Federal Register / Vol. 77, No. 64 / Tuesday, April 3, 2012 / Notices 20087 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 66381 

(February 10, 2012), 77 FR 9281 (‘‘Notice’’). 

4The Trust is registered under the Investment 

Company Act of 1940 (‘‘1940 Act’’). On February 

14, 2011, the Trust filed with the Commission PostEffective Amendment No. 25 under the Securities 

Act of 1933 (15 U.S.C. 77a) (‘‘Securities Act’’) and 

Amendment No. 27 under the 1940 Act to the 

Trust’s registration statement on Form N–1A 

relating to the Fund. On October 28, 2011, the Trust 

filed with the Commission Post-Effective 

Amendment No. 43 under the Securities Act and 

Amendment No. 45 under the 1940 Act to the 

Trust’s registration statement on Form N–1A 

relating to the Fund (File Nos. 333–155395 and 

811–22250) (‘‘Registration Statement’’). In addition, 

the Commission has issued an order granting 

certain exemptive relief to the Trust under the 1940 

Act. See Investment Company Act Release No. 

28993 (November 10, 2009) (File No. 812–13571) 

(‘‘Exemptive Order’’). 

5See NYSE Arca Equities Rule 8.600, 

Commentary .06. In the event (a) the Adviser or any 

sub-adviser becomes newly affiliated with a brokerdealer, or (b) any new adviser or sub-adviser 

becomes affiliated with a broker-dealer, it will 

implement a fire wall with respect to such brokerdealer regarding access to information concerning 

the composition and/or changes to the portfolio, 

and will be subject to procedures designed to 

prevent the use and dissemination of material nonpublic information regarding such portfolio. 

6The term ‘‘under normal circumstances’’ 

includes, but is not limited to, the absence of 

extreme volatility or trading halts in the fixed 

income 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. 

7PIMCO generally considers an instrument to be 

economically tied to a non-U.S. country if the issuer 

is a foreign government (or any political 

subdivision, agency, authority or instrumentality of 

such government), or if the issuer is organized 

under the laws of a non-U.S. country. In the case 

of certain money market instruments, such 

instruments will be considered economically tied to 

a non-U.S. country if either the issuer or the 

guarantor of such money market instrument is 

organized under the laws of a non-U.S. country. 

8Each country’s approximate weighting within 

the global inflation-linked bond market, as reflected 

by the approximate weighting of the Barclays 

Capital Universal Government Inflation-Linked 

Bond Index (the Fund’s primary benchmark), as of 

January 31, 2011, is as follows: U.S. 32%, U.K. 

19%, France 11%, Brazil 10%, Italy 7%, Canada 

2%, Germany 3%, Japan 3%, Mexico 2%, Sweden 

2%, Turkey 2%, Argentina 1%, Australia 1%, 

Greece 1%, South Africa 1%, Chile <1%, Poland 

<1%, Colombia <1%, and South Korea <1%. Each 

country’s approximate value of outstanding 

inflation-linked bonds also as of January 31, 2011, 

is as follows (in $ billions): U.S. $642.7, U.K. 

$392.2, France $222.0, Brazil $209.6, Italy $143.2, 

Canada $49.9, Germany $60.9, Japan $57.0, Mexico 

$45.7, Sweden $39.1, Turkey $45.9, Argentina 

$20.0, Australia $17.7, Greece $11.8, South Africa 

$26.4, Chile $8.2, Poland $5.5, Colombia $2.7, and 

South Korea $3.4. 

9The term ‘‘Fixed Income Instruments’’ includes: 

securities issued or guaranteed by the U.S. 

Government, its agencies or government-sponsored 

enterprises (‘‘U.S. Government Securities’’); 

corporate debt securities of U.S. and non-U.S. 

issuers, including convertible securities and 

corporate commercial paper; mortgage-backed and 

other asset-backed securities; inflation-indexed 

bonds issued both by governments and 

corporations; structured notes, including hybrid or 

‘‘indexed’’ securities and event-linked bonds; bank 

capital and trust preferred securities; loan 

participations and assignments; delayed funding 

loans and revolving credit facilities; bank 

certificates of deposit, fixed time deposits and 

bankers’ acceptances; repurchase agreements on 

Fixed Income Instruments and reverse repurchase 

agreements on Fixed Income Instruments; debt 

securities issued by states or local governments and 

their agencies, authorities and other governmentsponsored enterprises; obligations of non-U.S. 

governments or their subdivisions, agencies and 

government-sponsored enterprises; and obligations 

of international agencies or supranational entities. 

Securities issued by U.S. Government agencies or 

government-sponsored enterprises may not be 

guaranteed by the U.S. Treasury. 

10The value of inflation-linked bonds is expected 

to change in response to changes in real interest 

rates. Real interest rates are tied to the relationship 

between nominal interest rates and the rate of 

inflation. If nominal interest rates increase at a 

faster rate than inflation, real interest rates may rise, 

Continued 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66670; File No. SR– 

NYSEArca–2012–09] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Granting Approval of 

Proposed Rule Change Relating to the 

Listing and Trading of the PIMCO 

Global Advantage Inflation-Linked 

Bond Strategy Fund Under NYSE Arca 

Equities Rule 8.600 

March 28, 2012. 

I. Introduction 

On January 27, 2012, 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’’ or 

‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

list and trade shares (‘‘Shares’’) of the 

PIMCO Global Advantage InflationLinked Bond Strategy Fund (‘‘Fund’’) 

under NYSE Arca Equities Rule 8.600. 

The proposed rule change was 

published for comment in the Federal 

Register on February 16, 2012.3 The 

Commission received no comments on 

the proposed rule change. This order 

grants approval of the proposed rule 

change. 

II. Description of the Proposed Rule 

Change 

The Exchange proposes to list and 

trade Shares of the Fund pursuant to 

NYSE Arca Equities Rule 8.600, which 

governs the listing and trading of 

Managed Fund Shares on the Exchange. 

The Shares will be offered by PIMCO 

ETF Trust (‘‘Trust’’),4 a statutory trust 

organized under the laws of the State of 

Delaware and registered with the 

Commission as an open-end 

management investment company. The 

investment manager of the Fund is 

Pacific Investment Management 

Company LLC (‘‘PIMCO’’ or ‘‘Adviser’’). 

State Street Bank & Trust Co. is the 

custodian and transfer agent for the 

Fund, and PIMCO Investments LLC is 

the distributor for the Fund. The 

Exchange states that the Adviser is 

affiliated with a broker-dealer and, as 

such, represents that the Adviser has 

implemented a fire wall with respect to 

its broker-dealer affiliate regarding 

access to information concerning the 

composition and/or changes to the 

Fund’s portfolio.5

PIMCO Global Advantage InflationLinked Bond Strategy Fund 

The Fund seeks total return which 

exceeds that of its benchmark indexes, 

consistent with prudent investment 

management. The Fund’s primary 

benchmark index is the Barclays Capital 

Universal Government Inflation-Linked 

Bond Index. The Fund’s secondary 

benchmark index is the PIMCO Global 

Advantage Inflation-Linked Bond Index. 

The Fund seeks to achieve its 

investment objective by investing under 

normal circumstances 6 at least 80% of 

its assets in a portfolio of inflationlinked bonds that is economically tied 

to at least three developed and/or 

emerging market countries (one of 

which may be the United States). The 

Fund’s holdings may include bonds 

issued by issuers in both developed 

and/or emerging market countries, and 

the Fund is expected to hold bonds of 

issuers that are economically tied 7 to 

many of the countries represented in the 

Fund’s primary benchmark index.8

Assets not invested in inflation-linked 

bonds may be invested in other types of 

Fixed Income Instruments.9

Inflation-linked bonds are 

government-issued fixed income 

securities that are structured to provide 

protection against inflation. The value 

of the bond’s principal or the interest 

income paid on the bond is adjusted to 

track changes in an official inflation 

measure. The effective duration of the 

Fund’s portfolio normally varies within 

two years (plus or minus) of the 

effective duration of the PIMCO Global 

Advantage Inflation-Linked Bond Index 

which, as of September 30, 2011, as 

converted, was 4.53 years. 

The Fund will invest under normal 

circumstances at least 80% of its assets 

in inflation-linked bonds issued by U.S. 

or foreign governments (or any political 

subdivision, agency, authority or 

instrumentality of such government).10

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20088 Federal Register / Vol. 77, No. 64 / Tuesday, April 3, 2012 / Notices 

leading to a decrease in value of inflation-linked 

bonds. 

11The value of the global inflation-linked bond 

market is calculated based on the total outstanding 

value of issues included in the Barclays Capital 

Universal Government Inflation-Linked Bond Index 

that are not expiring in less than one year. 

12The Adviser represents that, in selecting 

securities for the Fund, PIMCO will develop an 

outlook for interest rates, currency exchange rates 

and the economy, analyze credit and call risks, and 

use other security selection techniques. The 

proportion of the Fund’s assets committed to 

investment in securities with particular 

characteristics (such as quality, sector, interest rate 

or maturity) will vary based on PIMCO’s outlook for 

the U.S. economy and the economies of other 

countries in the world, the financial markets, and 

other factors. Sophisticated proprietary software 

will assist in evaluating sectors, pricing and rating 

specific securities. Once investment opportunities 

are identified, PIMCO will shift assets among 

sectors and securities depending upon changes in 

relative valuations and credit spreads in a manner 

consistent with the Fund’s objective and strategies. 

To the extent the Fund invests in unrated securities 

that PIMCO determines to be of comparable quality 

to rated securities that the Fund may purchase, the 

Fund’s ability to achieve its objective may depend 

more heavily on PIMCO’s creditworthiness analysis 

than if the Fund invested exclusively in rated 

securities. 

13The Fund may engage in these transactions 

primarily to: (1) Protect against uncertainty in the 

level of future foreign exchange rates in the 

purchase and sale of securities; or (2) lower 

currency deviations relative to the Fund’s 

benchmark indexes. 

14The Fund’s policy with respect to the 

concentration of investments in a particular 

industry is disclosed in the Trust’s Registration 

Statement. 

15The minimum number of inflation-linked 

bonds and other Fixed Income Instruments and 

issuers in which the Fund may invest at any one 

time depends in part upon the number of securities 

or issuers comprising the Fund’s benchmark 

indexes. In seeking to achieve its investment 

objective, the Fund’s portfolio will consist of at 

least twenty-five (25) inflation-linked bonds and 

other Fixed Income Instruments on any given day, 

but the Fund may regularly invest in fifty (50) or 

more inflation-linked bonds and other Fixed 

Income Instruments at a time in seeking to achieve 

its investment objective. The Fund’s portfolio will 

hold issues of at least 13 non-affiliated issuers. 

16 17 CFR 240.10A–3. 

17See Notice and Registration Statement, supra 

notes 3 and 4, respectively. 

The secondary benchmark includes a 

liquidity screen to remove inflationlinked bonds issued by governments of 

countries with cumulative inflationlinked bond issuances below $7 billion 

local currency equivalent, in addition to 

liquidity screens at the issue level. The 

Exchange represents that the global 

inflation-linked bond market exceeded 

$2.25 trillion as of December 31, 2011.11

The Fund primarily will invest in 

debt securities rated Baa or higher by 

Moody’s Investors Service, Inc., or 

equivalently rated by Standard & Poor’s 

Ratings Services or Fitch, Inc., or, if 

unrated, determined by PIMCO to be of 

comparable quality.12 The Fund may 

obtain foreign currency exposure (from 

non-U.S. dollar denominated debt 

securities or currencies) without 

limitation. The Fund may purchase and 

sell debt securities on a when-issued, 

delayed delivery or forward 

commitment basis. The Fund may, 

without limitation, seek to obtain 

market exposure to the securities in 

which it primarily invests by entering 

into a series of purchase and sale 

contracts or by using other investment 

techniques (such as buy backs or dollar 

rolls). The Fund may invest, without 

limitation, in debt securities and 

instruments of foreign government 

issuers, including debt securities and 

instruments economically tied to 

emerging market countries. 

Other Portfolio Holdings 

If PIMCO believes that economic or 

market conditions are unfavorable to 

investors, PIMCO may temporarily 

invest up to 100% of the Fund’s assets 

in certain defensive strategies, including 

holding a substantial portion of the 

Fund’s assets in cash, cash equivalents, 

or other highly rated short-term 

securities, including securities issued or 

guaranteed by the U.S. government, its 

agencies or instrumentalities, and 

affiliated money market and/or shortterm bond funds. 

The Fund may invest in, to the extent 

permitted by Section 12(d)(1) of the 

1940 Act and rules thereunder, other 

affiliated and unaffiliated funds, such as 

open-end or closed-end management 

investment companies, including other 

exchange traded funds. In addition, the 

Fund may enter into foreign currency 

transactions (such as currency 

forwards).13

The Fund may hold in the aggregate 

up to 15% of its net assets in: (1) Illiquid 

securities, which include delayed 

funding loans, revolving credit facilities, 

fixed- and floating-rate loans, and loan 

participations and assignments, and (2) 

Rule 144A securities. Certain illiquid 

securities may require pricing at fair 

value as determined in good faith under 

the supervision of the Fund’s Board of 

Trustees. The term ‘‘illiquid securities’’ 

for this purpose means securities that 

cannot be disposed of within seven days 

in the ordinary course of business at 

approximately the amount at which the 

Fund has valued the securities. 

With respect to its equity securities 

investments, the Fund will invest only 

in U.S. registered equity securities and 

non-U.S.-registered equity securities 

that trade in markets that are members 

of the Intermarket Surveillance Group 

(‘‘ISG’’) or are parties to a 

comprehensive surveillance sharing 

agreement with the Exchange. 

Investment Limitations 

The Fund is subject to the following 

investment limitations: 

The Fund may not concentrate its 

investments in a particular industry, as 

that term is used in the 1940 Act, and 

as interpreted, modified, or otherwise 

permitted by regulatory authority 

having jurisdiction from time to time.14

The Fund will be non-diversified, 

which means that it may invest its 

assets in a smaller number of issuers 

than a diversified fund.15

The Fund intends to qualify annually 

and elect to be treated as a regulated 

investment company under Subchapter 

M of the Internal Revenue Code. 

Consistent with the Exemptive Order, 

the Fund will not invest in options 

contracts, futures contracts, or swap 

agreements. 

The Fund’s investments will be 

consistent with the Fund’s investment 

objective and will not be used to 

enhance leverage. That is, while the 

Fund will be permitted to borrow as 

permitted under the 1940 Act, the 

Fund’s investments will not be used to 

seek performance that is the multiple or 

inverse multiple of the Fund’s primary 

broad-based securities benchmark index 

(as defined in the Registration 

Statement, i.e., the Barclays Capital 

Universal Government Inflation-Linked 

Bond Index). 

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 

under the Exchange Act,16 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 (‘‘NAV’’) per Share will be 

calculated daily and that the NAV and 

the Disclosed Portfolio will be made 

available to all market participants at 

the same time. 

Additional information regarding the 

Trust, Fund, Shares, Fund’s investment 

strategies, risks, creation and 

redemption procedures, fees, portfolio 

holdings and disclosure policies, 

distributions and taxes, availability of 

information, trading rules and halts, and 

surveillance procedures, among other 

things, can be found in the Notice and/ 

or the Registration Statement, as 

applicable.17

III. Discussion and Commission’s 

Findings 

After careful review, the Commission 

finds that the proposed rule change is 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 77, No. 64 / Tuesday, April 3, 2012 / Notices 20089 

18 15 U.S.C. 78f. 

19 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). 

20 15 U.S.C. 78f(b)(5). 

21 15 U.S.C. 78k–1(a)(1)(C)(iii). 

22According to the Exchange, several major 

market data vendors display and/or make widely 

available Portfolio Indicative Values published on 

CTA or other data feeds. 

23On a daily basis, the Adviser will disclose for 

each portfolio security or other financial instrument 

of the Fund the following information: ticker 

symbol (if applicable), name of security or financial 

instrument, number of shares or dollar value of 

financial instruments held in the portfolio, and 

percentage weighting of the security or financial 

instrument in the portfolio. The Web site 

information will be publicly available at no charge. 

24See NYSE Arca Equities Rule 8.600(d)(1)(B). 

25See NYSE Arca Equities Rule 8.600(d)(2)(C) 

(providing additional considerations for the 

suspension of trading in or removal from listing of 

Managed Fund Shares on the Exchange). With 

respect to trading halts, the Exchange may consider 

other relevant factors in exercising its discretion to 

halt or suspend trading in the Shares of the Fund. 

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. 

26See NYSE Arca Equities Rule 8.600(d)(2)(B)(ii). 

27See supra note 5. 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 its 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 nonpublic 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. 

consistent with the requirements of 

Section 6 of the Act 18 and the rules and 

regulations thereunder applicable to a 

national securities exchange.19 In 

particular, the Commission finds that 

the proposed rule change is consistent 

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

of the Act,20 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 8.600 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,21 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 for the Shares 

will be available via the Consolidated 

Tape Association (‘‘CTA’’) high-speed 

line. In addition, the Portfolio Indicative 

Value, as defined in NYSE Arca Equities 

Rule 8.600(c)(3), will be widely 

disseminated by one or more major 

market data vendors at least every 15 

seconds during the Core Trading 

Session.22 On each business day, before 

commencement of trading in Shares in 

the Core Trading Session on the 

Exchange, the Fund will disclose on the 

Trust’s Web site the Disclosed Portfolio, 

as defined in NYSE Arca Equities Rule 

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

the Fund’s calculation of NAV at the 

end of the business day.23 The NAV of 

the Fund will normally be determined 

as of the close of the regular trading 

session on the New York Stock 

Exchange (‘‘NYSE’’), ordinarily 4 p.m. 

Eastern Time on each business day. 

Information regarding market price and 

trading volume of the Shares 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 for the Shares will 

be published daily in the financial 

section of newspapers. In addition, 

price information for the debt securities 

held by the Fund will be available 

through major market data vendors. The 

Trust’s Web site will include a form of 

the prospectus for the Fund 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. The 

Commission notes that the Exchange 

will obtain a representation from the 

issuer of the Shares that the NAV per 

Share will be calculated daily and that 

the NAV and the Disclosed Portfolio 

will be made available to all market 

participants at the same time.24 In 

addition, 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. The Exchange 

may halt trading in the Shares if trading 

is not occurring in the securities and/or 

the financial instruments comprising 

the Disclosed Portfolio of the Fund, or 

if other unusual conditions or 

circumstances detrimental to the 

maintenance of a fair and orderly 

market are present.25 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.26 The Exchange states that it 

has a general policy prohibiting the 

distribution of material, non-public 

information by its employees. The 

Exchange also states that the Adviser is 

affiliated with a broker-dealer, and the 

Adviser has implemented a fire wall 

with respect to its broker-dealer affiliate 

regarding access to information 

concerning the composition and/or 

changes to the portfolio.27

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 conform to the 

initial and continued listing criteria 

under NYSE Arca Equities Rule 8.600. 

(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, which include Managed Fund 

Shares, 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) Prior to the commencement of 

trading, the Exchange will inform its 

Equity Trading Permit Holders in an 

Information Bulletin of the special 

characteristics and risks associated with 

mstockstill on DSK4VPTVN1PROD with NOTICES

20090 Federal Register / Vol. 77, No. 64 / Tuesday, April 3, 2012 / Notices 

28 17 CFR 240.10A–3. 

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. 

3Section II of the Fee Schedule includes options 

overlying equities, ETFs, ETNs, indexes and 

HOLDRs which are Multiply Listed. 

4Section III of the Fee Schedule includes options 

overlying equities, ETFs, ETNs, indexes and 

HOLDRs which are not listed on another exchange. 

5RUT represents the options on the Russell 

2000® Index (the ‘‘Full Value Russell Index’’ or 

‘‘RUT’’). 

6MNX represents options on the one-tenth value 

of the Nasdaq 100 Index traded under the symbol 

MNX (‘‘MNX’’). 

7NDX represents options on the Nasdaq 100 

Index1 traded under the symbol NDX (‘‘NDX’’). 

8BKX represents the KBW Bank Index. 

trading the Shares. Specifically, the 

Information Bulletin will discuss the 

following: (a) The procedures for 

purchases and redemptions of Shares in 

Creation Unit aggregations (and that 

Shares are not individually redeemable); 

(b) 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; (c) 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; (d) how information 

regarding the Portfolio Indicative Value 

is disseminated; (e) the requirement that 

Equity Trading Permit Holders 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 will be in compliance 

with Rule 10A–3 under the Exchange 

Act,28 as provided by NYSE Arca 

Equities Rule 5.3. 

(6) The Fund will invest only in U.S.- 

registered equity securities and nonU.S.-registered equity securities that 

trade in markets that are members of the 

ISG or are parties to a comprehensive 

surveillance sharing agreement with the 

Exchange; the Fund’s investments will 

be consistent with its investment 

objective and will not be used to 

enhance leverage; and consistent with 

the Exemptive Order, the Fund will not 

invest in options contracts, futures 

contracts, or swap agreements. 

(7) The Fund may hold in the 

aggregate up to 15% of its net assets in: 

(a) Illiquid securities, which include 

delayed funding loans, revolving credit 

facilities, fixed- and floating-rate loans, 

and loan participations and 

assignments; and (b) Rule 144A 

securities. 

(8) A minimum of 100,000 Shares of 

the Fund 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 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– 

2012–09) 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, 

Deputy Secretary. 

[FR Doc. 2012–7913 Filed 4–2–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66668; File No. SR–Phlx– 

2012–35] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to the 

Equity Options Fees and Singly Listed 

Option Fee 

March 28, 2012. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that, on March 

16, 2012, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘Exchange’’) 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 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 

The Exchange proposes to amend: (i) 

Section II 3 of the Fee Schedule entitled 

‘‘Equity Options Fees’’ to assess 

Professionals an Options Surcharge in 

certain Multiply Listed Options; (ii) 

amend Section III 4 of the Fee Schedule 

entitled ‘‘Singly Listed Options’’ to 

specify certain options that would be 

subject to the fees in this section; and 

(iii) amend the title of the Fee Schedule. 

While changes to the Fee Schedule 

pursuant to this proposal are effective 

upon filing, the Exchange has 

designated these changes to be operative 

on April 2, 2012. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://nasdaqtrader.com/ 

micro.aspx?id=PHLXRulefilings, at the 

principal office of the Exchange, 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 

Exchange 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 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Section II of the Fee Schedule to assess 

Professionals an Options Surcharge for 

transactions in RUT,5 MNX,6 NDX 7 and 

BKX.8 The Exchange believes that these 

surcharges will assist the Exchange in 

remaining competitive in these options. 

The Exchange also proposes to amend 

Section III of the Fee Schedule to 

specify that the following options: 

PHLX Semiconductor SectorSM

(SOX SM), PHLX Housing SectorTM

(HGX SM) and PHLX Oil Service 

SectorSM (OSX SM) are subject to the 

Singly Listed Options Transaction 

Charge even though these options will 

no longer be Singly Listed. These abovereferenced options are proprietary 

indexes. These options will be listed on 

the NASDAQ Options Market LLC 

(‘‘NOM’’) commencing on April 2, 2012. 

The Exchange seeks to continue to 

recoup fees associated with maintaining 

these proprietary indexes. The Exchange 

is also proposing to amend the title of 

the Fee Schedule to more specifically 

describe the document. 

Section II Amendments 

The Exchange currently assesses an 

Options Surcharge for transactions in 

RUT, MNX and NDX of $.15 per 

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