82106 Federal Register / Vol. 75, No. 249 / Wednesday, December 29, 2010 / Notices 

60 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b-4. 

3See Securities Exchange Act Release No. 63292 

(November 9, 2010), 75 FR 70319 (‘‘Notice’’). 

4See Registration Statement on Form N–1A for 

the Trust filed with the Commission on July 22, 

2010 (File Nos. 333–132380 and 811–21864) 

(‘‘Registration Statement’’). The Registration 

Statement became effective on September 20, 2010. 

5The Benchmark is designed to capture the 

economic benefit derived from rising or declining 

price trends in the commodity, currency, and U.S. 

Treasury futures markets. The Benchmark consists 

of U.S. listed futures contracts on sixteen tangible 

commodities and eight financial futures. The 

sixteen commodity futures contracts are on: light 

crude oil, natural gas, RBOB gas, heating oil, 

soybeans, corn, wheat, gold, silver, copper, live 

cattle, lean hogs, coffee, cocoa, cotton, and sugar. 

The eight financial futures contracts are on: the 

Australian dollar, British pound, Canadian dollar, 

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

Notes, and U.S. Treasury bonds. Each contract is 

sometimes referred to as a ‘‘Component’’ of the 

Benchmark. Additional information relating to the 

Benchmark, including, without limitation, the 

sector aggregations, weightings, and position 

methodology can be found in the Registration 

Statement and Notice. See Notice and Registration 

Statement, supra notes 3 and 4. 

6Additional information regarding the 

investments of the Fund can be found in the 

Registration Statement and Notice. See id. 

7The Fund’s investments in commodity futures 

contracts will be limited by the application of 

position limits imposed by the Commodity Futures 

Trading Commission and U.S. futures exchanges 

intended to prevent undue influence on prices by 

a single trader or group of affiliated traders. The 

Adviser represents that the Fund’s investment in 

futures contracts will be limited to investments in 

the U.S. listed futures contracts included in the 

Benchmark, except that the Fund may invest up to 

10% of its assets in U.S. listed commodity and 

currency futures contracts not included in the 

Benchmark in a manner designed to achieve its 

investment objective. 

8The Fund will enter into over-the-counter swap 

transactions only with respect to transactions based 

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

the Benchmark, (ii) any Component in the 

Benchmark, or (iii) any commodity or currency 

represented in the Benchmark. 

• Has BX sufficiently addressed how 

quotations and transactions reports 

relating to BX-listed securities will be 

disseminated? Will this result in 

fragmentation of pricing information 

relating to these securities? Will this 

undermine the ability of investors to 

receive best execution? Why or why 

not? 

Comments may continue to 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–BX–2010–059 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–BX–2010–059. 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–BX– 

2010–059 and should be submitted on 

or before January 24, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.60

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–32731 Filed 12–28–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63598; File No. SR– 

NYSEArca-2010–98] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Granting Approval of 

Proposed Rule Change Relating to the 

Listing and Trading of Shares of the 

WisdomTree Managed Futures 

Strategy Fund 

December 22, 2010. 

I. Introduction 

On November 1, 2010, NYSE Arca, 

Inc. (‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’)1 and Rule 19b-4 

thereunder,2 a proposed rule change to 

list and trade shares (‘‘Shares’’) of the 

WisdomTree Managed Futures Strategy 

Fund (‘‘Fund’’) of the WisdomTree Trust 

(‘‘Trust’’) under NYSE Arca Equities 

Rule 8.600. The proposed rule change 

was published for comment in the 

Federal Register on November 17, 

2010.3 The Commission received no 

comments on the proposal. This order 

grants approval of the proposed rule 

change. 

II. Description of the Proposal 

The Exchange proposes to list and 

trade the Shares pursuant to NYSE Arca 

Equities Rule 8.600, which governs the 

listing and trading of Managed Fund 

Shares. The Shares will be offered by 

the Trust, which is registered with the 

Commission as an investment 

company.4 The Fund will be an actively 

managed exchange-traded fund. 

WisdomTree Asset Management, Inc. 

(‘‘Adviser’’) is the investment adviser to 

the Fund. WisdomTree Investments, 

Inc. is the parent company of the 

Adviser. Mellon Capital Management 

Corporation (‘‘Sub-Adviser’’) serves as 

the sub-adviser for the Fund. The Bank 

of New York Mellon is the 

administrator, custodian, and transfer 

agent for the Fund. ALPS Distributors, 

Inc. serves as distributor for the Fund. 

The Fund is managed using a strategy 

designed to provide returns that 

correspond to the performance of the 

Diversified Trends Indicator TM

(‘‘Benchmark’’).5 The Fund seeks to 

achieve its investment objective by 

investing substantially all of its assets in 

a combination of commodity- and 

currency-linked investments (including 

investments linked to U.S. Treasuries) 

designed to correspond to the 

performance of the Benchmark, and U.S. 

government securities (as defined in 

Section 3(a)(42) of the Act, ‘‘Government 

Securities’’) that serve as collateral or 

otherwise back the commodity- and 

currency-linked investments.6

Specifically, the Fund will invest at 

least 70% of its assets in a combination 

of: (i) listed commodity and financial 

futures contracts included in the 

Benchmark; 7 and (ii) forward currency 

contracts based on currencies 

represented in the Benchmark, in each 

case collateralized or otherwise backed 

by Government Securities. The Fund 

may invest up to 30% of its assets in a 

combination of swap transactions 8 and 


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Federal Register / Vol. 75, No. 249 / Wednesday, December 29, 2010 / Notices 82107 

9Commodity-linked notes are over-the-counter 

debt instruments, typically issued by a bank or 

broker-dealer, that are designed to provide cash 

flows linked to the value of a reference asset. They 

provide exposure, which may include long and/or 

short exposure, to the investment returns of the 

reference asset underlying the note. The 

performance of these notes is determined by the 

price movement of the reference asset underlying 

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

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

Benchmark, (ii) any Component of the Benchmark 

or (iii) any commodity or currency represented in 

the Benchmark. 

10The Sub-Adviser is responsible for day-to-day 

management of the Fund and, as such, typically 

makes all decisions with respect to portfolio 

holdings. The Adviser has ongoing oversight 

responsibility. 

11The Fund will not invest in non-U.S. equity 

securities (other than shares of the Subsidiary). 

12The Exchange states that a minimum of 100,000 

Shares will be outstanding at the commencement of 

trading on the Exchange, and the Exchange will 

obtain a representation from the issuer of the Shares 

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

Fund will be calculated daily and that the NAV and 

the Disclosed Portfolio will be made available to all 

market participants at the same time. See Notice, 

supra note 3. 

13 17 CFR 240.10A–3. 

14See Notice and Registration Statement, supra 

notes 3 and 4. 

15 15 U.S.C. 78f. 

16 In approving this proposed rule change, the 

Commission notes that it has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

17 17 U.S.C. 78f(b)(5). 

18 15 U.S.C. 78k–1(a)(1)(C)(iii). 

19 Intra-day prices for the Benchmark are updated 

and disseminated at least every 15 seconds during 

the Core Trading Session on the Exchange. The 

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

Time. 

commodity-linked notes.9 The Fund’s 

investments in listed futures contracts, 

forward currency contracts, and swap 

transactions will be backed by 

investments in Government Securities 

in an amount equal to the exposure of 

such contracts. 

The Fund will be managed so that the 

long and short exposure of the Fund’s 

portfolio is economically similar to the 

long and short positions in the 

Benchmark. This does not, however, 

mean that the long and short exposures 

will be identical. The Fund’s positions 

in such listed futures contracts may 

deviate from the Benchmark when the 

Adviser or the Sub-Adviser believes it is 

in the best interest of the Fund to do 

so.10 For example, the Fund may deviate 

from the Benchmark in order to manage 

cash flows in and out of the Fund, such 

as in connection with the payment of 

dividends or expenses, to manage 

portfolio holdings around Benchmark 

changes, or to comply with the 

Investment Company Act of 1940 (‘‘1940 

Act’’), the Commodity Exchange Act, the 

Internal Revenue Code of 1986, 

exchange position limits, or other 

applicable laws, rules and regulations. 

The Fund’s investment in 

Government Securities will be limited 

to investments: (i) to satisfy margin 

requirements, to provide collateral or to 

otherwise back investments in 

commodity- and currency-linked 

derivatives (such as futures contracts, 

forward contracts, and swaps); (ii) to 

help manage cash flows in and out of 

the Fund, such as in connection with 

the payment of dividends or expenses; 

or (iii) as a substitute for investments in 

the listed U.S. Treasury futures 

contracts included in the Benchmark. In 

addition, the Fund may invest in money 

market instruments with remaining 

maturities of one year or less, as well as 

cash and cash equivalents, in order to 

collateralize or otherwise back its 

positions in listed futures contracts, 

forward currency contracts, or swaps, or 

for cash management purposes. All 

money market securities acquired by the 

Fund will be rated investment grade. 

The Fund generally expects to maintain 

an average portfolio maturity of 90 days 

or less on its investments in money 

market securities. 

The Fund will seek to gain exposure 

to the commodity and currency markets, 

in whole or in part, through investments 

in a subsidiary organized in the Cayman 

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

wholly-owned and controlled by the 

Fund, and its investments will be 

consolidated into the Fund’s financial 

statements. The Fund’s and the 

Subsidiary’s holdings will be disclosed 

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

The Fund’s investment in the 

Subsidiary may not exceed 25% of the 

Fund’s total assets at the end of each 

fiscal quarter. The Subsidiary’s shares 

will be offered only to the Fund, and the 

Fund will not sell shares of the 

Subsidiary to other investors. The 

Fund’s use of the Subsidiary is designed 

to help the Fund achieve exposure to 

commodity and currency returns in a 

manner consistent with the federal tax 

requirements applicable to the Fund 

and other regulated investment 

companies. The Subsidiary will comply 

with the 1940 Act except that, unlike 

the Fund, the Subsidiary may invest 

without limitation in commodity- and 

currency-linked investments based on 

commodities and currencies included 

within the Benchmark. The Subsidiary 

will otherwise operate in the same 

manner as the Fund with regard to 

applicable compliance policies and 

procedures. Because the Subsidiary’s 

investments are consolidated into the 

Fund’s, the Fund’s combined holdings 

(including the investments of the 

Subsidiary) must comply with the 1940 

Act.11

The Exchange states that the Shares 

will be subject to NYSE Arca Equities 

Rule 8.600(d), which sets forth the 

initial and continued listing criteria 

applicable to Managed Fund Shares,12

and that the Shares must comply with 

Rule 10A–3 under the Act,13 as 

provided by NYSE Arca Equities Rule 

5.3, for initial and/or continued listing. 

Additional information regarding the 

Trust, the Fund, the Shares, the Fund’s 

investment objectives, strategies, 

policies, and restrictions, risks, fees and 

expenses, creation and redemption 

procedures, portfolio holdings and 

policies, distributions and taxes, 

availability of information, trading rules 

and halts, and surveillance procedures, 

among other things, can be found in the 

Registration Statement and in the 

Notice, as applicable.14

III. Discussion and Commission’s 

Findings 

The Commission has carefully 

reviewed the proposed rule change and 

finds that it is consistent with the 

requirements of Section 6 of the Act 15

and the rules and regulations 

thereunder applicable to a national 

securities exchange.16 In particular, the 

Commission finds that the proposal is 

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

Act,17 which requires, among other 

things, that the Exchange’s rules be 

designed 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 Commission notes 

that the Shares must comply with the 

requirements of NYSE Arca Equities 

Rule 8.600 to be listed and traded on the 

Exchange. 

The Commission finds that the 

proposal to list and trade the Shares on 

the Exchange is consistent with Section 

11A(a)(1)(C)(iii) of the Act,18 which sets 

forth Congress’ finding that it is in the 

public interest and appropriate for the 

protection of investors and the 

maintenance of fair and orderly markets 

to assure the availability to brokers, 

dealers, and investors of information 

with respect to quotations for and 

transactions in securities. Quotation and 

last-sale information for the Shares will 

be available via the Consolidated Tape 

Association high-speed line. Intra-day 

and end-of-day prices for the 

Benchmark,19 the listed futures 

contracts included in the Benchmark, 

the commodities and currencies 

represented in the Benchmark, and the 

forward currency contracts, swaps, 


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82108 Federal Register / Vol. 75, No. 249 / Wednesday, December 29, 2010 / Notices 

20The Disclosed Portfolio will disclose the 

following information: Ticker symbol (if 

applicable), name or description of security or 

investment, number of shares or dollar value of 

investments held in the portfolio, and percentage 

weighting of the security or investment in the 

portfolio. 

21See NYSE Arca Equities Rule 8.600(d)(1)(B). 

22See NYSE Arca Equities Rule 8.600(d)(2)(D). 

23See id. Trading in the Shares may also 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. 

24The Exchange represents that the Adviser is not 

affiliated with any broker-dealer. 

25See NYSE Arca Equities Rule 8.600(d)(2)(B)(ii). 

26 17 CFR 240.10A–3. 

27 15 U.S.C. 78f(b)(5). 

28 15 U.S.C. 78s(b)(2). 

29 17 CFR 200.30–3(a)(12). 

notes and other derivatives based on the 

Benchmark are readily available through 

Bloomberg, other major market data 

providers, and broker-dealers. On each 

business day, before commencement of 

trading in Shares in the Core Trading 

Session on the Exchange, the Trust will 

disclose on its Web site the identities 

and quantities of the portfolio of 

securities and other assets (‘‘Disclosed 

Portfolio’’) held by the Fund and the 

Subsidiary that will form the basis for 

the Fund’s calculation of NAV at the 

end of the business day.20 In addition, 

an estimated value, defined in NYSE 

Arca Equities Rule 8.600 as the 

‘‘Portfolio Indicative Value,’’ that reflects 

an estimated intra-day value of the 

Fund’s portfolio, will be disseminated. 

The Portfolio Indicative Value will be 

based upon the current value for the 

components of the Disclosed Portfolio 

and will be updated and disseminated 

by one or more major market data 

vendors at least every 15 seconds during 

the Core Trading Session on the 

Exchange. 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. The Fund’s Web 

site (http://www.wisdomtree.com) will 

include a form of the Prospectus and 

other quantitative information relating 

to NAV, updated on a daily basis, for 

the Fund. 

The Commission further believes that 

the proposal to list and trade the Shares 

is reasonably designed to promote fair 

disclosure of information that may be 

necessary to price the Shares 

appropriately and to prevent trading 

when a reasonable degree of 

transparency cannot be assured. The 

Commission notes that the Exchange 

will obtain a representation from the 

issuer that the NAV per Share will be 

calculated daily and that the NAV and 

the Disclosed Portfolio will be made 

available to all market participants at 

the same time.21 If the Exchange 

becomes aware that the NAV or the 

Disclosed Portfolio is not disseminated 

to all market participants at the same 

time, the Exchange will halt trading in 

the Shares until such information is 

available to all market participants.22 In 

addition, if the Portfolio Indicative 

Value is not being disseminated as 

required, the Exchange may halt trading 

during the day in which the 

interruption to the dissemination of the 

Portfolio Indicative Value occurs; if the 

interruption to the dissemination of the 

Portfolio Indicative Value persists past 

the trading day in which it occurred, the 

Exchange will halt trading no later than 

the beginning of the trading day 

following the interruption.23 Moreover, 

the Exchange represents that the SubAdviser is affiliated with multiple 

broker-dealers and has implemented a 

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

concerning the composition and/or 

changes to the Fund’s portfolio.24 In the 

event (a) the Adviser or the Sub-Adviser 

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

implement a fire wall with respect to 

such broker-dealer regarding access to 

information concerning the composition 

and/or changes to the portfolio. Further, 

the Commission notes that the 

Reporting Authority that provides the 

Disclosed Portfolio must implement and 

maintain, or be subject to, procedures 

designed to prevent the use and 

dissemination of material non-public 

information regarding the actual 

components of the portfolio.25

The Exchange has represented that 

the Shares are deemed to be equity 

securities subject to the Exchange’s 

rules governing the trading of equity 

securities. In support of this proposal, 

the Exchange has made representations, 

including: 

(1) The Shares will be subject to the 

initial and continued listing criteria 

under NYSE Arca Equities Rule 

8.600(d). 

(2) The Exchange has appropriate 

rules to facilitate transactions in the 

Shares during all trading sessions. 

(3) The Exchange’s surveillance 

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. 

(4) 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: (a) The 

procedures for purchases and 

redemptions of Shares and that Shares 

are not individually redeemable; (b) 

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; (c) 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; (d) how information 

regarding the Portfolio Indicative Value 

is disseminated; (e) 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 (f) 

trading information. 

(5) For initial and/or continued 

listing, the Shares must be in 

compliance with Rule 10A–3 under the 

Act.26

(6) The Fund will not invest in nonU.S. equity securities (other than shares 

of the Subsidiary). 

(7) A minimum of 100,000 Shares will 

be outstanding at the commencement of 

trading on the Exchange. 

This approval order is based on the 

Exchange’s representations. 

For the foregoing reasons, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act27 and the rules and 

regulations thereunder applicable to a 

national securities exchange. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,28 that the 

proposed rule change (SR–NYSEArca2010–98), be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.29

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–32733 Filed 12–28–10; 8:45 am] 

BILLING CODE 8011–01–P 


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