11216 Federal Register / Vol. 75, No. 46 / Wednesday, March 10, 2010 / Notices 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4A 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. 

5The Commission previously approved listing 

and trading on the Exchange of the following 

actively managed funds under Rule 8.600. See 

Securities Exchange Act Release Nos. 57619 (April 

4, 2008), 73 FR 19544 (April 10, 2008) (SR– 

NYSEArca–2008–25) (order approving Rule 8.600 

and Exchange listing and trading of PowerShares 

Active AlphaQ Fund, PowerShares Active Alpha 

Multi-Cap Fund, PowerShares Active Mega-Cap 

Portfolio and PowerShares Active Low Duration 

Portfolio); 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); 60975 

(November 10, 2009) (SR–NYSEArca–2009–83) 

(order approving listing of Grail American Beacon 

International Equity ETF); 60981 (November 10, 200 

[sic]) (SR–NYSEArca–2009–79) (order approving 

listing of five fixed income funds of the PIMCO ETF 

Trust). 

6The Trust is registered under the 1940 Act. On 

September 8, 2009, the Trust filed with the 

Commission Form N–1A under the Securities Act 

of 1933 (15 U.S.C. 77a), and under the 1940 Act 

relating to the Fund (File Nos. 333–157876 and 

811–22110) (the ‘‘Registration Statement’’). The 

description of the operation of the Trust and the 

Fund herein is based on the Registration Statement. 

7With respect to the Fund, the Exchange 

represents that the Advisor, as the investment 

advisor of the Fund, as well as the Sub-Advisor to 

the Fund and their related personnel, are subject to 

Investment Advisers Act Rule 204A–1. This Rule 

specifically requires the adoption of a code of ethics 

by an investment advisor to include, at a minimum: 

(i) Standards of business conduct that reflect the 

firm’s/personnel fiduciary obligations; (ii) 

provisions requiring supervised persons to comply 

with applicable federal securities laws; (iii) 

provisions that require all access persons to report, 

and the firm to review, their personal securities 

transactions and holdings periodically as 

specifically set forth in Rule 204A–1; (iv) provisions 

requiring supervised persons to report any 

violations of the code of ethics promptly to the 

chief compliance officer (‘‘CCO’’) or, provided the 

CCO also receives reports of all violations, to other 

persons designated in the code of ethics; and (v) 

provisions requiring the investment advisor to 

provide each of the supervised persons with a copy 

of the code of ethics with an acknowledgement by 

said supervised persons. In addition, Rule 206(4)– 

7 under the Advisers Act makes it unlawful for an 

investment advisor to provide investment advice to 

clients unless such investment advisor has (i) 

adopted and implemented written policies and 

procedures reasonably designed to prevent 

violation, by the investment advisor and its 

supervised persons, of the Advisers Act and the 

Commission rules adopted thereunder; (ii) 

implemented, at a minimum, an annual review 

regarding the adequacy of the policies and 

procedures established pursuant to subparagraph (i) 

above and the effectiveness of their 

implementation; and (iii) designated an individual 

(who is a supervised person) responsible for 

administering the policies and procedures adopted 

under subparagraph (i) above. 8According to the Registration Statement, 

Depositary Receipts, which include ADRs, Global 

Depositary Receipts, Euro Depositary Receipts and 

New York Shares, are negotiable U.S. securities that 

generally represent a non-U.S. company’s publicly 

traded equity or debt. Depositary Receipts may be 

purchased in the U.S. secondary trading market. 

They may trade either on an exchange or in the 

over-the-counter market. Although typically 

denominated in U.S. dollars, Depositary Receipts 

can also be denominated in Euros. Depositary 

Receipts can trade on all U.S. stock exchanges as 

well as on many European stock exchanges. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61642; File No. SR– 

NYSEArca–2010–07] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change Relating to Listing of 

AdvisorShares WCM/BNY Mellon 

Focused Growth ADR ETF 

March 3, 2010. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on February 

23, 2010, NYSE Arca, Inc. (the 

‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the selfregulatory 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 the following under NYSE Arca 

Equities Rule 8.600 (‘‘Managed Fund 

Shares’’): AdvisorShares WCM/BNY 

Mellon Focused Growth ADR ETF. The 

text of the proposed rule change is 

available on the Exchange’s Web site at 

http://www.nyx.com, at the Exchange’s 

principal office and at the Commission’s 

Public Reference Room. 

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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to list and 

trade the following Managed Fund 

Shares 4 (‘‘Shares’’) under NYSE Arca 

Equities Rule 8.600: AdvisorShares 

WCM/BNY Mellon Focused Growth 

ADR ETF (‘‘ADR Fund’’ or ‘‘Fund’’).5 The 

Shares will be offered by AdvisorShares 

Trust (the ‘‘Trust’’), a statutory trust 

organized under the laws of the State of 

Delaware and registered with the 

Commission as an open-end 

management investment company.6

The investment advisor to the ADR 

Fund is AdvisorShares Investments, 

LLC (the ‘‘Advisor’’). WCM Investment 

Management (‘‘WCM’’) is the sub-advisor 

(‘‘Sub-Advisor’’) to the ADR Fund and 

the portfolio manager. The Sub-Advisor 

selects securities for the Fund in which 

to invest pursuant to an ‘‘active’’ 

management strategy for security 

selection and portfolio construction. 

The ADR Fund will periodically change 

the composition of its portfolio to best 

meet its investment objective. Neither 

the Advisor nor the Sub-Advisor is 

affiliated with a broker-dealer.7

According to the Registration 

Statement, the ADR Fund’s investment 

objective is long-term capital 

appreciation above international 

benchmarks, such as the BNY Mellon 

Classic ADR Index and the MSCI EAFE 

Index. WCM seeks to achieve the Fund’s 

investment objective by primarily 

investing in other exchange-traded 

funds (‘‘ETFs’’), as well as a portfolio of 

American Depositary Receipts (‘‘ADRs’’) 

included in the BNY Mellon Classic 

ADR Index,8 and swap contracts. The 

ADR Fund’s portfolio will typically 

have exposure to fewer than 30 

companies concentrating on the best 

ideas developed in WCM’s investment 

process. 

The Fund currently intends to invest 

primarily in the securities of other ETFs 


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9 7 U.S.C. 1 et seq. 

consistent with the requirements of 

Section 12(d)(1) of the 1940 Act, or any 

rule, regulation or order of the SEC or 

interpretation thereof. The Fund will 

only make such investments in 

conformity with the requirements of 

Section 817 of the Internal Revenue 

Code of 1986, as amended (‘‘Internal 

Revenue Code’’). The ETFs in which the 

Fund will invest will primarily be 

index-based ETFs that hold 

substantially all of their assets in 

securities representing a specific index. 

Typically the components of such 

indexes will be short-term U.S. 

government securities. 

Although WCM currently seeks to 

achieve the Fund’s investment objective 

by investing primarily in ETFs, WCM 

could at any point seek to achieve the 

Fund’s investment objective by 

investing primarily in ADRs. 

The Investment Process 

According to the Registration 

Statement, WCM employs a team 

approach through Investment Strategy 

Group, consisting of four senior 

investment professionals (the ‘‘Portfolio 

Managers’’). This team establishes 

portfolio guidelines for sector and 

industry analysis and develops the 

portfolio of the ADR Fund. The Portfolio 

Managers analyze the major trends in 

the global economy in order to identify 

those economic sectors and industries 

that are most likely to benefit. 

According to the Registration Statement, 

typical themes incorporated in the 

Portfolio Managers’ investment process 

include demographics, global 

commerce, outsourcing, the growing 

global middle class and the proliferation 

of technology. A portfolio strategy is 

then implemented using a combination 

of low duration fixed income ETFs, 

direct investment in ADRs selected by 

WCM, and swap contracts based on the 

ADRs selected by WCM, that will best 

capitalize on these investment themes 

and subsequent expected growth of the 

underlying assets. All buy and sell 

decisions are made by the Portfolio 

Managers. 

Portfolio Construction 

According to the Registration 

Statement, WCM seeks, either directly 

or through swap exposure, non-US 

domiciled quality growth businesses. 

WCM focuses its attention on 

conventional growth sectors such as 

technology, consumer discretionary and 

staples, and healthcare. 

The ADR Fund utilizes quantitative 

analysis that entails backward-looking 

screens to help narrow the non-U.S. 

universe of companies in which the 

ADR Fund invests. The ADR Fund looks 

for companies with market 

capitalization of $3.5 billion or greater 

within traditional growth sectors, and 

that have high returns on invested 

capital; low or no debt; high gross, 

operating margins; and a history of 

sustainable growth. Typical portfolio 

construction would entail exposure to 

15 or more industries with initial 

positions of approximately 2–5%; 

maximum position size of 

approximately 10%; maximum sector 

size of approximately 45%; maximum 

industry exposure of approximately 

15%; and maximum emerging markets 

exposure of approximately 35%. 

The Fund will under normal 

circumstances have at least 80% of its 

total assets invested in ADRs or their 

synthetic equivalent. Prior to any 

change in this policy, the Fund will 

provide shareholders with 60 days 

written notice. This is a nonfundamental policy of the Fund and 

may be changed with respect to the 

Fund by the Fund’s board of director. 

The ADR Fund may invest in equity 

securities, including common and 

preferred stock, warrants, convertible 

securities and Master Limited 

Partnerships. The ADR Fund’s portfolio 

will consist primarily of ADRs or their 

synthetic equivalent and the ADR Fund 

will not invest in non-U.S. equity 

securities outside of U.S. markets. 

The Advisor represents that, with 

respect to Fund assets invested in ADRs, 

the composition of the Fund’s portfolio, 

on a continual basis, will consist of: 

(1) ADRs that in the aggregate account 

for at least 90% of the weight of the 

ADRs in the Fund’s portfolio each shall 

have a minimum global market value of 

at least $100 million; 

(2) ADRs that in the aggregate account 

for at least 70% of the weight of the 

ADRs in the Fund’s portfolio each shall 

have a minimum global monthly trading 

volume of 250,000 shares, or minimum 

global notional volume traded per 

month of $25,000,000, averaged over the 

last six months; and 

(3) Any portion of the Fund’s 

portfolio consisting of ADRs will 

include a minimum of 20 ADRs of 

which the most heavily weighted ADR 

shall not exceed 25% of the weight of 

the ADRs in the Fund’s portfolio, and 

the five most heavily weighted ADRs 

shall not exceed 60% of the weight of 

the ADRs in the Fund’s portfolio. 

The ADR Fund may use futures 

contracts and related options for bona 

fide hedging; attempting to offset 

changes in the value of securities held 

or expected to be acquired or be 

disposed of; attempting to gain exposure 

to a particular market, index or 

instrument; or other risk management 

purposes. As stated in the Registration 

Statement, the Trust is not subject is not 

subject [sic] to registration or regulation 

as a commodity pool operator under the 

Commodity Exchange Act.9 The ADR 

Fund will reduce the risk that it will be 

unable to close out a futures contract by 

only entering into futures contracts that 

are traded on a national futures 

exchange regulated by the Commodity 

Futures Trading Commission (‘‘CFTC’’). 

The ADR Fund may purchase and 

write put and call options on indices 

and enter into related closing 

transactions; trade put and call options 

on securities, securities indices and 

currencies, as the Sub-Advisor 

determines is appropriate in seeking the 

ADR Fund’s investment objective, 

except as restricted by the ADR Fund’s 

investment limitations (as described in 

the Registration Statement); enter into 

repurchase agreements with financial 

institutions; use reverse repurchase 

agreements as part of the ADR Fund’s 

investment strategy; and make shortterm investments in U.S. Government 

securities. 

The Fund expects to enter into swap 

agreements, including, but not limited 

to, equity index swaps and interest rate 

swap agreements. The Fund will utilize 

swap agreements in an attempt to gain 

exposure to specific securities in a 

market without actually purchasing 

those securities, or to hedge a position. 

In addition, the ADR Fund may invest 

up to 15% of its net assets in illiquid 

securities. For this purpose, ‘‘illiquid 

securities’’ are securities that the ADR 

Fund may not sell or dispose of within 

seven days in the ordinary course of 

business at approximately the amount at 

which the ADR Fund has valued the 

securities. 

The ADR Fund, from time to time, in 

the ordinary course of business, may 

purchase securities on a when-issued or 

delayed-delivery basis (i.e., delivery and 

payment can take place between a 

month and 120 days after the date of the 

transaction). The ADR Fund may invest 

in U.S. Treasury zero-coupon bonds. 

As stated in the Registration 

Statement, it is a fundamental policy of 

the ADR Fund that it may not, with 

respect to 75% of its total assets, (i) 

purchase securities of any issuer (except 

securities issued or guaranteed by the 

U.S. Government, its agencies or 

instrumentalities) 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 


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10This diversification standard is contained in 

section 5(b)(1) of the 1940 Act. 

11Such fundamental policies may not be changed 

without the vote of a majority of the outstanding 

voting securities of the ADR Fund. 

12According to the Registration Statement, one of 

several requirements for RIC qualification is that a 

Fund must receive at least 90% of the Fund’s gross 

income each year from dividends, interest, 

payments with respect to securities loans, gains 

from the sale or other disposition of stock, 

securities or foreign currencies, or other income 

derived with respect to the Fund’s investments in 

stock, securities, foreign currencies and net income 

from an interest in a qualified publicly traded 

partnership (the ‘‘90% Test’’). A second requirement 

for qualification as a RIC is that a Fund must 

diversify its holdings so that, at the end of each 

fiscal quarter of the Fund’s taxable year: (a) At least 

50% of the market value of the Fund’s total assets 

is represented by cash and cash items, U.S. 

Government securities, securities of other RICs, and 

other securities, with these other securities limited, 

in respect to any one issuer, to an amount not 

greater than 5% of the value of the Fund’s total 

assets or 10% of the outstanding voting securities 

of such issuer; and (b) not more than 25% of the 

value of its total assets are invested in the securities 

(other than U.S. Government securities or securities 

of other RICs) of any one issuer or two or more 

issuers which the Fund controls and which are 

engaged in the same, similar, or related trades or 

businesses, or the securities of one or more 

qualified publicly traded partnership (the ‘‘Asset 

Test’’). 13 17 CFR 240.10A–3. 

14The Bid/Ask Price of the Fund is determined 

using the highest bid and the lowest offer on the 

Exchange as of the time of calculation of the Fund’s 

NAV. The records relating to Bid/Ask Prices will be 

retained by the Fund and its service providers. 

15Under accounting procedures followed by the 

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

will be booked and reflected in NAV on the current 

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

be able to disclose at the beginning of the business 

day the portfolio that will form the basis for the 

NAV calculation at the end of the business day. 

issuer.10 In addition, the ADR Fund may 

not purchase any securities which 

would cause 25% or more of its total 

assets to be invested in the securities of 

one or more issuers conducting their 

principal business activities in the same 

industry or group of industries, 

provided that this limitation does not 

apply to investments in securities 

issued or guaranteed by the U.S. 

Government, its agencies or 

instrumentalities, or shares of 

investment companies.11

According to the Registration 

Statement, the ADR Fund will seek to 

qualify for treatment as a Regulated 

Investment Company (‘‘RIC’’) under the 

Internal Revenue Code.12

To respond to adverse market, 

economic, political or other conditions, 

the ADR Fund may invest 100% of its 

total assets, without limitation, in highquality short-term debt securities and 

money market instruments. The ADR 

Fund may be invested in these 

instruments for extended periods, 

depending on the Sub-Advisor’s 

assessment of market conditions. These 

debt securities and money market 

instruments include shares of other 

mutual funds, commercial paper, 

certificates of deposit, bankers’ 

acceptances, U.S. Government securities 

and repurchase agreements. 

Creations and redemptions of Shares 

occur in large specified blocks of 

Shares, referred to as ‘‘Creation Units’’. 

According to the Registration Statement, 

the shares of the Fund are ‘‘created’’ at 

their net asset value (‘‘NAV’’) by market 

makers, large investors and institutions 

only in block-size Creation Units of 

25,000 shares or more. A ‘‘creator’’ 

enters into an authorized participant 

agreement (a ‘‘Participant Agreement’’) 

with the ADR Fund’s distributor (the 

‘‘Distributor’’) or a DTC participant that 

has executed a Participant Agreement 

with the Distributor (an ‘‘Authorized 

Participant’’), and deposits into the ADR 

Fund a portfolio of securities closely 

approximating the holdings of the ADR 

Fund and a specified amount of cash, 

together totaling the NAV of the 

Creation Unit(s), in exchange for 25,000 

shares of the ADR Fund (or multiples 

thereof). Similarly, Shares can only be 

redeemed in Creation Units, generally 

25,000 shares or more, principally inkind for a portfolio of securities held by 

the ADR Fund and a specified amount 

of cash together totaling the NAV of the 

Creation Unit(s). Shares are not 

redeemable from the ADR Fund except 

when aggregated in Creation Units. The 

prices at which creations and 

redemptions occur are based on the next 

calculation of NAV after an order is 

received in a form prescribed in the 

Participant Agreement. 

According to the Registration 

Statement, the Trust reserves the right to 

offer an ‘‘all cash’’ option for creations 

and redemptions of Creation Units for 

the ADR Fund. In addition, Creation 

Units may be issued in advance of 

receipt of Deposit Securities subject to 

various conditions, including a 

requirement to maintain a cash deposit 

with the Trust at least equal to a 

specified percentage of the market value 

of the missing Deposit Securities. In 

each instance, transaction fees may be 

imposed that will be higher than the 

transaction fees associated with 

traditional in-kind creations or 

redemptions. In all cases, such fees will 

be limited in accordance with SEC 

requirements applicable to management 

investment companies offering 

redeemable securities. 

The Shares will conform to the initial 

and continued listing criteria under 

NYSE Arca Equities Rule 8.600. The 

Exchange represents that, for initial 

and/or continued listing, the Fund will 

be in compliance with Rule 10A–3 13

under the Exchange Act, as provided by 

NYSE Arca Equities Rule 5.3. A 

minimum of 100,000 Shares will be 

outstanding at the commencement of 

trading on the Exchange. The Exchange 

will obtain a representation from the 

issuer of the Shares that the net asset 

value and the Disclosed Portfolio will be 

made available to all market 

participants at the same time. 

Availability of Information 

The Fund’s Web site (http:// 

www.advisorshares.com), which will be 

publicly available prior to the public 

offering of Shares, will include a form 

of the Prospectus for the Fund that may 

be downloaded. The Fund’s Web site 

will include additional quantitative 

information updated on a daily basis, 

including, for the Fund, (1) daily trading 

volume, the prior business day’s 

reported closing price, NAV and 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 Fund will disclose on its 

Web site the Disclosed Portfolio as 

defined in NYSE Arca Equities Rule 

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

the Fund’s calculation of NAV at the 

end of the business day.15

On a daily basis, for each portfolio 

security of the Fund, the Fund will 

disclose on its Web site the following 

information: Ticker symbol, name of 

security, number of shares held in the 

portfolio, and percentage weighting of 

the security in the portfolio. On a daily 

basis, the Advisor will disclose for each 

portfolio security or other financial 

instrument of the Fund 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. The Web 

site information will be publicly 

available at no charge. 

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 


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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 may obtain 

information from futures exchanges with which the 

Exchange has entered into a surveillance sharing 

agreement or that are ISG members. The Exchange 

notes that not all components of the Disclosed 

Portfolio for the Fund may trade on markets that are 

members of ISG or with which the Exchange has in 

place a comprehensive surveillance sharing 

agreement. 

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

components, will be publicly 

disseminated daily prior to the opening 

of the New York Stock Exchange 

(‘‘NYSE’’) via the National Securities 

Clearing Corporation. The basket 

represents one Creation Unit of the 

Fund. The NAV of the Fund will 

normally be determined as of the close 

of the regular trading session on the 

NYSE (ordinarily 4 p.m. Eastern Time) 

on each business day. 

Investors can also obtain the Trust’s 

Statement of Additional Information 

(‘‘SAI’’), the Fund’s Shareholder Reports, 

and its Form N–CSR and Form N–SAR, 

filed twice a year. The Trust’s SAI and 

Shareholder Reports are available free 

upon request from the Trust, and those 

documents and the Form N–CSR and 

Form N–SAR may be viewed on-screen 

or downloaded from the Commission’s 

Web site at http://www.sec.gov. 

Information regarding market price and 

trading volume of the Shares is and will 

be continually available on a real-time 

basis throughout the day on brokers’ 

computer screens and other electronic 

services. Information regarding the 

previous day’s closing price and trading 

volume information will be published 

daily in the financial section of 

newspapers. Quotation and last sale 

information for the Shares will be 

available via the Consolidated Tape 

Association (‘‘CTA’’) high-speed line. In 

addition, the Portfolio Indicative Value, 

as defined in NYSE Arca Equities Rule 

8.600 (c)(3), will be disseminated by one 

or more major market data vendors at 

least every 15 seconds during the Core 

Trading Session. The dissemination of 

the Portfolio Indicative Value, together 

with the Disclosed Portfolio, will allow 

investors to determine the value of the 

underlying portfolio of the Fund on a 

daily basis and to provide a close 

estimate of that value throughout the 

trading day. 

Additional information regarding the 

Trust and the Shares, including 

investment strategies, risks, creation and 

redemption procedures, fees, portfolio 

holdings disclosure policies, 

distributions and taxes is included in 

the Registration Statement. All terms 

relating to the Fund that are referred to, 

but not defined in, this proposed rule 

change are defined in the Registration 

Statement. 

Trading Halts 

With respect to trading halts, the 

Exchange may consider all relevant 

factors in exercising its discretion to 

halt or suspend trading in the Shares of 

the Fund.16 Trading in Shares of the 

Fund will be halted if the circuit breaker 

parameters in NYSE Arca Equities Rule 

7.12 have been reached. Trading also 

may be halted because of market 

conditions or for reasons that, in the 

view of the Exchange, make trading in 

the Shares inadvisable. These may 

include: (1) The extent to which trading 

is not occurring in the securities 

comprising the Disclosed Portfolio and/ 

or the financial instruments of the Fund; 

or (2) whether other unusual conditions 

or circumstances detrimental to the 

maintenance of a fair and orderly 

market are present. Trading in the 

Shares will be subject to NYSE Arca 

Equities Rule 8.600(d)(2)(D), which sets 

forth circumstances under which Shares 

of the Fund 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. The minimum trading 

increment for Shares on the Exchange 

will be $0.01. 

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.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 

Shares prior to or concurrently with the 

confirmation of a transaction; and (6) 

trading information. 

In addition, the Bulletin will 

reference that the Fund is subject to 

various fees and expenses described in 

the Registration Statement. The Bulletin 

will discuss any exemptive, no-action, 

and interpretive relief granted by the 

Commission from any rules under the 

Exchange Act. The Bulletin will also 

disclose that the NAV for the Shares 

will be calculated after 4:00 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 additional types of activelymanaged exchange-traded products that 

will enhance competition among market 


erowe on DSK5CLS3C1PROD with NOTICES
11220 Federal Register / Vol. 75, No. 46 / Wednesday, March 10, 2010 / Notices 

19 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 

2The ORF was established in October 2008 as a 

replacement of Registered Representative fees. See 

Securities Exchange Act Release No. 58817 (October 

20, 2008), 73 FR 63744 (October 27, 2008). The ORF 

was to be effective January 1, 2009. In December 

2008 and January 2009, the Exchange filed 

proposed rule changes waiving the ORF for January 

and February, to allow additional time for the 

Exchange, OCC and firms to put in place 

appropriate procedures to implement the fee. See 

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 35 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 the proposed 

rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

The Exchange has requested 

accelerated approval of this proposed 

rule change prior to the 30th day after 

the date of publication of notice in the 

Federal Register. The Commission is 

considering granting accelerated 

approval of the proposed rule change at 

the end of a 15-day comment period. 

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–2010–07 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–2010–07. 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 the 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–2010–07 and should be 

submitted on or before March 25, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–5068 Filed 3–9–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61641; File No. SR–CBOE– 

2010–020] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to the Options 

Regulatory Fee 

March 3, 2010. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

February 23, 2010, Chicago Board 

Options Exchange, Incorporated 

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

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by CBOE. 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 

Chicago Board Options Exchange, 

Incorporated (‘‘CBOE’’ or ‘‘Exchange’’) 

proposes to amend the Options 

Regulatory Fee to eliminate the 

minimum one-cent charge per trade. 

The text of the proposed rule change is 

available on the Exchange’s Web site 

(http://www.cboe.org/legal), at the 

Exchange’s Office of the Secretary, and 

at the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

CBOE 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 these statements 

may be examined at the places specified 

in Item IV below. CBOE has prepared 

summaries, set forth in Sections A, B, 

and C below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange charges an Options 

Regulatory Fee (‘‘ORF’’) of $.004 per 

contract to each member for all options 

transactions executed or cleared by the 

member that are cleared by The Options 

Clearing Corporation (‘‘OCC’’) in the 

customer range, excluding Linkage 

orders, regardless of the exchange on 

which the transaction occurs. The ORF 

is collected indirectly from members 

through their clearing firms by OCC on 

behalf of the Exchange. There is a 

minimum one-cent charge per trade.2


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