Federal Register / Vol. 76, No. 4 / Thursday, January 6, 2011 / Notices 807 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Commentary .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. 

4See, e.g., Securities Exchange Act Release No. 

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

(SR–Amex–2008–39). 

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

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

(SR–NYSEArca–2008–73). 

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

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

10, 2008) (SR–NYSEArca–2008–91). 

7See 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). 

8See, 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 

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). 

9See registration statement on Amendment No. 1 

to Form S–1 for Teucrium Commodity Trust, dated 

September 7, 2010 (File No. 333–167594) 

(‘‘Registration Statement’’). The discussion herein 

relating to the Trust and the Shares is based on the 

Registration Statement. 

10See e-mail from Michael Cavalier, Chief 

Counsel, NYSE Euronext, to Christopher W. Chow, 

Special Counsel, Commission, dated December 22, 

2010. 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street, NE., 

Washington, DC 20549–1090 on official 

business days between 10 a.m. and 3 

p.m. Copies of the filing will also be 

available for inspection and copying at 

the 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–2010–120 and 

should be submitted on or before 

January 27, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–33362 Filed 1–5–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63625; File No. SR– 

NYSEArca–2010–119] 

Self-Regulatory Organizations; NYSE 

Arca Inc.; Notice of Filing of Proposed 

Rule Change To List and Trade Shares 

of the Teucrium WTI Crude Oil Fund 

Under NYSE Arca Equities Rule 8.200 

December 30, 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 

20, 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 WTI Crude 

Oil 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’’).3 The Exchange 

proposes to list and trade shares 

(‘‘Shares’’) of the Teucrium WTI Crude 

Oil Fund (the ‘‘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,4 trading on NYSE 

Arca pursuant to unlisted trading 

privileges (‘‘UTP’’),5 and listing on NYSE 

Arca.6 Among these is the Teucrium 

Corn Fund, a series of the Teucrium 

Commodity Trust (‘‘Trust’’).7 In addition, 

the Commission has approved other 

exchange-traded fund-like products 

linked to the performance of underlying 

commodities.8

The Shares represent beneficial 

ownership interests in the Fund, as 

described in the Registration Statement 

for the Fund.9 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 WTI Crude Oil Fund 

According to the 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 closing settlement prices 

for futures contracts for Western Texas 

Intermediate (‘‘WTI’’) crude oil, also 

known as Texas Light Sweet crude oil 

(‘‘Oil Futures Contracts’’) traded on the 

New York Mercantile Exchange 

(‘‘NYMEX’’), specifically (1) the nearest 

to spot June or December Oil Futures 

Contract, weighted 35%; (2) the June or 

December Oil Futures Contract 

following the aforementioned (1), 

weighted 30%; and (3) the December Oil 

Futures Contract following the 

aforementioned (2),10 weighted 35%; 

before taking Fund expenses and 

interest income into account. This 

weighted average of the three referenced 


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808 Federal Register / Vol. 76, No. 4 / Thursday, January 6, 2011 / Notices 

11Western Texas Intermediate crude oil futures 

volume on NYMEX for 2009 and 2010 (through 

November 30, 2010) was 137,352,118 contracts and 

156,155,620 contracts, respectively. As of 

November 30, 2010, NYMEX open interest for 

Western Texas Intermediate crude oil was 1,342,325 

contracts, and open interest for near month futures 

was 323,184 contracts. The contract price was 

$84,110 ($84.11 USD per barrel and 1,000 barrels 

per contract). The approximate value of all 

outstanding contracts was $112.9 billion. The 

position limits for all months is 20,000 contracts 

and the total value of contracts if position limits 

were reached would be approximately $1.68 billion 

(based on the $84.11 contract price). Western Texas 

Intermediate crude oil futures are also traded on 

ICE and the Singapore Mercantile Exchange. 

12See e-mail from Michael Cavalier, Chief 

Counsel, NYSE Euronext, to Christopher W. Chow, 

Special Counsel, Commission, dated December 27, 

2010. 

13The Commission has previously approved 

listing of similar funds which held forward 

contracts or swaps on the American Stock Exchange 

(‘‘Amex’’) and NYSE Arca. See, e.g., Securities 

Exchange Act Release Nos. 53582 (March 31, 2006), 

71 FR 17510 (April 6, 2006) (SR–Amex–2005–127) 

(order approving Amex listing of United States Oil 

Fund, LP); 57188 (January 23, 2008), 73 FR 5607 

(January 30, 2008) (SR–Amex–2007–70) (order 

approving Amex listing of United States Heating Oil 

Fund, LP and United States Gasoline Fund, LP); 

61881 (April 9, 2010), 75 FR 20028 (April 16, 2010) 

(SR–NYSEArca–2010–14) (order approving listing 

and trading of United States Brent Oil Fund, LP); 

and 62527 (July 19, 2010), 75 FR 43606 (July 26, 

2010) (order approving listing and trading of United 

States Commodity Index Fund). 

14See e-mail from Michael Cavalier, Chief 

Counsel, NYSE Euronext, to Christopher W. Chow, 

Special Counsel, Commission, dated December 22, 

2010. 

15According to the Registration Statements [sic], 

the Fund faces the risk of non-performance by the 

counterparties to over-the-counter contracts. Unlike 

in futures contracts, the counterparty to these 

contracts is generally a single bank or other 

financial institution, rather than a clearing 

organization backed by a group of financial 

institutions. As a result, there will be greater 

counterparty credit risk in these transactions. 

Oil Futures Contracts is referred to 

herein as the ‘‘Oil Benchmark,’’ and the 

three Oil Futures Contracts that at any 

given time make up the Oil Benchmark 

are referred to herein as the ‘‘Oil 

Benchmark Component Futures 

Contracts.’’ 11

The Fund seeks to achieve its 

investment objective by investing under 

normal market conditions in Oil 

Benchmark Component Futures 

Contracts or, in certain circumstances, 

in other Oil Futures Contracts traded on 

the NYMEX and to a lesser extent the 

IntercontinentalExchange (‘‘ICE’’). The 

Fund may also invest in other kinds of 

crude oil futures contracts traded on the 

NYMEX or ICE or on other domestic or 

foreign exchanges. In addition, and to a 

limited extent, the Fund will invest in 

crude oil-based swap agreements that 

are cleared through the NYMEX or ICE 

or their affiliated providers of clearing 

services (‘‘Cleared Oil Swaps’’) in 

furtherance of the Fund’s investment 

objective, and to the extent permitted 

and appropriate in light of the liquidity 

in the Cleared Oil Swaps market. Once 

position limits and accountability levels 

in Oil Futures Contracts are applicable, 

the Fund’s intention is to invest first in 

Cleared Oil Swaps to the extent 

permitted by the position limits and 

accountability levels applicable to 

Cleared Oil Swaps and appropriate in 

light of the liquidity in the Cleared Oil 

Swaps market,12 and then in contracts 

or instruments such as cash-settled 

options on Oil Futures Contracts and 

forward contracts, swaps other than 

Cleared Oil Swaps, and other over-thecounter transactions that are based on 

the price of crude oil and Oil Futures 

Contracts (collectively, ‘‘Other Oil 

Interests,’’ and together with Oil Futures 

Contracts and Cleared Oil Swaps, ‘‘Oil 

Interests’’).13 The circumstances under 

which such investments in Other Oil 

Interests may be utilized (e.g., 

imposition of position limits or 

accountability levels) are discussed 

below. 

Light Sweet Crude Oil Futures 

Contracts traded on the NYMEX are 

listed for the current year and the next 

8 years. However, the nature of the Oil 

Benchmark is such that the Fund will 

not hold futures contracts beyond 

approximately the first 24 months of 

listed Oil Futures Contracts.14

It is the intent of the Sponsor to never 

hold the next-to-expire an Oil 

Benchmark Component Futures 

Contract (commonly called the ‘‘spot’’ 

contract). For example, in terms of the 

Oil Benchmark, in April of a given year, 

the Oil Benchmark Component Futures 

Contracts will be the contracts expiring 

in June (the first-to-expire Oil 

Benchmark Component Futures 

Contract), December (the second-toexpire Oil Benchmark Component 

Futures Contract), and June of the 

following year (the third-to-expire Oil 

Benchmark Component Futures 

Contract). Because the next-to-expire Oil 

Benchmark Component Futures 

Contract (the June contract) will become 

spot on the third-to-last trading day 

prior to the 25th calendar day in April, 

the Sponsor will ‘‘roll’’ or change that 

contract prior to the third-to-last trading 

day prior to the 25th calendar day in 

April for a position in December of the 

following year, not intending to hold 

any futures contract to spot. 

According to the Registration 

Statement, the Fund seeks to achieve its 

investment objective primarily by 

investing in Oil Interests such that daily 

changes in the Fund’s NAV will be 

expected to closely track the changes in 

the Oil Benchmark. The Fund’s 

positions in Oil Interests will be 

changed or ‘‘rolled’’ on a regular basis in 

order to track the changing nature of the 

Oil Benchmark. For example, two times 

a year (in the month in which an Oil 

Benchmark Component Futures 

Contract is set to become the first-toexpire Oil Futures Contract listed on 

NYMEX), the first-to-expire Oil 

Benchmark Component Contract will 

become the next-to-expire (spot) Oil 

Futures Contract and will no longer be 

an Oil 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 Oil Benchmark, the Sponsor may for 

certain reasons cause the Fund to enter 

into or hold Oil Futures Contracts other 

than Oil Benchmark Component Futures 

Contracts, Cleared Oil Swaps and/or 

Other Oil Interests. For example, certain 

Cleared Oil Swaps have standardized 

terms similar to, and are priced by 

reference to, a corresponding Oil 

Benchmark Component Futures 

Contract. Additionally, Other Oil 

Interests that do not have standardized 

terms and are not exchange-traded can 

generally be structured as the parties to 

the Oil Interest contract desire. 

Therefore, the Fund might enter into 

multiple Cleared Oil Swaps and/or overthe-counter Other Oil Interests intended 

to exactly replicate the performance of 

each of the three Oil Benchmark 

Component Futures Contracts, or a 

single over-the-counter Other Oil 

Interest designed to replicate the 

performance of the Oil Benchmark as a 

whole. According to the Registration 

Statement, assuming that there is no 

default by a counterparty to an over-thecounter Other Oil Interest, the 

performance of the Other Oil Interest 

will necessarily correlate exactly with 

the performance of the Oil Benchmark 

or the applicable Oil Benchmark 

Component Futures Contract.15 The 

Fund might also enter into or hold 

Other Oil Interests 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 Oil 

Interests that would be expected to 

alleviate overall deviation between the 

Fund’s performance and that of the Oil 

Benchmark that may result from certain 


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Federal Register / Vol. 76, No. 4 / Thursday, January 6, 2011 / Notices 809 

16The Sponsor represents that the Fund will 

invest in Oil Interests in a manner consistent with 

the Fund’s investment objective and not to achieve 

additional leverage. 

17The Sponsor believes that market arbitrage 

opportunities will cause the Fund’s Share price on 

the NYSE Arca to closely track the Fund’s NAV per 

share. The Sponsor believes that the net effect of 

this expected relationship and the expected 

relationship described above between the Fund’s 

NAV and the Benchmark will be that the changes 

in the price of the Fund’s Shares on the NYSE Arca 

will closely track, in percentage terms, changes in 

such Benchmark, less expenses. 

18As 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; 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). 

19More specifically, the NYMEX imposes a 

$10.00 per barrel ($10,000 per contract) price 

fluctuation limit for Oil Futures Contracts. This 

limit is initially based off of the previous trading 

day’s settlement price. If any Oil 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 $10.00 per 

barrel in either direction of that point. If another 

halt were triggered, the market would continue to 

be expanded by $10.00 per barrel in either direction 

after each successive five-minute trading halt. There 

is no maximum price fluctuation limit during any 

one trading session. 

market and trading inefficiencies or 

other reasons. 

The Fund invests in Oil 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 Oil Interests.16 After 

fulfilling such margin and collateral 

requirements, the Fund will invest the 

remainder of its proceeds from the sale 

of baskets in obligations of the United 

States Government (‘‘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 Oil 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 each Fund’s custodian, the 

Bank of New York Mellon (the 

‘‘Custodian’’ and the ‘‘Administrator’’). 

The Sponsor endeavors to place the 

Fund’s trades in Oil Interests and 

otherwise manage the Fund’s 

investments so that the Fund’s average 

daily tracking error against the Oil 

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 Oil Benchmark over 

the same period.17

According to the Registration 

Statement, the Sponsor employs a 

‘‘neutral’’ investment strategy intended 

to track the changes in the Oil 

Benchmark regardless of whether the 

Oil 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 

crude oil in a cost-effective manner. 

Such investors may include participants 

in the crude oil market and other 

industries seeking to hedge the risk of 

losses in their crude oil-related 

transactions, as well as investors 

seeking exposure to the crude oil 

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 a barrel of WTI 

light, sweet crude oil or the price of any 

particular Oil Futures Contract. 

The CFTC and U.S. designated 

contract markets such as the NYMEX 

have established accountability levels 

and position limits on the maximum net 

long or net short futures contracts in 

commodity interests that any person or 

group of persons under common trading 

control (other than as a hedge) may 

hold, own or control. For example, the 

current accountability level for 

investments at any one time is 20,000 

Oil Futures Contracts. While this is not 

a fixed ceiling, it is a threshold above 

which the NYMEX may exercise greater 

scrutiny and control over an investor, 

including limiting an investor to 

holding no more than 20,000 Oil Future 

Contracts. With regard to position 

limits, the NYMEX limits an investor 

from holding more than 3,000 net 

futures in the last 3 days of trading in 

the near month contract to expire. The 

Fund, however, does not believe the 

current position limits imposed by the 

NYMEX will have any impact on the 

Fund.18

In addition to accountability levels 

and position limits, the exchanges set 

price fluctuation limits on futures 

contracts. For Oil Futures Contracts, the 

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 from the price at 

which the limit was last imposed. When 

a price fluctuation limit has been 

reached for a particular futures contract, 

no trades may be made at a price 

beyond that limit.19

The Fund does not intend to limit the 

size of the offering and will attempt to 

expose substantially all of its proceeds 

to the oil market utilizing Oil Interests. 

If the Fund encounters position limits, 

accountability levels, or price 

fluctuation limits for Oil Futures 

Contracts on the NYMEX or Cleared Oil 

Swaps on the NYMEX or ICE, it may 

then, if permitted under applicable 

regulatory requirements, purchase Other 

Oil Interests, including oil futures 

contracts listed on foreign exchanges. 

However, the oil futures contracts 

available on such foreign exchanges 

may have different underlying sizes, 

deliveries, and prices. The crude oil 

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 

and accountability levels could force the 

Fund to limit the 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 25,000 Shares. 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 


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810 Federal Register / Vol. 76, No. 4 / Thursday, January 6, 2011 / Notices 

20 17 CFR 240.10A–3. 

21 17 CFR 240.10A–3(c)(7). 

22The NAV will be calculated by taking the 

current market value of the Fund’s total assets and 

subtracting any liabilities. Under the Fund’s 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. 

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 each 

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 Funds 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 20 under the 

Act, the Trust relies on the exception 

contained in Rule 10A–3(c)(7).21 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 Oil 

Interests as well as investment risks, are 

set forth in the Registration Statement. 

All terms relating to the Fund that are 

referred to, but not defined in, this 

proposed rule change are defined in the 

Registration Statement. 

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.22 With respect to the Teucrium 

WTI Crude Oil Fund, in determining the 

value of Oil Futures Contracts, the 

Administrator will use the NYMEX 

closing price (usually determined as of 

2:30 p.m. E.T.). The value of over-thecounter Oil Interests will be determined 

based on the value of the commodity or 

futures contract underlying such Oil 

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 

Oil 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 Oil 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 each 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.teucriumoilfund.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 Fund’s holdings on a 

daily basis on the Fund’s Web site. 

The closing price and settlement 

prices of the Oil Futures Contracts are 

also readily available from the NYMEX 

(http://www.cmegroup.com) and ICE 

(http://www.theice.com), automated 

quotation systems, published or other 

public sources, or on-line information 

services such as Bloomberg or Reuters. 

The Oil Benchmarks [sic] 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 each Fund’s 

Web site, which will display all 

intraday and closing Oil Benchmark 

levels, the intraday Indicative Trust 

Value (see below), and NAV. 

In addition, various data vendors and 

news publications publish futures 

prices and data. The Exchange 

represents that quotation and last sale 

information for the Oil 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 real-time data for the Oil 

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 

WTI Crude Oil also is 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, quantity, price and market value 

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 


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Federal Register / Vol. 76, No. 4 / Thursday, January 6, 2011 / Notices 811 

23See NYSE Arca Equities Rule 7.12. 

24The Exchange notes that not all Oil Interests 

may trade on markets that are members of ISG or 

with which the Exchange has in place a 

comprehensive surveillance sharing agreement. 

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 applicable 

Oil Benchmark Component Futures 

Contracts. As stated in the respective 

Registration Statements [sic], changes in 

the value of over-the-counter Oil 

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 Oil 

Futures Contracts on NYMEX are 9 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 Oil Futures 

Contracts and the close of the NYSE 

Arca Core Trading Session. The value of 

a Share may be influenced by nonconcurrent trading hours between NYSE 

Arca and the NYMEX and ICE when the 

Shares are traded on NYSE Arca after 

normal trading hours of Oil Futures 

Contracts. 

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 23 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 and ICE, which are members of 

the Intermarket Surveillance Group 

(‘‘ISG’’). A list of ISG members is 

available at http://www.isgportal.org.24

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. 

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 


erowe on DSK5CLS3C1PROD with NOTICES
812 Federal Register / Vol. 76, No. 4 / Thursday, January 6, 2011 / Notices 

25 15 U.S.C. 78f(b). 

26 15 U.S.C. 78f(b)(5). 

27 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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 Oil 

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,25 in general, and furthers the 

objectives of Section 6(b)(5),26 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 rule-comments@

sec.gov. Please include File Number SR– 

NYSEArca–2010–119 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–-2010–119. 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–2010–119 and should be 

submitted on or before January 27, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–33363 Filed 1–5–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63626; File No. SR–Phlx– 

2010–185] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to a 

Pilot Program for Cabinet Trading 

Below $1.00 Per Contract Until June 1, 

2011 

December 30, 2010. 

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

Securities Exchange Act of 1934 

(‘‘Act’’) 1, and Rule 19b–4 2 thereunder, 

notice is hereby given that on December 

21, 2010, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘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 


erowe on DSK5CLS3C1PROD with NOTICES