9294 Federal Register / Vol. 80, No. 34 / Friday, February 20, 2015 / Notices 

16 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4Amendment No. 1 replaces SR–NYSEArca– 

2015–004 and supersedes such filing in its entirety. 

5A 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. 

6The Trust is registered under the 1940 Act. On 

October 9, 2014 and on December 19, 2014, the 

Trust filed with the Commission amendments to its 

registration statement on Form N–1A under the 

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

Act’’) and under the 1940 Act relating to the Fund 

(File Nos. 333–146827 and 811–22135) 

(‘‘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. 

31248 (September 9, 2014) (File No. 812–14308) 

(‘‘Exemptive Order’’). 

7The Commission has 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. 63076 

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

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

Exchange listing and trading of Cambria Global 

Tactical ETF); 63802 (January 31, 2011), 76 FR 6503 

(February 4, 2011) (SR–NYSEArca–2010–118) 

(order approving Exchange listing and trading of the 

SiM Dynamic Allocation Diversified Income ETF 

and SiM Dynamic Allocation Growth Income ETF); 

and 65468 (October 3, 2011), 76 FR 62873 (October 

11, 2011) (SR–NYSEArca–2011–51) (order 

approving Exchange listing and trading of TrimTabs 

Float Shrink ETF). 

8An investment adviser to an open-end fund is 

required to be registered under the Investment 

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

result, the Adviser and Sub-Adviser and their 

related personnel are subject to the provisions of 

Rule 204A–1 under the Advisers Act relating to 

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 Room, 100 F Street NE., 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–Phlx– 

2015–15, and should be submitted on or 

before March 13, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–03517 Filed 2–19–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74278; File No. SR– 

NYSEArca–2015–04] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change, as Modified by 

Amendment No. 1, Relating to the 

Listing and Trading of Shares of the 

Innovator IBD® 50 Fund Under NYSE 

Arca Equities Rule 8.600 

February 13, 2015. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on January 

30, 2015, NYSE Arca, Inc. (the 

‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. On February 12, 2015, the 

Exchange filed Amendment No. 1 to the 

proposal.4 The Commission is 

publishing this notice, as modified by 

Amendment No. 1, 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 the shares of the following under 

NYSE Arca Equities Rule 8.600 

(‘‘Managed Fund Shares’’): Innovator 

IBD® 50 Fund. The text of the proposed 

rule change is available on the 

Exchange’s Web site at www.nyse.com, 

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 

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 shares (‘‘Shares’’) of the following 

under NYSE Arca Equities Rule 8.600, 

which governs the listing and trading of 

Managed Fund Shares: 5 Innovator IBD®

50 Fund (‘‘Fund’’). The Shares will be 

offered by Academy Funds Trust (the 

‘‘Trust’’),6 an open-end management 

investment company.7 The investment 

adviser to the Fund will be Innovator 

Management LLC (the ‘‘Adviser’’). 

Penserra Capital Management LLC will 

be the Fund’s sub-adviser (‘‘SubAdviser’’). Quasar Distributors, LLC (the 

‘‘Distributor’’) will be the principal 

underwriter and distributor of the 

Fund’s Shares. U.S. Bank, N.A. (the 

‘‘Administrator’’ or ‘‘Custodian’’) will 

serve as the administrator, custodian 

and transfer agent for the Fund. 

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.8 Commentary .06 to Rule 


TKELLEY on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 34 / Friday, February 20, 2015 / Notices 9295 

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. 

9The term ‘‘under normal circumstances’’ means, 

without limitation, 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 man-made disaster, act 

of God, armed conflict, act of terrorism, riot or labor 

disruption or any similar intervening circumstance. 

10Most MLPs operate in oil and gas related 

businesses including energy processing and 

distribution. The remaining MLPs operate in a 

variety of businesses including coal, timber, other 

minerals, real estate, and some miscellaneous 

businesses. 

11According to the Registration Statement, REITs, 

which are pooled investment vehicles that invest in 

real estate or real estate loans or interests, generally 

can be classified as ‘‘Equity REITs’’, ‘‘Mortgage 

REITs’’ and ‘‘Hybrid REITs’’. Equity REITs invest 

the majority of their assets directly in real property 

and derive their income primarily from rents and 

capital gains from appreciation realized through 

property sales. Mortgage REITs invest the majority 

of their assets in real estate mortgages and derive 

their income primarily from interest payments. 

Hybrid REITs combine the characteristics of both 

Equity and Mortgage REITs. 

12ADRs are certificates evidencing ownership of 

shares of a foreign issuer. Depositary receipts may 

be sponsored or unsponsored. These certificates are 

issued by depository banks and generally trade on 

an established market in the United States. The 

underlying shares are held in trust by a custodian 

bank or similar financial institution in the issuer’s 

home country. The depository bank may not have 

physical custody of the underlying securities at all 

times and may charge fees for various services, 

including forwarding dividends and interest and 

corporate actions. ADRs are alternatives to directly 

purchasing the underlying foreign securities in their 

national markets and currencies. ADRs may be 

sponsored or unsponsored; however, the Fund will 

not invest in ADRs that are not U.S. exchangelisted. Not more than 10% of the net assets of the 

Fund in the aggregate invested in exchange-traded 

equity securities shall consist of equity securities 

whose principal market is not a member of the 

Intermarket Surveillance Group (’’ ISG’’) or is a 

market with which the Exchange does not have a 

comprehensive surveillance sharing agreement. 

13The commercial paper in which the Fund may 

invest consists of unsecured short-term promissory 

notes issued by corporations and other entities. 

Maturities on these issues vary from a few to 270 

days. 

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. Neither the Adviser nor the SubAdviser is registered as a broker-dealer. 

The Adviser is not affiliated with a 

broker-dealer. The Sub-Adviser is 

affiliated with a broker-dealer and has 

implemented a ‘‘fire wall’’ with respect 

to such broker-dealer regarding access to 

information concerning the composition 

and/or changes to the Fund’s portfolio. 

In the event (a) the Adviser or the SubAdviser becomes a registered brokerdealer or becomes newly affiliated with 

a broker-dealer, or (b) any new adviser 

or any sub-adviser is a registered brokerdealer or becomes affiliated with a 

broker-dealer, it will implement a fire 

wall with respect to its relevant 

personnel or its broker-dealer affiliate 

regarding access to information 

concerning the composition and/or 

changes to the Fund’s portfolio, and will 

be subject to procedures designed to 

prevent the use and dissemination of 

material non-public information 

regarding such portfolio. 

Principal Investments 

According to the Registration 

Statement, the investment objective of 

the Fund will be to seek long-term 

capital appreciation. Under normal 

circumstances,9 the Fund will invest at 

least 80% of its net assets in companies 

included in the IBD® 50 Index (‘‘Index’’) 

and in other assets identified below in 

this ‘‘Principal Investments’’ section. 

The Fund will generally hold all of the 

companies included in the Index other 

than during periods when the Fund is 

rebalanced due to changes in the 

constitution of the Index. The Fund, 

however, will not invest in the Index 

companies in the same proportion as 

reflected in the Index. The Fund will be 

actively managed and will not be an 

index fund. As a result, the Fund’s 

performance will deviate from the 

performance of the Index. 

The Index is a computer-generated 

stock index published by Investor’s 

Business Daily® (‘‘IBD®’’). IBD® uses 

proprietary fundamental and technical 

ratings to compile what IBD® considers 

the 50 leading growth companies that 

trade on U.S. national securities 

exchanges. Companies included in the 

Index must meet minimum earnings, 

sales, profit margin, volume and 

technical requirements. Companies 

meeting these requirements are 

included in the Index on a priceweighted basis. This means that stocks 

with higher prices receive a greater 

weight in the Index. The Index is 

rebalanced on the last day of each 

trading week after the U.S. stock market 

closes and is published by IBD® on its 

Web site, www.investors.com, and in its 

Monday print edition. 

According to the Registration 

Statement, unlike the Index’s priceweighted basis, the Fund will invest in 

the companies included in the Index on 

a conviction basis. This means that the 

Fund’s portfolio manager will 

overweight the higher ranked 

companies in the Index and 

underweight the lower ranked 

companies. The Fund’s portfolio 

manager anticipates that these higher 

ranked companies may each represent 

as much as approximately 3.5% of the 

Fund’s portfolio at the time of 

investment while the lower ranked 

companies may each represent as little 

as approximately 0.5% of the Fund’s 

portfolio at the time of investment. 

Under normal circumstances, the 

Fund will invest in U.S. exchangetraded equities. Typically, the Fund will 

hold U.S. exchange-traded common 

stocks as well as U.S. exchange-traded 

master limited partnerships (‘‘MLPs’’),10

real estate investment trusts 

(‘‘REITs’’),11 royalty trusts and business 

development companies (‘‘BDCs’’). It 

will invest primarily in U.S. equity 

securities but may, to a lesser extent, 

invest in equity securities of foreign 

companies in both developed and 

emerging markets, generally through 

American depositary receipts 

(‘‘ADRs’’).12 The Fund may invest in 

companies of any size. 

Non-Principal Investments 

According to the Registration 

Statement, while the Fund, under 

normal circumstances, will invest at 

least 80% of its net assets in securities 

described above, the Fund may invest 

up to 20% of its net assets in the 

following securities. 

The Fund may invest in money 

market securities (the types of which are 

discussed below) for liquidity and cash 

management purposes or if the Adviser 

or Sub-Adviser determines that 

securities meeting the Fund’s 

investment objective and policies are 

not otherwise readily available for 

purchase. Money market securities 

include (i) short-term U.S. government 

securities; (ii) commercial paper 13 rated 

in the highest short-term rating category 

by a nationally recognized statistical 

ratings organization (‘‘NRSRO’’), such as 

Standard & Poor’s or Moody’s, or 

determined by the Adviser or SubVerDate Sep<11>2014 17:07 Feb 19, 2015 Jkt 235001 PO 00000 Frm 00036 Fmt 4703 Sfmt 4703 E:\FR\FM\20FEN1.SGM 20FEN1

TKELLEY on DSK3SPTVN1PROD with NOTICES
9296 Federal Register / Vol. 80, No. 34 / Friday, February 20, 2015 / Notices 

14Certificates of deposit are interest-bearing 

instruments with a specific maturity issued by 

banks and savings and loan institutions in exchange 

for the deposit of funds. 

15Time deposits are non-negotiable receipts 

issued by a bank in exchange for the deposit of 

funds. 

16Bankers’ acceptances are bills of exchange or 

time drafts drawn on and accepted by a commercial 

bank. Corporations use bankers’ acceptances to 

finance the shipment and storage of goods and to 

furnish dollar exchange. Maturities are generally six 

months or less. 

17The Fund will follow certain procedures 

designed to minimize the risks inherent in such 

agreements. These procedures include effecting 

repurchase transactions only with large, wellcapitalized and well-established financial 

institutions whose condition will be continually 

monitored by the Adviser. 

18For purposes of this filing, ETFs include 

Investment Company Units (as described in NYSE 

Arca Equities Rule 5.2(j)(3)); Portfolio Depositary 

Receipts (as described in NYSE Arca Equities Rule 

8.100); and Managed Fund Shares (as described in 

NYSE Arca Equities Rule 8.600). The ETFs all will 

be listed and traded in the U.S. on national 

securities exchanges. While the Fund may invest in 

inverse ETFs, the Fund will not invest in leveraged 

or inverse leveraged ETFs (e.g., 2X or 3X). 

19The diversification standard is set forth in 

Section 5(b)(1) of the 1940 Act. 

20 26 U.S.C. 851. 

21Under the supervision of the Board, the 

Adviser determines the liquidity of the Fund’s 

investments. In determining the liquidity of the 

Fund’s investments, the Adviser may consider 

various factors, including (1) the frequency and 

volume of trades and quotations; (2) the number of 

dealers and prospective purchasers in the 

marketplace; (3) dealer undertakings to make a 

market; and (4) the nature of the security and the 

market in which it trades (including any demand, 

put or tender features, the mechanics and other 

requirements for transfer, any letters of credit or 

other credit enhancement features, any ratings, the 

number of holders, the method of soliciting offers, 

the time required to dispose of the security, and the 

ability to assign or offset the rights and obligations 

of the security). 

22The 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 14618 (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 1933 Act). 

Adviser to be of comparable quality at 

the time of purchase; (iii) short-term 

bank obligations (certificates of 

deposit 14 time deposits 15 and bankers’ 

acceptances 16) of U.S. domestic banks, 

foreign banks and foreign branches of 

domestic banks, and commercial banks 

with assets of at least $1 billion as of the 

end of their most recent fiscal year; (iv) 

repurchase agreements 17 involving such 

securities; and (v) money market mutual 

funds. 

The Fund may invest in securities of 

other investment companies (other than 

BDCs), including shares of the 

following: (1) Exchange-traded funds 

(‘‘ETFs’’),18 unit investment trusts, and 

closed-end investment companies, each 

of which will be listed and traded on a 

U.S. national securities exchange, and 

(2) non-exchange-listed open-end 

investment companies. 

Investment Restrictions 

According to the Registration 

Statement, the Fund will be classified as 

a diversified investment company under 

the 1940 Act.19

The Fund intends to qualify as a 

‘‘regulated investment company’’ for 

purposes of the Internal Revenue Code 

of 1986.20

According to the Registration 

Statement, the Fund will not invest 25% 

or more of the Fund’s net assets in 

securities of issuers in any one industry 

or group of industries (other than 

securities issued or guaranteed by the 

U.S. government or any of its agencies 

or instrumentalities or securities of 

other investment companies), except 

that the Fund may invest 25% or more 

of its net assets in securities of issuers 

in the same industry to approximately 

the same extent that the Index 

concentrates in the securities of a 

particular industry or group of 

industries. 

The Fund may hold up to an aggregate 

amount of 15% of its net assets in 

illiquid assets.21 The Fund will monitor 

its portfolio liquidity on an ongoing 

basis to determine whether, in light of 

current circumstances, an adequate 

level of liquidity is being maintained, 

and will consider taking appropriate 

steps in order to maintain adequate 

liquidity if, through a change in values, 

net assets, or other circumstances, more 

than 15% of the Fund’s net assets are 

held in illiquid assets. Illiquid assets 

include securities subject to contractual 

or other restrictions on resale and other 

instruments that lack readily available 

markets as determined in accordance 

with Commission staff guidance.22

The Fund will not invest in options, 

futures contracts or swaps agreements. 

The Fund’s investments will be 

consistent with its investment objective 

and will not be used to enhance 

leverage. The Fund will not invest in 

leveraged or inverse leveraged (e.g., 2X, 

¥2X, 3X or ¥3X) ETFs. 

Net Asset Value 

According to the Registration 

Statement, the Administrator will 

calculate the Fund’s net asset value 

(‘‘NAV’’) at the close of regular trading 

(ordinarily 4:00 p.m. Eastern time) every 

day the New York Stock Exchange 

(‘‘NYSE’’) is open. The NAV for one 

Fund Share will be the value of that 

Share’s portion of all of the net assets of 

the Fund. In calculating its NAV, the 

Fund generally will value its investment 

portfolio at market price. If market 

prices are not readily available or the 

Fund reasonably believes that they are 

unreliable, such as in the case of a 

security value that has been materially 

affected by events occurring after the 

relevant market closes, the Fund will 

price those securities at fair value as 

determined using methods approved by 

the Fund’s Board of Trustees (‘‘Board’’). 

In computing the Fund’s NAV, the 

Fund’s securities holdings will be 

valued based on their last readily 

available market price. Price 

information on exchange-listed 

securities, including common stocks, 

ETFs, unit investment trusts, closed-end 

investment companies, ADRs, MLPs, 

REITs, royalty trusts and BDCs will be 

valued at market value, which will 

generally be determined using the last 

reported official closing or last trading 

price on the exchange or market on 

which the security is primarily traded at 

the time of valuation or, if no sale has 

occurred, at the last quoted bid price on 

the primary market or exchange on 

which they are traded. Money market 

mutual funds will be valued at NAV. 

Other money market securities generally 

will be valued on the basis of 

independent pricing services or quotes 

obtained from brokers and dealers. 

Other portfolio securities and assets 

for which market quotations are not 

readily available or determined to not 

represent the current fair value will be 

valued based on fair value as 

determined in good faith in accordance 

with procedures adopted by the Board 

and in accordance with the 1940 Act. 

Creations and Redemptions of Shares 

According to the Registration 

Statement, the Fund will issue and sell 

Shares only in ‘‘Creation Unit’’ size at 

the NAV next determined after receipt, 

on any business day, of an order in 

proper form. A Creation Unit consists of 

25,000 Shares. The size of a Creation 

Unit is subject to change. 

The consideration for purchase of 

Creation Units of the Fund generally 

will consist of the in-kind deposit of a 

designated portfolio of equity 

securities—the ‘‘Deposit Securities’’— 

per each Creation Unit constituting a 

substantial replication, or a 

representation, of the securities 

included in the Fund’s portfolio and an 


TKELLEY on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 34 / Friday, February 20, 2015 / Notices 9297 

23The Adviser represents that, to the extent the 

Trust effects the creation or redemption of Shares 

in cash, such transactions will be effected in the 

same manner for all Authorized Participants. 

amount of cash—the ‘‘Cash 

Component’’—computed as described 

below. Together, the Deposit Securities 

and the Cash Component constitute the 

‘‘Fund Deposit,’’ which represents the 

minimum initial and subsequent 

investment amount for a Creation Unit 

of the Fund. 

The Cash Component (also referred to 

as the ‘‘Balancing Amount’’) serves the 

function of compensating for any 

differences between the NAV per 

Creation Unit and the Deposit Amount 

(as defined below). The Cash 

Component is an amount equal to the 

difference between the NAV of the Fund 

Shares (per Creation Unit) and the 

‘‘Deposit Amount’’—an amount equal to 

the market value of the Deposit 

Securities. If the Cash Component is a 

positive number (i.e., the NAV per 

Creation Unit exceeds the Deposit 

Amount), the creator will deliver the 

Cash Component. If the Cash 

Component is a negative number (i.e., 

the NAV per Creation Unit is less than 

the Deposit Amount), the creator will 

receive the Cash Component. 

The Custodian, through the National 

Securities Clearing Corporation 

(‘‘NSCC’’), will make available on each 

business day, prior to the opening of 

business on the Exchange (currently 

9:30 a.m., Eastern time), 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. 

Such Fund Deposit will be applicable, 

subject to any adjustments as described 

below, in order to effect creations of 

Creation Units of the Fund until such 

time as the next announced composition 

of the Deposit Securities is made 

available. 

The identity and number of shares of 

the Deposit Securities required for a 

Fund Deposit for the Fund will change 

as rebalancing adjustments and 

corporate action events are reflected 

from time to time by the Sub-Adviser to 

the Fund with a view to the investment 

objective of the Fund. In addition, the 

Trust reserves the right to permit or 

require the substitution of an amount of 

cash—i.e., a ‘‘cash in lieu’’ amount—to 

be added to the Cash Component to 

replace any Deposit Security which may 

not be available in sufficient quantity 

for delivery or which may not be 

eligible for transfer, or which may not 

be eligible for trading by an Authorized 

Participant (as defined below) or the 

investor for which it is acting. The Trust 

also reserves the right to offer an ‘‘all 

cash’’ option for creations of Creation 

Units for the Fund.23

In addition to the list of names and 

numbers of securities constituting the 

current Deposit Securities of a Fund 

Deposit, the Administrator, 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 of the Fund. 

To be eligible to place orders with the 

Distributor to create a Creation Unit of 

the Fund, an entity must be (i) a 

‘‘Participating Party,’’ i.e., a brokerdealer or other participant in the 

clearing process through the Continuous 

Net Settlement System of the NSCC (the 

‘‘Clearing Process’’), a clearing agency 

that is registered with the Commission; 

or (ii) a Depository Trust Company 

(‘‘DTC’’) Participant, and, in each case, 

must have executed a ‘‘Participant 

Agreement’’ with the Trust, the 

Distributor and the Administrator with 

respect to creations and redemptions of 

Creation Units. A Participating Party 

and DTC Participant are collectively 

referred to as an ‘‘Authorized 

Participant.’’ 

All orders to create Creation Units 

must be placed for one or more Creation 

Unit size aggregations of at least 25,000 

Shares. All orders to create Creation 

Units must be received by the 

Distributor no later than 3:00 p.m., 

Eastern Time, an hour earlier than the 

close of the regular trading session on 

the Exchange (ordinarily 4:00 p.m., 

Eastern Time) (‘‘Closing Time’’), in each 

case on the date such order is placed in 

order for the creation of Creation Units 

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. 

Redemption of Shares 

According to the Registration 

Statement, Shares may be redeemed 

only in Creation Units at their NAV next 

determined after receipt of a redemption 

request in proper form by the Fund 

through the Administrator and only on 

a business day. Orders to redeem 

Creation Units must be received by the 

Administrator not later than 3:00 p.m., 

Eastern Time. 

With respect to the Fund, the 

Administrator, through the NSCC, will 

make available immediately prior to the 

opening of business on the Exchange 

(currently 9:30 a.m., Eastern Time) on 

each business day, the list of the names 

and number of shares of the Fund’s 

portfolio securities (‘‘Fund Securities’’) 

that will be applicable (subject to 

possible amendment or correction) to 

redemption requests received in proper 

form on that day. Fund Securities 

received on redemption may not be 

identical to Deposit Securities which are 

applicable to creations of Creation 

Units. 

Unless cash redemptions are available 

or specified for the Fund, the 

redemption proceeds for a Creation Unit 

generally will consist of Fund 

Securities—as announced by the 

Administrator on the business day of 

the request for redemption received in 

proper form—plus cash in an amount 

equal to the difference between the NAV 

of the Shares being redeemed, as next 

determined after receipt of a request in 

proper form, and the value of the Fund 

Securities (the ‘‘Cash Redemption 

Amount’’), less a redemption 

transaction fee. In the event that the 

Fund Securities have a value greater 

than the NAV of the Shares, a 

compensating cash payment equal to the 

differential is required to be made by or 

through an Authorized Participant by 

the redeeming shareholder. 

If it is not possible to effect deliveries 

of the Fund Securities, the Fund may in 

its discretion exercise its option to 

redeem such shares in cash, and the 

redeeming beneficial owner will be 

required to receive its redemption 

proceeds in cash. In addition, an 

investor may request a redemption in 

cash which the Fund may, in its sole 

discretion, permit. In either case, the 

investor will receive a cash payment 

equal to the NAV of its Shares based on 

the NAV of Shares of the Fund next 

determined after the redemption request 

is received in proper form (minus a 

redemption transaction fee and 

additional charge for requested cash 

redemptions to offset the Trust’s 

brokerage and other transaction costs 

associated with the disposition of Fund 

Securities). The Fund may also, in its 

sole discretion, upon request of a 

shareholder, provide such redeemer a 

portfolio of securities which differs from 

the exact composition of the Fund 

Securities but does not differ in NAV. 

Redemptions of Shares for Fund 

Securities will be subject to compliance 

with applicable federal and state 

securities laws and the Fund (whether 

or not it otherwise permits cash 

redemptions) reserves the right to 

redeem Creation Units for cash to the 

extent that the Fund could not lawfully 

deliver specific Fund Securities upon 

redemptions or could not do so without 

first registering the Fund Securities 

under such laws. An Authorized 


TKELLEY on DSK3SPTVN1PROD with NOTICES
9298 Federal Register / Vol. 80, No. 34 / Friday, February 20, 2015 / Notices 

24The Bid/Ask Price of Shares of the Fund will 

be determined using the mid-point 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. 

25Under 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. 

26Currently, it is the Exchange’s understanding 

that several major market data vendors display and/ 

or make widely available Portfolio Indicative 

Values taken from CTA or other data feeds. 27See NYSE Arca Equities Rule 7.12. 

Participant or an investor for which it is 

acting subject to a legal restriction with 

respect to a particular stock included in 

the Fund Securities applicable to the 

redemption of a Creation Unit may be 

paid an equivalent amount of cash. The 

Trust also reserves the right to offer an 

‘‘all cash’’ option for redemptions of 

Creation Units for the Fund. 

The right of redemption may be 

suspended or the date of payment 

postponed with respect to the Fund (1) 

for any period during which the NYSE 

is closed (other than customary 

weekend and holiday closings); (2) for 

any period during which trading on the 

NYSE is suspended or restricted; (3) for 

any period during which an emergency 

exists as a result of which disposal of 

the Shares of the Fund or determination 

of the Shares’ NAV is not reasonably 

practicable; or (4) in such other 

circumstance as is permitted by the 

Commission. 

Availability of Information 

The Fund’s Web site 

(www.innovatorfunds.com), which will 

be publicly available prior to the public 

offering of Shares, will include a form 

of the prospectus for the Fund that may 

be downloaded. The Fund’s Web site 

will include additional quantitative 

information updated on a daily basis, 

including, for the Fund, (1) daily trading 

volume, the prior business day’s 

reported closing price, NAV and midpoint of the bid/ask spread at the time 

of calculation of such NAV (the ‘‘Bid/

Ask Price’’),24 and a calculation of the 

premium and discount of the Bid/Ask 

Price against the NAV, and (2) data in 

chart format displaying the frequency 

distribution of discounts and premiums 

of the daily Bid/Ask Price against the 

NAV, within appropriate ranges, for 

each of the four previous calendar 

quarters. On each business day, before 

commencement of trading in Shares in 

the Core Trading Session on the 

Exchange, the Fund will disclose on its 

Web site the Disclosed Portfolio that 

will form the basis for the Fund’s 

calculation of NAV at the end of the 

business day.25

On a daily basis, the Adviser, on 

behalf of the Fund, will disclose on the 

Fund’s Web site the following 

information regarding each portfolio 

holding, as applicable to the type of 

holding: Ticker symbol, CUSIP number 

or other identifier, if any; a description 

of the holding (including the type of 

holding); the identity of the security, 

index, or other asset or instrument 

underlying the holding, if any; maturity 

date, if any; coupon rate, if any; 

effective date, if any; market value of the 

holding; and the percentage weighting 

of the holding in the Fund’s 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 (as applicable) required 

to be delivered in exchange for Fund 

Shares, together with estimates and 

actual cash components, will be 

publicly disseminated daily prior to the 

opening of the NYSE via the NSCC. The 

basket will represent one Creation Unit 

of the Fund. 

Investors can also obtain the Fund’s 

Statement of Additional Information 

(‘‘SAI’’), the Fund’s Shareholder 

Reports, and its Form N–CSR and Form 

N–SAR, filed twice a year. The Trust’s 

SAI and Shareholder Reports will be 

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 and U.S. exchange-listed 

equity securities, including common 

stocks, ETFs, unit investment trusts, 

closed-end investment companies, 

ADRs, MLPs, REITs, royalty trusts and 

BDCs will be available via the 

Consolidated Tape Association (‘‘CTA’’) 

high-speed line, and will be available 

from the national securities exchange on 

which they are listed. Intra-day and 

closing price information relating to the 

investments of the Fund will be 

available from major market data 

vendors and from securities exchanges, 

as applicable. Price information 

regarding money market mutual funds 

will be available from on-line sources 

and from the Web site for the applicable 

fund. Price information relating to other 

money market securities will be 

available from major market data 

vendors. In addition, the Portfolio 

Indicative Value, as defined in NYSE 

Arca Equities Rule 8.600(c)(3), based on 

current information regarding the value 

of the securities and other assets in the 

Disclosed Portfolio, will be widely 

disseminated at least every 15 seconds 

during the Core Trading Session by one 

or more major market data vendors.26

The dissemination of the Portfolio 

Indicative Value, together with the 

Disclosed Portfolio, will allow investors 

to determine the value of the underlying 

portfolio of the Fund on a daily basis 

and will provide a close estimate of that 

value throughout the trading day. The 

Portfolio Indicative Value should not be 

viewed as a ‘‘real-time’’ update of the 

NAV per Share of the Fund, which will 

be calculated once per day. 

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.27 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. Eastern Time in accordance 

with NYSE Arca Equities Rule 7.34 

(Opening, Core, and Late Trading 

Sessions). The Exchange has 

appropriate rules to facilitate 

transactions in the Shares during all 

trading sessions. 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 


TKELLEY on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 34 / Friday, February 20, 2015 / Notices 9299 

28 17 CFR 240.10A–3. 

29FINRA surveils trading on the Exchange 

pursuant to a regulatory services agreement. The 

Exchange is responsible for FINRA’s performance 

under this regulatory services agreement. 

30For 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. 31 15 U.S.C. 78f(b)(5). 

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. 

The Shares will conform to the initial 

and continued listing criteria under 

NYSE Arca Equities Rule 8.600. 

Consistent with NYSE Arca Equities 

Rule 8.600(d)(2)(B)(ii), the Adviser, as 

the Reporting Authority, will implement 

and maintain, or be subject to, 

procedures designed to prevent the use 

and dissemination of material nonpublic information regarding the actual 

components of the Fund’s portfolio. The 

Exchange represents that, for initial 

and/or continued listing, the Fund will 

be in compliance with Rule 10A–3 28

under the Act, as provided by NYSE 

Arca Equities Rule 5.3. A minimum of 

100,000 Shares will be outstanding at 

the commencement of trading on the 

Exchange. The Exchange will obtain a 

representation from the issuer of the 

Shares that the NAV per Share will be 

calculated daily and that the NAV and 

the Disclosed Portfolio as defined in 

NYSE Arca Equities Rule 8.600(c)(2) 

will be made available to all market 

participants at the same time. 

Surveillance 

The Exchange represents that trading 

in the Shares will be subject to the 

existing trading surveillances, 

administered by the Financial Industry 

Regulatory Authority (‘‘FINRA’’) on 

behalf of the Exchange, which are 

designed to detect violations of 

Exchange rules and applicable federal 

securities laws.29 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 federal 

securities laws applicable to trading on 

the Exchange. 

The surveillances referred to above 

generally focus on detecting securities 

trading outside their normal patterns, 

which could be indicative of 

manipulative or other violative activity. 

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. 

FINRA, on behalf of the Exchange, 

will communicate as needed regarding 

trading in the Shares and underlying 

exchange-traded equity securities 

(including common stocks, ETFs, unit 

investment trusts, closed-end 

investment companies, ADRs, MLPs, 

REITs, royalty trusts and BDCs) with 

other markets and other entities that are 

members of the Intermarket 

Surveillance Group (‘‘ISG’’), and FINRA, 

on behalf of the Exchange, may obtain 

trading information regarding trading in 

the Shares, underlying exchange-traded 

equity securities, from such markets and 

other entities. In addition, the Exchange 

may obtain information regarding 

trading in the Shares and underlying 

exchange-traded equity securities from 

markets and other entities that are 

members of ISG or with which the 

Exchange has in place a comprehensive 

surveillance sharing agreement.30

Not more than 10% of the net assets 

of the Fund in the aggregate invested in 

exchange-traded equity securities shall 

consist of equity securities whose 

principal market is not a member of the 

ISG or is a market with which the 

Exchange does not have a 

comprehensive surveillance sharing 

agreement. 

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 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 Equity Trading Permit Holders to 

learn the essential facts relating to every 

customer prior to trading the Shares; (3) 

the risks involved in trading the Shares 

during the Opening and Late Trading 

Sessions when an updated Portfolio 

Indicative Value will not be calculated 

or publicly disseminated; (4) how 

information regarding the Portfolio 

Indicative Value is disseminated; (5) the 

requirement that Equity Trading Permit 

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 

Act. The Bulletin will also disclose that 

the NAV for the Shares will be 

calculated after 4:00 p.m. Eastern Time 

each trading day. 

2. Statutory Basis 

The basis under the Act for this 

proposed rule change is the requirement 

under Section 6(b)(5) 31 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. FINRA, on behalf of the Exchange, 

will communicate as needed regarding 

trading in the Shares and underlying 

exchange-traded equity securities 

(including common stocks, ETFs, unit 

investment trusts, closed-end 

investment companies, ADRs, MLPs, 

REITs, royalty trusts and BDCs) with 

other markets and other entities that are 

members of ISG, and FINRA, on behalf 

of the Exchange, may obtain trading 

information regarding trading in the 

Shares and underlying exchange-traded 

equity securities from such markets and 

other entities. In addition, the Exchange 

may obtain information regarding 

trading in the Shares and underlying 

exchange-traded equity securities with 

other markets and other entities that are 

members of ISG or with which the 

Exchange has in place a comprehensive 

surveillance sharing agreement. Not 

more than 10% of the net assets of the 

Fund in the aggregate invested in 

exchange-traded equity securities shall 

consist of equity securities whose 

principal market is not a member of the 

ISG or is a market with which the 

Exchange does not have a 

comprehensive surveillance sharing 


TKELLEY on DSK3SPTVN1PROD with NOTICES
9300 Federal Register / Vol. 80, No. 34 / Friday, February 20, 2015 / Notices 

agreement. Neither the Adviser nor the 

Sub-Adviser is registered as a brokerdealer. The Adviser is not affiliated with 

a broker-dealer. The Sub-Adviser is 

affiliated with a broker-dealer and has 

implemented a ‘‘fire wall’’ with respect 

to such broker-dealer regarding access to 

information concerning the composition 

and/or changes to the Fund’s portfolio. 

In the event (a) the Adviser or the SubAdviser becomes a registered brokerdealer or becomes newly affiliated with 

a broker-dealer, or (b) any new adviser 

or any sub-adviser is a registered brokerdealer or becomes affiliated with a 

broker-dealer, it will implement a fire 

wall with respect to its relevant 

personnel or its broker-dealer affiliate 

regarding access to information 

concerning the composition and/or 

changes to the Fund’s portfolio, and will 

be subject to procedures designed to 

prevent the use and dissemination of 

material non-public information 

regarding such portfolio. The Fund may 

hold up to an aggregate amount of 15% 

of its net assets in illiquid assets. The 

Fund will not invest in leveraged or 

inverse leveraged (e.g., 2X, ¥2X, 3X or 

¥3X) ETFs. The Fund’s investments 

will be consistent with the Fund’s 

investment objective and will not be 

used to enhance leverage. 

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 

will be publicly available regarding the 

Fund and the Shares, thereby promoting 

market transparency. Quotation and last 

sale information for the Shares will be 

available via the CTA high-speed line. 

In addition, the Portfolio Indicative 

Value will be widely disseminated by 

the Exchange at least every 15 seconds 

during the Core Trading Session. The 

Fund’s Web site will include a form of 

the prospectus for the Fund that may be 

downloaded, as well as additional 

quantitative information updated on a 

daily basis. 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. On a daily basis, the 

Adviser, on behalf of the Fund, will 

disclose on the Fund’s Web site the 

following information regarding each 

portfolio holding, as applicable to the 

type of holding: Ticker symbol, CUSIP 

number or other identifier, if any; a 

description of the holding (including 

the type of holding); the identity of the 

security, index, or other asset or 

instrument underlying the holding, if 

any; maturity date, if any; coupon rate, 

if any; effective date, if any; market 

value of the holding; and the percentage 

weighting of the holding in the Fund’s 

portfolio. The Web site information will 

be publicly available at no charge. 

Moreover, 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 

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. 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 Portfolio Indicative 

Value, 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 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. In 

addition, as noted above, investors will 

have ready access to information 

regarding the Fund’s holdings, the 

Portfolio Indicative Value, 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 purpose of the Act. The Exchange 

notes that the proposed rule change will 

facilitate the listing and trading of an 

additional type of actively-managed 

exchange-traded product that primarily 

holds equity securities and that will 

enhance competition among market 

participants, to the benefit of investors 

and the marketplace. 

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 

up to 90 days (i) as the Commission may 

designate 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 rule-comments@

sec.gov. Please include File Number SR– 

NYSEArca–2015–04 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEArca–2015–04. 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 


TKELLEY on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 34 / Friday, February 20, 2015 / Notices 9301 

32 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities Exchange Act Release No. 62502 

(July 15, 2010), 75 FR 42471 (July 21, 2010) (SR– 

NYSEArca–2010–57) (the ‘‘Prior Order’’). The 

notice with respect to the Prior Order was 

published in Securities Exchange Act Release No. 

62344 (June 21, 2010), 75 FR 37498 (June 29, 2010) 

(‘‘Prior Notice’’ and, together with the Prior Order, 

the ‘‘Prior Release’’). 

5A 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. 

6The Trust is registered under the 1940 Act. On 

November 1, 2014, the Trust filed with the 

Commission an amendment to its registration 

statement on Form N–1A under the Securities Act 

of 1933 (15 U.S.C. 77a) and the 1940 Act relating 

to the Fund (File Nos. 333–157876 and 811–22110) 

(the ‘‘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 

the1940 Act. See Investment Company Act Release 

No. 29291 (May 28, 2010) (File No. 812–13677) 

(‘‘Exemptive Order’’). 

7According to the Registration Statement, DRs, 

which include ADRs, GDRs, Euro DRs and NYSs, 

are negotiable securities that generally represent a 

non-U.S. company’s publicly traded equity or debt. 

Depositary Receipts may be purchased in the U.S. 

secondary trading market. They may trade freely, 

just like any other security, either on an exchange 

or in the over-the-counter market. Although 

typically denominated in U.S. dollars, Depositary 

Receipts can also be denominated in Euros. 

Depositary Receipts can trade on all U.S. stock 

exchanges as well as on many European stock 

exchanges. 

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 Room, 100 F Street NE., 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR– 

NYSEArca–2015–04, and should be 

submitted on or before March 13, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.32

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–03519 Filed 2–19–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74271; File No. SR– 

NYSEArca–2015–06] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Regarding the 

AdvisorShares WCM/BNY Mellon 

Focused Growth ADR ETF’s Holdings 

of Non-U.S. Equity Securities 

February 13, 2015. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on February 

3, 2015, NYSE Arca, Inc. (the 

‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. 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 change a 

representation regarding the 

AdvisorShares WCM/BNY Mellon 

Focused Growth ADR ETF’s holdings of 

non-U.S. equity securities. Shares of the 

WCM/BNY Mellon Focused Growth 

ADR ETF have been approved for listing 

and trading on the Exchange under 

NYSE Arca Equities Rule 8.600. The text 

of the proposed rule change is available 

on the Exchange’s Web site at 

www.nyse.com, 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 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

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

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Commission has approved a 

proposed rule change relating to listing 

and trading on the Exchange of shares 

(‘‘Shares’’) of the AdvisorShares WCM/ 

BNY Mellon Focused Growth ADR ETF 

(the ‘‘Fund’’) under NYSE Arca Equities 

Rule 8.600,4 which governs the listing 

and trading of Managed Fund Shares.5

The Fund’s Shares are currently listed 

and traded on the Exchange under 

NYSE Arca Equities Rule 8.600. 

The Shares are offered by 

AdvisorShares Trust (the ‘‘Trust’’), a 

statutory trust organized under the laws 

of the State of Delaware and registered 

with the Commission as an open-end 

management investment company.6 The 

investment adviser to the Fund is 

AdvisorShares Investments, LLC (the 

‘‘Adviser’’). WCM Investment 

Management (‘‘WCM’’) is the subadviser and portfolio manager to the 

Fund (‘‘Sub-Adviser’’). 

According to the Registration 

Statement, and as stated in the Prior 

Release the Fund’s investment objective 

is long-term capital appreciation above 

international benchmarks such as the 

BNY Mellon Classic ADR Index and the 

MSCI EAFE Index. WCM seeks to 

achieve the Fund’s investment objective 

by selecting a portfolio of U.S. traded 

securities of non-U.S. organizations 

included in the BNY Mellon Classic 

ADR Index. The BNY Mellon Classic 

ADR Index predominantly includes 

American Depositary Receipts (‘‘ADRs’’) 

and in addition includes other 

Depositary Receipts (‘‘DRs’’), which 

include Global Depositary Receipts 

(‘‘GDRs’’), Euro Depositary Receipts 

(‘‘Euro DRs’’) and New York Shares 

(‘‘NYSs’’).7

According to the Prior Release, WCM 

employs a team approach through 

Investment Strategy Group, consisting of 

four senior investment professionals 

(the ‘‘Portfolio Managers’’). This team 

establishes portfolio guidelines for 

sector and industry analysis and 

develops the Fund’s portfolio. The 

Portfolio Managers analyze the major 

trends in the global economy in order to 

identify those economic sectors and 


TKELLEY on DSK3SPTVN1PROD with NOTICES