Federal Register / Vol. 77, No. 44 / Tuesday, March 6, 2012 / Notices 13383 

27See Nasdaq Rule 5735(g), supra note 8 and 

accompanying text. The Commission notes that an 

investment adviser to an open-end fund is required 

to be registered under the Investment Advisers Act 

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

and Sub-Adviser and their related personnel are 

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 non-public information by an 

investment adviser must be consistent with Rule 

204A–1 under the Advisers Act. 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. 

28See Nasdaq Rule 5735(d)(2)(B)(ii). 

29The Exchange states that FINRA surveils 

trading on Nasdaq pursuant to a regulatory services 

agreement. Nasdaq is responsible for FINRA’s 

performance under this regulatory services 

agreement. 

30See 17 CFR 240.10A–3. 

31 15 U.S.C. 78f(b)(5). 

32 15 U.S.C. 78s(b)(2). 

33 17 CFR 200.30–3(a)(12). 

represents that the Sub-Adviser is 

affiliated with multiple broker-dealers 

and has implemented a ‘‘fire wall’’ with 

respect to such broker-dealers regarding 

access to information concerning the 

composition and/or changes to the 

Fund’s portfolio.27 Further, the 

Commission notes that the Reporting 

Authority that provides the Disclosed 

Portfolio must implement and maintain, 

or be subject to, procedures designed to 

prevent the use and dissemination of 

material non-public information 

regarding the actual components of the 

portfolio.28 The Exchange states that it 

prohibits the distribution of material, 

non-public information by its 

employees. 

The Exchange represents 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 Shares will be subject to 

Nasdaq Rule 5735, which sets forth the 

initial and continued listing criteria 

applicable to Managed Fund Shares. 

(2) The Exchange has appropriate 

rules to facilitate transactions in the 

Shares during all trading sessions. 

(3) Trading of the Shares will be 

subject to the Financial Industry 

Regulatory Authority’s (‘‘FINRA’’) 

surveillance procedures for derivative 

products, including Managed Fund 

Shares.29 The Exchange’s surveillance 

procedures are adequate to properly 

monitor the trading of the Shares on 

Nasdaq during all trading sessions and 

to deter and detect violations of 

Exchange rules and the applicable 

federal securities laws. 

(4) Prior to the commencement of 

trading, the Exchange will inform its 

members in an Information Circular of 

the special characteristics and risks 

associated with trading the Shares. 

Specifically, the Information Circular 

will discuss the following: (a) The 

procedures for purchases and 

redemptions of Shares in Creation Units 

(and that Shares are not individually 

redeemable); (b) Nasdaq Rule 2310, 

which imposes suitability obligations on 

Nasdaq members with respect to 

recommending transactions in the 

Shares to customers; (c) how 

information regarding the Intraday 

Indicative Value is disseminated; (d) the 

risks involved in trading the Shares 

during the Pre-Market and Post-Market 

Sessions when an updated Intraday 

Indicative Value will not be calculated 

or publicly disseminated; (e) the 

requirement that members deliver a 

prospectus to investors purchasing 

newly issued Shares prior to or 

concurrently with the confirmation of a 

transaction; and (f) trading information. 

(5) For initial and/or continued 

listing, the Fund must be in compliance 

with Rule 10A–3 under the Act.30

(6) The Fund may hold up to an 

aggregate amount of 15% of its net 

assets in (a) illiquid securities, (b) Rule 

144A securities, and (c) loan interests 

(such as loan participations and 

assignments, but not including LPNs). 

(7) The Fund will not invest in any 

non-U.S. registered equity securities. 

(8) The Fund expects that no more 

than 20% of the value of the Fund’s net 

assets will be invested in derivative 

instruments. Such investments will be 

consistent with the Fund’s investment 

objective and will not be used to 

enhance leverage. 

(9) A minimum of 100,000 Shares will 

be outstanding at the commencement of 

trading on the Exchange. 

This approval order is based on all of 

the Exchange’s representations. 

For the foregoing reasons, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act 31 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,32 that the 

proposed rule change (SR–NASDAQ– 

2012–004) be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.33

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–5367 Filed 3–5–12; 8:45 am] 

BILLING CODE 8011–01–P 

STATE DEPARTMENT 

[Public Notice: 7604] 

Foreign Affairs Policy Board Meeting 

Notice; Closed Meeting 

In accordance with section 10(a)(2) of 

the Federal Advisory Committee Act, 5 

U.S.C. App. 10(a)(2), the Department of 

State announces a meeting of the 

Foreign Affairs Policy Board to take 

place on March 19, 2012, at the 

Department of State, Washington, DC. 

The Foreign Affairs Policy Board 

reviews and assesses: (1) Global threats 

and opportunities; (2) trends that 

implicate core national security 

interests; (3) tools and capacities of the 

civilian foreign affairs agencies; and (4) 

priorities and strategic frameworks for 

U.S. foreign policy. Pursuant to section 

10(d) of the Federal Advisory 

Committee Act, 5 U.S.C. App. 10(d), and 

5 U.S.C. 552b(c)(1), it has been 

determined that this meeting will be 

closed to the public as the Board will be 

reviewing and discussing matters 

properly classified in accordance with 

Executive Order 13526. 

For more information, contact 

Samantha Raddatz at (202) 647–2372. 

This announcement might appear in the 

Federal Register less than 15 days prior 

to the advisory committee meeting. The 

Department of State finds: (1) That there 

is an exceptional circumstance to hold 

this meeting with less than a 15-day 

notice, in that a senior government 

official must address this committee 

meeting, and (2) further postponing this 

meeting to accommodate this official’s 

schedule would result in an 

unacceptable delay in the work of this 

advisory committee. 

Dated: February 29, 2012. 

Dan Kurtz-Phelan, 

Designated Federal Officer. 

[FR Doc. 2012–5407 Filed 3–5–12; 8:45 am] 

BILLING CODE 4710–10–P 


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