10524 Federal Register / Vol. 80, No. 38 / Thursday, February 26, 2015 / Notices 

1Exchange Act Release No. 74299 (Feb. 18, 2015) 

(SR–NASDAQ–2014–065). 

2Creation Units of shares are composed of 25,000 

‘‘Up’’ Shares and 25,000 ‘‘Down’’ Shares, as 

explained infra. 

3The Underlying Indexes for the Funds are (1) 

S&P GSCI Spot Index, (2) S&P GSCI Agricultural 

and Livestock Spot Index, (3) S&P GSCI Industrial 

Metals Spot Index, (4) S&P GSCI Crude Oil Spot 

Index, (5) S&P GSCI Brent Crude Oil Spot Index, 

(6) S&P GSCI Natural Gas Spot Index, and (7) CBOE 

Volatility Index (also known as the ‘‘VIX’’). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74348; File No. TP 14–02] 

Order Granting Limited Exemptions 

From Exchange Act Rule 10b–17 and 

Rules 101 and 102 of Regulation M to 

AccuShares S&P GSCI Spot Fund, 

AccuShares S&P GSCI Agriculture and 

Livestock Spot Fund, AccuShares S&P 

GSCI Industrial Metals Spot Fund, 

AccuShares S&P GSCI Crude Oil Spot 

Fund, AccuShares S&P GSCI Brent Oil 

Spot Fund, AccuShares S&P GSCI 

Natural Gas Spot Fund, and 

AccuShares Spot CBOE VIX Fund, 

Pursuant to Exchange Act Rule 10b– 

17(b)(2) and Rules 101(d) and 102(e) of 

Regulation M 

February 20, 2015. 

On February 18, 2015, the 

Commission approved a proposed rule 

change by NASDAQ Stock Market LLC 

to adopt new listing standards for 

‘‘Paired Class Shares’’ as new NASDAQ 

Rule 5713, as well as to permit the 

listing and trading of ‘‘Paired Class 

Shares’’ issued by AccuShares 

Commodity Trust I (the ‘‘Trust’’).1 By 

letter dated February 20, 2015 (the 

‘‘Letter’’), as supplemented by 

conversations with the staff of the 

Division of Trading and Markets, 

counsel for AccuShares Investment 

Management LLC (the ‘‘Sponsor’’), the 

Trust, AccuShares S&P GSCI Spot Fund, 

AccuShares S&P GSCI Agriculture and 

Livestock Spot Fund, AccuShares S&P 

GSCI Industrial Metals Spot Fund, 

AccuShares S&P GSCI Crude Oil Spot 

Fund, AccuShares S&P GSCI Brent Oil 

Spot Fund, AccuShares S&P GSCI 

Natural Gas Spot Fund, and AccuShares 

Spot CBOE VIX Fund (the ‘‘Funds’’), the 

listing exchange, any national securities 

exchange on or through which shares 

issued by the Funds (‘‘Shares’’) may 

subsequently trade, and persons or 

entities engaging in transactions in 

Shares (collectively, the ‘‘Requestors’’) 

requested exemptions, or interpretive or 

no-action relief, from Rule 10b–17 

under the Securities Exchange Act of 

1934, as amended (‘‘Exchange Act’’), 

and Rules 101 and 102 of Regulation M, 

in connection with secondary market 

transactions in Shares and the creation 

or redemption of aggregations of Shares 

of at least 50,000 shares (‘‘Creation 

Units’’).2

As the Requestors explain in the 

Letter, the Trust is a Delaware statutory 

trust that is organized into separate 

Funds. Each Fund will have a 

distinctive objective to track the 

movements in a specified spot 

commodity, commodity futures 

contract, or measures of price volatility 

of a broad-based equity index as 

measured by such Fund’s underlying 

index (‘‘Underlying Index’’) during each 

Fund’s ‘‘Measuring Period.’’ 3 Each 

Fund will engage in issuing, offering, 

and redeeming ‘‘paired’’ ‘‘Up’’ and 

‘‘Down’’ Shares, two types of Shares 

that reflect different views on the future 

direction of the Underlying Index. 

Entitlements of a Fund’s Up Shares to 

distributions are related to any increases 

of such Fund’s Underlying Index, and 

entitlements of a Fund’s Down Shares to 

distributions from such Fund are related 

to any decreases of the same Underlying 

Index, during each Measuring Period. 

The Funds will not hold commodities, 

futures, or other assets that are 

referenced by the Underlying Index but 

will instead hold cash, certain U.S. 

Treasury securities, and certain 

overnight repurchase agreements. 

Creations and redemptions are 

permitted only in Creation Units. 

The Requestors also represent, among 

other things, the following: 

• Shares of the Funds will be listed 

and traded on a national securities 

exchange that has obtained approval of 

a rule change from the Commission 

pursuant to Rule 19b–4; 

• Neither the Trust nor any of its 

Funds will be an investment company 

registered under the Investment 

Company Act of 1940, as amended 

(‘‘1940 Act’’), and will not be required 

to register under the 1940 Act; 

• Each Fund will continuously issue 

and redeem Shares in aggregations of at 

least 50,000 Shares (25,000 Up Shares 

and 25,000 Down Shares) in exchange 

for specified amounts of cash, with the 

objective of tracking the performance of 

a specified commodity or volatility 

index; 

• Throughout the trading day, the 

listing exchange will publicly 

disseminate intra-day prices of Fund 

Shares and their respective Underlying 

Indexes; 

• The market value of Shares should 

be in close alignment with the increases 

and decreases in the value of each 

Fund’s Underlying Index which tracks 

one or more physical commodities, a 

basket of particular commodities, 

commodity futures contracts, other 

commodity derivatives, or measures of 

price volatility of a broad-based equity 

index; 

• Like other exchange-traded 

products, the secondary market price of 

Shares should not vary substantially 

from their respective Class Values (as 

defined in the Letter) per Share because 

the redeemability and the continuous 

offering features of the Funds provide 

opportunities for arbitrage activity that 

should eliminate any significant 

disparity between the market price of 

Shares and their respective Class Values 

per Share. 

• Significant disparities between the 

market price of each Fund’s Shares and 

the liquidation value of the Shares and 

between the market price of each Fund’s 

Shares and the value of the Underlying 

Index should be eliminated by the 

arbitrage mechanism afforded by the 

open-ended character of the Funds and 

the redeemability of their Shares; 

• The ‘‘Corrective Distribution’’ 

mechanism (as described in the Letter) 

is designed to supplement the 

aforementioned arbitrage mechanism in 

those rare situations where the arbitrage 

mechanism fails; 

• The presence of each Fund’s preestablished Corrective Distribution 

Thresholds (as defined in the Letter) is 

also intended to aid in driving the 

alignment of market prices with Class 

Value per Share; 

• Special Distributions (as defined in 

the Letter) will be triggered only if a 

Fund’s Underlying Index experiences an 

unexpected level of volatility and 

exceeds a fixed rate of change (for 

example, 75% for the AccuShares S&P 

GSCI Spot and AccuShares S&P GSCI 

Natural Gas Spot Funds) since the 

beginning of the Measuring Period (as 

defined in the Letter); 

• Special Distributions are not 

expected to occur regularly and will 

occur, if at all, only under the limited 

circumstances and according to the 

fixed formula stated in each Fund’s 

prospectus; 

• Each Fund will alert shareholders 

in a prominent manner on its Web site 

at the close of the business day during 

any Measuring Period when such 

Fund’s Underlying Index first 

experiences a 50% increase or decrease 

in its level since the beginning of that 

Measuring Period and, if and when a 

Fund’s Underlying Index exceeds its 

threshold for issuing a Special 

Distribution during such Measuring 

Period, at the close of business on such 

day the relevant Fund will immediately 

notify the listing exchange, and will 

thereafter issue a press release and post 

a notice of such event and its details on 


rmajette on DSK2VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 38 / Thursday, February 26, 2015 / Notices 10525 

4Other distributions, specifically previously 

announced distributions of a Fund’s net income or 

a Corrective Distribution, may occasionally 

simultaneously accompany a Special Distribution 

(‘‘Accompanying Distributions’’). In some cases, 

these Accompanying Distributions may be triggered 

without sufficient time to make the notice required 

by Rule 10b–17 in the time frame mandated in the 

rule. The exemption contained herein only extends 

to those Accompanying Distributions that cannot be 

disclosed ten days prior to the record date because 

the Accompanying Distribution was triggered 

within that ten-day time frame (‘‘Exempted 

Accompanying Distributions’’). 

5See Securities Exchange Act Release No. 33924 

(Apr. 19, 1994); 59 FR 21681 (Apr. 26, 1994) (stating 

that the purpose of the prohibitions of Rules 101 

and 102 are to ‘‘prevent those persons participating 

in a distribution of securities . . . from artificially 

conditioning the market for the securities in order 

to facilitate the distribution’’ as well as ‘‘to protect 

the integrity of the securities trading market as an 

independent pricing mechanism.’’). 

its Web site, including notice of any 

other distributions to be made 

therewith; 4

• The Funds will provide at least 

three business days’ notice to the listing 

exchange in advance of the related 

record date for Special Distributions and 

any Exempted Accompanying 

Distribution; 

• The listing exchange has confirmed 

that publication of a Special 

Distribution Notice (as defined in the 

Letter) three business days in advance of 

a Special Distribution Record Date (as 

defined in the Letter) can be made in the 

normal course, and will not require any 

system changes, technology alterations 

or other type of reconfigurations by the 

exchange and that it will be able to 

adequately disseminate the distribution 

information contained in the Special 

Distribution Notice to its members and 

the investing public within the threeday time period and, as a result, the 

Sponsor believes that the parties 

transacting in Fund Shares, as well as 

their broker-dealers, will be able to 

timely reflect Special Distributions and 

Exempted Accompanying Distributions 

in the price ultimately paid; and 

• The Sponsor has agreed to compile 

the following data and provide it to the 

Commission staff on a quarterly basis 

for each Fund during the first year of 

operation: 

Æ Daily Class Values and daily Class 

Values per Share; 

Æ Daily end of day secondary market 

price per Class (as defined in the Letter) 

per Share; 

Æ Per Share, the date, form (i.e., 

shares, dollars, etc.), and size of any 

distributions including any stock split; 

and 

Æ Per Share, with respect to any stock 

split, whether it was a reverse or 

forward split. 

Regulation M 

While redeemable securities issued by 

an open-end management investment 

company are excepted from the 

provisions of Rule 101 and 102 of 

Regulation M, the Requestors may not 

rely upon that exception for the Shares 

as they are not issued by an open-end 

management investment company. 

However, we find that it is appropriate 

in the public interest and is consistent 

with the protection of investors to grant 

limited exemptions from Rules 101 and 

102 to persons who may be deemed to 

be participating in a distribution of 

Shares of the Funds as well as the 

Funds, as described in more detail 

below. 

Rules 101 and 102 of Regulation M 

Generally, Rule 101 of Regulation M 

is an anti-manipulation rule that, 

subject to certain exceptions, prohibits 

any ‘‘distribution participant’’ and its 

‘‘affiliated purchasers’’ from bidding for, 

purchasing, or attempting to induce any 

person to bid for or purchase any 

security which is the subject of a 

distribution until after the applicable 

restricted period, except as specifically 

permitted in the rule. Rule 100 of 

Regulation M defines ‘‘distribution’’ to 

mean any offering of securities that is 

distinguished from ordinary trading 

transactions by the magnitude of the 

offering and the presence of special 

selling efforts and selling methods. The 

provisions of Rule 101 of Regulation M 

apply to underwriters, prospective 

underwriters, brokers, dealers, or other 

persons who have agreed to participate 

or are participating in a distribution of 

securities. The Shares are in a 

continuous distribution and, as such, 

the restricted period in which 

distribution participants and their 

affiliated purchasers are prohibited from 

bidding for, purchasing, or attempting to 

induce others to bid for or purchase 

extends indefinitely. 

Similarly, Rule 102 of Regulation M 

prohibits issuers, selling security 

holders, and any affiliated purchaser of 

such person from bidding for, 

purchasing, or attempting to induce any 

person to bid for or purchase a covered 

security during the applicable restricted 

period in connection with a distribution 

of securities effected by or on behalf of 

an issuer or selling security holder. 

Based on the representations and facts 

presented in the Letter, particularly that 

the market value of Shares should be in 

close alignment with the increases and 

decreases in the value of each Fund’s 

Underlying Index, that significant 

disparities between the market price of 

each Fund’s Shares and the liquidation 

value of the Shares and between the 

market price of each Fund’s Shares and 

the value of the Underlying Index 

should be eliminated by the arbitrage 

mechanism, and that the Corrective 

Distribution mechanism is designed to 

supplement the arbitrage mechanism in 

those rare situations where the arbitrage 

mechanism fails (which will be 

infrequent and, for most Funds, a 

Corrective Distribution may never 

occur), the concerns that the 

Commission raised in adopting Rules 

101 and 102 of Regulation M should not 

be implicated because these 

mechanisms should reduce the potential 

that the purchases effected during the 

restricted period by these distribution 

participants and the Funds may 

artificially affect the secondary market 

price of the Shares.5 As a result, the 

Commission finds that it is appropriate 

in the public interest and consistent 

with the protection of investors to grant 

the Trust an exemption (1) under 

paragraph (d) of Rule 101 of Regulation 

M with respect to the Funds, thus 

permitting persons participating in a 

distribution of Shares of the Funds to 

bid for or purchase such Shares during 

the applicable restricted period and (2) 

under paragraph (e) of Rule 102 of 

Regulation M with respect to the Funds, 

thus permitting the Funds to redeem 

Shares of the Funds during the 

applicable restricted period. 

Rule 10b–17 

Rule 10b–17, with certain exceptions, 

requires an issuer of a class of publicly 

traded securities to give notice of certain 

specified actions (for example, a 

dividend distribution) relating to such 

class of securities in accordance with 

Rule 10b–17(b). Based on the 

representations from the Fund, Sponsor, 

and listing exchange that timely 

notification of the existence and timing 

of such Special Distributions and 

Exempted Accompanying Distributions 

will be provided to market participants 

and that Special Distributions and 

Exempted Accompanying Distributions 

are not expected to occur frequently and 

only under the limited circumstances, if 

at all, according to a pre-determined 

formula published in each Fund’s 

prospectus, the concerns that the 

Commission raised in adopting Rule 

10b–17 should not be implicated. As a 

result, the Commission finds that it is 

appropriate in the public interest and 

consistent with the protection of 

investors to grant the Trust a 

conditional exemption from Rule 10b– 

17 with respect to the Special 

Distributions and Exempted 

Accompanying Distributions. 


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10526 Federal Register / Vol. 80, No. 38 / Thursday, February 26, 2015 / Notices 

6 17 CFR 200.30–3(a)(6) and (9). 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release Nos. 69140 

(March 15, 2013), 78 FR 17255 (March 20, 2013); 

and 69343 (April 8, 2013), 78 FR 21982 (April 2, 

2013) (SR–BX–2013–026). 

4Securities Exchange Act Release No. 69343 

(April 8, 2013), 78 FR 21982 (April 12, 2013) (SR– 

BX–2013–026). 

5The Plan was extended until February 20, 2015. 

The Plan was initially approved for a one-year pilot 

period, which began on April 8, 2013. Securities 

Exchange Act Release No. 71649 (March 5, 2014), 

79 FR 13696 (March 11, 2014). 

6Unless otherwise specified, capitalized terms 

used in this rule filing are based on the defined 

terms of the Plan. 

7Securities Exchange Act Release No. 71900 

(April 8, 2014), 79 FR 20951 (April 14, 2014) (SR– 

BX–2014–017). 

Conclusion 

It is hereby ordered, pursuant to Rule 

101(d) of Regulation M, that the Trust, 

based on the representations and facts 

presented in the Letter, is exempt from 

the requirements of Rule 101 with 

respect to the Funds, thus permitting 

persons who may be deemed to be 

participating in a distribution of Shares 

of the Funds to bid for or purchase such 

Shares during their participation in 

such distribution. 

It is further ordered, pursuant to Rule 

102(e) of Regulation M, that the Trust, 

based on the representations and the 

facts presented in the Letter, is exempt 

from the requirements of Rule 102 with 

respect to the Funds, thus permitting 

the Funds to redeem Shares of the 

Funds during the continuous offering of 

such Shares. 

It is further ordered, pursuant to Rule 

10b–17(b)(2), that the Trust, based on 

the representations and the facts 

presented in the Letter, subject to the 

conditions that the Funds will provide 

at least three business days’ notice in 

advance of the related record date for 

Special Distributions and any Exempted 

Accompanying Distribution and that the 

Funds will otherwise comply with Rule 

10b–17 with regard to any distributions 

except Special Distributions and 

Exempted Accompanying Distributions 

as described above and in the Letter, is 

exempt from the requirements of Rule 

10b–17 with respect to Special 

Distributions and any Exempted 

Accompanying Distribution. 

This exemptive relief is subject to 

modification or revocation at any time 

the Commission determines that such 

action is necessary or appropriate in 

furtherance of the purposes of the 

Exchange Act. This exemption is based 

on the facts presented and the 

representations made in the Letter. Any 

different facts or representations may 

require a different response. In the event 

that any material change occurs in the 

facts or representations in the Letter, 

transactions in Shares of the Funds 

must be discontinued, pending 

presentation of the facts for our 

consideration. In addition, persons 

relying on this exemption are directed 

to the anti-fraud and anti-manipulation 

provisions of the Exchange Act, 

particularly Sections 9(a) and 10(b), and 

Rule 10b–5 thereunder. Responsibility 

for compliance with these and any other 

applicable provisions of the federal 

securities laws must rest with the 

persons relying on this exemption. This 

order should not be considered a view 

with respect to any other question that 

the proposed transactions may raise, 

including, but not limited to the 

adequacy of the disclosure concerning, 

and the applicability of other federal or 

state laws to, the proposed transactions. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–03967 Filed 2–25–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74334; File No. SR–BX– 

2015–012] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change To Amend the 

BX Options Rules To Extend the Pilot 

Program Under Chapter V, Section 

3(d)(iv) 

February 20, 2015. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on February 

19, 2015, NASDAQ OMX BX, Inc. (‘‘BX’’ 

or ‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes to amend the 

BX Options Rules to extend the pilot 

program under Chapter V, Section 

3(d)(iv), which provides for how the 

Exchange treats obvious and 

catastrophic options errors in response 

to the Plan to Address Extraordinary 

Market Volatility Pursuant to Rule 608 

of Regulation NMS under the Act (the 

‘‘Limit Up-Limit Down Plan’’ or the 

‘‘Plan’’).3 The Exchange proposes to 

extend the pilot period until October 23, 

2015. 

The text of the proposed rule 

change is available on the Exchange’s 

Web site at http://

nasdaqomxbx.cchwallstreet.com/, at the 

principal office of the Exchange, and at 

the Commission’s Public Reference 

Room.] [sic] 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

In April 2013,4 the Commission 

approved a proposal, on a one year pilot 

basis, to adopt Chapter V, Section 

3(d)(iv) to provide for how the Exchange 

will treat obvious and catastrophic 

options errors in response to the Plan, 

which is applicable to all NMS stocks, 

as defined in Regulation NMS Rule 

600(b)(47).5 The Plan is designed to 

prevent trades in individual NMS stocks 

from occurring outside of specified 

Price Bands.6 The requirements of the 

Plan are coupled with Trading Pauses to 

accommodate more fundamental price 

moves (as opposed to erroneous trades 

or momentary gaps in liquidity). 

The Exchange extended the operation 

of Chapter V, Section 3(d)(iv), which 

provides that trades are not subject to an 

obvious error or catastrophic error 

review pursuant to Chapter V, Sections 

6(b) or 6(f) during a Limit State or 

Straddle State in 2014.7 The Exchange 

now proposes to extend the pilot 

program for an additional pilot period 

ending October 23, 2015. The Exchange 

believes conducting an obvious error or 

catastrophic error review is 

impracticable given the lack of a reliable 

National Best Bid/Offer (‘‘NBBO’’) in the 


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