Federal Register / Vol. 74, No. 195 / Friday, October 9, 2009 / Notices 52285 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5 15 U.S.C. 78ee. 6 17 CFR 240.31. 

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–Phlx–2009–69 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–Phlx–2009–69. 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 inspection and copying in 

the Commission’s Public Reference 

Room, 100 F Street, NE., Washington, 

DC 20549, on official business days 

between the hours of 10 am and 3 pm. 

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–Phlx–2009–69 and should 

be submitted on or before October 30, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–24355 Filed 10–8–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60766; File No. SR– 

NYSEArca–2009–86] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to Activity 

Assessment Fees 

October 1, 2009. 

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

Securities Exchange Act of 1934 (the 

‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that, 

on September 28, 2009, NYSE Arca, Inc. 

(‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the Exchange. NYSE 

Arca filed the proposed rule change as 

a ‘‘non-controversial’’ proposal pursuant 

to Section 19(b)(3)(A) of the Act 3 and 

Rule 19b–4(f)(6) thereunder,4 which 

renders the proposal effective upon 

filing with the Commission. 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 

NYSE Arca proposes to, among other 

changes, (1) amend NYSE Arca Equities 

Rule 2.17(a) to provide for an Activity 

Assessment Fee to be paid by ETP 

Holders in connection with the 

Exchange’s required payments to the 

Commission under Section 31 of the 

Exchange Act; 5 (2) add Commentary .01 

to NYSE Arca Equities Rule 2.17 to 

allow ETP Holders to voluntarily submit 

to the Exchange, on or before December 

31, 2009, funds that may have been 

previously accumulated by them to 

satisfy their, and subsequently NYSE 

Arca’s, obligation to remit Section 31- 

related fees; and (3) amend NYSE Arca 

Options Rule 2.18(a) to provide for an 

Activity Assessment Fee to be paid by 

OTP Firms and Holders in connection 

with the required payments to the 

Commission under Section 31 of the 

Exchange Act. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.nyse.com, at the 

Exchange’s principal office and at the 

Public Reference Room of the 

Commission. 

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 

Pursuant to Section 31 of the 

Exchange Act and Rule 31 thereunder,6

national securities exchanges and 

associations (collectively, ‘‘SROs’’) are 

required to pay a transaction fee to the 

SEC that is designed to recover the costs 

related to the government’s supervision 

and regulation of the securities markets 

and securities professionals. To offset 

this obligation, the ETP Holders (under 

NYSE Arca Equities Rule 2.17) and OTP 

Firms and OTP Holders (under NYSE 

Arca Options Rule 2.18) are assessed 

charges in connection with satisfaction 

of the Exchange’s payment obligations 

under Section 31. The Exchange 

calculates such fees by multiplying the 

aggregate dollar amount of ‘‘covered 

sales’’ (as defined in Section 31 of the 

Exchange Act) effected on the Exchange 

during the appropriate period by the 

Section 31(b) fee rate in effect during 

that period. Clearing members may in 

turn seek to charge a fee to their 

customers or correspondent firms. Any 

allocation of the fee between the 

clearing member and its correspondent 

firm or customer is the responsibility of 

the clearing member. 

NYSE Arca Equities Rule 2.17 and 

NYSE Arca Options Rule 2.18 relate to 

payment by ETP Holders (pursuant to 

NYSE Arca Equities Rule 2.17) and by 

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52286 Federal Register / Vol. 74, No. 195 / Friday, October 9, 2009 / Notices 

7The SEC stated in its release adopting new Rule 

31 and Rule 31T that ‘‘it is misleading to suggest 

that a customer or an SRO member incurs an 

obligation to the Commission under Section 31.’’ 

See Securities Exchange Act Release No. 49928 

(June 28, 2004), 69 FR 41060, 41072 (July 7, 2004). 

8NASD has asked all surveyed firms whether 

they could ‘‘identify and relate the funds to specific 

customers on a transaction by transaction basis.’’ 

The surveyed firms universally stated that tracking 

fractions of a penny to individual customers would 

be impossible and any over-collections could not be 

passed back at the customer level. See Securities 

Exchange Act Release No. 34–55697 (May 2, 2007), 

72 FR 26432 (May 9, 2007) (SR–NASD–2007–027). 

9See Securities Exchange Act Release No. 55003 

(December 22, 2006), 71 FR 78497 (December 29, 

2007) (SR–NYSE–2006–109) (approved in 

Securities Exchange Act Release No. 55216 (January 

31, 2007), 72 FR 5779 (February 7, 2007), relating 

to NYSE Regulation, Inc. policies regarding exercise 

of power to fine NYSE member organizations and 

use of money collected as fines). 

10 17 CFR 240.19b–4(f)(6). 

OTP Firms and OTP Holders (pursuant 

to NYSE Arca Options Rule 2.18) of 

charges imposed by the Exchange in 

connection with the Exchange’s 

payment to the Commission of amounts 

required under Section 31 of the 

Exchange Act. The Exchange proposes 

to (1) provide for an Activity 

Assessment Fee to be paid by ETP 

Holders in connection with the 

Exchange’s required payments to the 

Commission under Section 31 of the 

Exchange Act; (2) add Commentary .01 

to NYSE Arca Equities Rule 2.17 to 

allow ETP Holders to voluntarily submit 

to the Exchange, on or before December 

31, 2009, funds that may have been 

previously accumulated by them to 

satisfy their, and subsequently NYSE 

Arca’s, obligation to remit Section 31- 

related fees; and (3) amend NYSE Arca 

Options Rule 2.18(a) to provide for an 

Activity Assessment Fee to be paid by 

OTP Firms and Holders in connection 

with the required payments to the 

Commission under Section 31 of the 

Exchange Act. 

Proposed Amendments to NYSE Arca 

Equities Rule 2.17 

The Exchange proposes to amend 

NYSE Arca Equities Rule 2.17(a) to 

delete outdated language regarding 

amounts payable under Section 31. The 

rule, as amended, characterizes the fees 

payable under such rule as Activity 

Assessment Fees. The proposed rule 

states that each ETP Holder that effects 

securities transactions on the 

Corporation that are defined in Section 

31 of the Exchange Act as ‘‘covered 

sales’’ of securities shall pay to the 

Corporation Activity Assessment Fees 

based upon all of their covered sales. 

The proposed rule provides that the 

Exchange shall calculate Activity 

Assessment Fees by multiplying the 

aggregate dollar amount of covered sales 

effected on the Corporation by the ETP 

Holder during the appropriate 

computational period by the Section 

31(b) fee rate in effect during that 

computational period. The proposed 

rule provides that Activity Assessment 

Fees shall be due and payable at such 

times and intervals as prescribed by the 

Exchange, and that ETP Holders that 

cease to effect securities transactions on 

the Corporation shall promptly pay to 

the Corporation any sum due pursuant 

to the rule. In addition, the Exchange 

proposes to add paragraph (c) to NYSE 

Arca Equities Rule 2.17 to provide that, 

to the extent that there may be excess 

monies collected under NYSE Arca 

Equities Rule 2.17(a), the Corporation 

may retain those monies to help fund its 

regulatory expenses. 

Program for Payment of Accumulated 

Funds or Designation of Exchange 

Accumulated Excess 

Reconciling the amounts billed by the 

Exchange and the amounts collected 

from the customers historically had 

been difficult for ETP Holders, possibly 

causing surpluses to accumulate at some 

broker-dealer firms (referred to herein as 

‘‘accumulated funds’’). Such 

accumulated funds may not have been 

remitted to the Exchange by certain 

firms, despite the fact that these charges 

may have been previously identified as 

‘‘Section 31 Fees’’ or ‘‘SEC Fees’’ by the 

firms.7 In addition, the Exchange has 

accumulated amounts remitted to the 

Corporation by ETP Holders collected 

by such ETP Holders in excess of their 

Rule 2.17 assessment, and in excess of 

amounts paid by the Corporation to the 

SEC pursuant to Section 31 of the 

Exchange Act (‘‘Corporation 

accumulated excess’’). 

In November 2004, the Exchange and 

other self-regulatory organizations 

(‘‘SROs’’) received a letter from the 

SEC’s Division of Market Regulation 

(now the Division of Trading and 

Markets) requesting, among other 

things, that the Exchange conduct an 

analysis to ascertain the amount of 

accumulated funds and present a plan 

for broker-dealers to dispose of or 

otherwise resolve title to such 

accumulated funds. Following 

discussion among the SROs and staff of 

the Division of Market Regulation, in an 

effort to ascertain the amount of 

accumulated funds, the NASD (now 

FINRA) surveyed 240 member clearing 

and self-clearing firms to review their 

practices regarding the collection of 

such fees from customers. After 

compiling and analyzing the data 

provided by member firms, NASD staff 

found that over half of the firms 

surveyed did not have an accumulated 

funds balance. NASD worked with the 

other SROs to recommend a potential 

solution to allow NASD and other SRO 

member firms to resolve title to the 

accumulated funds. It was determined, 

based upon information provided in 

connection with NASD’s survey, that it 

would be virtually impossible to return 

customer-related accumulated funds to 

the customers that had paid these funds 

to the firms.8

The proposed rule change is aimed at 

enabling those fees that may have been 

collected for purposes of paying an 

‘‘SEC Fee’’ or ‘‘Section 31 Fee’’ to be 

used to pay such fees. The Exchange is 

proposing new NYSE Arca Equities Rule 

2.17, Commentary .01 that will allow 

ETP Holders, on a one-time-only basis, 

voluntarily to remit historically 

accumulated funds to the Exchange. 

These funds then would be used to pay 

the Exchange’s current Section 31 fees 

in conformity with prior representations 

made by ETP Holders. In addition, an 

ETP Holder may designate all or part of 

the Exchange accumulated excess held 

by the Exchange and allocated to ETP 

Holder to be used by the Exchange in 

accordance with the terms of NYSE 

Arca Equities Rule 2.17, Commentary 

.01. 

Finally, to the extent the payment of 

these historically accumulated funds or 

Exchange accumulated excess is in 

excess of the fees due the SEC from 

NYSE Arca under Section 31 of the 

Exchange Act, such surplus shall be 

used by the Exchange to offset Exchange 

regulatory costs. Specifically, the 

Exchange will subject such surplus to 

the same treatment utilized with respect 

to unused fine income that has 

accumulated beyond a level reasonably 

necessary for future contingencies. That 

is, the board of directors of NYSE 

Regulation, Inc. will utilize such 

surplus to fund one or more special 

projects of NYSE Regulation, Inc., to 

reduce fees charged by NYSE 

Regulation, Inc. to its member 

organizations or the markets that it 

serves, or for a charitable purpose.9

The Exchange proposes that the 

effective date of the proposed rule 

change would be the date of filing with 

the Commission pursuant to Rule 19b– 

4(f)(6) under the Exchange Act.10 In 

addition, NYSE Arca Equities Rule 2.17, 

Commentary .01 would automatically 

sunset on December 31, 2009. 

Proposed Amendments to NYSE Arca 

Options Rule 2.18 

Similar to the proposed changes to 

NYSE Arca Equities Rule 2.17, 

described above, the Exchange also 

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Federal Register / Vol. 74, No. 195 / Friday, October 9, 2009 / Notices 52287 

11 15 U.S.C. 78f(b). 

12 15 U.S.C. 78f(b)(4). 

13 15 U.S.C. 78f(b)(5). 

14 15 U.S.C. 78s(b)(3)(A)(iii). 

15 17 CFR 240.19b–4(f)(6). 

16 15 U.S.C. 78s(b)(3)(A). 

17 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the Exchange to give the 

Commission written notice of the Exchange’s intent 

to file the proposed rule change along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied the pre-filing requirement. 

18See, e.g., Securities Exchange Act Release Nos. 

55886 (June 8, 2007), 72 FR 32935 (June 14, 2007) 

(SR–NASD–2007–027); 57829 (May 16, 2008), 73 

FR 30173 (May 23, 2008) (SR–Amex-2007–107); and 

58108 (July 7, 2008), 73 FR 40413 (July 14, 2008) 

(SR–NYSE–2007–64). 

19For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

proposes to delete outdated language 

regarding amounts payable under 

Section 31 in NYSE Arca Options Rule 

2.18 and to characterize the fees payable 

under such rule as Activity Assessment 

Fees. The proposed rule states the 

current practice relating to collection 

and payment of Section 31-related fees 

for options transactions, namely, that 

Activity Assessment Fees are collected 

from OTP Firms and OTP Holders 

through their clearing firms by the 

Options Clearing Corporation on behalf 

of the Exchange. In addition, the 

Exchange proposes to add paragraph (c) 

to NYSE Arca Options Rule 2.18 to 

provide that, to the extent that there 

may be excess monies collected under 

NYSE Arca Equities Rule 2.18(a), the 

Corporation may retain those monies to 

help fund its regulatory expenses. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) 11 of the 

Exchange Act, in general, and furthers 

the objectives of Section 6(b)(4) of the 

Exchange Act,12 which permits the rules 

of an Exchange to provide for the 

equitable allocation of reasonable dues, 

fees, and other charges among its 

members, and issuers and other persons 

using its facilities. In addition, the 

proposed rule change is consistent with 

Section 6(b)(5) 13 of the Exchange Act 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 mechanisms of a free and 

open market and a national market 

system. The Exchange believes that the 

proposed rule change will provide a 

transparent way of addressing the issue 

of accumulated funds held at the 

member firm level as well as the 

Corporation accumulated excess. As this 

proposed rule change would 

automatically sunset, it will be of a 

limited duration. Moreover, based on 

the reminder set forth in the proposed 

NYSE Arca Equities Rule 2.17, 

Commentary .01 and the issuance of 

prior Information Memos on this matter, 

any accumulation of funds that are 

collected and disclosed as ‘‘Section 31 

Fees’’ or ‘‘SEC Fees’’ should not reoccur. 

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 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 14 and Rule 

19b–4(f)(6) thereunder.15 Because the 

proposed rule change does not: (i) 

Significantly affect the protection of 

investors or the public interest; (ii) 

impose any significant burden on 

competition; and (iii) become operative 

prior to 30 days from the date on which 

it was filed, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 16 and Rule 19b–4(f)(6)(iii) 

thereunder.17

The Exchange requests that the 

Commission waive the 30-day operative 

delay to allow for implementation of the 

proposed voluntary program in a timely 

manner to accommodate the proposed 

December 31, 2009 sunset date. The 

Commission has previously approved 

proposals for similar programs at other 

exchanges.18 Therefore, the Commission 

believes that waiving the 30-day 

operative delay to allow the Exchange to 

implement this proposed rule change 

without delay is consistent with the 

protection of investors and the public 

interest. The Commission hereby 

designates the proposal operative upon 

filing.19

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. 

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–2009–86 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–2009–86. 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 inspection and copying 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 

mstockstill on DSKH9S0YB1PROD with NOTICES

52288 Federal Register / Vol. 74, No. 195 / Friday, October 9, 2009 / Notices 

20 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(1). 

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 adviser 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 No. 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); Securities Exchange Act Release No. 

57801 (May 8, 2008), 73 FR 27878 (May 14, 2008) 

(SR–NYSEArca–2008–31) (order approving 

Exchange listing and trading of twelve activelymanaged funds of the WisdomTree Trust); 

Securities Exchange Act Release No. 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); Securities Exchange Act Release 

No. 60460 (August 7, 2009), 74 FR 41468 (August 

17, 2009) (SR–NYSEArca–2009–55) (order 

approving Exchange listing and trading of Dent 

Tactical ETF). 

6The Trust is registered under the 1940 Act. On 

April 29, 2009, the Trust filed with the Commission 

pre-effective Amendment No. 3 to its registration 

statement on 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. 333–148082 and 

811–22154) (‘‘Registration Statement’’). The 

description of the operation of the Trust herein is 

based on the Registration Statement. 

7 17 CFR 240.10A–3. 

8An investment adviser to an open-end fund is 

required to be registered under the Investment 

Advisers Act of 1940 (the ‘‘Advisers Act’’). As a 

result, the investment adviser is subject to the 

provisions of Rule 204A–1 under the Advisers Act 

relating to codes of ethics. This Rule requires 

investment advisers to adopt a code of ethics that 

reflects the fiduciary nature of the relationship to 

clients as well as compliance with other applicable 

securities laws. Accordingly, procedures designed 

to prevent the communication and misuse of nonpublic information by an investment adviser must 

be consistent with Rule 204A–1 under the Advisers 

Act. 

submissions should refer to File 

Number SR–NYSEArca–2009–86 and 

should be submitted on or before 

October 30, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–24351 Filed 10–8–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60773; File No. SR– 

NYSEArca–2009–83] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change To List and Trade Shares 

of the Grail American Beacon 

International Equity ETF 

October 2, 2009. 

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

Securities Exchange Act of 1934 

(‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that, 

on September 18, 2009, NYSE Arca, Inc. 

(‘‘NYSE Arca’’ 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 the Exchange. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Pursuant to the provisions of Section 

19(b)(1) of the Exchange Act,3 NYSE 

Arca, through its wholly-owned 

subsidiary NYSE Arca Equities, Inc. 

(‘‘NYSE Arca Equities’’ or the 

‘‘Corporation’’), proposes to list and 

trade the following under NYSE Arca 

Equities Rule 8.600 (‘‘Managed Fund 

Shares’’): The Grail American Beacon 

International Equity 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 the 

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: The Grail American 

Beacon International Equity ETF 

(‘‘Fund’’).5 The Shares will be offered by 

Grail Advisors’ ETF 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 Grail Advisors, LLC (the 

‘‘Manager’’), a majority-owned 

subsidiary of Grail Partners, LLC, acts as 

the Fund’s investment manager. The 

Fund is subadvised by American 

Beacon Advisors, Inc. (‘‘ABA’’). The 

Bank of New York Mellon Corporation 

is the administrator, Fund accountant, 

transfer agent and custodian for the 

Fund. ALPS Distributors, Inc. (the 

‘‘Distributor’’) serves as the distributor 

for the Fund. 

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 7

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 will be calculated daily and that 

the net asset value and the Disclosed 

Portfolio will be made available to all 

market participants at the same time. 

Commentary .07 to Rule 8.600 

provides that, if the investment adviser 

to the Investment Company issuing 

Managed Fund Shares is affiliated with 

a broker-dealer, such investment adviser 

shall erect a ‘‘fire wall’’ between the 

investment adviser and the brokerdealer with respect to access to 

information concerning the composition 

and/or changes to such Investment 

Company portfolio.8 In addition, 

Commentary .07 further requires that 

personnel who make decisions on the 

open-end fund’s portfolio composition 

must be subject to procedures designed 

to prevent the use and dissemination of 

material nonpublic information 

regarding the open-end fund’s portfolio. 

Commentary .07 to Rule 8.600 is similar 

to Commentary .03(a)(i) and (iii) to 

NYSE Arca Equities Rule 5.2(j)(3); 

however, Commentary .07 in connection 

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