Federal Register / Vol. 75, No. 221 / Wednesday, November 17, 2010 / Notices 70319 

49 15 U.S.C. 78s(b)(3)(A)(ii). 

50 17 CFR 240.19b–4(f)(2). 

51The text of the proposed rule change is 

available on the Commission’s Web site at http:// 

www.sec.gov/rules/sro.shtml. 

52 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Form 19b–4 Information of the proposed 

rule change at 3. 

4NYSE Arca Equities Rule 8.600(c)(1) provides 

that, among other criteria, a Managed Fund Share 

is a security that represents an interest in an 

investment company registered under the 

Investment Company Act of 1940 (15 U.S.C. 80a) 

(‘‘1940 Act’’) organized as an open-end investment 

company or similar entity that invests in a portfolio 

of securities selected by its investment adviser 

consistent with its investment objectives and 

policies. In contrast, an open-end investment 

company that issues Investment Company Units, 

listed and traded on the Exchange under NYSE 

Arca Equities Rule 5.2(j)(3), seeks to provide 

investment results that correspond generally to the 

price and yield performance of a specific foreign or 

domestic stock index, fixed income securities index 

or combination thereof. 

5The Commission approved NYSE Arca Equities 

Rule 8.600 and the listing and trading of certain 

shares of the PowerShares Actively Managed Funds 

Trust on the Exchange pursuant to Rule 8.600 in 

Securities Exchange Act Release No. 57619 (April 

4, 2008), 73 FR 19544 (April 10, 2008) (SR– 

NYSEArca–2008–25). The Commission also 

previously approved listing and trading on the 

Exchange of Managed Fund Shares under Rule 

8.600. See, e.g., Securities Exchange Act Release 

Nos. 57801 (May 8, 2008), 73 FR 27878 (May 14, 

2008) (SR–NYSEArca–2008–31) (order approving 

Exchange listing and trading of twelve activelymanaged funds of the WisdomTree Trust); 60981 

(November 10, 2009), 74 FR 59594 (November 18, 

2009) (SR–NYSEArca–2009–79) (order approving 

listing of five fixed income funds of the PIMCO ETF 

Continued 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective upon filing pursuant to Section 

19(b)(3)(A)(ii) of the Act 49 and 

subparagraph (f)(2) of Rule 19b–4 

thereunder 50 because it establishes a 

due, fee, or other charge imposed by the 

Exchange. At any time within 60 days 

of the filing of the proposed rule change, 

the Commission summarily may 

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 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–NYSEArca–2010–97 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NYSEArca–2010–97. This 

file number should be included on the 

subject line if e-mail 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,51 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, on official business 

days between the hours of 10 a.m. and 

3 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–2010–97 and 

should be submitted on or before 

December 8, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.52

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–28893 Filed 11–16–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63292; File No. SR– 

NYSEArca-2010–98] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change Relating to the Listing 

and Trading of the WisdomTree 

Managed Futures Strategy Fund 

November 9, 2010. 

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

Securities Exchange Act of 1934 (‘‘Act’’ 

or ‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that, 

on November 1, 2010, NYSE Arca, Inc. 

(‘‘Exchange’’ or ‘‘NYSE Arca’’ or 

‘‘Corporation’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

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 Substance of 

the Proposed Rule Change 

The Exchange proposes to list and 

trade the shares of the following fund of 

the WisdomTree Trust (‘‘Trust’’) under 

NYSE Arca Equities Rule 8.600: 

WisdomTree Managed Futures Strategy 

Fund (‘‘Fund’’). The shares of the Fund 

are collectively referred to herein as the 

‘‘Shares.’’ 3 The text of the proposed rule 

change is available at the Exchange, the 

Commission’s Public Reference Room, 

and http://www.nyse.com. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to list and 

trade the Shares of the Fund under 

NYSE Arca Equities Rule 8.600,4 which 

governs the listing and trading of 

‘‘Managed Fund Shares’’ on the 

Exchange.5

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70320 Federal Register / Vol. 75, No. 221 / Wednesday, November 17, 2010 / Notices 

Trust); 61697 (March 12, 2010), 75 FR 13616 (March 

22, 2010) (SR–NYSEArca 2010–04) (order 

approving listing and trading of WisdomTree Real 

Return Fund); and 62604 (June [sic] 30, 2010), 75 

FR 47323 (August 5, 2010) (SR–NYSEArca–2010– 

49) (order approving listing and trading of the 

WisdomTree Emerging Markets Local Debt Fund). 

6See Registration Statement on Form N–1A for 

the Trust filed with the Securities and Exchange 

Commission on July 22, 2010 (File Nos. 333–132380 

and 811–21864) (‘‘Registration Statement’’). The 

Registration Statement became effective on 

September 20, 2010. The descriptions of the Fund 

and the Shares contained herein are based on 

information in the Registration Statement. 

7An investment adviser to an open-end fund is 

required to be registered under the Investment 

Advisers Act of 1940 (‘‘Advisers Act’’). As a result, 

the Adviser and Sub-Adviser are subject to the 

provisions of Rule 204A–1 under the Advisers Act 

relating to codes of ethics. This Rule requires 

investment advisers to adopt a code of ethics that 

reflects the fiduciary nature of the relationship to 

clients as well as compliance with other applicable 

securities laws. Accordingly, procedures designed 

to prevent the communication and misuse of nonpublic information by an investment adviser must 

be consistent with Rule 204A–1 under the Advisers 

Act. 

8The Exchange represents that the Adviser and 

the Sub-Adviser and their related personnel are 

subject to Investment Advisers Act Rule 204A–1. 

This Rule specifically requires the adoption of a 

code of ethics by an investment adviser to include, 

at a minimum: (i) Standards of business conduct 

that reflect the firm’s/personnel fiduciary 

obligations; (ii) provisions requiring supervised 

persons to comply with applicable federal securities 

laws; (iii) provisions that require all access persons 

to report, and the firm to review, their personal 

securities transactions and holdings periodically as 

specifically set forth in Rule 204A–1; (iv) provisions 

requiring supervised persons to report any 

violations of the code of ethics promptly to the 

chief compliance officer (‘‘CCO’’) or, provided the 

CCO also receives reports of all violations, to other 

persons designated in the code of ethics; and (v) 

provisions requiring the investment adviser to 

provide each of the supervised persons with a copy 

of the code of ethics with an acknowledgement by 

said supervised persons. In addition, Rule 206(4)– 

7 under the Advisers Act makes it unlawful for an 

investment adviser to provide investment advice to 

clients unless such investment adviser has (i) 

adopted and implemented written policies and 

procedures reasonably designed to prevent 

violation, by the investment adviser and its 

supervised persons, of the Advisers Act and the 

Commission rules adopted thereunder; (ii) 

implemented, at a minimum, an annual review 

regarding the adequacy of the policies and 

procedures established pursuant to subparagraph (i) 

above and the effectiveness of their 

implementation; and (iii) designated an individual 

(who is a supervised person) responsible for 

administering the policies and procedures adopted 

under subparagraph (i) above. 

The Fund will be an actively managed 

exchange-traded fund. WisdomTree 

Asset Management, Inc. (‘‘WisdomTree 

Asset Management’’) is the investment 

adviser (‘‘Adviser’’) to the Fund. 

WisdomTree Investments, Inc. 

(‘‘WisdomTree Investments’’) is the 

parent company of WisdomTree Asset 

Management. Mellon Capital 

Management Corporation (‘‘Mellon’’ or 

‘‘Sub-Adviser’’) serves as the sub-adviser 

for the Fund. The Bank of New York 

Mellon is the administrator, custodian 

and transfer agent for the Fund. ALPS 

Distributors, Inc. serves as distributor 

for the Fund. The Shares will be offered 

by the Trust, which is registered with 

the Commission as an investment 

company.6

Commentary .06 to Rule 8.600 

provides that, if the investment adviser 

to the Investment Company issuing 

Managed Fund Shares is affiliated with 

a broker-dealer, such investment adviser 

shall erect a ‘‘fire wall’’ between the 

investment adviser and the brokerdealer with respect to access to 

information concerning the composition 

and/or changes to such Investment 

Company portfolio. In addition, 

Commentary .06 further requires that 

personnel who make decisions on the 

open-end fund’s portfolio composition 

must be subject to procedures designed 

to prevent the use and dissemination of 

material nonpublic information 

regarding the open-end fund’s 

portfolio.7 Commentary .06 to Rule 

8.600 is similar to Commentary .03(a)(i) 

and (iii) to NYSE Arca Equities Rule 

5.2(j)(3); however, Commentary .06 in 

connection with the establishment of a 

‘‘fire wall’’ between the investment 

adviser and the broker-dealer reflects 

the applicable open-end fund’s 

portfolio, not an underlying benchmark 

index, as is the case with index-based 

funds. WisdomTree Asset Management 

is not affiliated with any broker-dealer. 

Mellon is affiliated with multiple 

broker-dealers and has implemented a 

‘‘fire wall’’ with respect to such brokerdealers regarding access to information 

concerning the composition and/or 

changes to the Fund’s portfolio.8 In the 

event (a) the Adviser or the Sub-Adviser 

becomes newly affiliated with a brokerdealer, or (b) any new adviser or subadviser becomes affiliated with a brokerdealer, they will be required to 

implement a fire wall with respect to 

such broker-dealer regarding access to 

information concerning the composition 

and/or changes to a portfolio. 

Description of the Shares, the 

Benchmark and the Fund: 

According to the Registration 

Statement, the WisdomTree Managed 

Futures Strategy Fund seeks to provide 

investors with positive total returns in 

rising or falling markets that are not 

directly correlated to broad market 

equity or fixed income returns. The 

Fund is managed using a quantitative, 

rules-based strategy designed to provide 

returns that correspond to the 

performance of the Diversified Trends 

IndicatorTM (‘‘Benchmark’’). The 

Benchmark is a widely used indicator 

designed to capture the economic 

benefit derived from rising or declining 

price trends in the commodity, currency 

and U.S. Treasury futures markets. 

The Benchmark: 

The Benchmark is a rules-based 

indicator designed to capture rising and 

falling price trends in the commodity, 

currency and U.S. Treasury markets 

through long and short positions on U.S. 

listed futures contracts. The Benchmark 

consists of U.S. listed futures contracts 

on 16 tangible commodities and 8 

financial futures. The 16 commodity 

futures contracts are: light crude oil, 

natural gas, RBOB gas, heating oil, 

soybeans, corn, wheat, gold, silver, 

copper, live cattle, lean hogs, coffee, 

cocoa, cotton and sugar. The 8 financial 

futures contracts are: the Australian 

dollar, British pound, Canadian dollar, 

Euro, Japanese yen, Swiss franc, U.S. 

Treasury Notes and U.S. Treasury 

bonds. Each contract is sometimes 

referred to as a ‘‘Component’’ of the 

Benchmark. 

Components that are similar in nature 

(such as gas and oil or gold and silver) 

are aggregated into ‘‘Sectors.’’ There are 

nine commodity Sectors in the 

Benchmark: Energy, Grains, Precious 

Metals, Industrial Metals, Livestock, 

Coffee, Cocoa, Cotton, and Sugar. Each 

financial futures contract is considered 

to be its own Sector. As a result, there 

are eight financial Sectors in the 

Benchmark: The Australian dollar, 

British pound, Canadian dollar, Euro, 

Japanese yen, Swiss franc, U.S. Treasury 

Notes and U.S. Treasury bonds. 

In order to capture both rising and 

falling price trends, at the end of each 

month each Sector in the Benchmark 

(other than the Energy Sector) is 

positioned as either ‘‘long’’ or ‘‘short’’ (at 

the end of each month, the Energy 

Sector is positioned as either ‘‘long’’ or 

‘‘flat’’ (i.e., no exposure)). This 

determination is made using an 

algorithm that compares the Sector’s 

monthly return to the Sector’s historic 

weighted moving average returns. If the 

Sector’s returns are above its moving 

average returns the Sector is positioned 

as ‘‘long’’ throughout the following 

month. If the Sector’s returns are below 

its moving average the Sector is 

positioned as ‘‘short’’ throughout the 

following month (with the sole 

exception of the Energy Sector, which 

would be positioned as ‘‘flat’’). All 

Components within a Sector are held in 

the same direction. The value of a 

Sector and the value of the Benchmark 

should increase if a long position 

increases in value or if a short position 

decreases in value. For example, if a 

Sector is long in the Benchmark and the 

value of its Components goes up intramonth, the return of the Sector (and 

therefore the Benchmark) should 

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Federal Register / Vol. 75, No. 221 / Wednesday, November 17, 2010 / Notices 70321 

9To arrive at the Sector weightings when the 

Energy Sector is flat, divide the Sector Base Weight 

by one minus the Energy Sector Base Weight (i.e., 

Sector Base Weight/1–0.1875)). 

10The current Sector (and Component) Base 

Weights when the Energy Sector is long are as 

follows: Energy 18.75% (light crude 8.50%, natural 

gas 4.25%, RBOB 3.0%, heating oil 3.0%); Grains 

11.50% (soybeans 5.0%, corn 4.0%, wheat 2.50%); 

Precious Metals 5.25% (Gold 3.50%, Silver 1.75%); 

Industrial Metals 5.0% (copper 5.0%); Livestock 

5.0% (live cattle 3.0%, lean hogs 2.0%); Coffee 

1.5%; Cocoa 1.0%; Cotton 1.0%; Sugar 1.0%; Euro 

13.0%; Japanese Yen 12.0%; U.S. Treasury Note 

7.50%; U.S. Treasury Bond 7.50%; British Pound 

5.00%; Swiss Franc 2.0%; Australian Dollar 2.0%; 

and Canadian Dollar 1.00%. 

The current Sector (and Component) Base 

Weights when the Energy Sector is flat are as 

follows: Energy 0% (light crude 0%, natural gas 

0%, RBOB 0%, heating oil 0%); Grains 14.15% 

(soybeans 6.15%, corn 4.92%, wheat 3.08%); 

Precious Metals 6.46% (gold 4.31%, silver 2.15%); 

Industrial Metals 6.15% (copper 6.15%); Livestock 

6.15% (live cattle 3.69%, lean hogs 2.46%); Coffee 

1.85%; Cocoa 1.23%; Cotton 1.23%; Sugar 1.23%; 

Euro 16.0%; Japanese Yen 14.77%; U.S. Treasury 

Note 9.23%; U.S. Treasury Bond 9.23%; British 

Pound 6.15%; Swiss Franc 2.46%; Australian 

Dollar 2.46%; and Canadian Dollar 1.23%. 

11The Fund’s investments in commodity futures 

contracts will be limited by the application of 

position limits imposed by the CFTC and U.S. 

futures exchanges intended to prevent undue 

influence on prices by a single trader or group of 

affiliated traders. The Adviser has represented that 

the Fund’s investment in futures contracts will be 

limited to investments in the U.S. listed futures 

contracts included in the Benchmark, except that 

the Fund may invest up to 10% of its assets in U.S. 

listed commodity and currency futures contracts 

not included in the Benchmark in a manner 

designed to achieve its investment objective. 

The U.S. listed commodity futures contracts 

included in the Benchmark (and therefore included 

in the Fund) are heavily traded and are based on 

some of the world’s most liquid and actively-traded 

commodities. As of August 31, 2010, the ten 

commodity futures contracts that are given the 

greatest weighting in the Benchmark, and their 

three-month Average Daily Dollar Volume 

(‘‘ADDV’’), were: high grade copper (6.15% weight; 

ADDV $528,158,471); soybeans (6.06% weight; 

ADDV $3,172,701,410); corn (4.67% weight; ADDV 

$2,528,323,106); gold (4.29% weight; ADDV 

$6,226,943,776); live cattle (3.75% weight; ADDV 

$566,731,652); wheat (3.42% weight; ADDV 

$1,385,115,481); lean hogs (2.40% weight; ADDV 

$339,611,918); silver (2.17% weight; ADDV 

$641,111,990); coffee (1.85% weight; ADDV 

$505,778,511); and cocoa (1.23% weight; ADDV 

$144,259,844). 

The Fund will not invest in any currency that is 

not represented in the Benchmark. The listed 

financial futures contracts included in the 

Benchmark (and therefore included in the Fund) are 

heavily traded and represent six of the world’s most 

liquid and actively-traded currencies (as well as the 

U.S. dollar through futures on Treasury bonds and 

10 year notes) as measured by daily turnover. For 

example, according to Table B.5 of the 2007 

Triennial Central Bank Survey of Foreign Exchange 

and Derivative Market Activity by the Bank for 

International Settlements (‘‘BIS 2007 Survey’’), the 

most actively traded currency pairs against the U.S. 

dollar (based on average daily turnover in U.S. 

dollars at current exchange rates in April 2007) 

were as follows: euro ($840 billion), yen ($397 

billion), British pound ($361 billion), Australian 

dollar ($175 billion), Swiss franc ($143 billion), and 

Canadian dollar ($115 billion). According to Table 

E.2 of the BIS 2007 Survey, the daily turnover in 

April 2007 consisted of the following (in billions of 

U.S. dollars) (approximate): 

Each of the currencies listed above is represented 

by U.S. listed financial futures contracts in the 

Benchmark. 

As of August 31, 2010, the weighting of the 

financial futures contracts in the Benchmark, and 

their respective three month ADDV, was: euro 

(16.00% weight; ADDV $43,890,327,409); Japanese 

yen (14.77% weight; ADDV $16,832,896,412), U.S. 

Treasury 10 yr. note (9.23% weight, ADDV 

$15,149,128,260); U.S. Treasury Bond (9.23% 

weight; ADDV $5,233,746,635); British pound 

(6.15% weight; ADDV $9,822,322,233); Australian 

dollar (2.46% weight; ADDV U.S. $8,172,424,454); 

Swiss franc (2.46% weight; ADDV $4,342,434,023); 

and Canadian dollar (1.23% weight; ADDV U.S. 

$7,560,986,056). The Adviser represents that the 

returns of the forward currency contracts held by 

the Fund will be highly correlated to the returns of 

the listed futures contracts included in the 

Benchmark. 

12The Fund will enter into over-the-counter swap 

transactions only with respect to transactions based 

on (i) the return of the Benchmark or any subset of 

the Benchmark, (ii) any Component in the 

Benchmark, or (iii) any commodity or currency 

represented in the Benchmark. 

13The Fund may invest in commodity-linked 

notes. Commodity-linked notes are over-the-counter 

debt instruments, typically issued by a bank or 

broker-dealer, that are designed to provide cash 

flows linked to the value of a reference asset. They 

provide exposure, which may include long and/or 

short exposure, to the investment returns of the 

reference asset underlying the note. The 

performance of these notes is determined by the 

Continued 

increase. If a Sector is short in the 

Benchmark, and the value of its 

Components goes down intra-month, 

the return of the Sector (and therefore 

the Benchmark) should increase. 

The Energy Sector and its 

Components may never be positioned 

short within the Benchmark. The 

Benchmark’s methodology provides 

that, due to significant levels of 

continuous consumption, limited 

reserves and other factors, the Energy 

Sector can only be long or flat (i.e., no 

exposure) within the Benchmark. If the 

Energy Sector is flat then the weighting 

of the other Sectors and Components 

within the Benchmark is increased on a 

pro-rata basis.9 As a result, when the 

Energy Sector is flat, financial futures 

will represent approximately 61.5% of 

the weight of the Benchmark and 

commodities will represent 

approximately 38.5% of the weight of 

the Benchmark. When the Energy Sector 

is long, financial futures and commodity 

futures each represent 50% of the 

weight of the Benchmark. 

At the beginning of each year and 

month, the Benchmark is weighted in 

one of two ways. If the Energy Sector is 

long, the Benchmark is weighted evenly 

(i.e., 50/50) between commodity futures 

contracts and financial futures 

contracts. If the Energy Sector is flat, 

financial futures represent 

approximately 61.5% of the weight of 

the Benchmark and commodity futures 

represent approximately 38.5% of the 

Benchmark. At the beginning of 2010, 

the Benchmark was weighted evenly: A 

50% weight to commodity futures and 

a 50% weight to financial futures. At the 

beginning of each year, each Component 

and Sector also has a ‘‘Base Weight,’’ 

depending on whether the Energy 

Sector is long or flat. If the Energy 

Sector is flat, then the Base Weight of 

the other Sectors and Components 

within the Benchmark is increased on a 

pro-rata basis. Commodity Sector 

weights are based on, but not exactly 

proportional to, historical world 

production levels. Commodity Sectors 

that have higher historical production 

levels are weighted higher in the 

Benchmark. Weightings of the financial 

futures Sectors are based on, but not 

directly proportional to, historical gross 

domestic product (‘‘GDP’’). Larger 

economic regions (i.e., Europe as 

measured by the Euro) should get a 

higher weighting than smaller regions 

(i.e., Australia as measured by the 

Australian dollar).10

The weight of each Component and 

Sector in the Benchmark changes 

throughout each month based upon 

performance. At the end of each month, 

each Sector is reset back to its 

applicable Base Weight depending on 

whether the Energy Sector is long or 

flat. Within Sectors that have multiple 

Components, the weight of each 

Component relative to the others is 

allowed to fluctuate throughout the year 

and Component weights are reset back 

to their respective Base Weights only at 

year-end. 

The Fund: 

The Fund will invest substantially all 

of its assets in a combination of 

commodity- and currency-linked 

investments (including investments 

linked to U.S. Treasuries) designed to 

correspond to the performance of the 

Benchmark, and U.S. government 

securities (as defined in Section 3(a)(42) 

of the Exchange Act) (‘‘Government 

Securities’’) that serve as collateral or 

otherwise back the commodity- and 

currency-linked investments. More 

specifically, the Fund will invest at least 

70% of its assets in a combination of: (i) 

Listed commodity and financial futures 

contracts included in the Benchmark; 

and (ii) forward currency contracts 

based on currencies represented in the 

Benchmark,11 in each case 

collateralized or otherwise backed by 

Government Securities. The Fund may 

invest up to 30% of its assets in a 

combination of swap transactions 12 and 

commodity-linked notes.13 The Fund’s 

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70322 Federal Register / Vol. 75, No. 221 / Wednesday, November 17, 2010 / Notices 

price movement of the reference asset underlying 

the note. The Fund’s investment in commoditylinked notes will be limited to notes providing 

exposure to (i) the Benchmark or any subset of the 

Benchmark, (ii) any Component of the Benchmark 

or (iii) any commodity or currency represented in 

the Benchmark. As noted, the Benchmark consists 

of heavily traded U.S. listed futures contracts based 

on liquid and actively-traded commodities and 

currencies and there is also an active market for 

forward currency contracts and other derivatives 

based on the commodities and currencies 

represented in the Benchmark. In addition, the 

Benchmark is widely-followed and currently serves 

as the basis for a range of investment products, 

including funds, swap contracts and other 

derivatives. The Fund’s overall investment in swaps 

and commodity-linked notes will not exceed 30% 

of the Fund’s assets. 

14The Sub-Adviser is responsible for day-to-day 

management of the Fund and, as such, typically 

makes all decisions with respect to portfolio 

holdings. The Adviser has ongoing oversight 

responsibility. 

15The NAV of the Fund’s Shares generally is 

calculated once daily Monday through Friday as of 

the close of regular trading on the New York Stock 

Exchange, generally 4 p.m. Eastern time (‘‘NAV 

Calculation Time’’). NAV per Share is calculated by 

dividing the Fund’s net assets by the number of 

Fund Shares outstanding. For more information 

regarding the valuation of Fund investments in 

calculating the Fund’s NAV, see the Registration 

Statement. 

investments in listed futures contracts, 

forward currency contracts and swap 

transactions will be backed by 

investments in Government Securities 

in an amount equal to the exposure of 

such contracts. 

Total Spot Forward Swap 

Euro ................................................................................................................. 840 265 90 485 

Yen ................................................................................................................... 397 140 42 215 

British Pound ................................................................................................... 361 103 30 228 

Australian Dollar .............................................................................................. 175 39 15 121 

Swiss Franc ..................................................................................................... 143 49 12 81 

Canadian Dollar ............................................................................................... 115 33 12 69 

The Fund will be managed so that the 

long and short exposure of the Fund’s 

portfolio is economically similar to the 

long and short positions in the 

Benchmark. This does not, however, 

mean that the long and short exposures 

will be identical. The Fund’s positions 

in such listed futures contracts may 

deviate from the Benchmark when the 

Adviser or the Sub-Adviser believes it is 

in the best interest of the Fund to do 

so.14 For example, the Fund may deviate 

from the Benchmark in order to manage 

cash flows in and out of the Fund, such 

as in connection with the payment of 

dividends or expenses, to manage 

portfolio holdings around Benchmark 

changes, or to comply with the 1940 

Act, the Commodity Exchange Act 

(‘‘CEA’’), the Internal Revenue Code of 

1986 (‘‘Code’’), exchange position limits 

or other applicable laws, rules and 

regulations. 

To the extent the Fund invests in 

futures contracts it will do so only in 

accordance with Rule 4.5 of the CEA. 

The Trust, on behalf of the Fund, has 

filed a notice of eligibility for exclusion 

from the definition of the term 

‘‘commodity pool operator’’ in 

accordance with Rule 4.5 so that the 

Fund is not subject to registration or 

regulation as a commodity pool operator 

under the CEA. The Fund does not 

invest directly in physical commodities. 

The Fund’s investment in 

Government Securities shall be limited 

to investments: (i) To satisfy margin 

requirements, to provide collateral or to 

otherwise back investments in 

commodity- and currency-linked 

derivatives (such as futures contracts, 

forward contracts and swaps); (ii) to 

help manage cash flows in and out of 

the Fund, such as in connection with 

the payment of dividends or expenses; 

or (iii) as a substitute for investment in 

the listed U.S. Treasury futures 

contracts included in the Benchmark. In 

addition, the Fund may invest in money 

market instruments with remaining 

maturities of one year or less, as well as 

cash and cash equivalents, in order to 

collateralize or otherwise back its 

positions in listed futures contracts, 

forward currency contracts or swaps or 

for cash management purposes. All 

money market securities acquired by the 

Fund will be rated investment grade. 

The Fund generally expects to maintain 

an average portfolio maturity of 90 days 

or less on its investments in money 

market securities. 

Neither the Fund nor the Benchmark 

is leveraged. The Fund will be a ‘‘nondiversified’’ fund. This means that a 

relatively high percentage of its assets 

may be invested in a limited number of 

securities and instruments. The Fund 

intends to maintain the level of 

diversification necessary to qualify as a 

regulated investment company (‘‘RIC’’) 

under Subchapter M of the Code. 

The Fund will seek to gain exposure 

to the commodity and currency markets, 

in whole or in part, through investments 

in a subsidiary organized in the Cayman 

Islands (‘‘Subsidiary’’). The Subsidiary is 

wholly-owned and controlled by the 

Fund, and its investments will be 

consolidated into the Fund’s financial 

statements. The Fund’s and the 

Subsidiary’s holdings will be disclosed 

on the Fund’s website on a daily basis. 

The Fund’s investment in the 

Subsidiary may not exceed 25% of the 

Fund’s total assets at the end of each 

fiscal quarter. The Subsidiary’s shares 

will be offered only to the Fund and the 

Fund will not sell shares of the 

Subsidiary to other investors. 

The Fund’s use of the Subsidiary is 

designed to help the Fund achieve 

exposure to commodity and currency 

returns in a manner consistent with the 

federal tax requirements applicable to 

the Fund and other regulated 

investment companies. The Subsidiary 

will comply with the 1940 Act except 

that, unlike the Fund, the Subsidiary 

may invest without limitation in 

commodity- and currency-linked 

investments based on commodities and 

currencies included within the 

Benchmark. The Subsidiary will 

otherwise operate in the same manner 

as the Fund with regard to applicable 

compliance policies and procedures. 

The Fund’s Registration Statement 

states that since the Subsidiary’s 

investments are consolidated into the 

Fund’s, the Fund’s combined holdings 

(including the investments of the 

Subsidiary) must comply with the 1940 

Act. 

The Fund will not invest in non-U.S. 

equity securities (other than shares of 

the Subsidiary). 

The Shares: 

According to the Registration 

Statement, the Fund issues and redeems 

Shares on a continuous basis at net asset 

value (‘‘NAV’’) 15 only in large blocks of 

Shares, typically 50,000 Shares or more 

(‘‘Creation Unit Aggregations’’), in 

transactions with Authorized 

Participants. Only institutional 

investors who have entered into an 

Authorized Participant agreement may 

purchase or redeem Creation Unit 

Aggregations. Orders to create or redeem 

Creation Unit Aggregations of the Fund 

must be delivered through an 

Authorized Participant prior to the 

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Federal Register / Vol. 75, No. 221 / Wednesday, November 17, 2010 / Notices 70323 

16The Bid/Ask Price of the Fund is determined 

using the mid-point of the highest bid and the 

lowest offer on the Exchange as of the time of 

calculation of the Fund’s NAV. The records relating 

to Bid/Ask Prices will be retained by the Fund and/ 

or its service providers. 

17The Core Trading Session is 9:30 a.m. to 4 p.m. 

Eastern time. 

18The Exchange notes that NYSE Arca Equities 

Rule 8.600(d)(2)(B)(ii) provides that the Reporting 

Authority that provides the Disclosed Portfolio 

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 the portfolio. 

19Under accounting procedures followed by the 

Fund, trades made on the prior business day (‘‘T’’) 

will be booked and reflected in NAV on the current 

business day (‘‘T+1’’). Notwithstanding the 

foregoing, portfolio trades that are executed prior to 

the opening of the Exchange on any business day 

may be booked and reflected in NAV on such 

business day. Accordingly, the Fund will be able to 

disclose at the beginning of the business day the 

portfolio that will form the basis for the NAV 

calculation at the end of the business day. 20See 17 CFR 240.10A–3. 

Fund’s NAV calculation time. The 

consideration for purchase of Creation 

Unit Aggregations of the Fund will 

consist of the in-kind deposit of a 

designated portfolio of Government 

Securities and/or listed futures contracts 

included in the Benchmark (‘‘Deposit 

Securities’’) and an amount of cash 

(‘‘Cash Component’’). Together, the 

Deposit Securities and the Cash 

Component constitute the ‘‘Fund 

Deposit,’’ which represents the 

minimum initial and subsequent 

investment amount for a Creation Unit 

Aggregation of the Fund. The Fund 

Deposit may consist entirely of cash. 

The process to redeem Creation Unit 

Aggregations works much like the 

process to purchase Creation Unit 

Aggregations, but in reverse. 

Each business day prior to the 

opening of trading the Fund will 

publish the specific securities and 

designated amount of cash included in 

that day’s basket for the Fund through 

the National Securities Clearing 

Corporation or other method of public 

dissemination. The Fund reserves the 

right to accept or pay out a basket of 

securities or cash that differs from the 

published basket. The prices at which 

creations and redemptions occur are 

based on the next calculation of NAV 

after an order is received in proper form. 

Additional information regarding the 

Fund and the Shares, including 

investment strategies, risks, creation and 

redemption procedures, fees, portfolio 

holdings, disclosure policies, 

distributions and taxes is included in 

the Registration Statement. All terms 

relating to the Fund that are referred to, 

but not defined in, this proposed rule 

change are defined in the Registration 

Statement. 

Availability of Information: 

The Fund’s website (http:// 

www.wisdomtree.com), which will be 

publicly available prior to the public 

offering of Shares, will include a form 

of the Prospectus for the Fund that may 

be downloaded. The website will 

include additional quantitative 

information updated on a daily basis, 

including, for the Fund: (1) The prior 

business day’s reported NAV, mid-point 

of the bid/ask spread at the time of 

calculation of such NAV (‘‘Bid/Ask 

Price’’),16 and a calculation of the 

premium and discount of the Bid/Ask 

Price against the NAV; and (2) data in 

chart format displaying the frequency 

distribution of discounts and premiums 

of the daily Bid/Ask Price against the 

NAV, within appropriate ranges, for 

each of the four previous calendar 

quarters. 

On each business day, before 

commencement of trading in Shares in 

the Core Trading Session 17 on the 

Exchange, the Trust will disclose on its 

website the identities and quantities of 

the portfolio of securities and other 

assets (‘‘Disclosed Portfolio’’) 18 held by 

the Fund and the Subsidiary that will 

form the basis for the Fund’s calculation 

of NAV at the end of the business day.19

On a daily basis, the Adviser (using an 

automated process currently used by 

existing WisdomTree Funds) will 

disclose for each portfolio security or 

other investment of the Fund the 

following information: ticker symbol (if 

applicable), name or description of 

security or investment, number of 

shares or dollar value of investments 

held in the portfolio, and percentage 

weighting of the security or investment 

in the portfolio. The website 

information will be publicly available at 

no charge. 

In addition, for the Fund, an 

estimated value, defined in NYSE Arca 

Equities Rule 8.600 as the ‘‘Portfolio 

Indicative Value,’’ that reflects an 

estimated intra-day value of the Fund’s 

portfolio, will be disseminated. The 

Portfolio Indicative Value will be based 

upon the current value for the 

components of the Disclosed Portfolio 

and will be updated and disseminated 

by one or more major market data 

vendors at least every 15 seconds during 

the Core Trading Session on the 

Exchange. The dissemination of the 

Portfolio Indicative Value, together with 

the Disclosed Portfolio, will allow 

investors to determine the value of the 

underlying portfolio of the Fund on a 

daily basis and to provide a close 

estimate of that value throughout the 

trading day. 

Intra-day and end-of-day prices are 

readily available through Bloomberg, 

other major market data providers and 

broker-dealers for the Benchmark, the 

listed futures contracts included in the 

Benchmark, the commodities and 

currencies represented in the 

Benchmark, and the forward currency 

contracts, swaps, notes and other 

derivatives based on the Benchmark. As 

a result, information necessary to 

evaluate the value of any swap or 

commodity-linked note purchased by 

the Fund will be readily available to 

market participants. Intra-day prices for 

the Benchmark are updated and 

disseminated at least every 15 seconds 

during the Core Trading Session on the 

Exchange. 

Investors can also obtain the Trust’s 

Statement of Additional Information 

(‘‘SAI’’), the Fund’s Shareholder Reports, 

and its Form N–CSR and Form N–SAR, 

filed twice a year. The Trust’s SAI and 

Shareholder Reports are available free 

upon request from the Trust, and those 

documents and the Form N–CSR and 

Form N–SAR may be viewed on-screen 

or downloaded from the Commission’s 

website at http://www.sec.gov. 

Information regarding market price and 

trading volume of the Shares is and 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 will be published 

daily in the financial section of 

newspapers. Quotation and last sale 

information for the Shares will be 

available via the Consolidated Tape 

Association (‘‘CTA’’) high-speed line. 

Initial and Continued Listing: 

The Shares will be subject to NYSE 

Arca Equities Rule 8.600(d), which sets 

forth the initial and continued listing 

criteria applicable to Managed Fund 

Shares. The Exchange represents that, 

for initial and/or continued listing, the 

Shares must be in compliance with Rule 

10A–3 under the Exchange Act,20 as 

provided by NYSE Arca Equities Rule 

5.3. A minimum of 100,000 Shares will 

be outstanding at the commencement of 

trading on the Exchange. The Exchange 

will obtain a representation from the 

issuer of the Shares that the NAV per 

Share for the Fund will be calculated 

daily and that the NAV and the 

Disclosed Portfolio will be made 

available to all market participants at 

the same time. 

Trading Halts: 

With respect to trading halts, the 

Exchange may consider all relevant 

factors in exercising its discretion to 

halt or suspend trading in the Shares of 

the Fund. Shares of the Fund will be 

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70324 Federal Register / Vol. 75, No. 221 / Wednesday, November 17, 2010 / Notices 

21For a list of the current members of ISG, see 

http://www.isgportal.org. The Exchange notes that 

not all of the components of the Disclosed Portfolio 

for the Fund may trade on exchanges that are 

members of ISG or with which the Exchange has in 

place a comprehensive surveillance sharing 

agreement. 22 15 U.S.C. 78f(b)(5). 

halted if the ‘‘circuit breaker’’ parameters 

in NYSE Arca Equities Rule 7.12 are 

reached. Trading may be halted because 

of market conditions or for reasons that, 

in the view of the Exchange, make 

trading in the Shares inadvisable. These 

may include: (1) The extent to which 

trading is not occurring in the securities 

comprising the Disclosed Portfolio and/ 

or the financial instruments of the Fund; 

or (2) whether other unusual conditions 

or circumstances detrimental to the 

maintenance of a fair and orderly 

market are present. Trading in the 

Shares will be subject to NYSE Arca 

Equities Rule 8.600(d)(2)(D), which sets 

forth circumstances under which Shares 

of the Fund may be halted. Such rule 

provides that, if the Portfolio Indicative 

Value (as defined in Rule 8.600(c)(3)) of 

a series of Managed Fund Shares is not 

being disseminated as required, the 

Corporation may halt trading during the 

day in which the interruption to the 

dissemination of the Portfolio Indicative 

Value occurs. If the interruption to the 

dissemination of the Portfolio Indicative 

Value persists past the trading day in 

which it occurred, the Corporation will 

halt trading no later than the beginning 

of the trading day following the 

interruption. In addition, if the 

Exchange becomes aware that the NAV 

or the Disclosed Portfolio with respect 

to a series of Managed Fund Shares is 

not disseminated to all market 

participants at the same time, it will halt 

trading in such series until such time as 

the NAV or the Disclosed Portfolio is 

available to all market participants. 

Trading Rules: 

The Exchange deems the Shares to be 

equity securities, thus rendering trading 

in the Shares subject to the Exchange’s 

existing rules governing the trading of 

equity securities. Shares will trade on 

the NYSE Arca Marketplace from 4 a.m. 

to 8 p.m. Eastern time in accordance 

with NYSE Arca Equities Rule 7.34 

(Opening, Core, and Late Trading 

Sessions). The Exchange has 

appropriate rules to facilitate 

transactions in the Shares during all 

trading sessions. As provided in NYSE 

Arca Equities Rule 7.6, Commentary .03, 

the minimum price variation (‘‘MPV’’) 

for quoting and entry of orders in equity 

securities traded on the NYSE Arca 

Marketplace is $0.01, with the exception 

of securities that are priced less than 

$1.00 for which the MPV for order entry 

is $0.0001. 

Surveillance: 

The Exchange intends to utilize its 

existing surveillance procedures 

applicable to derivative products (which 

includes Managed Fund Shares) to 

monitor trading in the Shares. The 

Exchange represents that these 

procedures are adequate to properly 

monitor Exchange trading of the Shares 

in all trading sessions and to deter and 

detect violations of Exchange rules and 

applicable federal securities laws. 

The Exchange’s current trading 

surveillance focuses on detecting 

securities trading outside their normal 

patterns. When such situations are 

detected, surveillance analysis follows 

and investigations are opened, where 

appropriate, to review the behavior of 

all relevant parties for all relevant 

trading violations. 

The Exchange may obtain information 

via the Intermarket Surveillance Group 

(‘‘ISG’’) from NYMEX, ICE Futures and 

other exchanges that are members of 

ISG.21

In addition, the Exchange also has a 

general policy prohibiting the 

distribution of material, non-public 

information by its employees. 

Information Bulletin: 

Prior to the commencement of 

trading, the Exchange will inform its 

ETP Holders in an Information Bulletin 

(‘‘Bulletin’’) of the special characteristics 

and risks associated with trading the 

Shares. Specifically, the Bulletin will 

discuss the following: (1) The 

procedures for purchases and 

redemptions of Shares in Creation Unit 

Aggregations (and that Shares are not 

individually redeemable); (2) NYSE 

Arca Equities Rule 9.2(a), which 

imposes a duty of due diligence on its 

ETP Holders to learn the essential facts 

relating to every customer prior to 

trading the Shares; (3) the risks involved 

in trading the Shares during the 

Opening and Late Trading Sessions 

when an updated Portfolio Indicative 

Value will not be calculated or publicly 

disseminated; (4) how information 

regarding the Portfolio Indicative Value 

is disseminated; (5) the requirement that 

ETP Holders deliver a prospectus to 

investors purchasing newly issued 

Shares prior to or concurrently with the 

confirmation of a transaction; and (6) 

trading information. 

In addition, the Bulletin will 

reference that the Fund is subject to 

various fees and expenses described in 

the Registration Statement. The Bulletin 

will discuss any exemptive, no-action, 

and interpretive relief granted by the 

Commission from any rules under the 

Exchange Act. The Bulletin will also 

disclose that the NAV for the Shares 

will be calculated after 4 p.m. Eastern 

time each trading day. 

2. Statutory Basis 

The basis under the Exchange Act for 

this proposed rule change is the 

requirement under Section 6(b)(5) 22

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 will facilitate the listing and 

trading of an additional type of 

exchange-traded product that will 

enhance competition among market 

participants, to the benefit of investors 

and the marketplace. In addition, the 

listing and trading criteria set forth in 

NYSE Arca Equities Rule 8.600 are 

intended to protect investors and the 

public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

the proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 75, No. 221 / Wednesday, November 17, 2010 / Notices 70325 

23 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). 

5A Member is any registered broker or dealer that 

has been admitted to membership in the Exchange. 

6See ‘‘BATS October U.S. Markets Update and 

Pricing November 1, 2010’’ (October 25, 2010), 

available at: http://batstrading.com/resources/fee_

schedule/2010/BATS-October-US-Markets-Updateand-Pricing-November-1-2010.pdf. 

7As defined in BYX Rule 11.9(c)(12), a 

‘‘Destination Specific Order’’ is ‘‘[a] market or limit 

order that instructs the System to route the order 

to a specified away trading center or centers, after 

exposing the order to the BATS Book.’’ 

8As defined in BYX Rule 11.13(a)(3)(G), ‘‘TRIM 

is a routing option under which an order checks the 

System for available shares and then is sent to 

destinations on the System routing table.’’ 

9As defined in BYX Rule 11.13(a)(3)(H), ‘‘SLIM is 

a routing option under which an order checks the 

System for available shares and then is sent to 

destinations on the System routing table.’’ 

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 e-mail to rulecomments@sec.gov. Please include File 

Number SR–NYSEArca–2010–98 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NYSEArca–2010–98. This 

file number should be included on the 

subject line if e-mail 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 20549–1090 on official 

business days between 10 a.m. and 3 

p.m. Copies of the filing will also be 

available for inspection and copying at 

the NYSE’s principal office. 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–2010–98 and 

should be submitted on or before 

December 8, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–28894 Filed 11–16–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63299; File No. SR–BYX– 

2010–005] 

Self-Regulatory Organizations; BATS 

Y-Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Related to Fees for Use 

of BATS Y-Exchange, Inc. 

November 10, 2010. 

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 October 

29, 2010, BATS Y-Exchange, Inc. 

(‘‘Exchange’’, ‘‘BYX Exchange’’ or ‘‘BYX’’) 

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. 

BYX 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 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 modify its 

fee schedule applicable to Members 5 of 

the Exchange pursuant to BYX Rules 

15.1(a) and (c). While changes to the fee 

schedule pursuant to this proposal will 

be effective upon filing, the changes will 

become operative on November 1, 2010. 

The text of the proposed rule change 

is available at the Exchange’s Web site 

at http://www.batstrading.com, at the 

principal office of the Exchange, on the 

Commission’s Web site at http:// 

www.sec.gov, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange 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 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange is proposing to modify 

its fee schedule to revise pricing for 

routed orders that are sent to and 

executed by the Exchange’s affiliate, 

BATS Exchange, Inc. (‘‘BZX Exchange’’). 

Effective November 1, 2010, BZX 

Exchange is increasing its standard fee 

to remove liquidity to $0.0028 per 

share.6 The Exchange has various 

routing strategies and order types that 

route to BZX Exchange and charge the 

current remove rate charged by BZX 

Exchange. These strategies include BYX 

+ BZX Exchange Destination Specific 

Orders orders 7 (referred to by the 

Exchange as ‘‘B2B’’ orders), the TRIM 

routing strategy 8 and the SLIM routing 

strategy.9 The Exchange proposes to 

increase the fee for executions at BZX 

Exchange through B2B, TRIM and SLIM 

to $0.0028 per share, consistent with the 

BZX Exchange fee increase. 

In addition to the changes described 

above, the Exchange proposes to use the 

name ‘‘BYX Exchange’’ and ‘‘BYX’’ 

throughout the fee schedule. Similarly, 

the Exchange proposes defining its 

affiliate, as it has done above, as ‘‘BZX 

Exchange.’’ Also, the Exchange proposes 

to make stylistic changes, including 

referring to its book of orders as its 

‘‘order book,’’ rather than just its ‘‘book.’’ 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder that 

are applicable to a national securities 

exchange, and, in particular, with the 

mstockstill on DSKH9S0YB1PROD with NOTICES