78290 Federal Register / Vol. 75, No. 240 / Wednesday, December 15, 2010 / Notices 

10 15 U.S.C. 78s(b)(3)(A)(ii). 

11 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4Commentary .02 to NYSE Arca Equities Rule 

8.200 applies to TIRs that invest in ‘‘Financial 

Instruments’’. The term ‘‘Financial Instruments’’, as 

defined in Commentary .02(b)(4) to NYSE Arca 

Equities Rule 8.200, means any combination of 

investments, including cash; securities; options on 

securities and indices; futures contracts; options on 

futures contracts; forward contracts; equity caps, 

collars and floors; and swap agreements. 

5See, e.g., Securities Exchange Act Release No. 

58161 (July 15, 2008), 73 FR 42380 (July 21, 2008) 

(SR–Amex–2008–39). 

6See, e.g., Securities Exchange Act Release No. 

58163 (July 15, 2008), 73 FR 42391 (July 21, 2008) 

(SR–NYSEArca–2008–73). 

7See, e.g., Securities Exchange Act Release No. 

58457 (September 3, 2008), 73 FR 52711 (September 

10, 2008) (SR–NYSEArca–2008–91). 

8See Securities Exchange Act Release No. 62213 

(June 3, 2010), 75 FR 32828 (June 9, 2010) (SR– 

NYSEArca–2010–22) (order approving listing on the 

Exchange of Teucrium Corn Fund). 

9See, e.g., Securities Exchange Act Release Nos. 

57456 (March 7, 2008), 73 FR 13599 (March 13, 

2008) (SR–NYSEArca–2007–91) (order granting 

accelerated approval for NYSE Arca listing the 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act.10 At any time 

within 60 days of the filing of such 

proposed rule change, the Commission 

summarily may temporarily suspend 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. If the Commission 

takes such action, the Commission shall 

institute proceedings to determine 

whether the proposed rule 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 

No. SR–ISE–2010–112 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–ISE–2010–112. 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 on official 

business days between the hours of 

10 a.m. and 3 p.m. Copies of such filing 

also will be available for inspection and 

copying at the principal office of the 

ISE. 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–ISE–2010–112 and should 

be submitted by January 5, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–31456 Filed 12–14–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63493; File No. SR– 

NYSEArca–2010–110] 

Self-Regulatory Organizations; NYSE 

Arca Inc.; Notice of Filing of Proposed 

Rule Change To List and Trade Shares 

of the Teucrium Natural Gas Fund 

Under NYSE Arca Equities Rule 8.200 

December 9, 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 December 

3, 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 self-regulatory 

organization. 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 shares of the Teucrium Natural 

Gas Fund under NYSE Arca Equities 

Rule 8.200. 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 

NYSE Arca Equities Rule 8.200, 

Commentary .02 permits the trading of 

Trust Issued Receipts (‘‘TIRs’’) either by 

listing or pursuant to unlisted trading 

privileges (‘‘UTP’’).4 The Exchange 

proposes to list and trade shares 

(‘‘Shares’’) of the Teucrium Natural Gas 

Fund (‘‘Fund’’) pursuant to NYSE Arca 

Equities Rule 8.200. 

The Exchange notes that the 

Commission has previously approved 

the listing and trading of other issues of 

Trust Issued Receipts on the American 

Stock Exchange LLC,5 trading on NYSE 

Arca pursuant to unlisted trading 

privileges (‘‘UTP’’),6 and listing on NYSE 

Arca.7 Among these is the Teucrium 

Corn Fund, a series of the Teucrium 

Commodity Trust (‘‘Trust’’).8 In addition, 

the Commission has approved other 

exchange-traded fund-like products 

linked to the performance of underlying 

commodities.9


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Federal Register / Vol. 75, No. 240 / Wednesday, December 15, 2010 / Notices 78291 

iShares GS Commodity Trusts); 59781 (April 17, 

2009), 74 FR 18771 (April 24, 2009) (SR– 

NYSEArca–2009–28) (order granting accelerated 

approval for NYSE Arca listing the ETFS Silver 

Trust); 59895 (May 8, 2009), 74 FR 22993 (May 15, 

2009) (SR–NYSEArca–2009–40) (order granting 

accelerated approval for NYSE Arca listing the 

ETFS Gold Trust); 61219 (December 22, 2009), 74 

FR 68886 (December 29, 2009) (order approving 

listing on NYSE Arca of the ETFS Platinum Trust). 

10See Amendment No. 1 to registration statement 

on Form S–1 for Teucrium Commodity Trust, dated 

September 7, 2010 (File No. 333–167593) relating 

to the Teucrium Natural Gas Fund (‘‘Registration 

Statement’’). The discussion herein relating to the 

Trust and the Shares is based on the Registration 

Statement. 

11Natural gas futures volume on NYMEX for 2009 

and 2010 (through October 29, 2010) was 

47,864,639 contracts and 52,490,180 contracts, 

respectively. As of October 29, 2010, NYMEX open 

interest for natural gas futures was 794,741 

contracts, and open interest for near month futures 

was 47,313 contracts. The contract price was 

$40,380 ($4.038 per MMBtu and 10,000 MMBtu per 

contract). The approximate value of all outstanding 

contracts was $32.1 billion. The position limits for 

all months is 12,000 contracts and the total value 

of contracts if position limits were reached would 

be approximately $484.56 million (based on the 

$40,380 contract price). As of October 29, 2010, 

open interest in natural gas swaps cleared on the 

NYMEX was approximately 2,618,092 contracts, 

with an approximate value of $26.4 billion ($4.038 

per MMBtu and 2,500 MMBtu per contract). Natural 

gas futures are also traded on ICE and the European 

Energy Exchange. 

The Shares represent beneficial 

ownership interests in the Fund, as 

described in the Registration 

Statement.10 The Fund is a commodity 

pool that is a series of the Trust, a 

Delaware statutory trust. The Fund is 

managed and controlled by Teucrium 

Trading, LLC (‘‘Sponsor’’). The Sponsor 

is a Delaware limited liability company 

that is registered as a commodity pool 

operator (‘‘CPO’’) with the Commodity 

Futures Trading Commission (‘‘CFTC’’) 

and is a member of the National Futures 

Association. 

Teucrium Natural Gas Fund 

According to the Fund’s Registration 

Statement, the investment objective of 

the Fund is to have the daily changes in 

percentage terms of the Shares’ net asset 

value (‘‘NAV’’) reflect the daily changes 

in percentage terms of a weighted 

average of the following: the nearest to 

spot month March, April, October and 

November Henry Hub Natural Gas 

Futures Contracts (‘‘Natural Gas Futures 

Contracts’’) traded on the NYMEX, 

weighted 25% equally in each contract 

month, less the Fund’s expenses. (This 

weighted average of the four referenced 

Natural Gas Futures Contracts is 

referred to herein as the ‘‘Gas 

Benchmark,’’ and the four Natural Gas 

Futures Contracts that at any given time 

make up the Gas Benchmark are referred 

to herein as the ‘‘Gas Benchmark 

Component Futures Contracts.’’).11

The Fund seeks to achieve its 

investment objective by investing under 

normal market conditions in Gas 

Benchmark Component Futures 

Contracts or, in certain circumstances, 

in other Natural Gas Futures Contracts 

traded on the New York Mercantile 

Exchange (‘‘NYMEX’’), Intercontinental 

Exchange (‘‘ICE’’), and other foreign 

exchanges. In addition, and to a limited 

extent, the Fund will invest in natural 

gas-based swap agreements that are 

cleared through the ICE or its affiliated 

provider of clearing services (‘‘Cleared 

Natural Gas Swaps’’) to the extent 

permitted and appropriate in light of the 

liquidity in the Cleared Natural Gas 

Swap market. Once position limits in 

Natural Gas Futures Contracts are 

applicable, the Fund may also invest 

first in Cleared Natural Gas Swaps to the 

extent permitted by the position limits 

applicable to Cleared Natural Gas Swaps 

and appropriate in light of the liquidity 

in the Cleared Natural Gas Swaps 

market, and then in contracts and 

instruments such as cash-settled options 

on Natural Gas Futures Contracts and 

forward contracts, swaps other than 

Cleared Natural Gas Swaps, and other 

over-the-counter transactions that are 

based on the price of natural gas and 

Natural Gas Futures Contracts 

(collectively, ‘‘Other Natural Gas 

Interests’’ and together with Natural Gas 

Futures Contracts and Cleared Natural 

Gas Swaps, ‘‘Natural Gas Interests’’). The 

circumstances under which such 

investments in Other Natural Gas 

Interests may be utilized (e.g., 

imposition of position limits or 

accountability limits) are discussed 

below. 

Natural Gas Futures Contracts traded 

on the NYMEX are listed for the current 

year and the next five years. However, 

the nature of the Gas Benchmark is such 

that the Fund will not hold futures 

contracts beyond approximately the first 

14 months of listed Natural Gas Futures 

Contracts. 

It is the intent of the Sponsor to never 

hold a Gas Benchmark Component 

Futures Contract to spot. For example, 

in terms of the Gas Benchmark, in 

January of a given year, the Gas 

Benchmark Component Futures 

Contracts will be the contracts expiring 

in March (the first-to-expire Gas 

Benchmark Component Futures 

Contract), April (the second-to-expire 

Gas Benchmark Component Futures 

Contract), October (the third-to-expire 

Gas Benchmark Component Futures 

Contract), and November (the fourth-toexpire Gas Benchmark Component 

Futures Contract). Because the next-toexpire Gas Benchmark Component 

Futures Contract (the March contract) 

will become spot on the third-to-last 

trading day in January, the Sponsor will 

‘‘roll’’ or change that contract prior to the 

third-to-last trading day in January for a 

position in the same month (March) of 

the following year, never holding any 

futures contract to spot. 

According to the Registration 

Statement, the Fund seeks to achieve its 

investment objective primarily by 

investing in Natural Gas Interests such 

that daily changes in the Fund’s NAV 

will be expected to closely track the 

changes in the Gas Benchmark. The 

Fund’s positions in Natural Gas 

Interests will be changed or ‘‘rolled’’ on 

a regular basis in order to track the 

changing nature of the Gas Benchmark. 

For example, four times a year in the 

month in which a Gas Benchmark 

Component Futures Contract is set to 

become the first-to-expire-natural [sic] 

Natural Gas Futures Contract traded on 

NYMEX (commonly called the ‘‘spot’’ 

contract), the first-to-expire Gas 

Benchmark Component Contract will 

become the next-to-expire (spot) Natural 

Gas Futures Contract and will no longer 

be a Gas Benchmark Component Futures 

Contract, and the Fund’s investments 

will have to be changed accordingly. In 

order that the Fund’s trading does not 

cause unwanted market movements and 

to make it more difficult for third parties 

to profit by trading based on such 

expected market movements, the Fund’s 

investments typically will not be rolled 

entirely on that day, but will typically 

be rolled over a period of several days. 

Consistent with achieving the Fund’s 

investment objective of closely tracking 

the Gas Benchmark, the Sponsor may 

for certain reasons cause the Fund to 

enter into or hold Natural Gas Futures 

Contracts other than the Gas Benchmark 

Component Futures Contracts, Cleared 

Natural Gas Swaps and/or Other Natural 

Gas Interests. For example, certain 

Cleared Natural Gas Swaps have 

standardized terms similar to, and are 

priced by reference to, a corresponding 

Gas Benchmark Component Futures 

Contract. Additionally, Other Natural 

Gas Interests that do not have 

standardized terms and are not 

exchange-traded can generally be 

structured as the parties to the Natural 

Gas Interest contract desire. Therefore, 

the Fund might enter into multiple 

Other Natural Gas Interests, including 

Cleared Natural Gas Swaps, intended to 

exactly replicate the performance of 

each of the Gas Benchmark Component 

Futures Contracts, or a single Other 

Natural Gas Interest designed to 

replicate the performance of the Gas 

Benchmark as a whole. According to the 

Registration Statement, assuming that 

there is no default by a counterparty to 


hsrobinson on DSK69SOYB1PROD with NOTICES
78292 Federal Register / Vol. 75, No. 240 / Wednesday, December 15, 2010 / Notices 

12The Sponsor represents that the Fund will 

invest in Natural Gas Interests in a manner 

consistent with the Fund’s investment objective and 

not to achieve additional leverage. 

13As stated in the Fund’s Registration Statement, 

on July 21, 2010, ‘‘The Dodd-Frank Wall Street 

Reform and Consumer Protection Act’’ (‘‘DoddFrank Act’’) was signed into law. This new law 

contains broad changes to the financial services 

industry including provisions changing the 

regulation of commodity interests. Such changes 

include the requirement that position limits on 

energy-based commodity futures contracts be 

established; new registration, recordkeeping, capital 

and margin requirements for ‘‘swap dealers’’ and 

‘‘major swap participants’’; the forced use of 

clearinghouse mechanisms for most over-thecounter transactions; and the aggregation, for 

purposes of position limits, of all positions in 

energy futures held by a single entity and its 

affiliates, whether such positions exist on U.S. 

futures exchanges, non-U.S. futures exchanges, or 

in over-the-counter contracts. The CFTC has 

announced that in accord with the significant 

amendments introduced to the Commodity 

Exchange Act of 1936 (‘‘CEA’’) (7 U.S.C. 1) by the 

Dodd-Frank Act, the CFTC plans to issue a notice 

of rulemaking proposing position limits for 

regulated exempt commodity contracts, including 

energy commodity contracts, as directed by the 

CEA. See Federal Speculative Position Limits for 

Referenced Energy Contracts and Associated 

Regulations, 75 FR 50950 (August 18, 2010). 

14For example, the NYMEX imposes a $3.00 per 

MMBtu ($30,000 per contract) price fluctuation 

limit for Natural Gas Futures Contracts. This limit 

is initially based off of the previous NYMEX trading 

day’s settlement price. If any Natural Gas Futures 

Contract is traded, bid or offered at the limit for five 

minutes, trading is halted for five minutes. When 

trading resumes it begins at the point where the 

limit was imposed and the limit is reset to be $3.00 

per MMBtu in either direction of that point. If 

another halt were triggered, the market would 

continue to be expanded by $3.00 per MMBtu in 

either direction after each successive five-minute 

trading halt. There is not a maximum price 

fluctuation limit during any one trading session. 

an Other Natural Gas Interest, the 

performance of the Other Natural Gas 

Interest will necessarily correlate 

exactly with the performance of the Gas 

Benchmark or the applicable Gas 

Benchmark Component Futures 

Contract. The Fund might also enter 

into or hold Natural Gas Interests other 

than Gas Benchmark Component 

Futures Contracts to facilitate effective 

trading, consistent with the discussion 

of the Fund’s ‘‘roll’’ strategy in the 

preceding paragraph. In addition, the 

Fund might enter into or hold Natural 

Gas Interests that would be expected to 

alleviate overall deviation between the 

Fund’s performance and that of the Gas 

Benchmark that may result from certain 

market and trading inefficiencies or 

other reasons. 

The Fund invests in Natural Gas 

Interests to the fullest extent possible 

without being leveraged or unable to 

satisfy its expected current or potential 

margin or collateral obligations with 

respect to its investments in Natural Gas 

Interests.12 After fulfilling such margin 

and collateral requirements, the Fund 

will invest the remainder of its proceeds 

from the sale of baskets in Treasury 

Securities or cash equivalents, and/or 

hold such assets in cash (generally in 

interest-bearing accounts). Therefore, 

the focus of the Sponsor in managing 

the Fund is investing in Natural Gas 

Interests and in Treasury Securities, 

cash and/or cash equivalents. The Fund 

will earn interest income from the 

Treasury Securities and/or cash 

equivalents that it purchases and on the 

cash it holds through the Fund’s 

Custodian. 

The Sponsor endeavors to place the 

Fund’s trades in Natural Gas Interests 

and otherwise manage the Fund’s 

investments so that the Fund’s average 

daily tracking error against the Gas 

Benchmark will be less than 10 percent 

over any period of 30 trading days. More 

specifically, the Sponsor will endeavor 

to manage the Fund so that A will be 

within plus/minus 10 percent of B, 

where A is the average daily change in 

the Fund’s NAV for any period of 30 

successive valuation days, i.e., any 

trading day as of which the Fund 

calculates its NAV, and B is the average 

daily change in the Gas Benchmark over 

the same period. 

The Sponsor employs a ‘‘neutral’’ 

investment strategy intended to track 

the changes in the Gas Benchmark 

regardless of whether the Gas 

Benchmark goes up or down. The 

Fund’s ‘‘neutral’’ investment strategy is 

designed to permit investors generally 

to purchase and sell the Fund’s Shares 

for the purpose of investing indirectly in 

the natural gas market in a cost-effective 

manner. Such investors may include 

participants in the natural gas market 

and other industries seeking to hedge 

the risk of losses in their natural gasrelated transactions, as well as investors 

seeking exposure to the natural gas 

market. The Sponsor does not intend to 

operate the Fund in a fashion such that 

its per share NAV will equal, in dollar 

terms, the spot price of British Thermal 

Units (‘‘MMBtu’’) of natural gas or the 

price of any particular Natural Gas 

Futures Contract. 

According to the Registration 

Statement, the current accountability 

level for investments at any one time in 

Natural Gas Futures Contracts is 12,000 

in any one month. While this is not a 

fixed ceiling, it is a threshold above 

which the NYMEX may exercise 

scrutiny and control over an investor, 

including limiting an investor to 

holding no more than 12,000 Natural 

Gas Futures Contracts. 

Cleared Natural Gas Swaps are subject 

to accountability levels that are 

substantially identical to, but measured 

separately from, the accountability 

levels on Natural Gas Futures Contracts. 

Accountability levels are imposed by 

ICE of 48,000 contracts for all months 

(12,000 NYMEX NG contract 

equivalents); and 24,000 (6,000 NYMEX 

NG contract equivalents) for any one 

month. Exemptions may be obtained 

from these accountability levels for bona 

fide hedging, risk management and 

spread positions. 

In addition to accountability levels, 

the NYMEX and ICE may impose 

position limits on contracts held in the 

last few days of trading in the near 

month contract to expire. It is unlikely 

that the Fund will be subject to such 

position limits because of the Fund’s 

investment strategy to ‘‘roll’’ from the 

near month contract to expire to the 

same month of the following year 

during the period beginning two weeks 

from the expiration of the contract. The 

Fund, however, does not believe the 

current position limits imposed by the 

NYMEX and ICE will have any impact 

on the Fund.13

The exchanges may also set price 

fluctuation limits on futures contracts. 

The Natural Gas Futures Contracts price 

fluctuation limit establishes the 

maximum amount that the price of 

futures contracts may vary either up or 

down from the previous day’s 

settlement price or for the price at 

which the limit was last imposed. When 

a price fluctuation limit is in effect for 

a particular futures contract, no trades 

may be made at a price beyond that 

limit.14

The Fund does not intend to limit the 

size of the offering and will attempt to 

expose substantially all of its proceeds 

to the natural gas market utilizing 

Natural Gas Interests. If the Fund 

encounters position limits, 

accountability levels, or price 

fluctuation limits for Natural Gas 

Futures Contracts on the NYMEX or 

Cleared Natural Gas Swaps on the ICE, 

it may then, if permitted under 

applicable regulatory requirements, 

purchase Natural Gas Interests, 

including Natural Gas Futures Contracts 

listed on foreign exchanges. However, 

the Natural Gas Futures Contracts 

available on such foreign exchanges 

may have different underlying sizes, 

deliveries, and prices. The Natural Gas 

Futures Contracts available on such 

foreign exchanges may be subject to 

their own position limits and 

accountability levels. In any case, 

notwithstanding the potential 

availability of these instruments in 

certain circumstances, position limits 

could force the Fund to limit the 


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15 17 CFR 240.10A–3. 

16 17 CFR 240.10A–3(c)(7). 

17The NAV will be calculated by taking the 

current market value of the Fund’s total assets and 

subtracting any liabilities. Under the Funds’ current 

operational procedures, the Administrator, will 

calculate the NAV of the Fund’s Shares as of the 

earlier of 4 p.m. Eastern Time (‘‘E.T.’’) or the close 

of the New York Stock Exchange (ordinarily, 4 p.m. 

E.T.) each day. NYSE Arca will calculate an 

approximate net asset value every 15 seconds 

throughout each day that the Fund’s Shares are 

traded on the NYSE Arca for as long as NYMEX’s 

main pricing mechanism is open. 

number of Creation Baskets (as defined 

below) that it sells. 

Creation and Redemption of Shares 

The Fund creates and redeems Shares 

only in blocks called Creation Baskets 

and Redemption Baskets, respectively, 

each consisting of 50,000 Shares for the 

Fund. Only Authorized Purchasers may 

purchase or redeem Creation Baskets or 

Redemption Baskets. An Authorized 

Purchaser is under no obligation to 

create or redeem baskets, and an 

Authorized Purchaser is under no 

obligation to offer to the public Shares 

of any baskets it does create. Baskets are 

generally created when there is a 

demand for Shares, including, but not 

limited to, when the market price per 

share is at (or perceived to be at) a 

premium to the NAV per share. 

Similarly, baskets are generally 

redeemed when the market price per 

share is at (or perceived to be at) a 

discount to the NAV per share. Retail 

investors seeking to purchase or sell 

Shares on any day are expected to effect 

such transactions in the secondary 

market, on the NYSE Arca, at the market 

price per share, rather than in 

connection with the creation or 

redemption of baskets. 

The total deposit required to create 

each basket (‘‘Creation Basket Deposit’’) 

is the amount of Treasury Securities 

and/or cash that is in the same 

proportion to the total assets of each 

Fund (net of estimated accrued but 

unpaid fees, expenses and other 

liabilities) on the purchase order date as 

the number of Shares to be created 

under the purchase order is in 

proportion to the total number of Shares 

outstanding on the purchase order date. 

The redemption distribution from the 

Fund will consist of a transfer to the 

redeeming Authorized Purchaser of an 

amount of Treasury Securities and/or 

cash that is in the same proportion to 

the total assets of the Fund (net of 

estimated accrued but unpaid fees, 

expenses and other liabilities) on the 

date the order to redeem is properly 

received as the number of Shares to be 

redeemed under the redemption order is 

in proportion to the total number of 

Shares outstanding on the date the order 

is received. 

Purchase or redemption orders for 

Creation and Redemption Baskets must 

be placed by 12 p.m. E.T. or the close 

of regular trading on the New York 

Stock Exchange, whichever is earlier. 

The Fund will meet the initial and 

continued listing requirements 

applicable to Trust Issued Receipts in 

NYSE Arca Equities Rule 8.200 and 

Commentary .02 thereto. With respect to 

application of Rule 10A–3 15 under the 

Act, the Trust relies on the exception 

contained in Rule 10A–3(c)(7).16 A 

minimum of 100,000 Shares for the 

Fund will be outstanding as of the start 

of trading on the Exchange. 

A more detailed description of 

Natural Gas Interests as well as 

investment risks, are set forth in the 

Registration Statement for the Fund. All 

terms relating to the Fund that are 

referred to, but not defined in, this 

proposed rule change are defined in the 

Registration Statement. 

Net Asset Value 

The NAV for the Fund will be 

calculated by the Administrator once a 

day and will be disseminated daily to 

all market participants at the same 

time.17 In determining the value of 

Natural Gas Futures Contracts, the 

Administrator will use the NYMEX 

closing price (usually determined as of 

2:30 p.m. E.T.). The value of Cleared 

Natural Gas Swaps and over-the-counter 

Natural Gas Interests will be determined 

based on the value of the commodity or 

futures contract underlying such 

Natural Gas Interest, except that a fair 

value may be determined if the Sponsor 

believes that the Fund is subject to 

significant credit risk relating to the 

counterparty to such Natural Gas 

Interest. 

Treasury Securities held by the Fund 

will be valued by the Administrator 

using values received from recognized 

third-party vendors and dealer quotes. 

NAV will include any unrealized profit 

or loss on open Natural Gas Interests 

and any other credit or debit accruing to 

the Fund but unpaid or not received by 

the Fund. 

The Exchange also will disseminate 

on a daily basis via the Consolidated 

Tape Association (‘‘CTA’’) information 

with respect to recent NAV, and shares 

outstanding. The Exchange will also 

make available on its Web site daily 

trading volume of the Shares, closing 

prices of such Shares, and the 

corresponding NAV. 

Availability of Information Regarding 

the Shares 

The Web site for the Fund (http:// 

www.teucriumnaturalgasfund.com) 

and/or the Exchange, which are publicly 

accessible at no charge, will contain the 

following information: (a) The current 

NAV per share daily and the prior 

business day’s NAV and the reported 

closing price; (b) the midpoint of the 

bid-ask price in relation to the NAV as 

of the time the NAV is calculated (the 

‘‘Bid-Ask Price’’); (c) calculation of the 

premium or discount of such price 

against such NAV; (d) the bid-ask price 

of Shares determined using the highest 

bid and lowest offer as of the time of 

calculation of the NAV; (e) data in chart 

form displaying the frequency 

distribution of discounts and premiums 

of the Bid-Ask Price against the NAV, 

within appropriate ranges for each of 

the four (4) previous calendar quarters; 

(f) the prospectus; and (g) other 

applicable quantitative information. The 

Fund will also disseminate its holdings 

on a daily basis on the Fund’s Web site. 

The Gas Benchmark will be 

disseminated by one or more major 

market data vendors every 15 seconds 

during the NYSE Arca Core Trading 

Session of 9:30 a.m. to 4 p.m. E.T. 

Quotation and last-sale information 

regarding the Shares will be 

disseminated through the facilities of 

the CTA. In addition, the Exchange will 

provide a hyperlink on its Web site at 

http://www.nyse.com to the Fund’s Web 

site, which will display all intraday and 

closing Gas Benchmark levels, the 

intraday Indicative Trust Value (see 

below), and NAV. 

The daily settlement prices for the 

Natural Gas Futures Contracts held by 

the Fund are publicly available on the 

Web site of the NYMEX. In addition, 

various data vendors and news 

publications publish futures prices and 

data. The Exchange represents that 

quotation and last sale information for 

the Natural Gas Futures Contracts are 

widely disseminated through a variety 

of major market data vendors 

worldwide, including Bloomberg and 

Reuters. In addition, the Exchange 

further represents that complete realtime data for the Natural Gas Futures 

Contracts is available by subscription 

from Reuters and Bloomberg. The 

NYMEX and ICE also provide delayed 

futures information on current and past 

trading sessions and market news free of 

charge on their Web sites. The specific 

contract specifications for the futures 

contracts are also available at the 

NYMEX and ICE Web sites, as well as 

other financial informational sources. 

The spot price of natural gas also is 


hsrobinson on DSK69SOYB1PROD with NOTICES
78294 Federal Register / Vol. 75, No. 240 / Wednesday, December 15, 2010 / Notices 

18See NYSE Arca Equities Rule 7.12. 

19The Exchange notes that not all Natural Gas 

Interests may trade on markets that are members of 

ISG or with which the Exchange has in place a 

comprehensive surveillance sharing agreement. 

available on a 24-hour basis from major 

market data vendors. Price and volume 

information for cleared swaps is 

available from major market data 

vendors and on the NYMEX Web site. 

The Fund will provide Web site 

disclosure of portfolio holdings daily 

and will include, as applicable, the 

names, quantities, prices and market 

values of Financial Instruments held by 

the Fund and the characteristics of such 

instruments and cash equivalents, and 

amount of cash held in the portfolio of 

the Fund. This Web site disclosure of 

the portfolio composition of the Fund 

will occur at the same time as the 

disclosure by the Sponsor of the 

portfolio composition to Authorized 

Purchasers so that all market 

participants are provided portfolio 

composition information at the same 

time. Therefore, the same portfolio 

information will be provided on the 

public Web site as well as in electronic 

files provided to Authorized Purchasers. 

Accordingly, each investor will have 

access to the current portfolio 

composition of the Fund through the 

Fund’s Web site. 

Dissemination of Indicative Trust Value 

In addition, in order to provide 

updated information relating to the 

Fund for use by investors and market 

professionals, an updated Indicative 

Trust Value (‘‘ITV’’) will be calculated. 

The ITV is calculated by using the prior 

day’s closing NAV per Share of the 

Fund as a base and updating that value 

throughout the trading day to reflect 

changes in the value of the Gas 

Benchmark Component Futures 

Contracts. As stated in the Registration 

Statement, changes in the value of overthe-counter Natural Gas Interests, 

Treasury Securities and cash 

equivalents will not be included in the 

calculation of the ITV. The ITV 

disseminated during NYSE Arca trading 

hours should not be viewed as an actual 

real time update of the NAV, which is 

calculated only once a day. 

The ITV will be disseminated on a per 

Share basis by one or more major market 

data vendors every 15 seconds during 

the NYSE Arca Core Trading Session. 

The normal trading hours for Natural 

Gas Futures Contracts on NYMEX are 

9:00 a.m. to 2:30 p.m. E.T. The ITV will 

not be updated, and, therefore, a static 

ITV will be disseminated, between the 

close of trading on NYMEX of Natural 

Gas Futures Contracts and the close of 

the NYSE Arca Core Trading Session. 

The value of a Share may be influenced 

by non-concurrent trading hours 

between NYSE Arca and the NYMEX 

and ICE when the Shares are traded on 

NYSE Arca after normal trading hours of 

Natural Gas Futures Contracts on 

NYMEX. 

The Exchange believes that 

dissemination of the ITV provides 

additional information regarding the 

Fund that is not otherwise available to 

the public and is useful to professionals 

and investors in connection with the 

related Shares trading on the Exchange 

or the creation or redemption of such 

Shares. 

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. 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. 

The trading of the Shares will be 

subject to NYSE Arca Equities Rule 

8.200, Commentary .02(e), which sets 

forth certain restrictions on ETP Holders 

acting as registered Market Makers in 

Trust Issued Receipts to facilitate 

surveillance. See ‘‘Surveillance’’ below 

for more information. 

With respect to trading halts, the 

Exchange may consider all relevant 

factors in exercising its discretion to 

halt or suspend trading in the Shares. 

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 underlying 

futures contracts, or (2) whether other 

unusual conditions or circumstances 

detrimental to the maintenance of a fair 

and orderly market are present. In 

addition, trading in Shares will be 

subject to trading halts caused by 

extraordinary market volatility pursuant 

to the Exchange’s ‘‘circuit breaker’’ 

rule 18 or by the halt or suspension of 

trading of the underlying futures 

contracts. 

The Exchange represents that the 

Exchange may halt trading during the 

day in which the interruption to the 

dissemination of the ITV or the value of 

the underlying futures contracts occurs. 

If the interruption to the dissemination 

of the ITV or the value of the underlying 

futures contracts persists past the 

trading day in which it occurred, the 

Exchange 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 with respect to the Shares is not 

disseminated to all market participants 

at the same time, it will halt trading in 

the Shares until such time as the NAV 

is available to all market participants. 

Surveillance 

The Exchange intends to utilize its 

existing surveillance procedures 

applicable to derivative products, 

including Trust Issued Receipts, 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 

surveillances focus 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 is able 

to obtain information regarding trading 

in the Shares, the physical commodities 

included in, or options, futures or 

options on futures on, Shares through 

ETP Holders, in connection with such 

ETP Holders’ proprietary or customer 

trades through ETP Holders which they 

effect on any relevant market. The 

Exchange can obtain market 

surveillance information, including 

customer identity information, with 

respect to transactions occurring on the 

NYMEX or ICE, which are members of 

the Intermarket Surveillance Group 

(‘‘ISG’’). A list of ISG members is 

available at http://www.isgportal.org. 19

In addition, with respect to the Fund’s 

futures contracts traded on exchanges, 

not more than 10% of the weight of 

such futures contracts in the aggregate 

shall consist of components whose 

principal trading market is not a 

member of ISG or is a market with 

which the Exchange does not have a 

comprehensive surveillance sharing 

agreement. 

The Exchange also has a general 

policy prohibiting the distribution of 

material, non-public information by its 

employees. 


hsrobinson on DSK69SOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 240 / Wednesday, December 15, 2010 / Notices 78295 

20 15 U.S.C. 78f(b). 

21 15 U.S.C. 78f(b)(5). 22 17 CFR 200.30–3(a)(12). 

Information Bulletin 

Prior to the commencement of 

trading, the Exchange will inform its 

ETP Holders in an Information Bulletin 

of the special characteristics and risks 

associated with trading the Shares. 

Specifically, the Information Bulletin 

will discuss the following: (1) The risks 

involved in trading the Shares during 

the Opening and Late Trading Sessions 

when an updated ITV will not be 

calculated or publicly disseminated; (2) 

the procedures for purchases and 

redemptions of Shares in Creation 

Baskets and Redemption Baskets (and 

that Shares are not individually 

redeemable); (3) 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; (4) 

how information regarding the ITV 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 Information Bulletin 

will advise ETP Holders, prior to the 

commencement of trading, of the 

prospectus delivery requirements 

applicable to the Fund. The Exchange 

notes that investors purchasing Shares 

directly from the Fund will receive a 

prospectus. ETP Holders purchasing 

Shares from the Fund for resale to 

investors will deliver a prospectus to 

such investors. The Information Bulletin 

will also discuss any exemptive, noaction and interpretive relief granted by 

the Commission from any rules under 

the Act. 

In addition, the Information Bulletin 

will reference that the Fund is subject 

to various fees and expenses described 

in the Registration Statement. The 

Information Bulletin will also reference 

that the CFTC has regulatory 

jurisdiction over the trading of Natural 

Gas Futures Contracts traded on U.S. 

markets. 

The Information Bulletin will also 

disclose the trading hours of the Shares 

of the Fund and that the NAV for the 

Shares is calculated after 4 p.m. E.T. 

each trading day. The Bulletin will 

disclose that information about the 

Shares of the Fund is publicly available 

on the Fund’s Web site. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) of the 

Act,20 in general, and furthers the 

objectives of Section 6(b)(5),21 in 

particular, in that it is designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities, and to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system. 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 Equities Rule 8.200 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 (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 

• 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–2010–110 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–2010–110. 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, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of such filing 

also will be available for inspection and 

copying at the principal office of the 

Exchange. All comments received will 

be posted without change; the 

Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR– 

NYSEArca–2010–110 and should be 

submitted on or before January 5, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–31455 Filed 12–14–10; 8:45 am] 

BILLING CODE 8011–01–P 


hsrobinson on DSK69SOYB1PROD with NOTICES