No. 1, To List and Trade 
Shares of the ETSpreads HY Long Credit Fund, the ETSpreads HY Short 
Credit Fund, the ETSpreads IG Long Credit Fund, and the ETSpreads IG 
Short Credit Fund Under NYSE Arca Equities Rule 8.600

April 14, 2014.

I. Introduction

    On December 27, 2013, NYSE Arca, Inc. (``Exchange'' or ``NYSE 
Arca'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to list and trade shares 
(``Shares'') of the ETSpreads HY Long Credit Fund, the ETSpreads HY 
Short Credit Fund, the ETSpreads IG Long Credit Fund, and the ETSpreads 
IG Short Credit Fund (each a ``Fund'' and, collectively, ``Funds'') 
under NYSE Arca Equities Rule 8.600. The proposed rule change was 
published for comment in the Federal Register on January 15, 2014.\3\ 
On February 26, 2014, the Commission issued a notice of designation of 
a longer period for Commission action on the proposed rule change.\4\ 
On April 11, 2014, the Exchange filed Amendment

[[Page 21982]]

No. 1 to the proposed rule change.\5\ The Commission received no 
comments on the proposal. The Commission is publishing this notice to 
solicit comments on Amendment No. 1 from interested persons, and is 
approving the proposed rule change, as modified by Amendment No. 1 
thereto, on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 71266 (January 9, 
2014), 79 FR 2705 (``Notice'').
    \4\ See Securities Exchange Act Release No. 71618, 79 FR 12254 
(March 4, 2014). Pursuant to Section 19(b)(2) of the Act, the 
Commission determined that it was appropriate to designate a longer 
period within which to take action on the proposed rule change. 
Accordingly, the Commission designated April 15, 2014, as the date 
by which the Commission should either approve or disapprove or 
institute proceedings to determine whether to disapprove the 
proposed rule change.
    \5\ In Amendment No. 1, the Exchange expands the information 
that would be included in the Funds' Disclosed Portfolios. 
Specifically, the investment adviser to the Funds would include the 
following information (as applicable) in the Disclosed Portfolios, 
which would be updated daily on the Funds' Web site: ticker symbol, 
CUSIP number or other identifier, if any; a description of the 
holding (including the type of holding, such as the type of swap); 
the identity of the security, commodity, index, Reference 
Entity(ies) or other asset or instrument underlying the holding, if 
any; for options, the option strike price; quantity held (as 
measured by, for example, par value, notional value or number of 
shares, contracts or units); maturity date, if any; coupon rate, if 
any; effective date, if any; market value of the holding; and the 
percentage weighting of the holding in a Fund's portfolio.
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II. Description of the Proposal

    The Exchange proposes to list and trade the Shares of each Fund 
under NYSE Arca Equities Rule 8.600, which governs the listing and 
trading of Managed Fund Shares. The Shares will be offered by Exchange 
Traded Spreads Trust (``Trust''), a statutory trust organized under the 
laws of the State of Delaware and registered with the Commission as an 
open-end management investment company.\6\ ETSpreads, LLC (``Adviser'') 
is the investment adviser for each Fund and is a registered investment 
adviser under the Investment Advisers Act of 1940 (``Advisers Act''). 
ALPS Distributors, Inc. will serve as the principal underwriter and 
distributor for each Fund. The Exchange represents that the Adviser is 
not registered as a broker-dealer, but 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 or 
changes to the Funds' portfolios.\7\
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    \6\ The Trust is registered under the Investment Company Act of 
1940 (``1940 Act''). According to the Exchange, on April 9, 2013, 
the Trust filed with the Commission an amendment to the registration 
statement for the Funds on Form N-1A under the Securities Act of 
1933 and under the 1940 Act relating to the Funds (File Nos. 333-
148886 and 811-22177) (``Registration Statement''). The Exchange 
also states that the Trust has obtained certain exemptive relief 
from the Commission under the 1940 Act. See Investment Company Act 
Release No. 30378 (February 5, 2013) (``Exemptive Order''). The 
Exchange represents that the investments made by the Funds will 
comply with the conditions set forth in the Exemptive Order.
    \7\ See Commentary .06 to NYSE Arca Equities Rule 8.600. The 
Exchange further represents that in the event (a) the Adviser 
becomes newly affiliated with a broker-dealer, or (b) any new 
adviser or sub-adviser, if any, is a registered broker-dealer or 
becomes affiliated with a broker-dealer, it will implement a fire 
wall with respect to its relevant personnel or its broker-dealer 
affiliate regarding access to information concerning the composition 
or changes to a 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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    The Exchange has made the following representations and statements 
in describing the Funds and their respective investment strategies, 
including other portfolio holdings and investment restrictions.\8\
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    \8\ The Commission notes that additional information regarding 
the Trust, the Funds, and the Shares, including information on 
swaps, in general, and credit default swaps (``CDS''), in 
particular, methodology and construction of the Indices (as defined 
below), investment strategies, risks, net asset value (``NAV'') 
calculation, creation and redemption procedures, fees, portfolio 
holdings, disclosure policies, distributions, and taxes, among other 
information, is included in the Notice and the Registration 
Statement, as applicable. See Notice and Registration Statement, 
supra notes 3 and 6, respectively.
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Description of the Funds
    Each Fund will seek to provide exposure to a long or short position 
with respect to a specific segment of the North American corporate 
credit markets.\9\ The strategy of each of the Funds involves buying 
and selling credit default swaps (``CDS'') to outperform, before fees 
and expenses, either a long or short position tied to its benchmark 
index. Currently, each Fund will use either the Markit CDX North 
American Investment Grade 5-year Total Return Index or the Markit CDX 
North American High Yield 5-year Total Return Index (each an ``Index'' 
or ``CDX Index,'' and collectively, ``Indices'') as its benchmark.\10\ 
None of the Funds will use leverage, and each Fund will maintain 
sufficient assets at all times so that it can meet its payment, margin, 
or other obligations without borrowing.\11\ While actual percentages 
will vary, it is generally expected that less than 20% of a Fund's 
assets will be in CDS and non-principal investments (as described 
below), and the balance of a Fund's assets will be U.S. Treasury 
securities, money market instruments, and cash.
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    \9\ With respect to a particular credit market, a ``long 
position'' means that an investor expects that the issuers of debt 
securities in a particular debt market will be able to meet their 
obligations in accordance with the terms of such debt securities in 
full and on-time. With respect to a particular credit market, a 
``short position'' means that an investor expects there will be an 
increased likelihood that the issuers of debt securities in a 
particular debt market will not be able to meet their obligations in 
accordance with the terms of such debt securities in full or on-
time.
    \10\ The Markit CDX North American Investment Grade 5-year Total 
Return Index is designed to track the credit quality of 125 
investment grade North American debt issuers or the unsubordinated 
debt obligations of such debt issuers. The Markit CDX North American 
High Yield 5-year Total Return Index is designed to track the credit 
quality of 100 high yield North American debt issuers or the 
unsubordinated debt obligations of such debt issuers.
    \11\ In general, no leverage means that, for each $100 million 
of assets under management, the relevant Fund will be a net buyer or 
seller (consistent with its investment objective) of protection on 
$100 million.
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A. Principal Investments

    To meet its respective investment objective, under normal market 
conditions,\12\ each Fund intends to invest substantially all of its 
assets in: (1) CDS that are cleared by a clearing organization \13\ and 
which are either (a) CDS index swaps, including swaps based on the CDX 
Index (``CDX Index swaps''), based on multiple CDS relating to the debt 
issued by different Reference Entities,\14\ or (b) ``Single Name CDS,'' 
which are CDS that relate only to the debt issued by a single Reference 
Entity; \15\ (2) futures contracts based on CDS or other similar 
futures contracts; and (3) obligations of, or those guaranteed by, the 
United States government with a maturity of less than six years (``U.S. 
Treasury securities''), money market instruments, and cash. Each of the 
Funds' investments, including derivatives, will be consistent with its 
investment objective.
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    \12\ The term ``under normal market conditions'' includes, but 
is not limited to, the absence of extreme volatility or trading 
halts in the fixed income markets or the financial markets 
generally; events or circumstances causing a disruption in market 
liquidity or orderly markets; 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.
    \13\ The Funds intend to use ICE Clear Credit LLC and CME 
Clearing as the clearing organizations for their cleared CDS. ICE 
Clear Credit LLC is a subsidiary of the IntercontinentalExchange, 
Inc. ICE Clear Credit LLC is registered with the Commodity Futures 
Trading Commission (``CFTC'') as a clearing house for credit default 
swaps, including CDX Index swaps. CME Clearing is a division of 
Chicago Mercantile Exchange Inc. (``CME''), which is a subsidiary of 
the CME Group Inc. CME is registered with the CFTC as a clearing 
house for CDS, including CDX Index swaps.
    \14\ The Exchange states that a ``Reference Entity'' is the 
entity whose debt underlies a Single Name CDS. A Reference Entity 
can be a corporation, government, or other legal entity that issues 
debt of any kind. The Exchange also states that CDX Index swaps are 
based on a particular index that includes Single Name CDS of several 
Reference Entities.
    \15\ Fund transactions in CDS cleared through a clearing 
organization that have been designated by the CFTC or the Commission 
as ``made available to trade'' will be executed on exchanges or on a 
swap execution facility subject to CFTC or Commission oversight or 
regulation.
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1. ETSpreads IG Long Credit Fund
    The investment objective of the Fund is to provide long exposure to 
the credit of a diversified portfolio of North

[[Page 21983]]

American investment grade debt issuers. With respect to a particular 
credit market, a ``long position'' means that an investor expects that 
the issuers of debt securities in a particular debt market will be able 
to meet their obligations in accordance with the terms of such debt 
securities in full and on-time. The Fund will invest, under normal 
market conditions, substantially all of its assets in (i) CDS cleared 
by a clearing organization which are either (a) CDS index swaps based 
on multiple CDS relating to the debt issued by different Reference 
Entities, or (b) Single Name CDS based on CDS relating to the debt 
issued by a single Reference Entity; (ii) futures contracts based on 
CDS or other similar futures contracts; and (iii) U.S. Treasury 
securities, money market instruments, and cash. In order to gain 
exposure to the investment grade credit market, the Fund will normally 
be a net protection seller under its CDS, and will be required to make 
payments to the protection buyer when a specified adverse credit event 
occurs relating to a Reference Entity.
    If the Fund is successful in meeting its objective, its NAV should 
generally increase when the North American investment grade credit 
market is improving. Conversely, its NAV should generally decrease when 
the North American investment grade credit market is deteriorating.
2. ETSpreads IG Short Credit Fund
    The investment objective of the Fund is to provide short exposure 
to the credit of a diversified portfolio of North American investment 
grade debt issuers. The Fund will invest, under normal market 
conditions, substantially all of its assets in (i) CDS cleared by a 
clearing organization which are either (a) CDS index swaps based on 
multiple CDS relating to the debt issued by different Reference 
Entities, or (b) Single Name CDS based on CDS relating to the debt 
issued by a single Reference Entity; (ii) futures contracts based on 
CDS or other similar futures contracts; and (iii) U.S. Treasury 
securities, money market instruments, and cash. To gain short exposure 
to the investment grade credit market, the Fund will normally be a net 
protection buyer under its CDS, and therefore will be required to make 
the ongoing payments specified under such contracts that represent the 
cost of purchasing protection from adverse credit events relating to a 
Reference Entity.
    If the Fund is successful in meeting its objective, its NAV should 
generally decrease as the North American investment grade credit market 
is improving. Conversely, its NAV should generally increase as the 
North American investment grade credit market is deteriorating.
3. ETSpreads HY Long Credit Fund
    The investment objective of the Fund is to provide long exposure to 
the credit of a diversified portfolio of North American high yield debt 
issuers. The Fund will invest, under normal market conditions, 
substantially all of its assets in (i) CDS cleared by a clearing 
organization which are either (a) CDS index swaps based on multiple CDS 
relating to the debt issued by different Reference Entities, or (b) 
Single Name CDS based on CDS relating to the debt issued by a single 
Reference Entity; (ii) futures contracts based on CDS or other similar 
futures contracts; and (iii) U.S. Treasury securities, money market 
instruments, and cash. To gain exposure to the high yield credit 
market, the Fund will normally be a net protection seller under its 
CDS, i.e., it will be required to make payments to the protection buyer 
when a specified adverse credit event occurs relating to a Reference 
Entity.
    If the Fund is successful in meeting its objective, its NAV should 
generally increase when the North American high yield credit market is 
rallying, which means that credit quality is improving and differences 
or ``spreads'' between the returns on high yield debt securities 
generally and the returns on debt securities with comparable maturities 
that are essentially free of credit risk (such as U.S. Treasury 
securities) are decreasing or ``tightening.'' Conversely, its NAV 
should generally decrease when the North American high yield credit 
market is falling (going down), credit quality is deteriorating, and 
spreads are increasing or ``widening.''
4. ETSpreads HY Short Credit Fund
    The investment objective of the Fund is to provide short exposure 
to the credit of a diversified portfolio of North American high yield 
debt issuers. The Fund will invest substantially all of its assets in 
(i) CDS cleared by a clearing organization which are either (a) CDS 
index swaps based on multiple CDS relating to the debt issued by 
different Reference Entities, or (b) Single Name CDS based on CDS 
relating to the debt issued by a single Reference Entity; (ii) futures 
contracts based on CDS or other similar futures contracts; and (iii) 
U.S. Treasury securities, money market instruments, and cash. To gain 
short exposure to the high yield credit market, the Fund will normally 
be a net protection buyer under its CDS, i.e., it will be required to 
make the ongoing payments specified under such contracts that represent 
the cost of purchasing protection from adverse credit events relating 
to a Reference Entity.
    If the Fund is successful in meeting its objective, its NAV should 
generally decrease when the North American high yield credit market is 
improving. Conversely, its NAV should generally increase as the North 
American high yield credit market is deteriorating.

B. Non-Principal Investments of the Funds

    While each Fund will invest, under normal market conditions, 
substantially all of its assets as described above under each Fund's 
principal investment strategies, each Fund may invest in, to the extent 
that CDS cleared by a clearing organization are not available, fully 
collateralized non-cleared CDS transactions,\16\ and (1) to the extent 
available, options that are cleared through a clearing organization 
regulated or subject to the oversight of the CFTC or the Commission 
\17\ and (2) if options cleared through a clearing organization are not 
available, fully collateralized non-cleared OTC options, in each case, 
relating to the following: options on CDS, options on CDS futures, 
options on CDS indexes and options on U.S. Treasury securities.\18\
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    \16\ To reduce the credit risk that arises in connection with 
investments in non-cleared swaps, each of the Funds generally will 
enter into an agreement with each counterparty based on a Master 
Agreement published by the International Swaps and Derivatives 
Association, Inc. that provides for the netting of its overall 
exposure to its counterparty. The Adviser will assess or review, as 
appropriate, the creditworthiness of each potential or existing 
counterparty to an over-the-counter (``OTC'') contract pursuant to 
guidelines approved by the Adviser. Furthermore, the Adviser on 
behalf of the Funds will only enter into OTC contracts with 
counterparties who are, or are affiliates of, (a) banks regulated by 
a United States federal bank regulator, (b) swap dealers or 
securities based swap dealers regulated by the CFTC and/or the 
Commission, (c) broker-dealers regulated by the Commission, or (d) 
insurance companies domiciled in the United States. Existing 
counterparties will be reviewed periodically by the Adviser. The 
Funds also may require that the counterparty be highly rated or 
provide collateral or other credit support.
    \17\ Fund transactions in options cleared through a clearing 
organization that have been designated by the CFTC or the Commission 
as ``made available to trade'' will be executed by the Funds on an 
exchange or on a swap execution facility subject to CFTC or 
Commission oversight or regulation.
    \18\ The Exchange states that each of the Funds' CDS 
transactions, whether cleared or uncleared, and the options 
described above will be subject to CFTC or Commission reporting, 
including the reporting of detailed transaction data to swap data 
repositories subject to CFTC or the Commission oversight or 
regulation. According to the Exchange, all swap transaction data, 
including data on options, will be available to the CFTC and the 
Commission and certain bank or other regulators. In addition, with 
certain exceptions (e.g., delays for large block trades), a portion 
of each CDS transaction's data will be available to major market 
data vendors on a real time, though anonymous, basis.

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[[Page 21984]]

    Each Fund also may utilize other types of swap agreements, 
including but not limited to: total return swaps on debt, equity or CDS 
or indexes relating to the foregoing; bond or corporate credit index 
swaps; and interest rate swaps. A Fund may utilize these swap 
agreements in an attempt to gain exposure to the investments used to 
meet its investment objective in a market without actually purchasing 
those investments, or to hedge a position.
    Each Fund may invest in the securities of other investment 
companies, consistent with the requirements of Section 12(d)(1) of the 
1940 Act, or any rule, regulation or order of the Commission or 
interpretation thereof.
    Each Fund may enter into repurchase agreements with financial 
institutions, which may be deemed to be loans. Each Fund follows 
certain procedures designed to minimize the risks inherent in such 
agreements. These procedures include effecting repurchase transactions 
only with large, well-capitalized, and well-established financial 
institutions whose condition will be continually monitored by the 
Adviser. In addition, the value of the collateral underlying the 
repurchase agreement will always be at least equal to the repurchase 
price, including any accrued interest earned on the repurchase 
agreement.

C. The Funds' Investment Restrictions

    Each of the Funds may hold up to an aggregate amount of 15% of its 
net assets in illiquid investments (calculated at the time of 
investment) in accordance with Commission staff guidance. The Funds 
will monitor their portfolio liquidity on an ongoing basis to determine 
whether, in light of current circumstances, an adequate level of 
liquidity is being maintained, and will take appropriate steps in order 
to maintain adequate liquidity if, through a change in values, net 
assets, or other circumstances, more than 15% of a Fund's net assets 
are held in illiquid investments. Illiquid investments include 
investments subject to contractual or other restrictions on resale and 
other instruments that lack readily available markets as determined in 
accordance with Commission staff guidance.
    The Funds will not invest in any equity securities except for 
investment company securities, and will be non-diversified, which means 
that a Fund may invest its assets in a smaller number of issuers than a 
diversified fund. In addition, the Funds intend to invest only in 
futures contracts traded on exchanges that are subject to CFTC or 
Commission oversight or regulation.

III. Discussion and Commission Findings

    After careful review, the Commission finds that the Exchange's 
proposal to list and trade the Shares is consistent with the Exchange 
Act and the rules and regulations thereunder applicable to a national 
securities exchange.\19\ In particular, the Commission finds that the 
proposed rule change, as modified by Amendment No. 1 thereto, is 
consistent with Section 6(b)(5) of the Exchange Act,\20\ which 
requires, among other things, that the Exchange's rules be designed to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, and, in general, to protect investors and the public 
interest. The Commission notes that the Funds and the Shares must 
comply with the requirements of NYSE Arca Equities Rule 8.600 for the 
Shares to be listed and traded on the Exchange.
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    \19\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \20\ 15 U.S.C. 78f(b)(5).
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    The Commission finds that the proposal to list and trade the Shares 
on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the 
Exchange Act,\21\ which sets forth Congress' finding that it is in the 
public interest and appropriate for the protection of investors and the 
maintenance of fair and orderly markets to assure the availability to 
brokers, dealers, and investors of information with respect to 
quotations for and transactions in securities. Quotation and last-sale 
information for the Shares and exchange-traded investment company 
securities will be available via the Consolidated Tape Association 
(``CTA'') high-speed line. Information regarding market price and 
trading volume of the Shares will be continually available on a real-
time basis throughout the day on brokers' computer screens and other 
electronic services. Information regarding the previous day's closing 
price and trading volume information for the Shares will be published 
daily in the financial section of newspapers.
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    \21\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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    The Commission also believes that the proposal to list and trade 
the Shares is reasonably designed to promote fair disclosure of 
information that may be necessary to price the Shares appropriately and 
to prevent trading when a reasonable degree of transparency cannot be 
assured. On each business day, before commencement of trading in Shares 
in the Core Trading Session (9:30 a.m. to 4:00 p.m. Eastern Time) on 
the Exchange, the Funds will disclose on their Web site the Disclosed 
Portfolio, as defined in NYSE Arca Equities Rule 8.600(c)(2), that will 
form the basis for the Funds' calculation of NAV at the end of the 
business day.\22\ The Web site information will be publicly available 
at no charge. The NAV per Share of each Fund will be calculated by The 
Bank of New York Mellon and determined as of the close of regular 
trading on the Exchange (ordinarily 4:00 p.m. Eastern Time) on each day 
that the Exchange is open. 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.
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    \22\ Under accounting procedures followed by the Funds, trades 
made on the prior business day (T) will be booked and reflected in 
NAV on the current business day (T+1). Accordingly, the Funds 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.
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    According to the Exchange, market participants, particularly large 
institutional investors, regularly receive executable and indicative 
quotations on CDS from dealers. In addition, intra-day and end-of-day 
prices for all Single Name CDS, CDS index swaps, or other financial 
instruments held by a Fund will be available through major market data 
vendors or broker-dealers or on the exchanges on which they are traded. 
Major market vendors which provide intra-day and end-of-day prices for 
both Single Name CDS and CDS index swaps include Markit, Credit Market 
Analysis Ltd., and Bloomberg L.P. Bloomberg L.P., Thomson Reuters 
Corporation, and similar data vendors provide intra-day and end-of-day 
pricing data for U.S. Treasury securities and money market instruments. 
Exchanges which provide intraday and end-of-day prices for futures and 
options on futures include ICE Futures and CME Group. Broker-dealers 
provide intraday and end-of-day prices for non-cleared swaps and 
options, including options on Single Name CDS and options on CDS index 
swaps.
    The Exchange further states that ICE Clear Credit LLC and CME 
Clearing provide daily price and transaction information for swaps that 
it or its affiliate clears by subscription to its members and other 
market participants.

[[Page 21985]]

Additionally, pricing intraday regarding various CDS index swaps is 
provided free to the public, with a fifteen minute delay, on the Markit 
Web site (https://source.markit.com). Daily trading volume of cleared 
swaps transacted via the ICE Clear Credit LLC and CME Clearing clearing 
organizations is also available through their respective Web sites.
    According to the Exchange, another source of intra-day information 
about Single Name CDS prices is the market for OTC corporate bonds on 
which the CDS are based. Because CDS represent the credit risk 
component of corporate bonds, and the effect of interest rate changes 
on the prices of corporate bonds is readily calculable, market 
professionals are able to obtain substantial information about the 
intra-day value of CDS based on data on the intra-day value of the 
underlying corporate bonds (short-term variations between the bond and 
CDS markets do arise, and may occur more frequently when such markets 
are volatile). One source of bond price information is the Financial 
Industry Regulatory Authority's (``FINRA'') Trace Reporting and 
Compliance System (``TRACE''). TRACE reports executed prices on 
corporate bonds, including high-yield bond transactions. TRACE reported 
prices are available without charge on the FINRA Web site on a ``real 
time'' basis (subject to a fifteen minute delay) and also are available 
by subscription from various information providers. In addition, 
authorized participants and other market participants, particularly 
those that regularly deal or trade in corporate bonds, have access to 
intra-day corporate bond prices from a variety of sources other than 
TRACE, such as Thomson Reuters, Interactive Data and MarketAxess.
    The Exchange states that the intraday, closing, and settlement 
prices of U.S. Treasury securities, money market instruments, and 
repurchase agreements will be readily available from published or other 
public sources, or major market data vendors such as Bloomberg and 
Thomson Reuters. Price information regarding exchange-traded options is 
available from the exchanges on which such instruments are traded and 
from Market Data Express's (an affiliate of Chicago Board Options 
Exchange) Customized Option Pricing Service. Price information 
regarding OTC options is available from major market data vendors. 
Intra-day and closing price information for shares of exchange-listed 
investment company securities are available from the exchange on which 
such securities are principally traded and from major market data 
vendors. The NAV of any investment company security investment will be 
readily available on the Web site of the relevant investment company 
and from major market data vendors. Major market data vendors also 
provide intra-day and end-of-day prices for total return swaps, bond, 
or corporate credit index swaps, and interest rate swaps.
    The Exchange states that the Portfolio Indicative Value of the 
Funds, as defined in NYSE Arca Equities Rule 8.600(c)(3), will be 
widely disseminated by one or more major market data vendors at least 
every 15 seconds during the Core Trading Session.\23\ In addition, the 
Web site for the Funds will include a form of the prospectus for the 
Funds and additional data relating to NAV and other applicable 
quantitative information. The Exchange represents that trading in 
Shares of the Funds 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,\24\ 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 Funds may be halted.
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    \23\ According to the Exchange, several major market data 
vendors display or make widely available Portfolio Indicative Values 
taken from the CTA or other data feeds.
    \24\ These reasons may include: (1) the extent to which trading 
is not occurring in the securities or the financial instruments 
comprising the Disclosed Portfolio of a Fund; or (2) whether other 
unusual conditions or circumstances detrimental to the maintenance 
of a fair and orderly market are present. The Exchange represents 
that it may consider all relevant factors in exercising its 
discretion to halt or suspend trading in the Shares of a Fund.
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    The Exchange states that it has a general policy prohibiting the 
distribution of material, non-public information by its employees. The 
Commission notes that, consistent with NYSE Arca Equities Rule 
8.600(d)(2)(B)(ii), the Reporting Authority, must implement and 
maintain, or be subject to, procedures designed to prevent the use and 
dissemination of material, non-public information regarding the actual 
components of each Fund's portfolio.\25\ The Exchange states that the 
Adviser has implemented a ``fire wall'' with respect to its broker-
dealer affiliate regarding access to information concerning the 
composition or changes to the Funds' portfolios.\26\ Prior to the 
commencement of trading, the Exchange will inform its Equity Trading 
Permit Holders in an Information Bulletin of the special 
characteristics and risks associated with trading the Shares. FINRA, on 
behalf of the Exchange,\27\ will communicate as needed regarding 
trading in the Shares, futures, exchange-listed options, and exchange-
listed investment company securities with other markets and other 
entities that are members of the Intermarket Surveillance Group 
(``ISG'').\28\ The Exchange also states that FINRA, on behalf of the 
Exchange, may obtain trading information regarding trading in the 
Shares, futures, exchange-listed options, and exchange-listed 
investment company securities from such markets and other entities. In 
addition, the Exchange may obtain information regarding trading in the 
Shares, futures, exchange-listed options, and exchange-listed 
investment company securities from markets and other entities that are 
members of ISG or with which the Exchange has in place a comprehensive 
surveillance sharing agreement. FINRA, on behalf of the Exchange, also 
is able to access, as needed, trade information for certain fixed-
income securities held by the Funds reported to FINRA's TRACE.
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    \25\ See NYSE Arca Equities Rule 8.600(d)(2)(D).
    \26\ See supra note 7 and accompanying text. The Exchange states 
that an investment adviser to an open-end fund is required to be 
registered under 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.
    \27\ The Exchange states that 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.
    \28\ For a list of the current members of ISG, see 
www.isgportal.org.
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    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. In support of this 
proposal, the Exchange has made representations, including:
    (1) The Exchange has appropriate rules to facilitate transactions 
in the Shares during all trading sessions (Opening, Core, and Late 
Trading Sessions).
    (2) The Shares will conform to the initial and continuing listing 
criteria under NYSE Arca Equities Rule 8.600.
    (3) Trading in 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 that these procedures are adequate to 
properly monitor Exchange trading of the Shares in all trading sessions 
and to detect and help deter violations of Exchange rules

[[Page 21986]]

and federal securities laws applicable to trading on the Exchange.
    (4) Prior to the commencement of trading, the Exchange will inform 
its Equity Trading Permit Holders in an Information Bulletin of the 
special characteristics and risks associated with trading the Shares. 
Specifically, the Information Bulletin will discuss the following: (a) 
the procedures for purchases and redemptions of Shares in creation unit 
aggregations (and that Shares are not individually redeemable); (b) 
NYSE Arca Equities Rule 9.2(a), which imposes a duty of due diligence 
on its Equity Trading Permit Holders to learn the essential facts 
relating to every customer prior to trading the Shares; (c) the risks 
involved in trading the Shares during the Opening and Late Trading 
Sessions when an updated Portfolio Indicative Value will not be 
calculated or publicly disseminated; (d) how information regarding the 
Portfolio Indicative Value is disseminated; (e) the requirement that 
Equity Trading Permit Holders deliver a prospectus to investors 
purchasing newly issued Shares prior to or concurrently with the 
confirmation of a transaction; and (f) trading information.
    (5) For initial and continued listing, the Funds will be in 
compliance with Rule 10A-3 under the Exchange Act,\29\ as provided by 
NYSE Arca Equities Rule 5.3.
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    \29\ 17 CFR 240.10A-3.
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    (6) Each Fund's investments, including derivatives, will be 
consistent with its respective investment objective.
    (7) A Fund may hold up to an aggregate amount of 15% of its net 
assets in illiquid investments (calculated at the time of investment).
    (8) A minimum of 100,000 Shares for each Fund will be outstanding 
at the commencement of trading on the Exchange.
    This approval order is based on all of the Exchange's 
representations, including those set forth above and in the Notice, and 
the Exchange's description of the Funds.
    For the foregoing reasons, the Commission finds that the proposed 
rule change, as modified by Amendment No. 1 thereto, is consistent with 
Section 6(b)(5) of the Act \30\ and the rules and regulations 
thereunder applicable to a national securities exchange.
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    \30\ 15 U.S.C. 78f(b)(5).
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IV. Solicitation of Comments on Amendment No. 1

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether Amendment No. 1 
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-2013-144 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArc-2013-144. 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 the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change; the Commission does not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly.
    All submissions should refer to File Number SR-NYSEArca-2013-144 
and should be submitted on or before May 9, 2014.

V. Accelerated Approval of Proposed Rule Change As Modified by 
Amendment No. 1

    The Commission finds good cause to approve the proposed rule 
change, as modified by Amendment No. 1, prior to the thirtieth day 
after the date of publication of notice in the Federal Register. The 
proposed Amendment supplements the proposed rule change by expanding 
the amount of disclosure regarding the Funds' holdings. The Commission 
believes that this additional information will benefit market 
participants. Accordingly, the Commission finds good cause, pursuant to 
Section 19(b)(2) of the Act,\31\ to approve the proposed rule change, 
as modified by Amendment No. 1, on an accelerated basis.
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    \31\ 15 U.S.C. 78s(b)(2).
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VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\32\ that the proposed rule change (SR-NYSEArca-2013-144), as 
modified by Amendment No. 1 thereto, be, and it hereby is, approved on 
an accelerated basis.
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    \32\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\33\
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    \33\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2014-08791 Filed 4-17-14; 8:45 am]
BILLING CODE 8011-01-P