Federal Register / Vol. 85, No. 246 / Tuesday, December 22, 2020 / Notices 83665 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities Exchange Act Release No. 90323 

(November 3, 2020), 85 FR 71366. 

5 In Amendment No. 1, the Exchange: (1) Updated 

the status of the application for exemptive relief 

filed by the Trust (defined below); (2) modified its 

representation regarding the use of the Funds’ 

investments; (3) supplemented its description of the 

Funds’ NAVs; (4) disclosed the minimum number 

of shares that would be outstanding at the 

commencement of trading on the Exchange; and (5) 

made technical changes. In Amendment No. 2, the 

Exchange clarified its representation regarding the 

minimum number of Shares outstanding at the 

commencement of trading on the Exchange. 

Because Amendments No. 1 and No. 2 do not 

materially alter the substance of the proposed rule 

change, Amendment No. 2 is not subject to notice 

and comment. Both amendments are available on 

the Commission’s website at: https://www.sec.gov/ 

comments/sr-nysearca-2020-94/ 

srnysearca202094.htm. 

6Additional information regarding the Fund, the 

Trust (defined infra), and the Shares can be found 

in Amendments No. 1 and No. 2, supra note 5, and 

the Registration Statement, infra note 7. 

7The Trust is registered under the Investment 

Company Act of 1940 (15 U.S.C. 80a–1) (‘‘1940 

Act’’). On September 11, 2020, the Trust filed a 

registration statement on Form N–1A under the 

Securities Act of 1933 and the 1940 Act for the 

Funds (File Nos. 333–157876 and 811–22110) 

(‘‘Registration Statement’’). The Commission issued 

an order granting exemptive relief to the Trust 

(‘‘Exemptive Order’’) under the 1940 Act on 

December 8, 2020 (Investment Company Act 

Release No. 31431). The Exemptive Order was 

granted in response to the Trust’s application for 

exemptive relief (‘‘Exemptive Application’’) (File 

No. 812–15146). 

8See Amendment No. 1, supra note 5, at 6, n.7. 

9 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). 

10 15 U.S.C. 78f(b)(5). 

11See Amendment No. 1, supra note 5, at 5. 

12See id. See also NYSE Arca Rule 8.900–E(c)(5) 

(defining ‘‘Creation Basket’’). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90683; File No. SR– 

NYSEArca–2020–94] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Approving a 

Proposed Rule Change, as Modified by 

Amendments No. 1 and No. 2, To List 

and Trade Shares of the 

AdvisorShares Q Portfolio Blended 

Allocation ETF and AdvisorShares Q 

Dynamic Growth ETF Under NYSE 

Arca Rule 8.900–E 

December 16, 2020. 

I. Introduction 

On October 20, 2020, NYSE Arca, Inc. 

(‘‘Exchange’’ or ‘‘NYSE Arca’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

to Section 19(b)(1) 1 of the Securities 

Exchange Act of 1934 (‘‘Act’’) 2 and Rule 

19b–4 thereunder,3 a proposed rule 

change to list and trade shares 

(‘‘Shares’’) of the following funds under 

NYSE Arca Rule 8.900–E (Managed 

Portfolio Shares): AdvisorShares Q 

Portfolio Blended Allocation ETF and 

AdvisorShares Q Dynamic Growth ETF 

(each a ‘‘Fund’’ and, collectively, the 

‘‘Funds’’). The proposed rule change 

was published for comment in the 

Federal Register on November 9, 2020.4

On December 9, 2020, the Exchange 

filed Amendment No. 1 to the proposed 

rule change, which replaced and 

superseded the proposed rule change as 

originally filed, and on December 10, 

2020, the Exchange filed Amendment 

No. 2 to the proposed rule change.5 The 

Commission has received no comment 

letters on the proposal. This order 

approves the proposed rule change, as 

modified by Amendments No. 1 and No. 

2. 

II. Description of the Proposal 6

NYSE Arca Rule 8.900–E(b)(1) 

requires the Exchange to file separate 

proposals under Section 19(b) of the Act 

before listing and trading any series of 

Managed Portfolio Shares on the 

Exchange; thus, the Exchange submitted 

this proposal to list and trade the 

Shares. The Shares will be issued by the 

AdvisorShares 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.7 The 

investment adviser to each Fund will be 

AdvisorShares Investments, LLC 

(‘‘Adviser’’). The investment subadvisor to each Fund will be 

ThinkBetter, LLC. Foreside Fund 

Services, LLC (‘‘Distributor’’) will serve 

as the distributor of the Shares. 

Each Fund’s holdings will conform to 

the permissible investments as set forth 

in the Exemptive Application and 

Exemptive Order. Pursuant to the 

Exemptive Order, the only permissible 

investments for the Funds are the 

following, all of which trade on a U.S. 

exchange contemporaneously with the 

Shares: Exchange-traded funds 

(‘‘ETFs’’), exchange-traded notes, 

exchange-listed common stocks, 

exchange-traded American Depositary 

Receipts, exchange-traded real estate 

investment trusts, exchange-traded 

commodity pools, exchange-traded 

metals trusts, exchange-traded currency 

trusts and exchange-traded futures, as 

well as cash and cash equivalents 

(short-term U.S. Treasury securities, 

government money market funds, and 

repurchase agreements).8

The AdvisorShares Q Portfolio 

Blended Allocation ETF is an actively 

managed ETF that is primarily a ‘‘fund 

of funds.’’ Its investment objective is to 

seek to maximize total return over the 

long-term. The Fund will invest in ETFs 

representing all asset classes, including, 

but not limited to, treasury bonds, 

municipal bonds, investment grade 

corporate bonds, high-yield U.S. 

corporate bonds, U.S. and foreign 

equities, and commodities. 

The AdvisorShares Q Dynamic 

Growth ETF is an actively managed ETF 

that is primarily a ‘‘fund of funds.’’ It 

will seek to achieve long-term growth by 

investing in ETFs representing all asset 

classes, including, but not limited to, 

treasury bonds, municipal bonds, 

investment grade corporate bonds, highyield U.S. corporate bonds, U.S. and 

foreign equities, commodities, and 

volatility products. 

Each Fund’s investments, including 

derivatives, will be consistent with its 

investment objective and will not be 

used to enhance leverage (although 

certain derivatives and other 

investments may result in leverage). 

Each Fund’s investments will not be 

used to seek performance that is the 

multiple or inverse multiple (e.g., 2X or 

–3X) of the Fund’s benchmark. 

III. Discussion and Commission 

Findings 

After careful review, the Commission 

finds that the proposed rule change, as 

modified by Amendments No. 1 and No. 

2, to list and trade the Shares is 

consistent with the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange.9 In 

particular, the Commission finds that 

the proposed rule change, as modified 

by Amendment No. 1, is consistent with 

Section 6(b)(5) of the Act,10 which 

requires, among other things, that the 

Exchange’s rules be 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 a national market system, and, in 

general, to protect investors and the 

public interest. 

The Adviser is not registered as a 

broker-dealer but is affiliated with a 

broker-dealer.11 The Adviser has 

implemented and will maintain a ‘‘fire 

wall’’ with respect to its broker-dealer 

affiliate regarding access to information 

concerning the composition and/or 

changes to a Fund’s portfolio and 

Creation Basket.12 Any person related to 

the Adviser or the Trust who makes 

decisions pertaining to a Fund’s 

portfolio composition or that has access 

to information regarding a Fund’s 

portfolio or changes thereto or the 


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83666 Federal Register / Vol. 85, No. 246 / Tuesday, December 22, 2020 / Notices 

13See Amendment No. 1, supra note 5, at 5. 

Furthermore, the Exchange represents that in the 

event that (a) the Adviser or any sub-adviser 

becomes registered as a broker-dealer or becomes 

newly affiliated with a broker-dealer, or (b) any new 

adviser or sub-adviser is a registered broker-dealer 

or becomes affiliated with a broker-dealer, the 

Adviser will implement and maintain a fire wall 

with respect to personnel of the broker-dealer or 

broker-dealer affiliate regarding access to 

information concerning the composition and/or 

changes to the portfolio and/or Creation Basket. See 

id. 

14See NYSE Arca Rule 8.900–E(c)(5) (defining 

‘‘AP Representative’’). 

15See Amendment No. 1, supra note 5, at 5–6. 

See also NYSE Arca Rule 8.900–E(b)(5). 

16See Amendment No. 1, supra note 5, at 6. See 

also NYSE Arca Rule 8.900–E(b)(5). 

17See Amendment No. 1, supra note 5, at 14. 

18See id. 

19 15 U.S.C. 78k–1(a)(1)(C)(iii). 

20See Amendment No. 1, supra note 5, at 14. 

21See id. at 11. 

22See id. 

23NYSE Arca Rule 8.900–E(c)(2) defines the term 

‘‘Verified Intraday Indicative Value’’ as the 

indicative value of a Managed Portfolio Share based 

on all of the holdings of a series of Managed 

Portfolio Shares as of the close of business on the 

prior business day and, for corporate actions, based 

on the applicable holdings as of the opening of 

business on the current business day, priced and 

disseminated in one second intervals during the 

Core Trading Session by the Reporting Authority. 

NYSE Arca Rule 8.900–E(c)(8) defines the term 

‘‘Reporting Authority’’ with respect to a particular 

series of Managed Portfolio Shares as the Exchange, 

an institution, or a reporting service designated by 

the Exchange or by the exchange that lists a 

particular series of Managed Portfolio Shares (if the 

Exchange is trading such series pursuant to unlisted 

trading privileges), as the official source for 

calculating and reporting information relating to 

such series, including, but not limited to, the NAV, 

the VIIV, or other information relating to the 

issuance, redemption, or trading of Managed 

Portfolio Shares. A series of Managed Portfolio 

Shares may have more than one Reporting 

Authority, each having different functions. 

24See Amendment No. 1, supra note 5, at 11–12. 

25The Bid/Ask Price of the Shares will be the 

mid-point between the current national best bid and 

offer at the time of calculation of a Fund’s NAV. 

The records relating to Bid/Ask Prices will be 

retained by the Funds or their service providers. 

See Amendment No. 1, supra note 5, at 11, n.15. 

26See id. at 11. 

27The Exemptive Application provides that the 

Investment Company or their agent will request that 

the Exchange halt trading in the applicable series 

of Managed Portfolio Shares where: (i) The intraday 

indicative values calculated by the calculation 

engines differ by more than 25 basis points for 60 

seconds in connection with pricing of the VIIV; or 

(ii) holdings representing 10% or more of a series 

of Managed Portfolio Shares’ portfolio have become 

subject to a trading halt or otherwise do not have 

readily available market quotations. Any such 

requests will be one of many factors considered in 

Creation Basket will be subject to 

procedures designed to prevent the use 

and dissemination of material nonpublic information regarding such 

portfolio or changes thereto and the 

Creation Basket.13 Further, any person 

or entity, including an AP 

Representative,14 custodian, Reporting 

Authority, distributor, or administrator, 

who has access to information regarding 

the Fund’s portfolio composition or 

changes thereto or its Creation Basket, 

must be subject to procedures designed 

to prevent the use and dissemination of 

material nonpublic information 

regarding the applicable Fund portfolio 

or changes thereto or the Creation 

Basket.15 Moreover, if any such person 

or entity is registered as a broker-dealer 

or affiliated with a broker-dealer, such 

person or entity must erect and 

maintain a ‘‘fire wall’’ between the 

person or entity and the broker-dealer 

with respect to access to information 

concerning the composition of and/or 

changes to such Fund’s portfolio or 

Creation Basket.16

The Exchange states that trading in 

the Shares will be subject to the 

Exchange’s surveillance procedures for 

derivative products, and that its 

surveillance procedures are adequate to 

properly monitor the trading of the 

Shares on the Exchange during all 

trading sessions and to deter and detect 

violations of Exchange rules and the 

applicable federal securities laws.17

NYSE Arca Rule 8.900–E(b)(3) requires 

each Fund’s investment adviser to, upon 

request by the Exchange, or the 

Financial Industry Regulatory Authority 

(‘‘FINRA’’) on behalf of the Exchange, to 

make available the daily portfolio 

holdings of each series of Managed 

Portfolio Shares. The Exchange states 

that it has a general policy prohibiting 

the distribution of material, non-public 

information by its employees.18

Similarly, FINRA Rule 9910(d) generally 

prohibits FINRA employees from 

disseminating or disclosing, for a 

purpose unnecessary to the performance 

of FINRA job responsibilities any 

nonpublic information obtained in the 

course of his or her employment. 

The Commission also finds that the 

proposal is consistent with Section 

11A(a)(1)(C)(iii) of the Act,19 which sets 

forth Congress’s 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. For the 

reasons discussed below, the 

Commission believes that the proposal 

is reasonably designed to promote fair 

disclosure of information that may be 

necessary to price the Shares 

appropriately and to prevent trading in 

the Shares when a reasonable degree of 

certain pricing transparency cannot be 

assured and, as such, the Commission 

believes the proposal is reasonably 

designed to maintain a fair and orderly 

market for trading the Shares. 

Specifically, as required by NYSE Arca 

Rule 8.900–E(d)(1)(B), the Exchange will 

obtain a representation from the issuer 

that the net asset value (‘‘NAV’’) per 

Share of each Fund will be calculated 

daily and will be made available to all 

market participants at the same time.20

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.21 Quotation and last-sale 

information for the Shares will be 

available via the Consolidated Tape 

Association high-speed line.22 In 

addition, the Verified Intraday 

Indicative Value (‘‘VIIV’’), as defined in 

NYSE Arca Rule 8.900–E(c)(2),23 will be 

widely disseminated by the Reporting 

Authority and/or one or more major 

market data vendors in one second 

intervals during the Exchange’s Core 

Trading Session and will be 

disseminated to all market participants 

at the same time.24 Moreover, the 

Funds’ website, 

www.advisorshares.com, will include a 

form of the prospectus for each Fund 

that may be downloaded. The Funds’ 

website will include additional 

quantitative information updated on a 

daily basis, including, for each Fund, 

the prior Business Day’s NAV, market 

closing price or mid-point of the bid/ask 

spread at the time of calculation of such 

NAV (‘‘Bid/Ask Price’’),25 and a 

calculation of the premium and 

discount of the market closing price or 

Bid/Ask Price against the NAV. The 

website and information will be 

publicly available at no charge.26

Additionally, the Exchange’s rules 

regarding trading halts should help 

ensure the maintenance of fair and 

orderly markets for the Shares. Trading 

in the Shares will be subject to NYSE 

Arca Rule 8.900–E(d)(2)(C), which sets 

forth circumstances under which 

trading in the Shares will be halted. 

NYSE Arca Rule 8.900–E(d)(2)(C)(i) 

provides that the Exchange may 

consider all relevant factors in 

exercising its discretion to halt trading 

in a series of Managed Portfolio Shares. 

Trading may be halted because of 

market conditions or for reasons that, in 

the view of the Exchange, make trading 

in the series of Managed Portfolio 

Shares inadvisable. These may include: 

(a) The extent to which trading is not 

occurring in the securities and/or the 

financial instruments composing the 

portfolio; or (b) whether other unusual 

conditions or circumstances detrimental 

to the maintenance of a fair and orderly 

market are present.27 Further, NYSE 


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Federal Register / Vol. 85, No. 246 / Tuesday, December 22, 2020 / Notices 83667 

order to determine whether to halt trading in a 

series of Managed Portfolio Shares, and the 

Exchange retains sole discretion in determining 

whether trading should be halted. As provided in 

the Exemptive Application, each series of Managed 

Portfolio Shares would employ a pricing 

verification agent to continuously compare two 

intraday indicative values during regular trading 

hours in order to ensure the accuracy of the VIIV. 

See id. at 13, n.19. 

28See id. at 14. 

29See Amendment No. 2, supra note 5, at 3. 

30See Amendment No. 1, supra note 5, at 13. 

31The Bulletin will discuss the following: (1) The 

procedures for purchases and redemptions of 

Shares; (2) NYSE Arca Rule 9.2–E(a), which 

imposes a duty of due diligence on its ETP Holders 

to learn the essential facts relating to every 

customer prior to trading the Shares; (3) how 

information regarding the VIIV is disseminated; (4) 

the requirement that ETP Holders deliver a 

prospectus to investors purchasing newly issued 

Shares prior to or concurrently with the 

confirmation of a transaction; (5) trading 

information; and (6) that the portfolio holdings of 

the Shares are not disclosed on a daily basis. See 

id. at 14–15. 

32See id. at 14. 

33See id. at 6, n.6. 

34See id. at 14. 

35 15 U.S.C. 78f(b)(5). 

36 15 U.S.C. 78k–1(a)(1)(C)(iii). 

37 15 U.S.C. 78s(b)(2). 

38 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78mm. 

2 17 CFR 242.608(e). 

Arca Rule 8.900–E(d)(2)(C)(ii) provides 

that, if the Exchange becomes aware 

that: (i) The VIIV of a series of Managed 

Portfolio Shares is not being calculated 

or disseminated in one second intervals, 

as required; (ii) the NAV with respect to 

a series of Managed Portfolio Shares is 

not disseminated to all market 

participants at the same time; (iii) the 

holdings of a series of Managed 

Portfolio Shares are not made available 

on at least a quarterly basis as required 

under the 1940 Act; or (iv) such 

holdings are not made available to all 

market participants at the same time 

(except as otherwise permitted under 

the applicable Exemptive Order or noaction relief granted by the Commission 

or Commission staff to the Investment 

Company with respect to the series of 

Managed Portfolio Shares), it will halt 

trading in such series until such time as 

the VIIV, the NAV, or the holdings are 

available, as required. 

In support of this proposal, the 

Exchange has also made the following 

representations: 

(1) The Shares will conform to the 

initial and continued listing criteria 

under NYSE Arca Rule 8.900–E, as well 

as all terms in the Exemptive Order.28

(2) The Exchange states that a 

minimum of 100,000 Shares of each 

Fund will be outstanding at the 

commencement of trading on the 

Exchange.29

(3) 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.30

(4) Prior to the commencement of 

trading, the Exchange will inform its 

Equity Trading Permit Holders (‘‘ETP 

Holders’’) in an Information Bulletin 

(‘‘Bulletin’’) of the special 

characteristics and risks associated with 

trading the Shares.31

(5) FINRA, on behalf of the Exchange, 

or the regulatory staff of the Exchange, 

or both, will communicate as needed 

regarding trading in the Shares and 

certain exchange-traded instruments 

with other markets and other entities 

that are members of the Intermarket 

Surveillance Group (‘‘ISG’’), and FINRA, 

on behalf of the Exchange, or the 

regulatory staff of the Exchange, or both, 

may obtain trading information 

regarding trading such securities from 

such markets and other entities. In 

addition, the Exchange may obtain 

information regarding trading in the 

Shares and certain exchange-traded 

instruments from markets and other 

entities that are members of ISG or with 

which the Exchange has in place a 

comprehensive surveillance sharing 

agreement.32

(6) The Exchange represents that, for 

initial and/or continued listing, each 

Fund will be in compliance with Rule 

10A–3 under the Act.33

This approval order is based on all of 

the Exchange’s statements and 

representations set forth above and in 

Amendments No. 1 and No. 2. 

Additionally, the Exchange states that 

all statements and representations made 

in its proposal regarding (a) the 

description of the portfolio or reference 

assets, (b) limitations on portfolio 

holdings or reference assets, or (c) the 

applicability of Exchange rules shall 

constitute continued listing 

requirements for listing the Shares on 

the Exchange, as provided under NYSE 

Arca Rule 8.900–E(b)(1). The issuer of 

the Shares will be required to represent 

to the Exchange that it will advise the 

Exchange of any failure by a Fund to 

comply with the continued listing 

requirements, and, pursuant to its 

obligations under Section 19(g)(1) of the 

Act, the Exchange will surveil for 

compliance with the continued listing 

requirements. If a Fund is not in 

compliance with the applicable listing 

requirements, the Exchange will 

commence delisting procedures under 

NYSE Arca Rule 5.5–E(m).34

For the foregoing reasons, the 

Commission finds that the proposed 

rule change, as modified by 

Amendments No. 1 and No. 2, is 

consistent with Section 6(b)(5) of the 

Act 35 and Section 11A(a)(1)(C)(iii) of 

the Act 36 and the rules and regulations 

thereunder applicable to a national 

securities exchange. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,37 that the 

proposed rule change (SR–NYSEArca– 

2020–94), as modified by Amendments 

No. 1 and No. 2, be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.38

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–28147 Filed 12–21–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90689] 

Order Granting Temporary Exemptive 

Relief, Pursuant to Section 36 of the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’) and Rule 608(e) of 

Regulation NMS Under the Exchange 

Act, From Section 8.1.1 and Section 

8.1.2 of Appendix D of the National 

Market System Plan Governing the 

Consolidated Audit Trail 

December 16, 2020. 

I. Introduction 

By letter dated December 1, 2020 

(‘‘Participant Letter’’), BOX Exchange 

LLC, Cboe BYX Exchange, Inc., Cboe 

BZX Exchange, Inc., Cboe C2 Exchange, 

Inc., Cboe EDGA Exchange, Inc., Cboe 

EDGX Exchange, Inc., Cboe Exchange, 

Inc., Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’), Investors 

Exchange LLC, Long-Term Stock 

Exchange, Inc., MEMX LLC, Miami 

International Securities Exchange LLC, 

MIAX Emerald, LLC, MIAX PEARL, 

LLC, NASDAQ BX, Inc., Nasdaq GEMX, 

LLC, Nasdaq ISE, LLC, Nasdaq MRX, 

LLC, NASDAQ PHLX LLC, The 

NASDAQ Stock Market LLC, New York 

Stock Exchange LLC, NYSE American 

LLC, NYSE Arca, Inc., NYSE Chicago, 

Inc., and NYSE National, Inc. 

(collectively, the ‘‘Participants’’) request 

that the Securities and Exchange 

Commission (the ‘‘Commission’’), 

pursuant to the Commission’s authority 

under Section 36 of the Exchange Act 1

and Rule 608(e) of Regulation NMS 

under the Exchange Act,2 grant 

exemptive relief from the national 

market system plan governing the 


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