Federal Register / Vol. 77, No. 41 / Thursday, March 1, 2012 / Notices 12631 

16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 66098 

(January 4, 2012), 77 FR 1526 (‘‘Notice’’). 

4Commentary .02 to NYSE Arca Equities Rule 

8.200 applies to Trust Issued Receipts that invest 

in ‘‘Financial Instruments.’’ The term ‘‘Financial 

Instruments,’’ as defined in Commentary .02(b)(4) to 

NYSE Arca Equities Rule 8.200, means any 

combination of investments, including cash; 

securities; options on securities and indices; futures 

contracts; options on futures contracts; forward 

contracts; equity caps, collars and floors; and swap 

agreements. 

5See Amendment No. 1 to Form S–1 for the 

Trust, dated December 5, 2011 (File No. 333– 

173691) relating to the Fund (‘‘Registration 

Statement’’). 

6Additional information regarding the 

Underlying Funds is included in the Commission 

orders approving the listing and trading of the 

Underlying Funds and in their corresponding 

registration statements. See Securities Exchange Act 

Release Nos. 62213 (June 3, 2010), 75 FR 32828 

(June 9, 2010) (SR–NYSEArca–2010–22) (order 

approving listing on the Exchange of Teucrium 

Corn Fund); 65344 (September 15, 2011), 76 FR 

58549 (September 21, 2011) (SR–NYSEArca–2011– 

48) (order approving listing on the Exchange of the 

Teucrium Wheat Fund, Teucrium Soybean Fund, 

and Teucrium Sugar Fund). See also Amendment 

No. 4 to the Registration Statement on Form S–1 for 

Teucrium Commodity Trust, dated May 26, 2010 

(File No. 333–162033) relating to the Teucrium 

Corn Fund; Amendment No. 3 to Form S–1 for 

Teucrium Commodity Trust, dated June 3, 2011 

(File No. 333–167591) relating to the Teucrium 

Wheat Fund; Amendment No. 3 to Form S–1 for 

Teucrium Commodity Trust, dated June 3, 2011 

(File No. 333–167590) relating to the Teucrium 

Soybean Fund; and Amendment No. 3 to Form 

S–1 for Teucrium Commodity Trust, dated June 3, 

2011 (File No. 333–167585) relating to the 

Teucrium Sugar Fund. 

7The term ‘‘under normal market conditions’’ 

includes, but is not limited to, the absence of 

extreme volatility or trading halts in the commodity 

markets or the financial markets generally; 

operational issues causing dissemination of 

inaccurate market information; or force majeure 

type events such as systems failure, natural or manmade disaster, act of God, armed conflict, act of 

terrorism, riot or labor disruption or any similar 

intervening circumstance. 

8This weighted average is referred to herein as 

the Underlying Fund’s ‘‘Benchmark,’’ the Futures 

Contracts that at any given time make up an 

Underlying Fund’s Benchmark are referred to 

herein as the Underlying Fund’s ‘‘Benchmark 

Component Futures Contracts,’’ and the commodity 

specified in the Underlying Fund’s name is referred 

to herein as its ‘‘Specified Commodity.’’ 

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 principal office of the 

Exchange. All comments received will 

be posted without change; the 

Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

publicly available. All submissions 

should refer to File Number SR–NYSE– 

2011–55 or SR–NYSEAmex–2011–84 

and should be submitted on or before 

March 22, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–4913 Filed 2–29–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66466; File No. 

SR–NYSEArca–2011–97] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Granting Approval of 

Proposed Rule Change Relating to 

Listing and Trading of Shares of the 

Teucrium Agriculture Fund Under 

NYSE Arca Equities Rule 8.200 

February 24, 2012. 

I. Introduction 

On December 20, 2011, NYSE Arca, 

Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to list and trade shares of the 

Teucrium Agriculture Fund under 

Commentary .02 to NYSE Arca Equities 

Rule 8.200. The proposed rule change 

was published for comment in the 

Federal Register on January 10, 2012.3

The Commission received no comments 

on the proposal. This order grants 

approval of the proposed rule change. 

II. Description of the Proposed Rule 

Change 

The Exchange proposes to list and 

trade shares (‘‘Shares’’) of the Teucrium 

Agriculture Fund (‘‘Fund’’) pursuant to 

NYSE Arca Equities Rule 8.200, 

Commentary .02, which permits the 

trading of Trust Issued Receipts either 

by listing or pursuant to unlisted trading 

privileges.4 The Fund is a commodity 

pool that is a series of the Teucrium 

Commodity Trust (‘‘Trust’’), a Delaware 

statutory trust.5 The Fund is managed 

and controlled by Teucrium Trading, 

LLC (‘‘Sponsor’’), which is a Delaware 

limited liability company that is 

registered as a commodity pool operator 

with the Commodity Futures Trading 

Commission (‘‘CFTC’’) and is a member 

of the National Futures Association. The 

Bank of New York Mellon (‘‘Custodian’’ 

or ‘‘Administrator’’) is the custodian, 

transfer agent, and administrator for the 

Fund. Foreside Fund Services, LLC 

(‘‘Distributor’’) is the distributor for the 

Fund’s Shares. 

Teucrium Agriculture Fund 

The investment objective of the Fund 

is to have the daily changes in 

percentage terms of the Shares’ net asset 

value (‘‘NAV’’) reflect the daily changes 

in percentage terms of a weighted 

average (‘‘Underlying Fund Average’’) of 

the NAVs per share of four other 

commodity pools that are series of the 

Trust and are sponsored by the Sponsor: 

Teucrium Corn Fund, Teucrium Wheat 

Fund, Teucrium Soybean Fund, and 

Teucrium Sugar Fund (collectively, 

‘‘Underlying Funds’’).6 The Fund seeks 

to achieve its investment objective by 

investing under normal market 

conditions 7 in the publicly-traded 

shares of each Underlying Fund so that 

the Underlying Fund Average will have 

a weighting of 25% for each Underlying 

Fund, and the Fund’s assets will be 

rebalanced, generally on a daily basis, to 

maintain the approximate 25% 

allocation to each Underlying Fund. The 

Fund does not intend to invest directly 

in futures contracts (‘‘Futures 

Contracts’’) or other Commodity 

Interests (as defined below), although it 

reserves the right to do so in the future, 

including if an Underlying Fund ceases 

operations or if shares of an Underlying 

Fund cease trading on the Exchange. 

While the Fund expects to maintain 

substantially all of its assets in shares of 

the Underlying Funds at all times, the 

Fund may hold some residual amount of 

assets in obligations of the United States 

government (‘‘Treasury Securities’’) or 

cash equivalents, and/or hold such 

assets in cash (generally in interestbearing accounts). The Fund will earn 

interest income from the Treasury 

Securities and/or cash equivalents that 

it purchases and on the cash it holds 

through the Custodian. 

The investment objective of each 

Underlying Fund is to have the daily 

changes in percentage terms of its 

shares’ NAV reflect the daily changes in 

percentage terms of a weighted average 

of the closing settlement prices for 

certain Futures Contracts for the 

commodity specified in the Underlying 

Fund’s name.8 The Teucrium Corn 

Fund’s Benchmark is: (1) The second-toexpire Futures Contract for corn traded 

on the Chicago Board of Trade 

(‘‘CBOT’’), weighted 35%, (2) the thirdto-expire CBOT corn Futures Contract, 

weighted 30%, and (3) the CBOT corn 

Futures Contract expiring in the 

December following the expiration 

month of the third-to-expire contract, 

weighted 35%. The Teucrium Wheat 

Fund’s Benchmark is: (1) The second-toexpire CBOT wheat Futures Contract, 

weighted 35%, (2) the third-to-expire 

CBOT wheat Futures Contract, weighted 

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12632 Federal Register / Vol. 77, No. 41 / Thursday, March 1, 2012 / Notices 

9According to the Registration Statement, 

although sugar Futures Contracts are primarily 

traded on the ICE Futures, they may also be traded 

on the New York Mercantile Exchange (‘‘NYMEX’’). 

10With respect to the Underlying Funds, the 

creditworthiness of each potential counterparty will 

be assessed by the Sponsor. The Sponsor will assess 

or review, as appropriate, the creditworthiness of 

each potential or existing counterparty to an overthe-counter contract pursuant to guidelines 

approved by the Sponsor. 

11The Sponsor represents that the Fund and 

Underlying Funds will invest in their applicable 

Commodity Interests in a manner consistent with 

their respective investment objectives and not to 

achieve additional leverage. 

30%, and (3) the CBOT wheat Futures 

Contract expiring in the December 

following the expiration month of the 

third-to-expire contract, weighted 35%. 

The Teucrium Soybean Fund’s 

Benchmark is: (1) The second-to-expire 

CBOT soybean Futures Contract, 

weighted 35%, (2) the third-to-expire 

CBOT soybean Futures Contract, 

weighted 30%, and (3) the CBOT 

soybean Futures Contract expiring in 

the November following the expiration 

month of the third-to-expire contract, 

weighted 35%, except that CBOT 

soybean Futures Contracts expiring in 

August and September will not be part 

of the Teucrium Soybean Fund’s 

Benchmark because of the less liquid 

market for these Futures Contracts. The 

Teucrium Sugar Fund’s Benchmark is: 

(1) The second-to-expire Sugar No. 11 

Futures Contract traded on ICE Futures 

U.S. (‘‘ICE Futures’’),9 weighted 35%, 

(2) the third-to-expire ICE Futures Sugar 

No. 11 Futures Contract, weighted 30%, 

and (3) the ICE Futures Sugar No. 11 

Futures Contract expiring in the March 

following the expiration month of the 

third-to-expire contract, weighted 35%. 

Each Underlying Fund seeks to 

achieve its investment objective by 

investing under normal market 

conditions in Benchmark Component 

Futures Contracts or, in certain 

circumstances, in other Futures 

Contracts for its Specified Commodity. 

In addition, and to a limited extent, an 

Underlying Fund also may invest in 

exchange-traded options on Futures 

Contracts for its Specified Commodity 

and in swap agreements based on its 

Specified Commodity that are cleared 

through a futures exchange or its 

affiliated provider of clearing services 

(‘‘Cleared Swaps’’) in furtherance of the 

Underlying Fund’s investment 

objective. Once position limits or 

accountability levels on Futures 

Contracts on an Underlying Fund’s 

Specified Commodity are reached, each 

Underlying Fund’s intention is to invest 

first in Cleared Swaps based on its 

Specified Commodity to the extent 

practicable under the position limits or 

accountability levels applicable to such 

Cleared Swaps and appropriate in light 

of the liquidity in the market for such 

Cleared Swaps, and then in contracts 

and instruments such as cash-settled 

options on Futures Contracts and 

forward contracts, swaps other than 

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

the price of its Specified Commodity or 

Futures Contracts on its Specified 

Commodity (collectively, ‘‘Other 

Commodity Interests,’’ and, together 

with Futures Contracts and Cleared 

Swaps, ‘‘Commodity Interests’’). By 

utilizing certain or all of these 

investments, the Sponsor will endeavor 

to cause each Underlying Fund’s 

performance to closely track that of its 

Benchmark. 

The Underlying Funds seek to achieve 

their investment objectives primarily by 

investing in Commodity Interests such 

that daily changes in the Underlying 

Fund’s NAV will be expected to closely 

track the changes in its Benchmark. 

Each Underlying Fund’s positions in 

Commodity Interests will be changed or 

‘‘rolled’’ on a regular basis in order to 

track the changing nature of its 

Benchmark. For example, several times 

a year (on the dates on which Futures 

Contracts on the Underlying Fund’s 

Specified Commodity expire), a 

particular Futures Contract will no 

longer be a Benchmark Component 

Futures Contract, and the Underlying 

Fund’s investments will have to be 

changed accordingly. In order that the 

Underlying Funds’ trading does not 

cause unwanted market movements and 

to make it more difficult for third parties 

to profit by trading based on such 

expected market movements, the 

Underlying Funds’ investments 

typically will not be rolled entirely on 

that day, but rather will typically be 

rolled over a period of several days. 

Consistent with achieving each 

Underlying Fund’s investment objective 

of closely tracking its Benchmark, the 

Sponsor may for certain reasons cause 

the Underlying Fund to enter into or 

hold Futures Contracts other than the 

Benchmark Component Futures 

Contracts, Cleared Swaps and/or Other 

Commodity Interests. For example, 

certain Cleared Swaps have 

standardized terms similar to, and are 

priced by reference to, a corresponding 

Benchmark Component Futures 

Contract. Additionally, Other 

Commodity Interests that do not have 

standardized terms and are not 

exchange-traded, referred to as ‘‘overthe-counter’’ Commodity Interests, can 

generally be structured as the parties to 

the Commodity Interest contract desire. 

Therefore, an Underlying Fund might 

enter into multiple Cleared Swaps and/ 

or over-the-counter Commodity Interests 

related to its Specified Commodity that 

are intended to exactly replicate the 

performance of Benchmark Component 

Futures Contracts of the Underlying 

Fund, or a single over-the-counter 

Commodity Interest designed to 

replicate the performance of its 

Benchmark as a whole. Assuming that 

there is no default by a counterparty to 

an over-the-counter Commodity Interest, 

the performance of the Commodity 

Interest will necessarily correlate 

exactly with the performance of the 

Underlying Fund’s Benchmark or the 

applicable Benchmark Component 

Futures Contract.10 The Underlying 

Funds might also enter into or hold 

Commodity Interests other than 

Benchmark Component Futures 

Contracts to facilitate effective trading. 

In addition, an Underlying Fund might 

enter into or hold Commodity Interests 

related to its Specified Commodity that 

would be expected to alleviate overall 

deviation between the Underlying 

Fund’s performance and that of its 

Benchmark that may result from certain 

market and trading inefficiencies or 

other reasons. 

The Underlying Funds invest in 

Commodity Interests to the fullest 

extent possible without being 

leveraged 11 or unable to satisfy their 

expected current or potential margin or 

collateral obligations with respect to 

their investments in Commodity 

Interests. After fulfilling such margin 

and collateral requirements, the 

Underlying Funds will invest the 

remainder of the proceeds from the sale 

of baskets in Treasury Securities or cash 

equivalents, and/or hold such assets in 

cash. Therefore, the focus of the 

Sponsor in managing the Underlying 

Funds is investing in Commodity 

Interests and in Treasury Securities, 

cash and/or cash equivalents. The 

Underlying Funds will earn interest 

income from the Treasury Securities 

and/or cash equivalents that it 

purchases and on the cash it holds 

through the Custodian. 

The Sponsor will endeavor to place 

the Fund’s trades in the Underlying 

Funds and otherwise manage the Fund’s 

investments so that the Fund’s average 

daily tracking error against the 

Underlying Fund Average will be less 

than 10 percent over any period of 30 

trading days. More specifically, the 

Sponsor will endeavor to manage the 

Fund so that A will be within plus/ 

minus 10 percent of B, where A is the 

average daily change in the Fund’s NAV 

for any period of 30 successive 

valuation days, i.e., any trading day as 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 77, No. 41 / Thursday, March 1, 2012 / Notices 12633 

12The Sponsor believes that market arbitrage 

opportunities will cause the Fund’s Share price on 

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

Share. The Sponsor believes that the net effect of 

this expected relationship and the expected 

relationship described above between the Fund’s 

NAV and the Underlying Fund Average will be that 

the changes in the price of the Fund’s Shares on the 

NYSE Arca will closely track, in percentage terms, 

changes in the Underlying Fund Average. 

13 17 CFR 240.10A–3. 

14 17 CFR 240.10A–3(c)(7). 

15See Notice and Registration Statement, supra 

notes 3 and 5, respectively. 

16See supra note 6. 

17 In approving this proposed rule change, the 

Commission notes that it has considered the 

proposed rule’s impact on efficiency, competition, 

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

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

19 15 U.S.C. 78k–1(a)(1)(C)(iii). 

20The normal trading hours for Futures Contracts 

may begin after 9:30 a.m. and end before 4 p.m. 

E.T., and there is a gap in time at the beginning and 

the end of each day during which the Underlying 

Funds’ shares are traded on the Exchange but realtime trading prices for at least some of the Futures 

Contracts held by the Underlying Funds are not 

available. As a result, during those gaps there will 

be no update to the IFVs of the Underlying Funds 

holding such Futures Contracts, and such IFVs will 

be static. 

21The NAV for the Fund will be calculated by 

taking the current market value of the Fund’s total 

assets and subtracting any liabilities. The 

Administrator will calculate the NAV of the Fund 

as of the earlier of the close of the New York Stock 

Exchange or 4 p.m. E.T. The NAV for a particular 

trading day will be released after 4:15 p.m. E.T. 

of which the Fund calculates its NAV, 

and B is the average daily change in the 

Underlying Fund Average over the same 

period.12

The Sponsor will employ a ‘‘neutral’’ 

investment strategy intended so that the 

Fund will track the changes in the 

Underlying Fund Average and each 

Underlying Fund will track the changes 

in its Benchmark regardless of whether 

the Underlying Fund Average or 

Benchmark goes up or down. According 

to the Registration Statement, the 

Fund’s and Underlying Funds’ 

‘‘neutral’’ investment strategies are 

designed to permit investors generally 

to purchase and sell the Fund’s Shares 

for the purpose of investing indirectly in 

the agricultural commodities market in 

a cost-effective manner. Such investors 

may include participants in agricultural 

industries and other industries seeking 

to hedge the risk of losses in their 

commodity-related transactions, as well 

as investors seeking exposure to the 

agricultural commodities market. The 

Sponsor does not intend to operate the 

Fund or an Underlying Fund in a 

fashion such that its per share NAV will 

equal, in dollar terms, the spot price of 

a unit of a Specified Commodity or the 

price of any particular Futures Contract. 

The Exchange represents that the 

Fund will meet the initial and 

continued listing requirements 

applicable to Trust Issued Receipts in 

NYSE Arca Equities Rule 8.200 and 

Commentary .02 thereto. The Exchange 

further represents that, with respect to 

application of Rule 10A–3 under the 

Act,13 the Trust will rely on the 

exception contained in Rule 10A– 

3(c)(7),14 and a minimum of 100,000 

Shares for the Fund will be outstanding 

as of the start of trading on the 

Exchange. 

Additional details regarding the Trust; 

Fund; Shares; Underlying Funds; 

Commodity Interests and other aspects 

of the applicable commodities markets; 

trading policies of the Fund; creations 

and redemptions of the Shares; 

Underlying Fund Average and 

Underlying Fund Benchmarks; 

investment risks; fees; NAV calculation; 

the dissemination and availability of 

information about the underlying assets 

of the Fund and the Underlying Funds; 

trading halts; applicable trading rules; 

surveillance; and the Information 

Bulletin, among other things, can be 

found in the Notice and/or the 

Registration Statement,15 as applicable, 

and the registration statements relating 

to the Underlying Funds and the 

releases approving the listing and 

trading of the Underlying Funds, as 

applicable.16

III. Discussion and Commission’s 

Findings 

After careful review, the Commission 

finds that the proposed rule change to 

list and trade the Shares of the Fund is 

consistent with the requirements of 

Section 6 of the Act and the rules and 

regulations thereunder applicable to a 

national securities exchange.17 In 

particular, the Commission finds that 

the proposed rule change is consistent 

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

of the Act,18 which requires, among 

other things, that the Exchange’s rules 

be 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, to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. The Commission notes 

that the Fund and the Shares must 

comply with the requirements of NYSE 

Arca Equities Rule 8.200 and 

Commentary .02 thereto to be listed and 

traded on the Exchange. 

The Commission finds that the 

proposal to list and trade the Shares on 

the Exchange is consistent with Section 

11A(a)(1)(C)(iii) of the Act,19 which sets 

forth Congress’s finding that it is in the 

public interest and appropriate for the 

protection of investors and the 

maintenance of fair and orderly markets 

to assure the availability to brokers, 

dealers, and investors of information 

with respect to quotations for, and 

transactions in, securities. Quotation 

and last-sale information regarding the 

Shares and shares of the Underlying 

Funds will be disseminated through the 

facilities of the Consolidated Tape 

Association. In addition, the Underlying 

Fund Average and each Benchmark will 

be disseminated by one or more major 

market data vendors every 15 seconds 

during the NYSE Arca Core Trading 

Session of 9:30 a.m. to 4 p.m. Eastern 

Time (‘‘E.T.’’). In addition, an updated 

Indicative Fund Value (‘‘IFV’’) for the 

Fund, which is calculated by using the 

prior day’s closing NAV per Share of the 

Fund as a base and updating that value 

throughout the NYSE Arca Core Trading 

Session to reflect changes in the value 

of the Underlying Funds’ shares, and 

updated IFVs for each Underlying Fund 

will be widely disseminated on a pershare basis by one or more major market 

data vendors every 15 seconds during 

the NYSE Arca Core Trading Session.20

The NAV for the Fund will be 

calculated by the Administrator once 

each trading day and will be 

disseminated daily to all market 

participants at the same time.21 The 

Fund will provide Web site disclosure 

of portfolio holdings daily and will 

include, as applicable, the names, 

quantity, price, and market value of the 

Underlying Funds held by the Fund, 

and other financial instruments, if any, 

and the characteristics of such 

instruments and cash equivalents, and 

amount of cash held in the portfolio of 

the Fund. In addition, the Underlying 

Funds provide Web site disclosure of 

their respective portfolio holdings daily 

and include the names, quantity, price 

and market value of such holdings and 

the characteristics of such holdings. The 

closing price and settlement prices of 

the corn, wheat and soybean Futures 

Contracts are readily available from 

CBOT, and of sugar Futures Contracts 

from ICE Futures, and on other 

automated quotation systems, published 

or other public sources, or on-line 

information services. The Exchange 

represents that quotation and last sale 

information for the corn, wheat, soybean 

and sugar Futures Contracts are widely 

disseminated through a variety of major 

market data vendors worldwide, 

including Bloomberg and Reuters. In 

addition, the Exchange further 

represents that complete real-time data 

for such contracts is available by 

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12634 Federal Register / Vol. 77, No. 41 / Thursday, March 1, 2012 / Notices 

22The Exchange also notes that, for each of the 

Underlying Funds, the Exchange may halt trading 

during the day in which an interruption to the 

dissemination of the IFV or the value of the 

applicable Benchmark Component Futures 

Contracts or Benchmark occurs. 

23With 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. Trading in the Shares of the Fund will 

be subject to halts caused by extraordinary market 

volatility pursuant to the Exchange’s circuit breaker 

rules in NYSE Arca Equities Rule 7.12. 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. 

24See NYSE Arca Equities Rule 1.1(n) (defining 

ETP Holder). 

25See NYSE Arca Equities Rule 1.1(u) (defining 

Market Maker). 

26See supra notes 13 and 14 and accompanying 

text. 

27The Commission notes that it does not regulate 

the market for futures in which the Fund and the 

Underlying Funds plan to take positions, which is 

the responsibility of the CFTC. The CFTC has the 

authority to set limits on the positions that any 

person may take in futures. These limits may be 

directly set by the CFTC or by the markets on which 

the futures are traded. The Commission has no role 

in establishing position limits on futures, even 

though such limits could impact an exchangetraded product that is under the jurisdiction of the 

Commission. 

subscription from Reuters and 

Bloomberg. CBOT and ICE Futures also 

provide delayed futures information on 

current and past trading sessions and 

market news free of charge on their Web 

sites. The specific contract 

specifications for such contracts are also 

available at the CBOT and ICE Futures 

Web sites, as well as other financial 

informational sources. The spot prices 

of corn, wheat, soybeans, and sugar are 

also available on a 24-hour basis from 

major market data vendors. In addition, 

the Web site for the Fund and/or the 

Exchange will contain the prospectus 

and additional data relating to NAV and 

other applicable quantitative 

information. 

The Commission further believes that 

the proposal to list and trade the Shares 

is reasonably designed to promote fair 

disclosure of information that may be 

necessary to price the Shares 

appropriately and to prevent trading 

when a reasonable degree of 

transparency cannot be assured. If the 

Exchange becomes aware that the NAV 

with respect to the Shares is not 

disseminated to all market participants 

at the same time, it will halt trading in 

the Shares until such time as the NAV 

is available to all market participants. 

Further, the Exchange represents that it 

may halt trading during the day in 

which an interruption to the 

dissemination of the IFV or the 

Underlying Fund Average or the value 

of the applicable Benchmark 

Component Futures Contracts or the 

applicable Benchmark occurs. If the 

interruption to the dissemination of the 

IFV, the Underlying Fund Average, the 

value of the applicable Benchmark 

Component Futures Contracts, or the 

applicable Benchmark persists past the 

trading day in which it occurred, the 

Exchange will halt trading no later than 

the beginning of the trading day 

following the interruption.22 In 

addition, the Web site disclosure of the 

portfolio composition of the Fund will 

occur at the same time as the disclosure 

by the Sponsor of the portfolio 

composition to Authorized Purchasers 

so that all market participants are 

provided portfolio composition 

information at the same time. Therefore, 

the same portfolio information will be 

provided on the public Web site as well 

as in electronic files provided to 

Authorized Purchasers. Accordingly, 

each investor will have access to the 

current portfolio composition of the 

Fund and each Underlying Fund 

through the applicable fund’s Web sites. 

The Exchange may halt trading in the 

Shares if trading is not occurring in the 

Futures Contracts or shares of the 

Underlying Funds, or if other unusual 

conditions or circumstances detrimental 

to the maintenance of a fair and orderly 

market are present.23 The Exchange 

states that it has a general policy 

prohibiting the distribution of material, 

non-public information by its 

employees. Lastly, the trading of the 

Shares will be subject to NYSE Arca 

Equities Rule 8.200, Commentary .02(e), 

which sets forth certain restrictions on 

ETP Holders 24 acting as registered 

Market Makers 25 in Trust Issued 

Receipts to facilitate surveillance. 

The Exchange has represented that 

the Shares are deemed to be equity 

securities, thus rendering trading in the 

Shares subject to the Exchange’s 

existing rules governing the trading of 

equity securities. In support of this 

proposal, the Exchange has made 

representations, including: 

(1) The Fund will meet the initial and 

continued listing requirements 

applicable to Trust Issued Receipts in 

NYSE Arca Equities Rule 8.200 and 

Commentary .02 thereto. 

(2) The Exchange has appropriate 

rules to facilitate transactions in the 

Shares during all trading sessions. 

(3) The Exchange’s surveillance 

procedures applicable to derivative 

products, including Trust Issued 

Receipts, are adequate to properly 

monitor Exchange trading of the Shares 

in all trading sessions and to deter and 

detect violations of Exchange rules and 

applicable federal securities laws. 

(4) To the extent that the Fund invests 

in Futures Contracts, not more than 

10% of the weight of such Futures 

Contracts in the aggregate shall consist 

of components whose principal trading 

market is not a member of the 

Intermarket Surveillance Group (‘‘ISG’’) 

or is a market with which the Exchange 

does not have a comprehensive 

surveillance sharing agreement. In 

addition, with respect to the Underlying 

Funds’ Futures Contracts traded on 

exchanges, not more than 10% of the 

weight of such Futures Contracts in the 

aggregate shall consist of components 

whose principal trading market is not a 

member of the ISG or is a market with 

which the Exchange does not have a 

comprehensive surveillance sharing 

agreement. With respect to the 

Underlying Funds, which are listed and 

traded on the Exchange, the Exchange 

can obtain market surveillance 

information from CBOT, NYMEX, and 

ICE Futures, which are ISG members, 

and from Kansas City Board of Trade 

(‘‘KCBT’’) and Minneapolis Grain 

Exchange (‘‘MGEX’’) in that the 

Exchange has in place a comprehensive 

surveillance sharing agreement with 

KCBT and MGEX. 

(5) Prior to the commencement of 

trading, the Exchange will inform its 

ETP Holders in an Information Bulletin 

of the special characteristics and risks 

associated with trading the Shares. 

Specifically, the Information Bulletin 

will discuss the following: (a) The risks 

involved in trading the Shares during 

the Opening and Late Trading Sessions 

when an updated IFV will not be 

calculated or publicly disseminated; (b) 

the procedures for purchases and 

redemptions of Shares in creation 

baskets and redemption baskets (and 

that Shares are not individually 

redeemable); (c) 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; (d) 

how information regarding the IFV is 

disseminated; (e) the requirement that 

ETP Holders deliver a prospectus to 

investors purchasing newly issued 

Shares prior to or concurrently with the 

confirmation of a transaction; and (f) 

trading information. 

(6) A minimum of 100,000 Shares for 

the Fund will be outstanding as of the 

start of trading on the Exchange. 

(7) With respect to the application of 

Rule 10A–3 under the Act, the Trust 

will rely on the exception contained in 

Rule 10A–3(c)(7).26

This approval order is based on all of 

the Exchange’s representations.27 The 

Commission notes that the Fund will 

primarily invest in shares of the 

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Federal Register / Vol. 77, No. 41 / Thursday, March 1, 2012 / Notices 12635 

28See supra note 6. 

29 15 U.S.C. 78f(b)(5). 

30 15 U.S.C. 78s(b)(2). 

31 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). 

5See also NASD Rules 1041 and 1050 and FINRA 

Rule 1230(b)(6) regarding the qualification and 

registration requirements for Order Processing 

Assistant Representatives, Research Analysts and 

Operations Professionals, respectively. 

6PROCTOR is a computer system that is 

specifically designed for the administration and 

delivery of computer-based testing and training. 

7The delivery fee represents a portion of the 

entire examination fee when a FINRA client has 

established an additional fee for an examination 

that it sponsors. For example, the fee to take the 

Series 51 (Municipal Fund Securities Limited 

Principal) examination is currently $145. Of this 

amount, $85 is the FINRA administration and 

delivery fee, and $60 is the development fee 

determined by the FINRA client, the MSRB. See 

MSRB Rule A–16. 

Underlying Funds, which have been 

approved for listing and trading on the 

Exchange by the Commission.28

For the foregoing reasons, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act 29 and the rules and 

regulations thereunder applicable to a 

national securities exchange. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,30 that the 

proposed rule change (SR–NYSEArca– 

2011–97) be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.31

Kevin M. O’Neill, 

Secretary. 

[FR Doc. 2012–4915 Filed 2–29–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66465; File No. SR–FINRA– 

2012–009] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Section 4(c) of 

Schedule A to the FINRA By-Laws To 

Increase Qualification Examination 

Fees and Assess a Service Charge for 

Regulatory Element Continuing 

Education Sessions Taken Outside the 

United States 

February 24, 2012. 

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 February 

23, 2012, Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I, II 

and III below, which Items have been 

prepared by FINRA. FINRA has 

designated the proposed rule change as 

‘‘establishing or changing a due, fee or 

other charge’’ under Section 

19(b)(3)(A)(ii) of the Act 3 and Rule 19b– 

4(f)(2) thereunder,4 which renders the 

proposal effective upon receipt of this 

filing by 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 the Substance 

of the Proposed Rule Change 

FINRA is proposing to amend Section 

4(c) of Schedule A to the FINRA ByLaws to (1) increase qualification 

examination fees, and (2) assess a 

service charge for any Regulatory 

Element sessions taken in a test center 

located outside the territorial limits of 

the United States. The text of the 

proposed rule change is available on 

FINRA’s Web site at http:// 

www.finra.org, at the principal office of 

FINRA 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, 

FINRA 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. FINRA 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 

As discussed in further detail below, 

the proposed rule change amends 

Section 4(c) of Schedule A to the FINRA 

By-Laws to (1) increase qualification 

examination fees, and (2) assess a 

service charge for any Regulatory 

Element session taken in a test center 

located outside the territorial limits of 

the United States. 

Qualification Examination Fees 

NASD Rules 1021(a) and 1031(a) 

require that persons engaged, or to be 

engaged, in the investment banking or 

securities business of a FINRA member 

who are to function as principals or 

representatives register with FINRA in 

each category of registration appropriate 

to their functions as specified in NASD 

Rules 1022 and 1032.5 Such individuals 

must pass an appropriate qualification 

examination before their registration can 

become effective. These mandatory 

qualification examinations cover a 

broad range of subjects regarding 

financial markets and products, 

individual responsibilities, securities 

industry rules, and regulatory structure. 

FINRA develops, maintains, and 

delivers all qualification examinations 

for individuals who are registered or 

seeking registration with FINRA. FINRA 

also administers and delivers 

examinations sponsored (i.e., 

developed) by the Municipal Securities 

Rulemaking Board (‘‘MSRB’’), the North 

American Securities Administrators 

Association, the National Futures 

Association, the Federal Deposit 

Insurance Corporation, and other selfregulatory organizations. 

FINRA currently administers 

examinations via computer through the 

PROCTOR® system 6 at testing centers 

operated by vendors under contract 

with FINRA. FINRA charges an 

examination fee to candidates for 

FINRA-sponsored and co-sponsored 

examinations to cover the development, 

maintenance, and delivery of these 

examinations. For qualification 

examinations sponsored by a FINRA 

client and administered by FINRA, 

FINRA charges a delivery fee that 

represents either a portion of or the 

entire examination fee for the 

examination.7

FINRA regularly conducts a 

comprehensive review of the 

examination fee structure, including an 

analysis of the costs associated with 

developing, administering, and 

delivering examinations. Based on the 

results of its review, FINRA may 

propose changes to better align the 

examination fee structure with the costs 

associated with the programs. In this 

regard, the most recent review revealed 

that certain operational costs have 

increased and, based on current 

information, will continue to increase 

over the next few years. In particular, 

these costs consist of (1) fees that 

vendors charge FINRA for delivering 

qualification examinations, and (2) 

PROCTOR maintenance and 

enhancement expenses. FINRA believes 

that the proposed rule change will help 

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