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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Federal Register / Vol. 74, No. 195 / Friday, October 9, 2009 / Notices 52289 

9The Exchange represents that Grail Advisors, 

LLC, as the investment adviser of the Fund, and 

each of the sub-advisers of the Fund, and their 

respective 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 adviser 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 adviser 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 adviser to provide investment advice to 

clients unless such investment adviser has (i) 

adopted and implemented written policies and 

procedures reasonably designed to prevent 

violation, by the investment adviser 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. E-mail from Michael 

Cavalier, Chief Counsel, NYSE Euronext, to Edward 

Cho, Special Counsel, and Arisa Tinaves, Special 

Counsel, Division of Trading and Markets, 

Commission, dated September 30, 2009. 

10The Commission has previously approved the 

listing and trading of funds based on MSCI EAFE 

Indexes. See, e.g., Securities Exchange Act Release 

Nos. 44700 (August 14, 2001), 66 FR 43927 (August 

21, 2001) (SR–Amex–2001–34) (approving shares of 

a fund based on the MSCI EAFE Index); 52178 (July 

29, 2005), 70 FR 46244 (August 9, 2005) (SR– 

NYSE–2005–41) (order approving iShares MSCI 

EAFE Growth Index Fund and iShares MSCI EAFE 

Value Index Fund); 56592 (October 1, 2007), 72 FR 

57364 (October 9, 2007) (SR–Amex–2007–60) (order 

approving fund of the Proshares Trust based on the 

MSCI EAFE Index). 

with the establishment of a ‘‘fire wall’’ 

between the investment adviser and the 

broker-dealer reflects the applicable 

open-end fund’s portfolio, not an 

underlying benchmark index, as is the 

case with index-based funds. Grail 

Advisors, LLC is affiliated with a 

broker-dealer, Grail Securities, LLC, and 

has implemented a fire wall with 

respect to such broker-dealer regarding 

access to information concerning the 

composition and/or changes to the 

portfolio.9

ABA, the Fund’s primary sub-adviser, 

is not affiliated with a broker-dealer. In 

addition, Lazard Asset Management 

LLC, Templeton Investment Counsel, 

LLC and The Boston Company Asset 

Management, LLC each is a sub-adviser 

to the Fund and each is affiliated with 

a broker-dealer. The sub-advisers have 

represented that they have implemented 

a fire wall with respect to their 

respective broker-dealer affiliates 

regarding access to information 

concerning the composition and/or 

changes to the portfolio. 

Description of the Fund 

According to the Registration 

Statement, the Fund’s objective is longterm capital appreciation. Ordinarily, at 

least 80% of the Fund’s net assets (plus 

the amount of any borrowings for 

investment purposes) will be invested 

in common stocks and securities 

convertible into common stocks of 

issuers based in at least three different 

countries located outside the United 

States and the Fund will primarily hold 

securities of large capitalization 

companies that have last sale reporting 

in the countries in which it invests. The 

Fund will primarily invest in countries 

in the Morgan Stanley Capital 

International Europe Australasia Far 

East Index (‘‘MSCI EAFE Index’’). The 

MSCI EAFE Index is comprised of 

equity securities of companies from 

various industrial sectors whose 

primary trading markets are located 

outside the United States. Companies 

included in the MSCI EAFE Index are 

selected from among the larger 

capitalization companies in these 

markets.10 The Fund considers 

companies with market capitalizations 

of more than $1 billion to be large 

capitalization companies. Thus, at least 

50% of the Fund’s assets invested in 

securities of companies will be in 

companies with market capitalizations 

of more than $1 billion. 

According to the Registration 

Statement, the investment sub-advisers 

will select stocks that, in their opinion, 

have most or all of the following 

characteristics (relative to that stock’s 

country, sector or industry): Aboveaverage return on equity or earnings 

growth potential, below-average price to 

earnings or price to cash flow ratio, 

below-average price to book value ratio, 

and above-average dividend yields. 

The investment sub-advisers may 

consider potential changes in currency 

exchange rates when choosing stocks. 

Each of the investment sub-advisers 

determines the earnings growth 

prospects of companies based upon a 

combination of internal and external 

research using fundamental analysis 

and considering changing economic 

trends. The decision to sell a stock is 

typically based on the belief that the 

company is no longer considered 

undervalued or shows deteriorating 

fundamentals, or that better investment 

opportunities exist in other stocks. The 

Manager and ABA believe that this 

strategy will help the Fund outperform 

other investment styles over the longer 

term while minimizing volatility and 

downside risk. An investment subadviser may trade forward foreign 

currency contracts or currency futures 

in an attempt to reduce the Fund’s risk 

exposure to adverse fluctuations in 

currency exchange rates. 

The Fund’s assets are allocated among 

one or more investment sub-advisers by 

the Manager and/or ABA. With respect 

to any assets allocated to it, each 

investment sub-adviser has discretion to 

purchase and sell securities in 

accordance with the Fund’s objectives, 

policies, restrictions and more specific 

policies provided by the Manager and 

ABA. 

According to the Registration 

Statement, in addition to the investment 

strategies described in the Registration 

Statement, the Fund may invest up to 

20% of its total assets in debt securities 

that are investment grade at the time of 

purchase, including obligations of the 

U.S. Government, its agencies and 

instrumentalities, corporate debt 

securities, mortgage-backed securities, 

asset-backed securities, and other debt 

securities, as specified in the 

Registration Statement. Such assets may 

include non-U.S. debt securities that are 

rated at the time of purchase in one of 

the three highest rating categories by 

any Rating Organization (as defined in 

the Registration Statement) or, if 

unrated, are deemed to be of comparable 

quality by the applicable investment 

sub-adviser and traded publicly on a 

world market. In addition, although not 

currently anticipated except to reduce 

the Fund’s exposure to adverse 

fluctuations in currency exchange rates, 

the Fund may use options and futures 

for various purposes, including for 

hedging and investment purposes. In 

addition, the Fund may purchase or 

otherwise receive warrants or rights, or 

convertible and non-convertible 

preferred and preference stocks. The 

Fund may also invest in over-thecounter options. To the extent 

consistent with applicable law, the 

Fund may invest in futures contracts on, 

among other things, financial 

instruments (such as a U.S. government 

security or other fixed income security), 

individual equity securities (‘‘single 

stock futures’’), securities indices, 

interest rates, currencies, inflation 

indices, and commodities or 

commodities indices. The Fund’s 

purchase and sale of index futures is 

limited to contracts and exchanges 

approved by the U. S. Commodity 

Futures Trading Commission. 

mstockstill on DSKH9S0YB1PROD with NOTICES

52290 Federal Register / Vol. 74, No. 195 / Friday, October 9, 2009 / Notices 

11The diversification standards are included in 

Section 5(b)(1) of the 1940 Act. The Fund’s 

fundamental policies may be changed with respect 

to an ETF only by a vote of the holders of a majority 

of the Fund’s outstanding voting securities. 

12The 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. 

13Under 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. 

According to the Registration 

Statement, the Fund may engage in 

transactions involving the use of interest 

rate futures; use options on futures 

contracts, interest rate caps, floors, and 

collars; and directly or indirectly use 

various different types of swaps, such as 

swaps on securities and securities 

indices, interest rate swaps, currency 

swaps, credit default swaps, commodity 

swaps, inflation swaps, and other types 

of available swap agreements. The Fund 

may enter into repurchase agreements 

with banks and broker-dealers. The 

Fund may temporarily invest a portion 

of its assets in cash or cash items 

pending other investments or to 

maintain liquid assets required in 

connection with some of the Fund’s 

investments. The Fund may invest in 

pooled real estate investment vehicles. 

In addition, the Fund may invest up to 

15% of its net assets in illiquid 

securities. For this purpose, ‘‘illiquid 

securities’’ are securities that the Fund 

may not sell or dispose of within seven 

days in the ordinary course of business 

at approximately the amount at which 

the Fund has valued the securities. The 

Fund may invest in the securities of 

other investment companies to the 

extent permitted by law. 

Under adverse market conditions, the 

Fund may, for temporary defensive 

purposes, invest up to 100% of its assets 

in cash or cash equivalents, including 

investment grade short-term obligations. 

Investment grade obligations include 

securities issued or guaranteed by the 

U.S. Government, its agencies and 

instrumentalities, as well as securities 

rated in one of the four highest rating 

categories by at least two nationally 

recognized statistical rating 

organizations rating that security (such 

as Standard & Poor’s Ratings Services or 

Moody’s Investors Service, Inc.) or rated 

in one of the four highest rating 

categories by one rating organization if 

it is the only organization rating that 

security. 

As stated in the Registration 

Statement, the following are 

fundamental policies of the Fund: (1) 

Regarding diversification, the Fund may 

not invest more than 5% of its total 

assets (taken at market value) in 

securities of any one issuer, other than 

obligations issued by the U.S. 

Government, its agencies and 

instrumentalities, or purchase more 

than 10% of the voting securities of any 

one issuer, with respect to 75% of an 

ETF’s total assets; 11 and (2) regarding 

concentration, the Fund may not invest 

more than 25% of its total assets in the 

securities of companies primarily 

engaged in any one industry or group of 

industries provided that: (i) This 

limitation does not apply to obligations 

issued or guaranteed by the U.S. 

Government, its agencies and 

instrumentalities; and (ii) municipalities 

and their agencies and authorities are 

not deemed to be industries. 

Creations and redemptions of Fund 

shares will generally be in-kind, with a 

specified Cash Component, as described 

in the Registration Statement. 

Authorized Participants or the investors 

on whose behalf the Authorized 

Participants are acting (‘‘Investors’’), 

however, may deliver in connection 

with creations or receive in connection 

with redemptions cash in lieu of one or 

more in-kind securities. Specifically, in 

connection with creations (or 

redemptions), an Authorized Participant 

or Investor may transact in cash, in 

whole or in part, at the sole discretion 

of the Fund, provided, however, that the 

cash amount delivered (or received) 

shall not exceed 10% of the value of the 

In-Kind Creation (or Redemption) 

Basket, unless the Authorized 

Participant or Investor is subject to legal 

restrictions with respect to delivery or 

receipt of one or more securities in the 

In-Kind Creation (or Redemption) 

Basket, or the Fund is in a temporary 

defensive position. The Creation Unit 

size for the Fund is 50,000 Shares. 

Availability of Information 

The Fund’s Web site (http:// 

www.grailadvisors.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’’),12 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 proposed Rule 8.600(c)(2) 

that will form the basis for the Fund’s 

calculation of NAV at the end of the 

business day.13 The Registration 

Statement provides that the Fund’s 

portfolio holdings are publicly 

disseminated each day the Fund is open 

for business through its internet Web 

site. In addition, a basket composition 

file, which includes the security names 

and share quantities required to be 

delivered in exchange for Fund shares, 

together with estimates and actual cash 

components, is publicly disseminated 

daily prior to the opening of the NYSE 

via the National Securities Clearing 

Corporation (‘‘NSCC’’). The basket 

represents one Creation Unit of the 

Fund. The Web site information will be 

publicly available at no charge. 

On a daily basis, the Fund will 

disclose on the Fund’s Web site 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 NAV of the Fund will normally 

be determined as of the close of the 

regular trading session on the New York 

Stock Exchange (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’’) 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 74, No. 195 / Friday, October 9, 2009 / Notices 52291 

14See NYSE Arca Equities Rule 7.12, 

Commentary .04. 

15For a list of the current members of ISG, see 

http://www.isgportal.org. The Exchange notes that 

not all components of the Disclosed Portfolio for the 

Fund may trade on markets that are members of ISG 

and the Exchange may not have in place 

comprehensive surveillance sharing agreements 

with such markets. 16 15 U.S.C. 78f(b)(5). 

high-speed line. In addition, the 

Portfolio Indicative Value, as defined in 

NYSE Arca Equities Rule 8.600 (c)(3), 

will be disseminated by the Exchange at 

least every 15 seconds during the Core 

Trading Session through the facilities of 

CTA. 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 

Shares and the Fund, 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.14 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.15 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 

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) 16

that an exchange have rules that are 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to remove impediments to, and 

perfect the mechanism of a free and 

open market and, in general, to protect 

investors and the public interest. The 

Exchange believes that the proposed 

rule change will facilitate the listing and 

trading of an additional type of activelymanaged exchange-traded product that 

will enhance competition among market 

participants, to the benefit of investors 

and the marketplace. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Exchange 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. 

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52292 Federal Register / Vol. 74, No. 195 / Friday, October 9, 2009 / Notices 

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)(ii). 

4 17 CFR 240.19b–4(f)(2). 

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 Exchange 

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–2009–83 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–2009–83. 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 will also be available 

for inspection and copying at NYSE 

Arca’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–2009–83 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. E9–24353 Filed 10–8–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60783; File No. SR–MSRB– 

2009–15] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Notice of Filing and Immediate 

Effectiveness of Amendments to Rule 

A–13, on Underwriting Assessments 

and Rule G–32, on Disclosures in 

Connection With Primary Offerings 

October 2, 2009. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on 

September 30, 2009, the Municipal 

Securities Rulemaking Board (‘‘MSRB’’ 

or ‘‘Board’’), 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 MSRB. The MSRB has designated 

the proposed rule change as changing a 

fee applicable to brokers, dealers and 

municipal securities dealers pursuant to 

Section 19(b)(3)(A)(ii) of the Act,3 and 

Rule 19b–4(f)(2) 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 

The MSRB is filing amendments to 

Rule A–13, which provides for fee 

assessments based on underwriting 

activity and Rule G–32, by adding a 

definition of commercial paper. The 

proposed rule change would apply to 

primary offerings of municipal 

securities for which submission of Form 

G–32 under Rule G–32(b)(i)(A) is 

initiated on or after December 1, 2009. 

The text of the proposed rule change is 

available on the MSRB’s Web site at 

http://www.msrb.org/msrb1/sec.asp, at 

the MSRB’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 

MSRB 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. The MSRB 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 purpose of the proposed rule 

change is to assess reasonable fees 

necessary to defray the costs and 

expenses of operating and administering 

the MSRB. The proposed rule change 

would partially accomplish this purpose 

by amending Rule A–13 to eliminate 

exemptions in Rule A–13 pertaining to 

underwriting assessments for primary 

offerings of municipal securities that: 

(i) Have an aggregate par value less than 

$1,000,000; (ii) have a final stated 

maturity of nine months or less, except 

commercial paper; (iii) at the option of 

the holder thereof, may be tendered to 

an issuer of such securities or its 

designated agent for redemption or 

purchase at par value or more at least 

as frequently as every nine months until 

maturity, earlier redemption, or 

purchase by an issuer or its designated 

agent; and (iv) have authorized 

denominations of $100,000 or more and 

are sold to no more than thirty-five 

persons each of whom the broker, dealer 

or municipal securities dealer (‘‘dealer’’) 

reasonably believes: (A) Has the 

knowledge and experience necessary to 

evaluate the merits and risks of the 

investment; and (B) is not purchasing 

for more than one account, with a view 

toward distributing the securities 

(‘‘limited offering’’). The underwriting 

fee for primary offerings of these 

securities will be $.03 per $1000 par 

value, which is the current underwriting 

fee for primary offerings of municipal 

bonds. Additionally, the proposed rule 

change will further harmonize the 

underwriting fees of notes and bonds by 

changing the underwriting fee on 

primary offerings in which all securities 

offered have a final stated maturity less 

than two years to the rate of $.03 per 

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