Federal Register / Vol. 77, No. 64 / Tuesday, April 3, 2012 / Notices 20079 

1 17 CFR 201.431. 

2See Securities Exchange Act Release No. 65362 

(September 20, 2011), 76 FR 59466 (September 26, 

2011). 

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

2 17 CFR 240.19b–4. 

NRC IMPORT LICENSE APPLICATION 

[Description of material] 

Name of applicant 

Date of application 

Date received 

application No. 

docket No. 

Material type Total quantity End use Country from 

Perma-Fix Northwest Richland, Inc., February 14, 

2012, February 16, 2012, 

IW031, 11005985.

Radioactive waste consisting 

of various radioactively contaminated materials for thermal destruction.

Up to 500 tons of combustible 

and noncombustible materials. Total combined activity level for all radionuclides 

not to exceed 17.3 TBq. 

Special nuclear material not 

to exceed 350 grams U235. Source material not to 

exceed 5000 kilograms.

Thermal destruction for volume reduction at Perma-Fix 

Northwest in Richland, WA. 

The resultant ash and nonincinerable/non-conforming 

material will be returned to 

Mexico under XW019.

Mexico. 

For the Nuclear Regulatory Commission. 

Dated this 28th day of March 2012 at 

Rockville, Maryland. 

Stephen Dembek, 

Acting Deputy Director, Office of 

International Programs. 

[FR Doc. 2012–7945 Filed 4–2–12; 8:45 am] 

BILLING CODE 7590–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold a Closed Meeting 

on Thursday, April 5, 2012 at 2 p.m. 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the Closed Meeting. Certain 

staff members who have an interest in 

the matters also may be present. 

The General Counsel of the 

Commission, or his designee, has 

certified that, in his opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) 

and 17 CFR 200.402(a)(3), (5), (7), 9(ii) 

and (10), permit consideration of the 

scheduled matters at the Closed 

Meeting. 

Commissioner Walter, as duty officer, 

voted to consider the items listed for the 

Closed Meeting in a closed session. 

The subject matter of the Closed 

Meeting scheduled for Thursday, April 

5, 2012 will be: 

Institution and settlement of injunctive 

actions; 

Institution and settlement of administrative 

proceedings; 

An adjudicatory matter; and 

Other matters relating to enforcement 

proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

For further information and to 

ascertain what, if any, matters have been 

added, deleted or postponed, please 

contact: 

The Office of the Secretary at (202) 

551–5400. 

Dated: March 29, 2012. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2012–8063 Filed 3–30–12; 11:15 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 66667; March 28, 2012] 

Securities Exchange Act of 1934; In the 

Matter of the NASDAQ Stock Market 

LLC; Order Granting Petition for 

Review and Scheduling Filing of 

Statements 

Pursuant to Rule 431 of the Rules of 

Practice,1 it is ordered that the petition 

of The NASDAQ Stock Market LLC for 

review of the order disapproving by 

delegated authority File No. SR– 

NASDAQ–2011–010 2 is granted. 

It is ordered, pursuant to Rule 431 

that any party or other person may file 

a statement in support of or in 

opposition to the action made by 

delegated authority on or before April 

18, 2012. 

By the Commission. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2012–7901 Filed 4–2–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66669; File No. SR– 

NYSEArca–2012–21] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change Relating To the Listing 

and Trading of the First Trust North 

American Infrastructure Fund Under 

NYSE Arca Equities Rule 8.600 

March 28, 2012. 

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

Securities Exchange Act of 1934 (‘‘Act’’ 

or ‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that, 

on March 13, 2012, NYSE Arca, Inc. 

(‘‘Exchange’’ or ‘‘NYSE Arca’’) 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 substantially 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 list and 

trade shares of the following under 

NYSE Arca Equities Rule 8.600 

(‘‘Managed Fund Shares’’): First Trust 

North American Infrastructure Fund. 

The text of the proposed rule change is 

available at the Exchange, the 

Commission’s Public Reference Room, 

and www.nyse.com. 

mstockstill on DSK4VPTVN1PROD with NOTICES

20080 Federal Register / Vol. 77, No. 64 / Tuesday, April 3, 2012 / Notices 

3A 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–1) (‘‘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. 

4The Trust is registered under the 1940 Act. On 

July 19, 2011, the Trust filed with the Commission 

a 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– 

174332 and 811–22559) (‘‘Registration Statement’’). 

The description of the operation of the Trust and 

the Fund herein is based, in part, on the 

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. 28468 

(October 27, 2008) (File No. 812–13477) 

(‘‘Exemptive Order’’). 

5The Commission has previously approved 

listing and trading on the Exchange of a number of 

actively managed funds under Rule 8.600. See, e.g., 

Securities Exchange Act Release Nos. 57801 (May 

8, 2008), 73 FR 27878 (May 14, 2008) (SR– 

NYSEArca–2008–31) (order approving Exchange 

listing and trading of twelve actively-managed 

funds of the WisdomTree Trust); 60460 (August 7, 

2009), 74 FR 41468 (August 17, 2009) (SR– 

NYSEArca–2009–55) (order approving listing of 

Dent Tactical ETF); 62502 (July 15, 2010), 75 FR 

42471 (July 21, 2010) (SR–NYSEArca–2010–57) 

(order approving listing of AdviserShares WCM/ 

BNY Mellon Focused Growth ADR ETF); 63076 

(October 12, 2010), 75 FR 63874 (October 18, 2010) 

(SR–NYSEArca–2010–79) (order approving listing 

of Cambria Global Tactical ETF). 

6An 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. 

7The term ‘‘under normal market conditions’’ 

includes, but is not limited to, the absence of 

extreme volatility or trading halts in the equity 

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. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

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

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to list and 

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

Trust North American Infrastructure 

Fund (‘‘Fund’’) under NYSE Arca 

Equities Rule 8.600, which governs the 

listing and trading of Managed Fund 

Shares.3 The Shares will be offered by 

First Trust Exchange-Traded Fund IV 

(‘‘Trust’’), which is organized as a 

Massachusetts business trust and is 

registered with the Commission as an 

open-end management investment 

company.4 The investment adviser to 

the Fund will be First Trust Advisors 

L.P. (‘‘Adviser’’ or ‘‘First Trust’’). Energy 

Income Partners LLC will serve as 

investment sub-adviser to the Fund 

(‘‘Sub-Adviser’’) and provide day-to-day 

portfolio management of the Fund. First 

Trust Portfolios L.P. (‘‘Distributor’’) will 

be the principal underwriter and 

distributor of the Fund’s Shares. Bank of 

New York Mellon (‘‘Administrator’’ or 

‘‘BNY’’) will serve as administrator, 

custodian, and transfer agent for the 

Fund.5

Commentary .06 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. In addition, 

Commentary .06 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.6 Commentary .06 to Rule 

8.600 is similar to Commentary .03(a)(i) 

and (iii) to NYSE Arca Equities Rule 

5.2(j)(3); however, Commentary .06 in 

connection 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. The Adviser is affiliated with 

First Trust Portfolios L.P., a brokerdealer, and 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. In addition, the 

Sub-Adviser is affiliated with a brokerdealer and has implemented a fire wall 

with respect to such broker-dealer 

affiliate regarding access to information 

concerning the composition and/or 

changes to the portfolio. In the event (a) 

the Adviser or the Sub-Adviser becomes 

newly affiliated with a broker-dealer, or 

(b) any new adviser or sub-adviser 

becomes affiliated with a broker-dealer, 

it will implement a fire wall with 

respect to such broker-dealer 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. 

According to the Registration 

Statement, the Fund’s investment 

objective is to seek total return with an 

emphasis on current distributions and 

dividends paid to shareholders. Under 

normal market conditions,7 the Fund 

will invest at least 80% of its net assets 

(plus the amount of any borrowings for 

investment purposes) in exchangetraded equity securities of companies 

domiciled in the United States or 

Canada and deemed to be engaged in 

the energy infrastructure segment of the 

energy and utilities sectors. Equity 

securities include common stocks; 

preferred securities; warrants to 

purchase common stocks or preferred 

securities; securities convertible into 

common stocks or preferred securities; 

and other securities with equity 

characteristics. Such securities may 

include depositary receipts, master 

limited partnerships (‘‘MLPs’’), MLP Ishares (‘‘I–Shares’’) (as described 

below), MLP subordinated units (as 

described below), securities of pipeline 

and power utility companies, and 

securities of Canadian energy 

infrastructure companies and Canadian 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 77, No. 64 / Tuesday, April 3, 2012 / Notices 20081 

8CEITs are Canadian trusts that own or invest in 

companies engaged in activities in the energy 

infrastructure sector, including the exploration, 

mining, production, processing, transportation and 

storage of energy-related resources. According to 

the Registration Statement, an investment in units 

of CEITs involves risks which differ from an 

investment in common stock of a corporation. 

CEITs generally pass revenue on to unit holders 

rather than reinvesting in the business, which may 

lead to the sacrifice of potential growth. CEITs 

generally do not guarantee minimum distributions 

or return of capital. If the assets underlying a CEIT 

do not perform as expected, the CEIT may reduce 

or eliminate distributions. The declaration of such 

distributions generally depends upon various 

factors, including the operating performance and 

financial condition of the CEITs and general 

economic conditions. 

9The foreign equity securities in which the Fund 

may invest, including any Depositary Receipts (as 

defined herein) and/or New York Shares and Global 

shares, as described herein, will be limited to 

securities that trade in markets that are members of 

the Intermarket Surveillance Group (‘‘ISG’’), which 

includes all U.S. national securities exchanges and 

certain foreign exchanges, or are parties to a 

comprehensive surveillance sharing agreement with 

the Exchange. See note 27, infra. 

10According to the Registration Statement, ADRs 

are receipts typically issued by an American bank 

or trust company that evidence ownership of 

underlying securities issued by a foreign 

corporation. EDRs are receipts issued by a European 

bank or trust company evidencing ownership of 

securities issued by a foreign corporation. New 

York Shares are typically issued by a company 

incorporated in the Netherlands and represent a 

direct interest in the company. GDRs are receipts 

issued throughout the world that evidence a similar 

arrangement. ADRs, EDRs, and GDRs may trade in 

foreign currencies that differ from the currency the 

underlying security for each ADR, EDR, or GDR 

principally trades in. Generally, ADRs and New 

York Shares, in registered form, are designed for use 

in the U.S. securities markets. EDRs, in registered 

form, are used to access European markets. GDRs, 

in registered form, are traded both in the United 

States and in Europe and are designed for use 

throughout the world. Global shares are the actual 

(ordinary) shares of a non-U.S. company which 

trade both in the home market and the United 

States. Global shares are represented by the same 

share certificate in the United States and the home 

market. Separate registrars in the United States and 

the home country are maintained. In most cases, 

purchases occurring on a U.S. exchange would be 

reflected on the U.S. registrar. Global shares may 

also be eligible to list on exchanges in addition to 

the United States and the home country. 

11According to the Registration Statement, MLPs 

generally have two classes of owners, the general 

partner and limited partners. The general partner, 

which is generally a major energy company, 

investment fund, or the management of the MLP, 

typically controls the MLP through a 2% general 

partner equity interest in the MLP plus common 

units and subordinated units. Limited partners own 

the remainder of the partnership, through 

ownership of common units, and have a limited 

role in the partnership’s operations and 

management. 

12Underlying ETPs, which will be listed on a 

national securities exchange, include the following: 

Index-Linked Securities (as described in NYSE Arca 

Equities Rule 5.2(j)(6)); Trust Issued Receipts (as 

described in NYSE Arca Equities Rule 8.200); 

Commodity-Based Trust Shares (as described in 

NYSE Arca Equities Rule 8.201); Currency Trust 

Shares (as described in NYSE Arca Equities Rule 

8.202); Commodity Index Trust Shares (as described 

in NYSE Arca Equities Rule 8.203); Trust Units (as 

described in NYSE Arca Equities Rule 8.500); and 

closed-end funds. 

Energy Infrastructure Trusts 8 (‘‘CEITs’’). 

According to the Registration Statement, 

the Sub-Adviser’s priority will be to 

focus on steady fee-for-service income 

and will limit the cyclical energy 

exposure of the portfolio in order to 

reduce the volatility of returns. 

The Fund may invest in U.S. dollardenominated, exchange-listed 

depositary receipts and U.S. dollardenominated foreign (primarily 

Canadian) equity securities.9 The 

Fund’s investments may include 

American Depositary Receipts 

(‘‘ADRs’’), Global Depositary Receipts 

(‘‘GDRs’’), European Depositary Receipts 

(‘‘EDRs’’) or other depositary receipts 

(collectively ‘‘Depositary Receipts’’), or 

New York Shares or Global shares.10

The Fund may invest in MLPs, which 

are limited partnerships whose shares 

(or common units) are listed and traded 

on a U.S. securities exchange. To qualify 

to be treated as a partnership for federal 

income tax purposes, such an MLP must 

receive at least 90% of its income from 

qualifying sources such as natural 

resource activities. Natural resource 

activities include the exploration, 

development, mining, production, 

processing, refining, transportation, 

storage, and marketing of mineral or 

natural resources.11

The Fund may invest in Energy MLPs, 

which can generally be classified as 

Midstream MLPs, Propane MLPs, and 

Coal MLPs. 

Midstream MLP natural gas services 

include the treating, gathering, 

compression, processing, transmission, 

and storage of natural gas and the 

transportation, fractionation, and 

storage of natural gas liquids (‘‘NGLs’’) 

(primarily propane, ethane, butane, and 

natural gasoline). Midstream MLP crude 

oil services include the gathering, 

transportation, storage, and terminalling 

of crude oil. Midstream MLP refined 

petroleum product services include the 

transportation (usually via pipelines, 

barges, rail cars, and trucks), storage, 

and terminalling of refined petroleum 

products (primarily gasoline, diesel fuel, 

and jet fuel) and other hydrocarbon byproducts. Midstream MLPs may also 

operate ancillary businesses, including 

the marketing of the products and 

logistical services. 

Propane MLP services include the 

distribution of propane to homeowners 

for space and water heating and to 

commercial, industrial, and agricultural 

customers. Propane serves 

approximately 3% of the household 

energy needs in the United States, 

largely for homes beyond the geographic 

reach of natural gas distribution 

pipelines. Volumes are weather 

dependent, and a majority of annual 

cash flow is earned during the winter 

heating season (October through March). 

Coal MLP services include the 

owning, leasing, managing, production, 

and sale of coal and coal reserves. 

Electricity generation is the primary use 

of coal in the United States. Demand for 

electricity and supply of alternative 

fuels to generators are the primary 

drivers of coal demand. 

The Fund may invest in MLP 

subordinated units, which are typically 

issued by MLPs to their original 

sponsors, such as their founders, 

corporate general partners of MLPs, 

entities that sell assets to the MLP, and 

institutional investors. 

The Fund may invest in I–Shares, 

which represent an ownership interest 

issued by an affiliated party of an MLP. 

The MLP affiliate uses the proceeds 

from the sale of I–Shares to purchase 

limited partnership interests in the MLP 

in the form of i-units. I-units have 

similar features as MLP common units 

in terms of voting rights, liquidation 

preference, and distributions. However, 

rather than receiving cash, the MLP 

affiliate receives additional i-units in an 

amount equal to the cash distributions 

received by MLP common units. 

Similarly, holders of I–Shares will 

receive additional I–Shares, in the same 

proportion as the MLP affiliates’ receipt 

of i-units, rather than cash distributions. 

I–Shares themselves have limited voting 

rights, which are similar to those 

applicable to MLP common units. I– 

Shares are listed and traded on the New 

York Stock Exchange LLC (‘‘NYSE’’) and 

NYSE Amex LLC. 

The Fund may invest in securities of 

other U.S. and Canadian-listed and 

traded open-end or closed-end 

investment companies, including 

exchange-traded funds that are 

registered under the 1940 Act (‘‘ETFs’’), 

such as ETFs listed on the Exchange 

under NYSE Arca Equities Rules 

5.2(j)(3) and 8.600, that invest primarily 

in securities of the types in which the 

Fund may invest directly. The Fund 

also may invest in other types of U.S. 

exchange-traded products, such as 

exchange traded notes (‘‘ETNs’’) and 

exchange-traded pooled investment 

vehicles (collectively, with ETNs, 

‘‘Underlying ETPs’’).12

The Fund may invest in the securities 

of ETFs in excess of the limits imposed 

under the 1940 Act pursuant to 

exemptive orders obtained by such ETFs 

and their sponsors from the 

Commission. Securities of other 

investment companies may be 

leveraged; such investments will not be 

mstockstill on DSK4VPTVN1PROD with NOTICES

20082 Federal Register / Vol. 77, No. 64 / Tuesday, April 3, 2012 / Notices 

13 In such an action, at the time the Fund 

purchases the security, it will simultaneously agree 

to resell and redeliver the security to the seller, who 

also simultaneously will agree to buy back the 

security at a fixed price and time. The Fund may 

enter into repurchase agreements only with respect 

to obligations of the U.S. Government, its agencies, 

or instrumentalities; certificates of deposit; or 

bankers acceptances in which the Fund may invest. 

In addition, the Fund may only enter into 

repurchase agreements where the market value of 

the purchased securities/collateral equals at least 

100% of principal including accrued interest and is 

marked-to-market daily. The Fund intends to enter 

into repurchase agreements only with financial 

institutions and dealers believed by First Trust to 

present minimal credit risks in accordance with 

criteria established by the Trust’s Board of Trustees 

(‘‘Board’’). First Trust will review and monitor the 

creditworthiness of such institutions. First Trust 

will monitor the value of the collateral at the time 

the action is entered into and at all times during 

the term of the repurchase agreement. First Trust 

will do so in an effort to determine that the value 

of the collateral always equals or exceeds the 

agreed-upon repurchase price to be paid to the 

Fund. 

14According to the Registration Statement, the 

Trust has filed a notice of eligibility for exclusion 

from the definition of the term ‘‘commodity pool 

operator’’ with the National Futures Association. 

The Fund will not enter into Futures and options 

transactions if the sum of the initial margin deposits 

and premiums paid for unexpired options exceeds 

5% of the Fund’s total assets. 

15Hedging or derivative instruments on securities 

generally will be used to hedge against price 

movements in one or more particular securities 

positions that the Fund owns or intends to acquire. 

Such instruments may also be used to ‘‘lock-in’’ 

realized but unrecognized gains in the value of 

portfolio securities. Hedging instruments on stock 

indices, in contrast, generally are used to hedge 

against price movements in broad equity market 

sectors in which the Fund has invested or expects 

to invest. The use of hedging instruments is subject 

to applicable regulations of the Commission, the 

several options and Futures exchanges upon which 

they are traded, the Commodity Futures Trading 

Commission (‘‘CFTC’’) and various state regulatory 

authorities. 

16 7 U.S.C. 1 et seq. 

used to enhance leverage and will be 

consistent with the Fund’s investment 

objective. 

Under normal market conditions, the 

Fund will invest substantially all of its 

assets to meet its investment objective. 

The Fund may invest the remainder of 

its assets in securities with maturities of 

less than one year or cash equivalents, 

or it may hold cash, as described below. 

The percentage of the Fund invested in 

such holdings will vary and depend on 

several factors, including market 

conditions. 

Other Investments 

Cash Equivalents and Short-Term 

Investments 

According to the Registration 

Statement, for temporary defensive 

purposes and during periods of high 

cash inflows or outflows, the Fund may 

depart from its principal investment 

strategies and invest part or all of its 

assets in securities with maturities of 

less than one year or cash or cash 

equivalents. The Fund may adopt a 

defensive strategy when the portfolio 

managers believe securities in which the 

Fund normally invests have elevated 

risks due to political or economic 

factors and in other extraordinary 

circumstances. The Fund may, without 

limit as to percentage of assets, purchase 

U.S. Government securities or shortterm debt securities to keep cash on 

hand fully invested or for temporary 

defensive purposes. Short-term debt 

securities are securities from issuers 

having a long-term debt rating of at least 

A by Standard & Poor’s Ratings Group 

(‘‘S&P Ratings’’), Moody’s Investors 

Service, Inc. (‘‘Moody’s’’), or Fitch, Inc. 

(‘‘Fitch’’) and having a maturity of one 

year or less. 

According to the Registration 

Statement, short-term debt securities are 

defined to include, without limitation, 

the following: 

1. U.S. Government securities, 

including bills, notes, and bonds 

differing as to maturity and rates of 

interest, which are either issued or 

guaranteed by the U.S. Treasury or by 

U.S. Government agencies or 

instrumentalities, as described further 

in the Registration Statement. 

2. Certificates of deposit issued 

against funds deposited in a bank or 

savings and loan association. 

3. Bankers’ acceptances, which are 

short-term credit instruments used to 

finance commercial transactions. 

4. Repurchase agreements, which 

involve purchases of debt securities.13

5. Bank time deposits, which are 

monies kept on deposit with banks or 

savings and loan associations for a 

stated period of time at a fixed rate of 

interest. There may be penalties for the 

early withdrawal of such time deposits, 

in which case the yields of these 

investments will be reduced. 

6. Commercial paper, which are shortterm unsecured promissory notes. The 

Fund will not invest in any master 

demand notes. 

The use of temporary investments 

will not be a part of a principal 

investment strategy of the Fund. The 

Fund may invest in shares of money 

market funds to the extent permitted by 

the 1940 Act. 

Investments in Derivatives 

In accordance with the Exemptive 

Order, the Fund may invest up to 35% 

of its net assets in futures (‘‘Futures’’ or 

‘‘Futures Contracts’’), interest rate 

swaps, total return swaps, non-U.S. 

currency swaps, credit default swaps, 

options, and other derivative 

instruments to seek to enhance return, 

to hedge some of the risks of their 

investments in securities, as a substitute 

for a position in the underlying asset, to 

reduce transaction costs, to maintain 

full market exposure (which means to 

adjust the characteristics of their 

investments to more closely 

approximate those of the markets in 

which they invest), to manage cash 

flows, to limit exposure to losses due to 

changes to non-U.S. currency exchange 

rates, or to preserve capital. 

Notwithstanding the Exemptive Order, 

the Fund, under normal market 

conditions, will not invest more than 

20% of its net assets in such 

instruments. In connection with 

hedging activities in which the Fund 

may engage, First Trust may cause the 

Fund to utilize a variety of financial 

instruments, including options, forward 

contracts, Futures Contracts, and 

options on Futures Contracts to attempt 

to hedge the Fund’s holdings.14 The use 

of Futures is not a part of a principal 

investment strategy of the Fund.15

The Fund may use derivative 

investments to hedge against interest 

rate and market risks. The Fund may 

engage in various interest rate and 

currency hedging transactions, 

including buying or selling options or 

entering into other transactions 

including forward contracts, swaps and 

other derivatives transactions. The Fund 

may also engage in certain transactions 

intended to hedge its exposure to 

currency risks due to foreign currency 

denominated investments. The Fund 

may sell covered calls on equity 

positions in the portfolio in order to 

enhance its income. 

The Fund may purchase stock index 

options, sell stock index options in 

order to close out existing positions, 

and/or write covered options on stock 

indices for hedging purposes. Stock 

index options are put options and call 

options on various stock indices. The 

Fund may enter into Futures Contracts, 

including index Futures as a hedge 

against movements in the equity 

markets, in order to hedge against 

changes on securities held or intended 

to be acquired by the Fund or for other 

purposes permissible under the 

Commodity Exchange Act (‘‘CEA’’).16

The Fund’s hedging may include sales 

of Futures as an offset against the effect 

of expected declines in stock prices and 

purchases of Futures as an offset against 

the effect of expected increases in stock 

prices. The Fund will not enter into 

Futures Contracts which are prohibited 

under the CEA and will, to the extent 

required by regulatory authorities, enter 

only into Futures Contracts that are 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 77, No. 64 / Tuesday, April 3, 2012 / Notices 20083 

17See note 9, supra, and note 27, infra. 18See Form N–1A, Item 9. The Commission has 

taken the position that a fund is concentrated if it 

invests more than 25% of the value of its total 

assets in any one industry. See, e.g., Investment 

Company Act Release No. 9011 (October 30, 1975), 

40 FR 54241 (November 21, 1975). 19The Commission has stated that long-standing 

Commission guidelines have required open-end 

funds to hold no more than 15% of their net assets 

in illiquid securities and other illiquid assets. See 

Investment Company Act Release No. 28193 (March 

11, 2008), 73 FR 14617 (March 18, 2008), footnote 

34. See also Investment Company Act Release No. 

5847 (October 21, 1969), 35 FR 19989 (December 

31, 1970) (Statement Regarding ‘‘Restricted 

Securities’’); Investment Company Act Release No. 

18612 (March 12, 1992), 57 FR 9828 (March 20, 

1992) (Revisions of Guidelines to Form N–1A). A 

fund’s portfolio security is illiquid if it cannot be 

disposed of in the ordinary course of business 

within seven days at approximately the value 

ascribed to it by the fund. See Investment Company 

Act Release No. 14983 (March 12, 1986), 51 FR 

9773 (March 21, 1986) (adopting amendments to 

Rule 2a-7 under the 1940 Act); Investment 

Company Act Release No. 17452 (April 23, 1990), 

55 FR 17933 (April 30, 1990) (adopting Rule 144A 

under the Securities Act of 1933). 

20 26 U.S.C. 851. According to the Registration 

Statement, to qualify for the favorable U.S. federal 

income tax treatment generally accorded to RICs, 

the Fund must, among other things, (a) derive in 

each taxable year at least 90% of its gross income 

from dividends, interest, payments with respect to 

securities loans and gains from the sale or other 

disposition of stock, securities or foreign currencies 

or other income derived with respect to its business 

of investing in such stock, securities or currencies, 

or net income derived from interests in certain 

publicly traded partnerships; (b) diversify its 

holdings so that, at the end of each quarter of the 

taxable year, (i) at least 50% of the market value of 

the Fund’s assets is represented by cash and cash 

items (including receivables), U.S. Government 

securities, the securities of other RICs and other 

securities, with such other securities of any one 

issuer generally limited for the purposes of this 

calculation to an amount not greater than 5% of the 

value of the Fund’s total assets and not greater than 

10% of the outstanding voting securities of such 

issuer, and (ii) not more than 25% of the value of 

its total assets is invested in the securities (other 

than U.S. Government securities or the securities of 

other RICs) of any one issuer, or two or more issuers 

which the Fund controls which are engaged in the 

same, similar or related trades or businesses, or the 

securities of one or more of certain publicly traded 

partnerships; and (c) distribute at least 90% of its 

investment company taxable income (which 

includes, among other items, dividends, interest 

and net short-term capital gains in excess of net 

long-term capital losses) and at least 90% of its net 

tax-exempt interest income each taxable year. There 

are certain exceptions for failure to qualify if the 

failure is for reasonable cause or its de minimis, and 

certain action is taken and certain tax payments are 

made by the Fund. 

traded on national Futures exchanges 

and are standardized as to maturity date 

and underlying financial instrument. 

The principal interest rate Futures 

exchanges in the United States are the 

Chicago Board of Trade and the Chicago 

Mercantile Exchange. 

The Fund may also purchase or write 

put and call options on Futures 

Contracts and enter into closing 

transactions with respect to such 

options to terminate an existing 

position. 

The Fund may use options on Futures 

Contracts in connection with hedging 

strategies. Generally, these strategies 

would be applied under the same 

market and market sector conditions in 

which the Fund uses put and call 

options on securities or indices. 

The Fund may invest in companies 

that are considered to be ‘‘passive 

foreign investment companies’’ 

(‘‘PFICs’’), which are generally certain 

non-U.S. corporations that receive at 

least 75% of their annual gross income 

from passive sources (such as interest, 

dividends, certain rents and royalties or 

capital gains) or that hold at least 50% 

of their assets in investments producing 

such passive income.17

The Fund may not invest 25% or 

more of the value of its total assets in 

securities of issuers in any one industry 

or group of industries. This restriction 

does not apply to securities issued by 

energy infrastructure companies or 

obligations issued or guaranteed by the 

U.S. Government, its agencies, or 

instrumentalities. Accordingly, the 

Fund will concentrate its investments in 

energy infrastructure companies.18

The Fund may hold illiquid securities 

(i.e., securities that are not readily 

marketable).19 For purposes of this 

restriction, illiquid securities include, 

but are not limited to, restricted 

securities (securities the disposition of 

which is restricted under the federal 

securities laws), securities that may only 

be resold pursuant to Rule 144A under 

the Securities Act of 1933, and 

repurchase agreements with maturities 

in excess of seven days. However, the 

Fund will not hold illiquid securities if, 

as a result, such securities would 

comprise more than 15% of the value of 

the Fund’s net assets. 

The Fund intends to qualify annually 

and to elect to be treated as a regulated 

investment company (‘‘RIC’’) under the 

Internal Revenue Code of 1986, as 

amended.20

Creations and Redemptions 

The Fund will issue and redeem 

Shares on a continuous basis, at net 

asset value (‘‘NAV’’), only in large 

specified blocks each consisting of 

50,000 Shares (each such block of 

Shares, called a ‘‘Creation Unit’’). Each 

group of Creation Units is referred to as 

a ‘‘Creation Unit Aggregation.’’ The 

Creation Units will be issued and 

redeemed for securities in which the 

Fund invests, cash or both securities 

and cash. 

The consideration for purchase of 

Creation Unit Aggregations of the Fund 

may consist of (i) cash in lieu of all or 

a portion of the Deposit Securities, as 

defined below, and/or (ii) a designated 

portfolio of equity securities determined 

by First Trust or the Sub-Adviser—the 

‘‘Deposit Securities’’—per each Creation 

Unit Aggregation (‘‘Fund Securities’’) 

and generally an amount of cash—the 

‘‘Cash Component.’’ Together, the 

Deposit Securities and the Cash 

Component (including the cash in lieu 

amount) constitute the ‘‘Fund Deposit,’’ 

which represents the minimum initial 

and subsequent investment amount for 

a Creation Unit Aggregation of the Fund. 

BNY, through the National Securities 

Clearing Corporation (‘‘NSCC’’) (as 

discussed below), will make available 

on each business day, prior to the 

opening of business of the NYSE 

(currently 9:30 a.m., Eastern time 

(‘‘E.T.’’)), the list of the names and the 

required number of shares of each 

Deposit Security to be included in the 

current Fund Deposit (based on 

information at the end of the previous 

business day) for the Fund. 

In addition to the list of names and 

numbers of securities constituting the 

current Deposit Securities of a Fund 

Deposit, BNY, through the NSCC, also 

will make available on each business 

day, the estimated Cash Component, 

effective through and including the 

previous business day, per outstanding 

Creation Unit Aggregation of the Fund. 

All orders to create Creation Unit 

Aggregations must be received by the 

transfer agent no later than the closing 

time of the regular trading session on 

the NYSE (‘‘Closing Time’’) (ordinarily 

4 p.m., E.T.) in each case on the date 

such order is placed in order for 

creation of Creation Unit Aggregations 

to be effected based on the NAV of 

Shares of the Fund as next determined 

on such date after receipt of the order 

in proper form. 

Fund Shares may be redeemed only in 

Creation Unit Aggregations at their NAV 

next determined after receipt of a 

redemption request in proper form by 

the Fund through the transfer agent and 

only on a business day. The Fund will 

not redeem Shares in amounts less than 

Creation Unit Aggregations. Beneficial 

owners must accumulate enough Shares 

in the secondary market to constitute a 

Creation Unit Aggregation in order to 

have such Shares redeemed by the 

Trust. With respect to the Fund, BNY, 

through the NSCC, will make available 

prior to the opening of business on the 

NYSE (currently 9:30 a.m., E.T.) on each 

business day, the identity of the Fund 

Securities that will be applicable 

(subject to possible amendment or 

correction) to redemption requests 

received in proper form (as described 

below) on that day. Fund Securities 

received on redemption may not be 

mstockstill on DSK4VPTVN1PROD with NOTICES

20084 Federal Register / Vol. 77, No. 64 / Tuesday, April 3, 2012 / Notices 

21 17 CFR 240.10A–3. 

22The Bid/Ask Price of the Fund will be 

determined using the midpoint of 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. 

23Under 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. 

24Currently, it is the Exchange’s understanding 

that several major market data vendors widely 

disseminate PIVs taken from the Consolidated Tape 

Association (‘‘CTA’’) or other data feeds. 

25The Fund’s investments will be valued at 

market value or, in the absence of market value 

with respect to any portfolio securities, at fair value 

in accordance with valuation procedures adopted 

by the Board and in accordance with the 1940 Act. 

identical to Deposit Securities that are 

applicable to creations of Creation Unit 

Aggregations. 

Unless cash redemptions are available 

or specified for the Fund, the 

redemption proceeds for a Creation Unit 

Aggregation generally will consist of 

Fund Securities—as announced on the 

business day of the request for 

redemption received in proper form— 

plus or minus cash in an amount equal 

to the difference between the NAV of 

the Fund Shares being redeemed, as 

next determined after a receipt of a 

request in proper form, and the value of 

the Fund Securities (the ‘‘Cash 

Redemption Amount’’), less the 

applicable redemption transaction fee as 

described in the Registration Statement 

and, if applicable, any operational 

processing and brokerage costs, transfer 

fees, or stamp taxes. 

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,21 as provided 

by NYSE Arca Equities Rule 5.3. A 

minimum of 100,000 Shares for the 

Fund 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 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. 

Availability of Information 

The Fund’s Web site 

(www.ftportfolios.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 (‘‘Bid/Ask 

Price’’),22 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 (9:30 a.m. to 

4 p.m., E.T.) on the Exchange, the Fund 

will disclose on its 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

On a daily basis, the Adviser will 

disclose for each portfolio security or 

other financial instrument of the Fund 

the following information on the Fund’s 

Web site: Ticker symbol (if applicable), 

name of security or financial 

instrument, number of shares or dollar 

value of securities and 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. 

In addition, a basket composition file, 

which includes the security names and 

share quantities required to be delivered 

in exchange for the Fund’s Shares, 

together with estimates and actual cash 

components, will be publicly 

disseminated daily prior to the opening 

of the NYSE via NSCC. The basket 

represents one Creation Unit of the 

Fund. 

In addition, the Portfolio Indicative 

Value (‘‘PIV’’), as defined in NYSE Arca 

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

disseminated by one or more major 

market data vendors during the Core 

Trading Session.24 The dissemination of 

the PIV, 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. The 

PIV should not be viewed as a ‘‘realtime’’ update of the NAV per Share of 

the Fund because the PIV may not be 

calculated in the same manner as the 

NAV, which is computed once a day, 

generally at the end of the business day. 

The price of a non-U.S. security that is 

primarily traded on a non-U.S. exchange 

shall be updated, using the last sale 

price, every 15 seconds throughout the 

trading day, provided that, upon the 

closing of such non-U.S. exchange, the 

closing price of the security, after being 

converted to U.S. dollars, will be used. 

Furthermore, in calculating the PIV of 

the Fund’s Shares, exchange rates may 

be used throughout the day (9 a.m. to 

4:15 p.m., E.T.) that may differ from 

those used to calculate the NAV per 

Share of the Fund and, consequently, 

may result in differences between the 

NAV and the PIV. 

Investors can also obtain the Trust’s 

Statement of Additional Information 

(‘‘SAI’’), the Fund’s Shareholder 

Reports, and the Trust’s 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 www.sec.gov. 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. Quotation and last sale 

information for the Shares will be 

available via the CTA high-speed line. 

The intra-day, closing, and settlement 

prices of the portfolio securities will 

also be readily available from the 

securities exchanges trading such 

securities, automated quotation systems, 

published or other public sources, or 

on-line information services such as 

Bloomberg or Reuters. 

The Fund’s NAV will be determined 

as of the close of trading (normally 4 

p.m., E.T.) on each day the NYSE is 

open for business. NAV will be 

calculated for the Fund by taking the 

market price of the Fund’s total assets, 

including interest or dividends accrued 

but not yet collected, less all liabilities, 

and dividing such amount by the total 

number of Shares outstanding. The 

result, rounded to the nearest cent, will 

be the NAV per Share. All valuations 

will be subject to review by the Trust’s 

Board or its delegate.25

Additional information regarding the 

Trust and the Shares, 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 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 77, No. 64 / Tuesday, April 3, 2012 / Notices 20085 

26See NYSE Arca Equities Rule 7.12, 

Commentary .04. 

27For a list of the current members of ISG, see 

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 or 

with which the Exchange has in place a 

comprehensive surveillance sharing agreement. 

28See note 9, supra. 29 15 U.S.C. 78f(b)(5). 

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.26 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 and/or 

the financial instruments comprising 

the Disclosed Portfolio 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., E.T. 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. As provided 

in NYSE Arca Equities Rule 7.6, 

Commentary .03, the minimum price 

variation (‘‘MPV’’) for quoting and entry 

of orders in equity securities traded on 

the NYSE Arca Marketplace is $0.01, 

with the exception of securities that are 

priced less than $1.00 for which the 

MPV for order entry is $0.0001. 

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 ISG from other exchanges that 

are members of ISG or with which the 

Exchange has in place a comprehensive 

surveillance sharing agreement.27 As 

noted above, the equity securities in 

which the Fund will invest will trade in 

markets that are ISG members or are 

parties to comprehensive surveillance 

sharing agreements with the 

Exchange.28

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 

Equity Trading Permit (‘‘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 PIV will not be 

calculated or publicly disseminated; (4) 

how information regarding the PIV 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 p.m., E.T. 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) 29

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 is designed to 

prevent fraudulent and manipulative 

acts and practices in that the Shares will 

be listed and traded on the Exchange 

pursuant to the initial and continued 

listing criteria in NYSE Arca Equities 

Rule 8.600. The Exchange has in place 

surveillance procedures that are 

adequate to properly monitor trading in 

the Shares in all trading sessions and to 

deter and detect violations of Exchange 

rules and applicable federal securities 

laws. The Adviser and Sub-Adviser 

have implemented a fire wall with 

respect to their respective broker-dealer 

affiliate regarding access to information 

concerning the composition and/or 

changes to the portfolio. The Exchange 

may obtain information via ISG from 

other exchanges that are members of ISG 

or with which the Exchange has entered 

into a comprehensive surveillance 

sharing agreement. Under normal 

market conditions, the Fund will invest 

at least 80% of its net assets (plus the 

amount of any borrowings for 

investment purposes) in exchangetraded equity securities of companies 

domiciled in the United States or 

Canada and deemed to be engaged in 

the energy infrastructure segment of the 

energy and utilities sectors. The Fund, 

under normal market conditions, will 

not invest more than 20% of its net 

assets in futures, interest rate swaps, 

total return swaps, non-U.S. currency 

swaps, credit default swaps, options, 

and other derivative instruments. While 

the Fund may invest in securities of 

other investment companies that are 

leveraged, such investments will not be 

use to enhance leverage and will be 

consistent with the Fund’s investment 

objective. The Fund will not hold 

illiquid securities if, as a result, such 

securities would comprise more than 

15% of the value of the Fund’s net 

assets. The equity securities in which 

the Fund will invest will trade in 

markets that are ISG members or are 

parties to comprehensive surveillance 

sharing agreements with the Exchange. 

mstockstill on DSK4VPTVN1PROD with NOTICES

20086 Federal Register / Vol. 77, No. 64 / Tuesday, April 3, 2012 / Notices 

30 17 CFR 200.30–3(a)(12). 

The proposed rule change is designed 

to promote just and equitable principles 

of trade and to protect investors and the 

public interest in 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. In 

addition, a large amount of information 

is publicly available regarding the Fund 

and the Shares, thereby promoting 

market transparency. Moreover, the PIV 

will be widely disseminated by one or 

more major market data vendors at least 

every 15 seconds during the Exchange’s 

Core Trading Session. 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 that 

will form the basis for the Fund’s 

calculation of NAV at the end of the 

business day. The intra-day, closing, 

and settlement prices of the portfolio 

securities will also be readily available 

from the securities exchanges trading 

such securities, automated quotation 

systems, published or other public 

sources, or on-line information services. 

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, and quotation and last sale 

information will be available via the 

CTA high-speed line. The Web site for 

the Fund will include a form of the 

prospectus for the Fund and additional 

data relating to NAV and other 

applicable quantitative information. 

Moreover, 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. 

Trading in Shares of the Fund will be 

halted if the circuit breaker parameters 

in NYSE Arca Equities Rule 7.12 have 

been reached or because of market 

conditions or for reasons that, in the 

view of the Exchange, make trading in 

the Shares inadvisable, and 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. In addition, 

as noted above, investors will have 

ready access to information regarding 

the Fund’s holdings, the PIV, the 

Disclosed Portfolio, and quotation and 

last sale information for the Shares. 

The proposed rule change is designed 

to perfect the mechanism of a free and 

open market and, in general, to protect 

investors and the public interest in that 

it 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. As noted above, 

the Exchange has in place surveillance 

procedures relating to trading in the 

Shares and may obtain information via 

ISG from other exchanges that are 

members of ISG or with which the 

Exchange has entered into a 

comprehensive surveillance sharing 

agreement. In addition, as noted above, 

investors will have ready access to 

information regarding the Fund’s 

holdings, the PIV, the Disclosed 

Portfolio, and quotation and last sale 

information for the Shares. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 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 or disapprove 

the proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rulecomments@sec.gov. Please include File 

Number SR–NYSEArca–2012–21 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–2012–21. This 

file number should be included on the 

subject line if email 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 Web site viewing and 

printing in the Commission’s Public 

Reference Section, 100 F Street NE., 

Washington, DC 20549–1090, on official 

business days between 10 a.m. and 3 

p.m. Copies of the filing will also be 

available for inspection and copying at 

the NYSE’s principal office and on its 

Internet Web site at www.nyse.com. 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–2012–21 and 

should be submitted on or before April 

24, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.30

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–7894 Filed 4–2–12; 8:45 am] 

BILLING CODE 8011–01–P 

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