Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Reflecting a Change in The Investment Objective of the Treesdale Rising Rates ETF and Change in Its Creation and Redemption Procedures, 70597-70600 [2014-27976]
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Federal Register / Vol. 79, No. 228 / Wednesday, November 26, 2014 / Notices
duration of the investment and for a
period of not less than six years
thereafter, the first two years in an
easily accessible place.
10. Before approving any advisory
contract under section 15 of the Act, the
board of directors or trustees of each
Investing Management Company
including a majority of the disinterested
directors or trustees, will find that the
advisory fees charged under such
contract are based on services provided
that will be in addition to, rather than
duplicative of, the services provided
under the advisory contract(s) of any
Fund in which the Investing
Management Company may invest.
These findings and their basis will be
fully recorded in the minute books of
the appropriate Investing Management
Company.
11. Any sales charges and/or service
fees charged with respect to shares of an
Investing Fund will not exceed the
limits applicable to a fund of funds as
set forth in NASD Conduct Rule 2830.
12. No Fund will acquire securities of
an investment company or company
relying on section 3(c)(1) or 3(c)(7) of
the Act in excess of the limits contained
in section 12(d)(1)(A) of the Act, except
to the extent the Fund acquires
securities of another investment
company pursuant to exemptive relief
from the Commission permitting the
Fund to acquire securities of one or
more investment companies for shortterm cash management purposes.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–27982 Filed 11–25–14; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
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Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Reflecting a Change in
The Investment Objective of the
Treesdale Rising Rates ETF and
Change in Its Creation and
Redemption Procedures
Pursuant to Section
of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
1 15
U.S.C.78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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The Exchange proposes to reflect a
change in the investment objective of
the Treesdale Rising Rates ETF and
changes in its creation and redemption
procedures. 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 the
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. Purpose
[Release No. 34–73658; File No. SR–
NYSEArca–2014–125]
19(b)(1) 1
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8011–01–P
November 20, 2014.
notice is hereby given that, on
November 10, 2014, 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 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.
The Commission has approved listing
and trading on the Exchange of shares
(‘‘Shares’’) of the Treesdale Rising Rates
ETF (the ‘‘Fund’’) under NYSE Arca
Equities Rule 8.600, which governs the
listing and trading of Managed Fund
Shares.4 Shares of the Fund have not
commenced trading on the Exchange.
The Fund is a series of the
AdvisorShares Trust (‘‘Trust’’), a
4 See Securities Exchange Act Release No. 73082
(September 11, 2014), 79 FR 55845 (September 17,
2014) (SR–NYSEArca–2014–71) (order approving
listing and trading on the Exchange of the Treesdale
Rising Rates ETF under NYSE Arca Equities Rule
8.600) (‘‘Prior Order’’). See also Securities Exchange
Act Release No. 72679 (July 28, 2014), 79 FR 44878
(August 1, 2014) (SR–NYSEArca–2014–71) (‘‘Prior
Notice,’’ and together with the Prior Order, the
‘‘Prior Release’’).
PO 00000
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70597
statutory trust organized under the laws
of the State of Delaware and registered
with the Securities and Exchange
Commission (the ‘‘Commission’’) as an
open-end management investment
company.5 The investment adviser to
the Fund is AdvisorShares Investment,
LLC (‘‘Adviser’’). Foreside Fund
Services, LLC (the ‘‘Distributor’’) is the
principal underwriter and distributor of
the Fund’s Shares. The Bank of New
York Mellon (the ‘‘Administrator’’)
serves as the administrator, custodian,
transfer agent and fund accounting
agent for the Fund.
In this proposed rule change, the
Exchange proposes to reflect a change in
the investment objective of the Fund
and changes in its creation and
redemption procedures, as described
below.6
Investment Objective
The Prior Release stated that the Fund
would seek to generate current income
while providing protection for investors
against loss of principal in a rising
interest rate environment. The Adviser
wishes to revise the description to state
that the Fund will seek total return
while providing protection for investors
against loss of principal in a rising
interest rate environment.
Creation and Redemption of Shares
As stated in the Prior Release, the
Fund will issue and redeem Shares on
a continuous basis at net asset value
(‘‘NAV’’) in aggregated lots which shall
initially be of 25,000 Shares (each, a
‘‘Creation Unit’’).
As stated in the Prior Release, all
orders to create or redeem Creation
Units must be received by the
Distributor no later than 3:00 p.m.,
Eastern Time in order for the creation or
redemption of Creation Units to be
5 The Trust is registered under the 1940 Act. On
September 4, 2013, the Trust filed with the
Commission an amendment to its registration
statement on Form N–1A under the Securities Act
of 1933 (15 U.S.C. 77a) and under the 1940 Act
relating to the Fund (File Nos. 333–157876 and
811–22110) and on September 29, 2014, the Trust
filed with the Commission definitive materials on
Form 497 (File No. 333–157876) (‘‘Registration
Statement’’). The description of the operation of the
Trust and the Fund herein is based, in part, on the
Registration Statement. In addition, the
Commission has issued an order granting certain
exemptive relief to the Trust under the 1940 Act.
See Investment Company Act Release No. 29291
(May 28, 2010) (File No. 812–13677) (‘‘Exemptive
Order’’).
6 The changes described herein have been filed
with the Commission in definitive materials on
Form 497. See note 5, supra. The Adviser
represents that it will manage the Fund in the
manner described in the Prior Release, and will not
implement the changes described herein until the
instant proposed rule change is operative. Shares of
the Fund have not commenced trading on the
Exchange.
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effected based on the NAV of Shares of
the Fund as next determined on such
date.
The Prior Release stated that the
consideration for purchase of a Creation
Unit generally would consist of an inkind 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
would constitute the ‘‘Fund Deposit,’’
which would represent the minimum
initial and subsequent investment
amount for a Creation Unit of the Fund.
The Prior Release stated that the Cash
Component would be an amount equal
to the difference between the NAV of
the Shares of the Fund (per Creation
Unit) and the market value of the
Deposit Securities. The Prior Release
also stated that the Trust reserved the
right to permit or require the
substitution of an amount of cash—i.e.,
a ‘‘cash in lieu’’ amount—to be added to
the Cash Component to replace any
Deposit Security which may not be
available in sufficient quantity for
delivery or which may not be eligible
for transfer through the clearing process,
or which may not be eligible for trading
by an authorized participant or the
investor for which it is acting. Finally,
the Prior Release stated that the Trust
reserves the right to offer an ‘‘all cash’’
option for creations and redemptions of
Creation Units for the Fund.7
The Advisor wishes to revise the
description of the consideration for
purchase of a Creation Unit to state that
Creation Units of the Fund generally
will be sold for cash (‘‘Cash Purchase
Amount’’). The Advisor wishes to revise
the description to state that Creation
Units will be sold at the NAV next
computed, plus a transaction fee, and all
purchases of the Fund will be effected
through a transfer of cash directly
through the Depository Trust Company
(‘‘DTC’’). The Advisor further wishes to
revise the description to state that the
Trust reserves the right to offer an inkind option for creations of Creation
Units for the Fund 8 and that the Trust
reserves the absolute right to reject a
creation order if (a) the order is not in
proper form; (b) the investor(s), upon
7 The Adviser represents that, to the extent the
Trust effects the creation of Shares in cash, such
transactions will be effected in the same manner for
all authorized participants.
8 The Adviser represents that, to the extent the
Trust effects the creation of Shares in kind, such
transactions will be effected in the same manner for
all authorized participants.
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17:21 Nov 25, 2014
Jkt 235001
obtaining the shares ordered, would
own 80% or more of the currently
outstanding shares of the Fund; (c)
acceptance of the Cash Purchase
Amount would, in the opinion of
counsel, be unlawful; or (d) in the event
that circumstances outside the control
of the Trust, the Distributor and the
Advisor make it for all practical
purposes impossible to process creation
orders.
As stated in the Prior Release, Shares
generally may be redeemed in Creation
Units at their NAV next determined
after receipt of a redemption request in
proper form by the Fund through the
Administrator and only on a business
day. The Trust will not redeem Shares
of the Fund in amounts less than
Creation Units.
The Prior Release stated that unless
cash redemptions are available or
specified, the redemption proceeds for a
Creation Unit generally would consist of
‘‘the Fund Securities’’—as announced
by the Administrator 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, less a
redemption transaction fee. The Prior
Release stated that the Administrator,
through the National Securities Clearing
Corporation (‘‘NSCC’’), would make
available immediately prior to the
opening of business on the Exchange
(currently 9:30 a.m., Eastern Time) on
each business day, the Fund Securities
that will be applicable to redemption
requests received in proper form on that
day as well as the estimated Cash
Component.
The Prior Release stated that if it is
not possible to effect deliveries of the
Fund Securities, for example if the
investor is not able to accept delivery,
the Trust could in its discretion exercise
its option to redeem Shares of the Fund
in cash, and the redeeming beneficial
owner would be required to receive its
redemption proceeds in cash. In
addition, the Prior Release stated that an
investor could request a redemption in
cash which the Fund could, in its sole
discretion, permit.9 The Prior Release
stated that in either case, the investor
would receive a cash payment equal to
the NAV of its Shares based on the NAV
of Shares of the Fund next determined
after the redemption request is received
in proper form (minus a redemption
9 The
Adviser represents that, to the extent the
Trust effects the redemption of Shares in cash, such
transactions will be effected in the same manner for
all authorized participants.
PO 00000
Frm 00100
Fmt 4703
Sfmt 4703
transaction fee and additional charge for
requested cash redemptions, as
described in the Registration Statement).
The Prior Release stated the Fund could
also, in its sole discretion, upon request
of a shareholder, provide such redeemer
a portfolio of securities which differs
from the exact composition of the
applicable Fund Securities but does not
differ in NAV.
The Prior Release stated that the Fund
(whether or not it otherwise permits
cash redemptions) reserves the right to
redeem Creation Units for cash to the
extent that the Fund could not lawfully
deliver specific Fund Securities upon
redemptions or could not do so without
first registering the Fund Securities
under such laws. The Prior Release
stated that an authorized participant or
an investor for which it is acting subject
to a legal restriction with respect to a
particular stock included in the Fund
Securities applicable to the redemption
of a Creation Unit may be paid an
equivalent amount of cash.
The Advisor wishes to revise the
description of redemption to state that
redemption proceeds for a Creation Unit
of the Fund generally will consist of
cash in an amount equal to the NAV of
the shares being redeemed, as next
determined after receipt of a request in
proper form, less a redemption
transaction fee. The Trust reserves the
right to offer an in-kind option for
redemptions of Creation Units for the
Fund.10
The Shares will conform to the initial
and continued listing criteria under
NYSE Arca Equities Rule 8.600.
Except for the changes noted above,
all other facts presented and
representations made in the Prior
Release remain unchanged.
All terms referenced but not defined
herein are defined in the Prior Release.
2. Statutory Basis
The basis under the Act for this
proposed rule change is the requirement
under Section 6(b)(5) 11 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, and is designed to
10 The Adviser represents that, to the extent the
Trust effects the redemption of Shares in kind, such
transactions will be effected in the same manner for
all authorized participants.
11 15 U.S.C. 78f(b)(5).
E:\FR\FM\26NON1.SGM
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Federal Register / Vol. 79, No. 228 / Wednesday, November 26, 2014 / Notices
promote just and equitable principles of
trade and to protect investors and the
public interest, in that the change in the
statement of investment objective will
specify that the Fund will seek to
generate total return while providing
protection for investors against loss of
principal in a rising interest rate
environment, thereby providing notice
to investors regarding the change in the
investment objective of the Fund before
Shares of the Fund commence trading
on the Exchange. The Adviser believes
such change will enable investors to
better understand the Fund’s expected
investment activities and determine if
and/or to what extent an investment in
the Fund is appropriate for their
portfolios. The Adviser represents that
there are no changes to the Fund’s
statements regarding how at least 80%
of its net assets will be invested in
normal circumstances, how it may
invest remaining assets, how it will
calculate NAV, or what information will
be publicly available regarding the
Shares and the portfolio holdings of the
Fund.
The Exchange also believes that the
proposed rule change is designed to
prevent fraudulent and manipulative
acts and practices, and is designed to
promote just and equitable principles of
trade and to protect investors and the
public interest, in that the proposed rule
change would provide notice to
investors of the proposed changes in the
creation and redemption procedures of
the Fund, including notice that Creation
Units of the Fund generally will be sold
for the Cash Purchase Amount, that
Creation Units will be sold at the NAV
next computed, plus a transaction fee,
and purchases of the Fund generally
will be effected through a transfer of
cash directly through the DTC. In
addition, the proposed rule change
would provide notice that the
redemption proceeds for a Creation Unit
of the Fund generally will consist of
cash in an amount equal to the NAV of
the shares being redeemed, as next
determined after receipt of a request in
proper form, less a redemption
transaction fee. The proposed rule
change would also provide notice that
the Trust reserves the right to offer inkind options for creations and
redemptions of Creation Units for the
Fund, and that to the extent such inkind creations and/or redemptions are
effected, such transactions will be
effected in the same manner for all
authorized participants.
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
the Shares will be listed and traded on
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17:21 Nov 25, 2014
Jkt 235001
the Exchange pursuant to the initial and
continued listing requirements in NYSE
Arca Equities Rule 8.600. Except for the
changes noted above, all other
representations made in the Prior
Release remain unchanged.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange notes that the proposed rule
change will facilitate the listing and
trading of an additional type of activelymanaged exchange-traded product that
will enhance competition among market
participants, to the benefit of investors
and the marketplace.
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
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A) of the Act 12 and Rule 19b–
4(f)(6) thereunder.13 Because the
foregoing proposed rule change does
not: (i) Significantly affect the
protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it is filed, or such shorter time as
the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act and Rule 19b–
4(f)(6) thereunder.14
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 15 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 16
permits the Commission to designate a
shorter time if such action is consistent
with the protection of investors and the
public interest. The Exchange has asked
the Commission to waive the 30-day
operative delay so that the proposal may
12 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
14 17 CFR 240.19b–4(f)(6). As required under Rule
19b–4(f)(6)(iii), the Exchange provided the
Commission with written notice of its intent to file
the proposed rule change, along with a brief
description and the text of the proposed rule
change, at least five business days prior to the date
of filing of the proposed rule change.
15 17 CFR 240.19b–4(f)(6).
16 17 CFR 240.19b–4(f)(6)(iii).
13 17
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70599
become operative immediately upon
filing. In support of its request, the
Exchange states that waiver of the 30day operative delay is consistent with
the protection of investors and the
public interest in that the proposed
changes will facilitate the listing and
trading of an additional type of activelymanaged exchange-traded product that
will enhance competition among market
participants, to the benefit of investors
and the marketplace. The Commission
believes that waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest. Therefore, the Commission
hereby waives the operative delay and
designates the proposed rule change
operative upon filing.17
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. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSEArca–2014–125 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–NYSEArca–2014–125. 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
17 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
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70600
Federal Register / Vol. 79, No. 228 / Wednesday, November 26, 2014 / Notices
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of 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–2014–125, and should be
submitted on or before December 17,
2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–27976 Filed 11–25–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–73662; File No. SR–
NASDAQ–2014–106]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Short Interest Reports
November 20, 2014.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on November
12, 2014, The NASDAQ Stock Market
LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I, II, and III, below, which Items
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange proposes to change the
model of pricing for Short Interest
Reports under the category of Historical
Research and Administrative Reports
under NASDAQ Rule 7022. Specifically,
NASDAQ proposes to replace the
current subscriber-based model with a
fee based on internal or external
distribution of the reports. Although the
proposed rule is effective upon filing,
NASDAQ plans to implement the fee on
January 1, 2015.
The text of the proposed rule change
is below; proposed new language is
italicized; proposed deletions are in
brackets.
*
*
*
*
*
7022. Historical Research and
Administrative Reports
(a) No Change.
(b) The charge to be paid by the
purchaser of an Historical Research
Report regarding a Nasdaq security that
wishes to obtain a license to redistribute
the information contained in the report
to subscribers shall be determined in
accordance with the following schedule:
NUMBER OF SUBSCRIBERS
1–500
A. Market Summary Statistics:
More often than once a month .....................................
Once a month, quarter, or year ....................................
B. Reserved.
C. Nasdaq Issues Summary Statistics:
More often than once a month .....................................
Internal Distribution ................................................
External Distribution ..............................................
Once a month, quarter, or year ....................................
Aggregation of data on an annual basis ......................
D. Intra-Day Quote and Intra-Day Time and Sales Data:
For a security and/or a market participant for a day ....
For all market participants for a day or for all securities for a day .............................................................
mstockstill on DSK4VPTVN1PROD with NOTICES
(c) No change.
(d) No change.
*
*
*
*
*
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
501–999
CFR 200.30–3(a)(12).
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17:21 Nov 25, 2014
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PO 00000
$450
225
$550
275
$750
375
[500
1,000
2,500
250
3,000
600
1,000
2,500
300
3,000
700
1,000
2,500
350
3,000
800
1,000
2,500
400
3,000
1,000]
1,000
2,500
500
3,000
200
300
400
500
700
1,000
1,500
2,500
3,500
5,000
U.S.C. 78s(b)(1).
Frm 00102
10,000+
$350
175
any comments it received on the
proposed rule change. The text of these
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 aspects of such
statements.
1 15
5,000–9,999
$250
125
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
18 17
1,000–4,999
Fmt 4703
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
NASDAQ proposes to modify the
pricing model for historical research
and administrative reports categorized
as Nasdaq Issues Summary Statistics
under subsection C of NASDAQ Rule
7022(b). The current pricing schedule
for Nasdaq Issues Summary Statistics
2 17
Sfmt 4703
CFR 240.19b–4.
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]]>Agencies
[Federal Register Volume 79, Number 228 (Wednesday, November 26, 2014)]
[Notices]
[Pages 70597-70600]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-27976]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73658; File No. SR-NYSEArca-2014-125]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Reflecting a Change
in The Investment Objective of the Treesdale Rising Rates ETF and
Change in Its Creation and Redemption Procedures
November 20, 2014.
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 November 10, 2014, 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 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.
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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 reflect a change in the investment
objective of the Treesdale Rising Rates ETF and changes in its creation
and redemption procedures. 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 the
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Commission has approved listing and trading on the Exchange of
shares (``Shares'') of the Treesdale Rising Rates ETF (the ``Fund'')
under NYSE Arca Equities Rule 8.600, which governs the listing and
trading of Managed Fund Shares.\4\ Shares of the Fund have not
commenced trading on the Exchange.
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\4\ See Securities Exchange Act Release No. 73082 (September 11,
2014), 79 FR 55845 (September 17, 2014) (SR-NYSEArca-2014-71) (order
approving listing and trading on the Exchange of the Treesdale
Rising Rates ETF under NYSE Arca Equities Rule 8.600) (``Prior
Order''). See also Securities Exchange Act Release No. 72679 (July
28, 2014), 79 FR 44878 (August 1, 2014) (SR-NYSEArca-2014-71)
(``Prior Notice,'' and together with the Prior Order, the ``Prior
Release'').
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The Fund is a series of the AdvisorShares Trust (``Trust''), a
statutory trust organized under the laws of the State of Delaware and
registered with the Securities and Exchange Commission (the
``Commission'') as an open-end management investment company.\5\ The
investment adviser to the Fund is AdvisorShares Investment, LLC
(``Adviser''). Foreside Fund Services, LLC (the ``Distributor'') is the
principal underwriter and distributor of the Fund's Shares. The Bank of
New York Mellon (the ``Administrator'') serves as the administrator,
custodian, transfer agent and fund accounting agent for the Fund.
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\5\ The Trust is registered under the 1940 Act. On September 4,
2013, the Trust filed with the Commission an amendment to its
registration statement on Form N-1A under the Securities Act of 1933
(15 U.S.C. 77a) and under the 1940 Act relating to the Fund (File
Nos. 333-157876 and 811-22110) and on September 29, 2014, the Trust
filed with the Commission definitive materials on Form 497 (File No.
333-157876) (``Registration Statement''). The description of the
operation of the Trust and the Fund herein is based, in part, on the
Registration Statement. In addition, the Commission has issued an
order granting certain exemptive relief to the Trust under the 1940
Act. See Investment Company Act Release No. 29291 (May 28, 2010)
(File No. 812-13677) (``Exemptive Order'').
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In this proposed rule change, the Exchange proposes to reflect a
change in the investment objective of the Fund and changes in its
creation and redemption procedures, as described below.\6\
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\6\ The changes described herein have been filed with the
Commission in definitive materials on Form 497. See note 5, supra.
The Adviser represents that it will manage the Fund in the manner
described in the Prior Release, and will not implement the changes
described herein until the instant proposed rule change is
operative. Shares of the Fund have not commenced trading on the
Exchange.
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Investment Objective
The Prior Release stated that the Fund would seek to generate
current income while providing protection for investors against loss of
principal in a rising interest rate environment. The Adviser wishes to
revise the description to state that the Fund will seek total return
while providing protection for investors against loss of principal in a
rising interest rate environment.
Creation and Redemption of Shares
As stated in the Prior Release, the Fund will issue and redeem
Shares on a continuous basis at net asset value (``NAV'') in aggregated
lots which shall initially be of 25,000 Shares (each, a ``Creation
Unit'').
As stated in the Prior Release, all orders to create or redeem
Creation Units must be received by the Distributor no later than 3:00
p.m., Eastern Time in order for the creation or redemption of Creation
Units to be
[[Page 70598]]
effected based on the NAV of Shares of the Fund as next determined on
such date.
The Prior Release stated that the consideration for purchase of a
Creation Unit generally would consist 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 would constitute the ``Fund
Deposit,'' which would represent the minimum initial and subsequent
investment amount for a Creation Unit of the Fund. The Prior Release
stated that the Cash Component would be an amount equal to the
difference between the NAV of the Shares of the Fund (per Creation
Unit) and the market value of the Deposit Securities. The Prior Release
also stated that the Trust reserved the right to permit or require the
substitution of an amount of cash--i.e., a ``cash in lieu'' amount--to
be added to the Cash Component to replace any Deposit Security which
may not be available in sufficient quantity for delivery or which may
not be eligible for transfer through the clearing process, or which may
not be eligible for trading by an authorized participant or the
investor for which it is acting. Finally, the Prior Release stated that
the Trust reserves the right to offer an ``all cash'' option for
creations and redemptions of Creation Units for the Fund.\7\
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\7\ The Adviser represents that, to the extent the Trust effects
the creation of Shares in cash, such transactions will be effected
in the same manner for all authorized participants.
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The Advisor wishes to revise the description of the consideration
for purchase of a Creation Unit to state that Creation Units of the
Fund generally will be sold for cash (``Cash Purchase Amount''). The
Advisor wishes to revise the description to state that Creation Units
will be sold at the NAV next computed, plus a transaction fee, and all
purchases of the Fund will be effected through a transfer of cash
directly through the Depository Trust Company (``DTC''). The Advisor
further wishes to revise the description to state that the Trust
reserves the right to offer an in-kind option for creations of Creation
Units for the Fund \8\ and that the Trust reserves the absolute right
to reject a creation order if (a) the order is not in proper form; (b)
the investor(s), upon obtaining the shares ordered, would own 80% or
more of the currently outstanding shares of the Fund; (c) acceptance of
the Cash Purchase Amount would, in the opinion of counsel, be unlawful;
or (d) in the event that circumstances outside the control of the
Trust, the Distributor and the Advisor make it for all practical
purposes impossible to process creation orders.
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\8\ The Adviser represents that, to the extent the Trust effects
the creation of Shares in kind, such transactions will be effected
in the same manner for all authorized participants.
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As stated in the Prior Release, Shares generally may be redeemed in
Creation Units at their NAV next determined after receipt of a
redemption request in proper form by the Fund through the Administrator
and only on a business day. The Trust will not redeem Shares of the
Fund in amounts less than Creation Units.
The Prior Release stated that unless cash redemptions are available
or specified, the redemption proceeds for a Creation Unit generally
would consist of ``the Fund Securities''--as announced by the
Administrator 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, less a redemption transaction fee. The Prior Release stated
that the Administrator, through the National Securities Clearing
Corporation (``NSCC''), would make available immediately prior to the
opening of business on the Exchange (currently 9:30 a.m., Eastern Time)
on each business day, the Fund Securities that will be applicable to
redemption requests received in proper form on that day as well as the
estimated Cash Component.
The Prior Release stated that if it is not possible to effect
deliveries of the Fund Securities, for example if the investor is not
able to accept delivery, the Trust could in its discretion exercise its
option to redeem Shares of the Fund in cash, and the redeeming
beneficial owner would be required to receive its redemption proceeds
in cash. In addition, the Prior Release stated that an investor could
request a redemption in cash which the Fund could, in its sole
discretion, permit.\9\ The Prior Release stated that in either case,
the investor would receive a cash payment equal to the NAV of its
Shares based on the NAV of Shares of the Fund next determined after the
redemption request is received in proper form (minus a redemption
transaction fee and additional charge for requested cash redemptions,
as described in the Registration Statement). The Prior Release stated
the Fund could also, in its sole discretion, upon request of a
shareholder, provide such redeemer a portfolio of securities which
differs from the exact composition of the applicable Fund Securities
but does not differ in NAV.
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\9\ The Adviser represents that, to the extent the Trust effects
the redemption of Shares in cash, such transactions will be effected
in the same manner for all authorized participants.
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The Prior Release stated that the Fund (whether or not it otherwise
permits cash redemptions) reserves the right to redeem Creation Units
for cash to the extent that the Fund could not lawfully deliver
specific Fund Securities upon redemptions or could not do so without
first registering the Fund Securities under such laws. The Prior
Release stated that an authorized participant or an investor for which
it is acting subject to a legal restriction with respect to a
particular stock included in the Fund Securities applicable to the
redemption of a Creation Unit may be paid an equivalent amount of cash.
The Advisor wishes to revise the description of redemption to state
that redemption proceeds for a Creation Unit of the Fund generally will
consist of cash in an amount equal to the NAV of the shares being
redeemed, as next determined after receipt of a request in proper form,
less a redemption transaction fee. The Trust reserves the right to
offer an in-kind option for redemptions of Creation Units for the
Fund.\10\
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\10\ The Adviser represents that, to the extent the Trust
effects the redemption of Shares in kind, such transactions will be
effected in the same manner for all authorized participants.
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The Shares will conform to the initial and continued listing
criteria under NYSE Arca Equities Rule 8.600.
Except for the changes noted above, all other facts presented and
representations made in the Prior Release remain unchanged.
All terms referenced but not defined herein are defined in the
Prior Release.
2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \11\ 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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\11\ 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, and is designed
to
[[Page 70599]]
promote just and equitable principles of trade and to protect investors
and the public interest, in that the change in the statement of
investment objective will specify that the Fund will seek to generate
total return while providing protection for investors against loss of
principal in a rising interest rate environment, thereby providing
notice to investors regarding the change in the investment objective of
the Fund before Shares of the Fund commence trading on the Exchange.
The Adviser believes such change will enable investors to better
understand the Fund's expected investment activities and determine if
and/or to what extent an investment in the Fund is appropriate for
their portfolios. The Adviser represents that there are no changes to
the Fund's statements regarding how at least 80% of its net assets will
be invested in normal circumstances, how it may invest remaining
assets, how it will calculate NAV, or what information will be publicly
available regarding the Shares and the portfolio holdings of the Fund.
The Exchange also believes that the proposed rule change is
designed to prevent fraudulent and manipulative acts and practices, and
is designed to promote just and equitable principles of trade and to
protect investors and the public interest, in that the proposed rule
change would provide notice to investors of the proposed changes in the
creation and redemption procedures of the Fund, including notice that
Creation Units of the Fund generally will be sold for the Cash Purchase
Amount, that Creation Units will be sold at the NAV next computed, plus
a transaction fee, and purchases of the Fund generally will be effected
through a transfer of cash directly through the DTC. In addition, the
proposed rule change would provide notice that the redemption proceeds
for a Creation Unit of the Fund generally will consist of cash in an
amount equal to the NAV of the shares being redeemed, as next
determined after receipt of a request in proper form, less a redemption
transaction fee. The proposed rule change would also provide notice
that the Trust reserves the right to offer in-kind options for
creations and redemptions of Creation Units for the Fund, and that to
the extent such in-kind creations and/or redemptions are effected, such
transactions will be effected in the same manner for all authorized
participants.
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 the Shares will be listed and traded on the
Exchange pursuant to the initial and continued listing requirements in
NYSE Arca Equities Rule 8.600. Except for the changes noted above, all
other representations made in the Prior Release remain unchanged.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. 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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \12\ and Rule 19b-4(f)(6) thereunder.\13\
Because the foregoing proposed rule change does not: (i) Significantly
affect the protection of investors or the public interest; (ii) impose
any significant burden on competition; and (iii) become operative for
30 days from the date on which it is filed, or such shorter time as the
Commission may designate, it has become effective pursuant to Section
19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder.\14\
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and the text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \15\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \16\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has asked the Commission to waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. In support
of its request, the Exchange states that waiver of the 30-day operative
delay is consistent with the protection of investors and the public
interest in that the proposed changes 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. The Commission believes that
waiving the 30-day operative delay is consistent with the protection of
investors and the public interest. Therefore, the Commission hereby
waives the operative delay and designates the proposed rule change
operative upon filing.\17\
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\15\ 17 CFR 240.19b-4(f)(6).
\16\ 17 CFR 240.19b-4(f)(6)(iii).
\17\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSEArca-2014-125 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-NYSEArca-2014-125. 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
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post all comments on the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent
amendments, all written statements with respect to the proposed rule
change that are filed with the Commission, and all written
communications relating to the proposed rule change between the
Commission and any person, other than those that may be withheld from
the public in accordance with the provisions of 5 U.S.C. 552, will be
available for Web site viewing and printing in the Commission's Public
Reference Room, 100 F Street NE., Washington, DC 20549 on official
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of
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-2014-125, and should be submitted on or before
December 17, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-27976 Filed 11-25-14; 8:45 am]
BILLING CODE 8011-01-P
