[Federal Register Volume 75, Number 238 (Monday, December 13, 2010)]
[Notices]
[Pages 77681-77685]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-31132]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63447; File No. SR-NYSEArca-2010-107]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
Relating to Listing and Trading of AdvisorShares Active Bear ETF Under 
NYSE Arca Equities Rule 8.600

December 7, 2010.
    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 23, 2010, 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 Exchange. The Commission 
is publishing this notice to solicit comments on the proposed rule 
change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to list and trade the following under NYSE 
Arca Equities Rule 8.600 (``Managed Fund Shares''): AdvisorShares 
Active Bear ETF. 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 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to list and trade the following Managed Fund 
Shares \4\ (``Shares'') under NYSE Arca Equities Rule 8.600: 
AdvisorShares Active Bear ETF (the ``Fund'').\5\ The Shares will be 
offered by AdvisorShares Trust (the ``Trust''), a statutory trust 
organized under the laws of the State of Delaware and registered with 
the Commission as an open-end management investment company.\6\ The 
investment advisor to the Fund is AdvisorShares Investments, LLC (the 
``Advisor''). Ranger Alternative Management, L.P. (``Ranger'') is the 
sub-advisor (``Sub-Advisor'') to the Fund and the portfolio manager. 
Foreside Fund Services LLC (``Distributor'') is the distributor for the 
Fund. The Bank of New York Mellon Corporation (``Administrator'') is 
the administrator, custodian, transfer agent and fund accounting agent 
for the Fund.
---------------------------------------------------------------------------

    \4\ A Managed Fund Share is a security that represents an 
interest in an investment company registered under the Investment 
Company Act of 1940 (15 U.S.C. 80a) (``1940 Act'') organized as an 
open-end investment company or similar entity that invests in a 
portfolio of securities selected by its investment advisor 
consistent with its investment objectives and policies. In contrast, 
an open-end investment company that issues Investment Company Units, 
listed and traded on the Exchange under NYSE Arca Equities Rule 
5.2(j)(3), seeks to provide investment results that correspond 
generally to the price and yield performance of a specific foreign 
or domestic stock index, fixed income securities index or 
combination thereof.
    \5\ The Commission has previously approved the listing and 
trading on the Exchange of other actively managed funds under Rule 
8.600. See, e.g., Securities Exchange Act Release Nos. 57801 (May 8, 
2008), 73 FR 27878 (May 14, 2008) (SR-NYSEArca-2008-31) (order 
approving Exchange listing and trading of twelve actively-managed 
funds of the WisdomTree Trust); 60460 (August 7, 2009) (SR-NYSEArca-
2009-55) (order approving Exchange listing and trading of 
AdvisorShares Dent Tactical ETF); 61842 (April 5, 2010-10), 75 FR 
18554 (April 12, 2010) (SR-NYSEArca-2010-10) (order approving 
listing of Mars Hill Global Relative Value ETF).
    \6\ The Trust is registered under the 1940 Act. On September 22, 
2010, the Trust filed with the Commission Post-Effective Amendment 
No. 12 to 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) (the ``Registration Statement''). The Trust 
has also filed an Amended Application for an Order under Section 
6(c) of the 1940 Act for exemptions from various provisions of the 
1940 Act and rules thereunder (File No. 812-13677 dated May 28, 
2010) (``Exemptive Application''). The description of the operation 
of the Trust and the Fund herein is based on the Registration 
Statement.
---------------------------------------------------------------------------

    Commentary .06 to Rule 8.600 provides that, if the investment 
adviser to the Investment Company issuing Managed Fund Shares is 
affiliated with a broker-dealer, such investment adviser shall erect a 
``fire wall'' between the investment adviser and the broker-dealer with 
respect to access to information concerning the composition 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. 
Neither the Advisor nor the Sub-Advisor is affiliated with a broker-
dealer.\8\ In the event the Advisor or Sub-

[[Page 77682]]

Advisor become affiliated with a broker-dealer, 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.
---------------------------------------------------------------------------

    \7\ An investment adviser to an open-end fund is required to be 
registered under the Investment Advisers Act of 1940 (the ``Advisers 
Act''). As a result, the Adviser and 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 non-public information by an investment adviser must be 
consistent with Rule 204A-1 under the Advisers Act.
    \8\ With respect to the Fund, the Exchange represents that the 
Advisor, as the investment advisor of the Fund, as well as the Sub-
Advisor to the Fund 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 advisor 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 advisor 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 advisor to provide investment advice to clients unless 
such investment advisor has (i) adopted and implemented written 
policies and procedures reasonably designed to prevent violation, by 
the investment advisor 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.
---------------------------------------------------------------------------

    According to the Registration Statement, the Fund's investment 
objective is to seek capital appreciation through short sales of 
domestically traded equity securities. The Sub-Advisor seeks to achieve 
the Fund's investment objective by short selling a portfolio of liquid 
mid- and large-cap U.S. exchange-traded equity securities, exchange-
traded funds (``ETFs'') registered pursuant to the 1940 Act, exchange-
traded notes (``ETNs''), and exchange-traded products (``ETPs'').\9\ In 
contrast to ETFs, ETNs and ETPs are not registered pursuant to the 1940 
Act.
---------------------------------------------------------------------------

    \9\ The Fund may sell short only equity securities traded in the 
U.S. on registered exchanges. The Fund will not purchase or borrow 
illiquid securities or securities registered pursuant to Rule 144A 
under the Securities Act of 1933.
---------------------------------------------------------------------------

Operation of the Fund
    According to the Registration Statement, the Sub-Advisor will 
utilize a disciplined, consistent investment approach to both security 
selection and risk management and will implement a bottom-up, 
fundamental, research driven security selection process. In addition to 
extensive quantitative analysis, careful consideration is given to 
qualitative analysis. The assessment of the management team, accounting 
practices, corporate governance and the company's competitive advantage 
are all key items. Once these quantitative and qualitative 
characteristics are thoroughly analyzed, the Sub-Advisor then 
determines if there is sufficient return to the stock price to warrant 
an investment. Once a position is included in the Fund's portfolio, it 
is subject to regular fundamental and technical risk management review.
    According to the Registration Statement, in selecting short 
positions, the Sub-Advisor seeks to identify securities with market 
capitalizations typically of $1 billion and above, and with low 
earnings quality or aggressive accounting. Key factors include, but are 
not limited to: Quality and sustainability of revenue, as indicated by 
extended payment terms, changes in revenue policies or other factors; 
deterioration of cash flows or declining quality of earnings; reserve 
reversals or an increase in ``soft'' assets which could indicate the 
capitalization of expenses; and an analysis of irregular items 
affecting operating or gross margins including inventory, payables and 
taxes. The Sub-Advisor will also seek out the following qualitative 
factors: Poor corporate governance or significant related party 
transactions; heavy insider selling; and unique competitive challenges.
    According to the Registration Statement, once it is determined that 
a company possesses the proper characteristics, it must then be 
determined whether to include that position in the Fund's portfolio. 
During this analysis, the Sub-Advisor considers specific factors 
described in the Registration Statement, including assessment on 
individual merits, valuation metrics and technical factors.
    The Fund generally targets composition of 20 to 50 equity short 
positions, with an average individual position size which generally 
ranges between 2-7% of the aggregate portfolio exposure. Typically, 
short positions will be initiated at the lower end of the position size 
range in order to gain exposure to a particular stock.
    ETFs registered pursuant to the 1940 Act or other exchange-traded 
products not registered pursuant to the 1940 Act will also be utilized 
to manage exposure to broad indexes or certain sectors. Exchange traded 
products positions will typically range between 10-15% of the Fund's 
portfolio. Exchange-traded products may be used to gain exposure in 
instances when the Sub-Advisor has a more bearish posture with respect 
to the broad market.
    The Fund, from time to time, in the ordinary course of business, 
may purchase securities on a when-issued or delayed-delivery basis 
(i.e., delivery and payment can take place between a month and 120 days 
after the date of the transaction). The Fund may invest in U.S. 
government securities and U.S. Treasury zero-coupon bonds.\10\
---------------------------------------------------------------------------

    \10\ As stated in the Registration Statement, the Fund may not, 
with respect to 75% of its total assets, (i) purchase securities of 
any issuer (except securities issued or guaranteed by the U.S. 
Government, its agencies or instrumentalities or shares of 
investment companies) if, as a result, more than 5% of its total 
assets would be invested in the securities of such issuer; or (ii) 
acquire more than 10% of the outstanding voting securities of any 
one issuer. In addition, the Fund may not purchase any securities 
which would cause 25% or more of its total assets to be invested in 
the securities of one or more issuers conducting their principal 
business activities in the same industry or group of industries, 
provided that this limitation does not apply to investments in 
securities issued or guaranteed by the U.S. Government, its agencies 
or instrumentalities, or shares of investment companies. According 
to the Registration Statement, the Fund will seek to qualify for 
treatment as a Regulated Investment Company (``RIC'') under the 
Internal Revenue Code.
---------------------------------------------------------------------------

    To respond to adverse market, economic, political or other 
conditions, the Fund may invest 100% of its total assets, without 
limitation, in high-quality short-term debt securities and money market 
instruments. The Fund may be invested in these instruments for extended 
periods, depending on the Sub-Advisor's assessment of market 
conditions. These debt securities and money market instruments include 
shares of other mutual funds, commercial paper, certificates of 
deposit, bankers' acceptances, U.S. Government securities, repurchase 
agreements and bonds that are BBB or higher.
Creations and Redemptions
    Creations and redemptions of Shares occur in large specified blocks 
of Shares, referred to as ``Creation Units.'' According to the 
Registration Statement, the Shares of the Fund are ``created'' at their 
net asset value (``NAV'') by market makers, large investors and 
institutions only in block-size Creation Units of 25,000 shares or 
more. A ``creator'' enters into an authorized participant agreement (a 
``Participant Agreement'') with the Distributor or a DTC participant 
that has executed a Participant Agreement with the Distributor (an 
``Authorized Participant''), and deposits into the Fund a specified 
amount of cash totaling the NAV of the Creation Unit(s), in exchange 
for 25,000 shares of the Fund (or multiples thereof). Similarly, Shares 
can only be redeemed in Creation Units, generally 25,000 shares or 
more, for a specified amount of cash totaling the NAV of the Creation 
Unit(s). Shares are not redeemable from the Fund except when aggregated 
in Creation Units. The prices at which creations and redemptions occur 
are based on the next calculation of NAV after an order is received in 
a form prescribed in the Participant Agreement.
    According to the Registration Statement, unlike many other ETFs, 
Creation Units of the Fund are sold only for cash. Creation Units are 
sold at the NAV next computed, plus a fixed creation transaction fee, 
assessed per transaction. In all cases, such fees will be limited in 
accordance with SEC requirements applicable to management investment 
companies offering redeemable securities.
    All orders to create must be received by the Distributor no later 
than the close of the Core Trading Session on NYSE Arca (ordinarily 4 
p.m. Eastern Time

[[Page 77683]]

(``E.T.'')); on the date such order is placed in order for the creation 
of Creation Units to be effected based on the NAV of Shares of the Fund 
as next determined on such date after receipt of the order in proper 
form. Orders to redeem must be received by the Administrator no later 
than 4 p.m. E.T.
    The Shares will conform to the initial and continued listing 
criteria under NYSE Arca Equities Rule 8.600. The Exchange represents 
that, for initial and/or continued listing, the Fund will be in 
compliance with Rule 10A-3 \11\ under the Exchange Act, 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 and the Disclosed Portfolio will be made available to all 
market participants at the same time.
---------------------------------------------------------------------------

    \11\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------

Net Asset Value
    According to the Registration Statement, the NAV per Share of the 
Fund is computed by dividing the value of the net assets of the Fund 
(i.e., the value of its total assets less total liabilities) by the 
total number of Shares of the Fund outstanding, rounded to the nearest 
cent. Expenses and fees, including without limitation, the management, 
administration and distribution fees, are accrued daily and taken into 
account for purposes of determining NAV. The NAV per Share for the Fund 
is calculated by the Administrator and determined as of the close of 
the regular trading session on NYSE Arca (ordinarily 4 p.m., Eastern 
Time) on each day that the Exchange is open.
    In computing the Fund's NAV, the Fund's securities positions are 
valued based on their last readily available market price. Price 
information on listed securities is taken from the exchange where the 
security is primarily traded. Securities regularly traded in an over-
the-counter market are valued at the latest quoted sales price. 
Securities not listed on an exchange or national securities market, or 
securities in which there was no last reported sales price, are valued 
at the most recent bid price. Other portfolio securities and assets for 
which market quotations are not readily available are valued based on 
fair value as determined in good faith by the Sub-Advisor in accordance 
with procedures adopted by the Fund's Board of Trustees.
Availability of Information
    The Fund's Web site (http://www.advisorshares.com), which will be 
publicly available prior to the public offering of Shares, will include 
a form of the Prospectus for the Fund that may be downloaded. The 
Fund's Web site will include additional quantitative information 
updated on a daily basis, including, for the Fund, (1) daily trading 
volume, the prior business day's reported closing price, NAV and mid-
point of the bid/ask spread at the time of calculation of such NAV (the 
``Bid/Ask Price''),\12\ and a calculation of the premium and discount 
of the Bid/Ask Price against the NAV, and (2) data in chart format 
displaying the frequency distribution of discounts and premiums of the 
daily Bid/Ask Price against the NAV, within appropriate ranges, for 
each of the four previous calendar quarters. On each business day, 
before commencement of trading in Shares in the Core Trading Session on 
the Exchange, the Fund will disclose on its Web site the Disclosed 
Portfolio as defined in NYSE Arca Equities Rule 8.600(c)(2) that will 
form the basis for the Fund's calculation of NAV at the end of the 
business day.\13\
---------------------------------------------------------------------------

    \12\ The Bid/Ask Price of the Fund is determined using the 
highest bid and the lowest offer on the Exchange as of the time of 
calculation of the Fund's NAV. The records relating to Bid/Ask 
Prices will be retained by the Fund and its service providers.
    \13\ Under 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''). Accordingly, the Fund 
will be able to disclose at the beginning of the business day the 
portfolio that will form the basis for the NAV calculation at the 
end of the business day.
---------------------------------------------------------------------------

    On a daily basis, for each portfolio security position of the Fund, 
the Fund will disclose on its Web site the following information: 
ticker symbol, name of security, positions \14\ held long or short in 
the portfolio, and percentage weighting of the security in the 
portfolio. The Web site information will be publicly available at no 
charge.
---------------------------------------------------------------------------

    \14\ See e-mail from Tim Malinowski, Senior Director, NYSE 
Euronext, Global Index and Exchange Traded Funds, to Christopher 
Chow and Kristie Diemer, Special Counsels, Division of Trading and 
Markets, Commission, dated November 24, 2010.
---------------------------------------------------------------------------

    In addition, a portfolio composition file which includes the cash 
amount required to be delivered in exchange for each Fund share, will 
be publicly disseminated daily prior to the opening of the New York 
Stock Exchange (``NYSE'') via the National Securities Clearing 
Corporation. The NAV of the Fund will normally be determined as of the 
close of the regular trading session on the NYSE (ordinarily 4 p.m. 
Eastern Time) on each business day.
    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 Web site 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. In addition, the Portfolio Indicative Value, as defined in NYSE 
Arca Equities Rule 8.600(c)(3), will be disseminated by one or more 
major market data vendors at least every 15 seconds during the Core 
Trading Session.
    Additional information regarding the Trust and the Shares, 
including investment strategies, risks, creation and redemption 
procedures, fees, portfolio holdings disclosure policies, distributions 
and taxes is included in the Registration Statement. All terms relating 
to the Fund that are referred to, but not defined in, this proposed 
rule change are defined in the Registration Statement.
Trading Halts
    With respect to trading halts, the Exchange may consider all 
relevant factors in exercising its discretion to halt or suspend 
trading in the Shares of the Fund.\15\ Trading in Shares of the Fund 
will be halted if the circuit breaker parameters in NYSE Arca Equities 
Rule 7.12 have been reached. Trading also may be halted because of 
market conditions or for reasons that, in the view of the Exchange, 
make trading in the Shares inadvisable. These may include: (1) The 
extent to which trading is not occurring in the securities 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

[[Page 77684]]

forth circumstances under which Shares of the Fund may be halted.
---------------------------------------------------------------------------

    \15\ See NYSE Arca Equities Rule 7.12, Commentary .04.
---------------------------------------------------------------------------

Trading Rules
    The Exchange deems the Shares to be equity securities, thus 
rendering trading in the Shares subject to the Exchange's existing 
rules governing the trading of equity securities. Shares will trade on 
the NYSE Arca Marketplace from 4 a.m. to 8 p.m. E.T. 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 include 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 other exchanges that are members of 
ISG.\16\
---------------------------------------------------------------------------

    \16\ For a list of the current members of ISG, see http://www.isgportal.org. The Exchange notes that not all components of the 
Disclosed Portfolio for the Fund may trade on markets that are 
members of ISG or with which the Exchange has in place a 
comprehensive surveillance sharing agreement.
---------------------------------------------------------------------------

    In addition, the Exchange also has a general policy prohibiting the 
distribution of material, non-public information by its employees.
Information Bulletin
    Prior to the commencement of trading, the Exchange will inform its 
Equity Trading Permit (``ETP'') Holders in an Information Bulletin 
(``Bulletin'') of the special characteristics and risks associated with 
trading the Shares. Specifically, the Bulletin will discuss the 
following: (1) The procedures for purchases and redemptions of Shares 
in Creation Unit aggregations (and that Shares are not individually 
redeemable); (2) NYSE Arca Equities Rule 9.2(a), which imposes a duty 
of due diligence on its ETP Holders to learn the essential facts 
relating to every customer prior to trading the Shares; (3) the risks 
involved in trading the Shares during the Opening and Late Trading 
Sessions when an updated 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. E.T. each trading day.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Exchange Act,\17\ in general, and furthers the objectives 
of Section 6(b)(5) of the Exchange Act,\18\ in particular, in that it 
is 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 Exchange believes that the proposed rule change 
will facilitate the listing and trading of additional types of actively 
managed exchange-traded products that will enhance competition among 
market participants, to the benefit of investors and the marketplace.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78f(b).
    \18\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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 (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

    <bullet> Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an e-mail to <a href="/cdn-cgi/l/email-protection#bdcfc8d1d890ded2d0d0d8d3c9cefdced8de93dad2cb"><span class="__cf_email__" data-cfemail="3c4e495059115f5351515952484f7c4f595f125b534a">[email protected]</span></a>. Please include 
File Number SR-NYSEArca-2010-107 on the subject line.

Paper Comments

    <bullet> 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-2010-107. 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

[[Page 77685]]

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 Section, 100 F Street, NE., Washington, DC 20549-1090 on 
official business days between the hours of 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 and on its Internet Web site at http://www.nyse.com. 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-2010-107 and should be submitted on or before January 3, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-31132 Filed 12-10-10; 8:45 am]
BILLING CODE 8011-01-P


</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>