Federal Register / Vol. 75, No. 248 / Tuesday, December 28, 2010 / Notices 81697 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3A 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. 

4The Commission previously approved listing 

and trading on the Exchange of 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); 59826 (April 28, 2009), 74 FR 20512 (May 

4, 2009) (SR–NYSEArca–2009–22) (order approving 

Exchange listing and trading of Grail American 

Beacon Large Cap Value ETF); 60460 (August 7, 

2009), 74 FR 41468 (August 17, 2009) (SR– 

NYSEArca–2009–55) (order approving Exchange 

listing and trading of Dent Tactical ETF). 

5The Trust is registered under the 1940 Act. On 

October 14, 2010, the Trust filed with the 

Commission Post-Effective Amendment No. 13 to 

Form N–1A under the Securities Act of 1933 (15 

U.S.C. 77a), and under the 1940 Act relating to the 

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

(‘‘Registration Statement’’). The description of the 

operation of the Trust and the Funds herein is 

based on the Registration Statement. 

6An 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 Advisor and Sub-Advisor 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. 

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 Exchange’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-2010–117 and 

should be submitted on or before 

January 18, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–32513 Filed 12–27–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63587; File No. SR– 

NYSEArca–2010–118] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change Relating to the Listing 

and Trading of the SiM Dynamic 

Allocation Diversified Income ETF and 

SiM Dynamic Allocation Growth 

Income ETF 

December 21, 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 December 15, 2010, NYSE Arca, Inc. 

(‘‘Exchange’’ or ‘‘NYSE Arca’’) 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 following Managed Fund 

Shares under NYSE Arca Equities Rule 

8.600: SiM Dynamic Allocation 

Diversified Income ETF and SiM 

Dynamic Allocation Growth Income 

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 3 (‘‘Shares’’) under NYSE Arca 

Equities Rule 8.600: SiM Dynamic 

Allocation Diversified Income ETF and 

SiM Dynamic Allocation Growth 

Income ETF (each a ‘‘Fund’’ and, 

collectively, the ‘‘Funds’’).4 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.5 The investment advisor to 

the Funds is AdvisorShares 

Investments, LLC (the ‘‘Advisor’’). 

Strategic Income Management, LLC 

(‘‘Sub-Advisor’’ or ‘‘SiM’’) serves as 

investment sub-advisor to the Funds. 

The Sub-Advisor is responsible for 

selecting the Funds’ investments 

according to the Funds’ investment 

objectives, policies and restrictions. 

Each of the Funds will periodically 

change the composition of its portfolio 

to best meet its investment objective. 

Foreside Fund Services, LLC (the 

‘‘Distributor’’) is the principal 

underwriter and distributor of the 

Funds’ shares. The Bank of New York 

Mellon Corporation serves as the 

administrator (‘‘Administrator’’), 

custodian, transfer agent and fund 

accounting agent for the Funds. 

Each Fund is an actively-managed 

exchange-traded fund and thus does not 

seek to replicate the performance of a 

specified index, but uses an active 

investment strategy to meet its 

investment objective. Accordingly, the 

Sub-Advisor manages each Fund’s 

portfolio in accordance with each 

Fund’s investment objective. 

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.6 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. 

Commentary .06 to Rule 8.600 is similar 


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81698 Federal Register / Vol. 75, No. 248 / Tuesday, December 28, 2010 / Notices 

7With respect to the Funds, the Exchange 

represents that the Advisor, as the investment 

advisor of the Funds, and SiM as the Sub-Advisor, 

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. 

8Underlying ETPs include Investment Company 

Units (as described in NYSE Arca Equities Rule 

5.2(j)(3)); Index-Linked Securities (as described in 

NYSE Arca Equities Rule 5.2(j)(6)); Portfolio 

Depositary Receipts (as described in NYSE Arca 

Equities Rule 8.100); Trust Issued Receipts (as 

described in NYSE Arca Equities Rule 8.200); 

Commodity-Based Trust Shares (as described in 

NYSE Arca Equities Rule 8.201); Currency Trust 

Shares (as described in NYSE Arca Equities Rule 

8.202); Commodity Index Trust Shares (as described 

in NYSE Arca Equities Rule 8.203); Trust Units (as 

described in NYSE Arca Equities Rule 8.500); 

Managed Fund Shares (as described in NYSE Arca 

Equities Rule 8.600), and closed-end funds. 9See note 7 supra [sic]. 

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.7 In the 

event (a) the Advisor or the Sub-Advisor 

becomes newly affiliated with a brokerdealer, or (b) any new advisor or subadvisor becomes 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, and will 

be subject to procedures designed to 

prevent the use and dissemination of 

material non-public information 

regarding such portfolio. 

SiM Dynamic Allocation Diversified 

Income ETF 

According to the Registration 

Statement, the Fund will seek to 

provide total return, consisting 

primarily of reinvestment and growth of 

income with some long-term capital 

appreciation. The Fund is considered a 

‘‘fund-of-funds’’ that will seek to achieve 

its investment objective by primarily 

investing in other exchange-traded 

funds (‘‘ETFs’’) that offer diversified 

exposure to various investment types 

(equities, bonds, etc.), global regions, 

countries, styles (market capitalization, 

value, growth, etc.) or sectors, and 

exchange-traded products (‘‘ETPs,’’ and, 

together with ETFs, the ‘‘Underlying 

ETPs’’) including, but not limited to, 

exchange-traded notes (‘‘ETNs’’), 

exchange-traded currency trusts and 

closed-end funds.8

The Fund will seek to offer the 

potential for total return from a high 

level of income and a low level of 

capital growth, with exposure to a low 

level of principal risk. The Fund 

through its investments in the 

Underlying ETPs generally will invest at 

least 60% of its net assets in domestic 

and international fixed income funds. 

The Fund will allocate its assets 

among Underlying ETPs in accordance 

with the Sub-Advisor’s outlook for the 

economy, the financial markets and the 

relative market valuations of the 

Underlying ETPs. The Fund will sell 

interests or reduce investment exposure 

among market segments or Underlying 

ETPs, if appropriate, when the SubAdvisor’s fundamental and quantitative 

factors indicate a low relative strength 

of such market segments and that such 

market segments are likely to 

underperform the market as a whole. 

According to the Registration 

Statement, under normal market 

conditions, the Fund’s portfolio will 

generally: 

• Invest up to 85% of its assets in 

Underlying ETPs that hold fixed-income 

securities as well as cash equivalents; 

• Not invest more than 40% of its net 

assets in Underlying ETPs that primarily 

hold equity securities; and 

• Invest up to 20% of its assets in any 

single Underlying ETP. 

The Fund’s portfolio may temporarily 

exceed these percentage ranges for short 

periods without notice, and the SubAdvisor, due to certain market 

conditions, may alter the percentage 

ranges when it deems appropriate. 

SiM Dynamic Allocation Growth 

Income ETF 

According to the Registration 

Statement, the Fund will seek to 

provide total return, consisting 

primarily of long term capital 

appreciation with some reinvestment 

and growth of income. The Fund is 

considered a ‘‘fund-of-funds’’ that will 

seek to achieve its investment objective 

by primarily investing in Underlying 

ETPs that offer diversified exposure to 

various investment types (equities, 

bonds, etc.), global regions, countries, 

styles (market capitalization, value, 

growth, etc.) or sectors, and ETPs 

including, but not limited to, ETNs, 

exchange-traded currency trusts and 

closed-end funds.9

In general, the Fund will seek to offer 

investors the potential for total return 

from a low to medium level of income 

and a medium to high level of capital 

growth, while exposing them to a 

medium to high level of principal risk. 

The Fund, through its investments in 

the Underlying ETPs, generally will 

invest at least 60% of its net assets in 

domestic and international equity 

funds. 

The Fund will allocate its assets 

among Underlying ETPs in accordance 

with the Sub-Advisor’s outlook for the 

economy, the financial markets and the 

relative market valuations of the 

Underlying ETPs. The Fund will sell 

interests or reduce investment exposure 

among market segments or Underlying 

ETPs when the Sub-Advisor’s 

fundamental and quantitative factors 

indicate a low relative strength of such 

market segments and that such market 

segments are likely to underperform the 

market as a whole. 

Under normal market conditions, the 

Fund’s portfolio will generally: 

• Invest up to 85% of its assets in 

Underlying ETPs that hold equity 

securities as well as cash equivalents; 

• Not invest more than 40% of its net 

assets in Underlying ETPs that primarily 

hold fixed income securities; and 

• Invest up to 20% of its assets in any 

single Underlying ETP. 

The Fund’s portfolio may temporarily 

exceed these percentage ranges for short 

periods without notice, and the SubAdvisor, due to certain market 

conditions, may alter the percentage 

ranges when it deems appropriate. 

Other Investments 

The Funds and the Underlying ETPs 

may invest in equity securities 

representing ownership interests in a 

company or partnership and that consist 


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Federal Register / Vol. 75, No. 248 / Tuesday, December 28, 2010 / Notices 81699 

10The Funds will hold only equity securities 

traded in the U.S. on registered exchanges. 

11 17 CFR 240.10A–3. 

12A ‘‘Business Day’’ with respect to the Funds is 

any day on which the New York Stock Exchange 

(‘‘NYSE’’) is open for business. 

13Terms relating to the Trust and the Shares 

referred to, but not defined, herein are defined in 

the Registration Statement. 

14The Bid/Ask Price of the Funds will be 

determined using the highest bid and the lowest 

offer on the Exchange as of the time of calculation 

of the Funds’ NAV. The records relating to Bid/Ask 

Prices will be retained by the Funds and their 

service providers. 

of common stocks, preferred stocks, 

warrants to acquire common stock, 

securities convertible into common 

stock, and investments in master limited 

partnerships.10 The Funds may enter 

into repurchase agreements with 

financial institutions, which may be 

deemed to be loans. The Funds may 

enter into reverse repurchase 

agreements as part of the Funds’ 

investment strategy. 

The Funds may invest in U.S. 

government securities and in U.S. 

Treasury zero-coupon bonds. The Funds 

may invest in shares of real estate 

investment trusts (‘‘REITs’’), which are 

pooled investment vehicles which 

invest primarily in real estate or real 

estate related loans. To respond to 

adverse market, economic, political or 

other conditions, the Funds may invest 

100% of their total assets, without 

limitation, in high-quality short-term 

debt securities and money market 

instruments. 

The Funds may not (i) with respect to 

75% of its total assets, 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. The Funds may not invest 

25% or more of total assets in the 

securities of one or more issuers 

conducting their principal business 

activities in the same industry or group 

of industries. The Funds will not invest 

25% or more of total assets in any 

investment company that so 

concentrates. 

Underlying ETPs will be listed on a 

national securities exchange. Except for 

Underlying ETPs that may hold nonU.S. issues, the Funds will not 

otherwise invest in non-U.S. issues. 

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 Funds 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 for each 

Fund 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 net asset value (‘‘NAV’’) 

and the Disclosed Portfolio will be made 

available to all market participants at 

the same time. 

Creation and Redemption of Shares 

The Funds will offer and issue shares 

at NAV only in aggregated lots of 50,000 

or more shares (each a ‘‘Creation Unit’’ 

or a ‘‘Creation Unit Aggregation’’), 

generally in exchange for: (i) A basket of 

portfolio securities (the ‘‘Deposit 

Securities’’); and (ii) an amount of cash 

(the ‘‘Cash Component’’). Together, the 

Deposit Securities and the Cash 

Component constitute the ‘‘Fund 

Deposit.’’ Shares are redeemable only in 

Creation Unit Aggregations, and, 

generally, in exchange for portfolio 

securities and a specified cash payment. 

Creations or redemptions of Shares will 

be effected by or through an Authorized 

Participant, as described in the 

Registration Statement, or a Depository 

Trust Company participant. 

The Administrator, through the 

National Securities Clearing Corporation 

(‘‘NSCC’’), will make available on each 

Business Day,12 immediately prior to 

the opening of business on the NYSE, 

the list of the names and the required 

number of shares of each Deposit 

Security to be included in the current 

Fund Deposit (based on information at 

the end of the previous Business Day) 

for a Fund. The identity and number of 

shares of the Deposit Securities required 

for a Fund Deposit for a Fund will 

change as rebalancing adjustments and 

corporate action events are reflected 

from time to time by the Sub-Advisor 

with a view to the investment objective 

of a Fund.13

In addition to the list of names and 

numbers of securities constituting the 

current Deposit Securities of a Fund 

Deposit, the Administrator, through the 

NSCC, also will make available on each 

Business Day, the estimated Cash 

Component, effective through and 

including the previous Business Day, 

per outstanding Creation Unit of a Fund. 

Net Asset Value 

According to the Registration 

Statement, the NAV per Share of each 

Fund will be computed by dividing the 

value of the net assets of such 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, will be accrued daily 

and taken into account for purposes of 

determining NAV. The NAV per Share 

for the Funds will be calculated by the 

Administrator and determined as of the 

close of the regular trading session on 

the NYSE Arca (ordinarily 4 p.m., 

Eastern Time) on each day that the 

Exchange is open. 

In computing each Fund’s NAV, each 

Fund’s securities holdings will be 

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 on 

the primary exchange or national 

securities market on which such 

securities are traded. 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 will be valued based on fair 

value as determined in good faith by the 

Sub-Advisor in accordance with 

procedures adopted by the Funds’ Board 

of Trustees. 

Availability of Information 

The Funds’ 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 Funds that may 

be downloaded. The Funds’ Web site 

will include additional quantitative 

information updated on a daily basis, 

including, for the Funds, (1) daily 

trading volume, the prior business day’s 

reported closing price, NAV and midpoint of the bid/ask spread at the time 

of calculation of such NAV (the ‘‘Bid/ 

Ask Price’’),14 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 Funds will disclose on 

their Web site the Disclosed Portfolio as 

defined in NYSE Arca Equities Rule 

8.600(c)(2) that will form the basis for 


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15Under accounting procedures followed by the 

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

will be booked and reflected in NAV on the current 

business day (‘‘T+1’’). Accordingly, the Funds 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. 

16See NYSE Arca Equities Rule 7.12, 

Commentary .04. 

17For 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 

Funds may trade on markets that are members of 

ISG or with which the Exchange has in place a 

comprehensive surveillance sharing agreement. 

the Funds’ calculation of NAV at the 

end of the business day.15

On a daily basis, the Advisor will 

disclose for each portfolio security or 

other financial instrument of the Funds 

the following information: Ticker 

symbol (if applicable), name of security 

or financial instrument, number of 

shares or dollar value of financial 

instruments held in the portfolio, and 

percentage weighting of the security or 

financial instrument in the portfolio. 

In addition, a basket composition file, 

which includes the security names and 

share quantities required to be delivered 

in exchange for Fund shares, together 

with estimates and actual cash 

components, will be publicly 

disseminated daily prior to the opening 

of the NYSE via the NSCC. The basket 

represents one Creation Unit of the 

Funds. The Web site information will be 

publicly available at no charge. 

Investors can also obtain the Trust’s 

Statement of Additional Information 

(‘‘SAI’’), the Funds’ 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 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. 

Information regarding market price and 

trading volume of the Underlying ETPs 

will be continually available on a realtime basis throughout the day from 

major market data vendors. Last sale 

and closing price information for 

Underlying ETPs will be available on 

the Web site of the national securities 

exchange on which such securities are 

listed or through major market data 

vendors. 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. The dissemination of the 

Portfolio Indicative Value, together with 

the securities and/or financial 

instruments comprising the Disclosed 

Portfolio, will allow investors to 

determine the value of the underlying 

portfolio of each of the Funds on a daily 

basis and to provide a close estimate of 

that value throughout 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. 

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 Funds.16 Trading in Shares of the 

Funds 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 and/or 

the financial instruments comprising 

the Disclosed Portfolio of the Funds; 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 Funds may be halted. 

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 

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, including those 

exchanges trading the Underlying ETPs 

and other securities held by the Funds, 

described above under ‘‘Other 

Investments’’.17

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 


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 248 / Tuesday, December 28, 2010 / Notices 81701 

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

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

Shares prior to or concurrently with the 

confirmation of a transaction; and (6) 

trading information. 

In addition, the Bulletin will 

reference that the Funds are 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) 18

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 actively 

managed exchange-traded product that 

will enhance competition among market 

participants, to the benefit of investors 

and the marketplace. 

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. 

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–2010–118 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–2010–118. 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 

publicly available. All submissions 

should refer to File Number SR– 

NYSEArca–2010–118 and should be 

submitted on or before January 18, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–32608 Filed 12–27–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63593; File No. SR–NYSE– 

2010–83] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Making 

Permanent the Pilot Program That 

Offers Liquidity Takers a Reduced 

Transaction Fee Structure for Certain 

Bond Trades Executed on the NYSE 

Bonds System 

December 21, 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 December 

16, 2010, the New York Stock Exchange 

LLC (‘‘NYSE’’ or the ‘‘Exchange’’) 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to make 

permanent the pilot program that offers 

liquidity takers a reduced transaction 

fee structure for certain bond trades 

executed on the NYSE Bonds SM system 

(‘‘NYSE Bonds’’). The text of the 

proposed rule change is available at the 

Exchange’s principal office, http:// 

www.nyse.com, the Commission’s 

Public Reference Room, and on the 

Commission’s Web site at http:// 

www.sec.gov. 

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 


emcdonald on DSK2BSOYB1PROD with NOTICES