Federal Register / Vol. 79, No. 214 / Wednesday, November 5, 2014 / Notices 65751 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 In Amendment No. 1, the Exchange changed the 

name of the ‘‘PowerShares Diversified Commodity 

Strategy Portfolio’’ to ‘‘PowerShares DB Optimum 

Yield Diversified Commodity Strategy Portfolio,’’ 

and changed the name of the ‘‘PowerShares 

Balanced Commodity Strategy Portfolio’’ to 

‘‘PowerShares Bloomberg Commodity Strategy 

Portfolio.’’ 

4See Securities Exchange Act Release No. 73078 

(Sept. 11, 2014), 79 FR 55851 (‘‘Notice’’). 

5According to the Exchange, the Trust is 

registered with the Commission as an investment 

company and has filed a registration statement on 

Form N–1A (‘‘Registration Statement’’) with the 

Commission. See Registration Statement on Form 

N–1A for the Trust, dated May 20, 2014 (File Nos. 

333–193135 and 811–22927). The Exchange states 

that the Commission has issued an order granting 

certain exemptive relief to affiliates of the Trust, 

and which extends to the Trust, under the 

Investment Company Act of 1940 (‘‘1940 Act’’). See 

Investment Company Act Release No. 30029 (Apr. 

10, 2012) (File No. 812–13795). 

6The Exchange states that, although the Adviser 

is not a broker-dealer, the Adviser is affiliated with 

the Distributor, which is a broker-dealer. The 

Exchange represents that the Adviser has 

implemented a fire wall with respect to its brokerdealer affiliate regarding access to information 

concerning the composition and/or changes to a 

Fund’s portfolio (including the portfolio of a 

Subsidiary, as defined herein). Nasdaq Rule 5735(g) 

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 non-public 

information regarding the open-end fund’s portfolio 

(including the portfolio of a Subsidiary, as defined 

herein). In addition, the Exchange represents that in 

the event (a) the Adviser registers as a broker-dealer 

or becomes newly affiliated with a broker-dealer, or 

(b) any new adviser or sub-adviser is a registered 

broker-dealer or becomes affiliated with a brokerdealer, the Adviser will implement a fire wall with 

respect to its relevant personnel or such brokerdealer affiliate, as applicable, regarding access to 

information concerning the composition and 

changes to the portfolio, and the Adviser will be 

subject to procedures designed to prevent the use 

and dissemination of material non-public 

information regarding such portfolio. The Exchange 

also states that the Funds do not currently intend 

to use a sub-adviser. 

7The Commission notes that additional 

information regarding the Trust, the Funds, and the 

Shares, including investment strategies, risks, 

creation and redemption procedures, calculation of 

net asset value (‘‘NAV’’), fees, portfolio holdings 

disclosure policies, distributions, and taxes, among 

other things, can be found in the Notice and 

Registration Statement, as applicable. See supra 

notes 4 and 5, respectively. 

8The term ‘‘under normal circumstances’’ 

includes, but is not limited to, the absence of 

extreme volatility or trading halts in the equity, 

commodities and futures 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. 

9According to the Exchange, all of the exchangetraded securities held by a Fund will be traded in 

a principal trading market that is a member of the 

Intermarket Surveillance Group (‘‘ISG’’) or a market 

with which the Exchange has a comprehensive 

surveillance sharing agreement. The Exchange 

states that with respect to futures contracts held 

indirectly through a Subsidiary, not more than 10% 

of the weight of such futures contracts in the 

aggregate shall consist of instruments whose 

principal trading market is not a member of the ISG 

or a market with which the Exchange does not have 

a comprehensive surveillance sharing agreement. 

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

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–C2– 

2014–020 and should be submitted on 

or before November 26, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–26347 Filed 11–4–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73471; File No. SR– 

NASDAQ–2014–080] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Order 

Granting Approval of a Proposed Rule 

Change, as Modified by Amendment 

No. 1 Thereto, Relating to the Listing 

and Trading of the Shares of the 

PowerShares DB Optimum Yield 

Diversified Commodity Strategy 

Portfolio, PowerShares Agriculture 

Commodity Strategy Portfolio, 

PowerShares Precious Metals 

Commodity Strategy Portfolio, 

PowerShares Energy Commodity 

Strategy Portfolio, PowerShares Base 

Metals Commodity Strategy Portfolio 

and PowerShares Bloomberg 

Commodity Strategy Portfolio, Each a 

Series of PowerShares Actively 

Managed Exchange-Traded 

Commodity Fund Trust 

October 30, 2014. 

I. Introduction 

On August 29, 2014, The NASDAQ 

Stock Market LLC (‘‘Nasdaq’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

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

the PowerShares DB Optimum Yield 

Diversified Commodity Strategy 

Portfolio, PowerShares Agriculture 

Commodity Strategy Portfolio, 

PowerShares Precious Metals 

Commodity Strategy Portfolio, 

PowerShares Energy Commodity 

Strategy Portfolio, PowerShares Base 

Metals Commodity Strategy Portfolio, 

and PowerShares Bloomberg 

Commodity Strategy Portfolio 

(individually, ‘‘Fund,’’ and collectively, 

‘‘Funds’’), each a series of PowerShares 

Actively Managed Exchange-Traded 

Commodity Fund Trust (‘‘Trust’’). On 

September 8, 2014, the Exchange filed 

Amendment No. 1 to the proposed rule 

change.3 The proposed rule change, as 

modified by Amendment No. 1 thereto, 

was published for comment in the 

Federal Register on September 17, 

2014.4 The Commission received no 

comments on the proposed rule change. 

This order grants approval of the 

proposed rule change. 

II. Description of Proposed Rule Change 

The Exchange proposes to list and 

trade the Shares of each Fund under 

Nasdaq Rule 5735, which governs the 

listing and trading of Managed Fund 

Shares on the Exchange. Each Fund will 

be an actively managed exchange-traded 

fund (‘‘ETF’’). Each Fund’s Shares will 

be offered by the Trust, which was 

established as a Delaware statutory trust 

on December 23, 2013.5 Each Fund is a 

series of the Trust. Invesco PowerShares 

Capital Management LLC will be the 

investment adviser (‘‘Adviser’’) to the 

Funds.6 Invesco Distributors, Inc. 

(‘‘Distributor’’) will be the principal 

underwriter and distributor of each 

Fund’s Shares. The Bank of New York 

Mellon will act as the administrator, 

accounting agent, custodian, and 

transfer agent to the Funds. 

The Exchange has made the following 

representations and statements in 

describing the Funds and their principal 

investments (including those of the 

Subsidiaries, as defined herein), other 

investments, and investment 

restrictions.7

Principal Investment Strategies 

Applicable to Each Fund 

Each Fund’s investment objective will 

be to seek long term capital 

appreciation. Each Fund will be an 

actively managed ETF that will seek to 

achieve its investment objective by 

investing, under normal circumstances,8

in a combination of securities and 

futures contracts, either directly or 

through each Fund’s own wholly-owned 

subsidiary controlled by such Fund and 

organized under the laws of the Cayman 

Islands (individually, ‘‘Subsidiary,’’ and 

collectively, ‘‘Subsidiaries’’).9 Each 

Fund will invest in: (i) Its respective 

Subsidiary; (ii) exchange-traded 

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65752 Federal Register / Vol. 79, No. 214 / Wednesday, November 5, 2014 / Notices 

10Specifically, the Funds will invest in: (1) ETFs 

that provide exposure to commodities as would be 

listed under Nasdaq Rules 5705 and 5735; (2) 

exchange-traded notes (‘‘ETNs’’) that provide 

exposure to commodities as would be listed under 

Nasdaq Rule 5710; or (3) exchange-traded pooled 

investment vehicles that invest primarily in 

commodities and commodity-linked instruments as 

would be listed under Nasdaq Rules 5711(b), (d), (f), 

(g), (h), (i), and (j) (‘‘Commodity Pool’’ or 

‘‘Commodity Pools’’). 

11U.S. Treasury obligations are backed by the 

‘‘full faith and credit’’ of the U.S. government. 

12 In addition, each Subsidiary may, for 

administrative convenience, also invest in U.S. 

Treasury Securities, money market mutual funds, 

high quality commercial paper, and similar 

instruments, as discussed more fully below, for 

purposes of collateralizing investments in 

Commodities. Although each Fund’s Subsidiary 

generally will hold many of the Commodities that 

are components of that Fund’s respective 

benchmark index (‘‘Benchmark’’), each Subsidiary 

(and its respective parent Fund) will be actively 

managed by the Adviser and will not be obligated 

to invest in all of (or limit its investments solely to) 

the component Commodities within its respective 

Benchmark. Each Subsidiary (and its respective 

parent Fund) also will not be obligated to invest in 

the same amount or proportion as its respective 

Benchmark, or be obligated to track the 

performance of a Benchmark or of any index. 

Rather, the Adviser will determine the weightings 

of these investments by using a rules-based 

approach that is designed to ensure that the relative 

weight of each investment within a Fund’s 

Subsidiary reflects the Adviser’s view of the 

economic significance and market liquidity of the 

corresponding, underlying physical commodities. 

13An ETF is an investment company registered 

under the 1940 Act that holds a portfolio of 

securities. Many ETFs are designed to track the 

performance of a securities index, including 

industry, sector, country and region indexes. ETFs 

included in a Fund will be listed and traded in the 

U.S. on registered exchanges. Each Fund may invest 

in the securities of other ETFs in excess of the 

limits imposed under the 1940 Act pursuant to 

exemptive relief obtained by an affiliate of the Trust 

that also applies to the Trust. The ETFs in which 

a Fund may invest include Index Fund Shares (as 

described in Nasdaq Rule 5705), Portfolio 

Depositary Receipts (as described in Nasdaq Rule 

5705), and Managed Fund Shares (as described in 

Nasdaq Rule 5735). 

14The shares of ETFs in which a Fund may invest 

will be limited to securities that trade in markets 

that are members of the ISG, which includes all 

U.S. national securities exchanges, or are parties to 

a comprehensive surveillance sharing agreement 

with the Exchange. 

15Such securities will include securities that are 

issued or guaranteed by the U.S. Treasury, by 

various agencies of the U.S. government, or by 

various instrumentalities, which have been 

established or sponsored by the U.S. government. 

U.S. Treasury obligations are backed by the ‘‘full 

faith and credit’’ of the U.S. government. Securities 

issued or guaranteed by federal agencies and U.S. 

government-sponsored instrumentalities may or 

may not be backed by the full faith and credit of 

the U.S. government. 

16For a Fund’s purposes, money market 

instruments will include: Short-term, high quality 

securities issued or guaranteed by non-U.S. 

governments, agencies, and instrumentalities; nonconvertible corporate debt securities with 

remaining maturities of not more than 397 days that 

satisfy ratings requirements under Rule 2a–7 of the 

1940 Act; money market mutual funds; and 

deposits and other obligations of U.S. and non-U.S. 

banks and financial institutions. 

17The remainder of a Subsidiary’s assets, if any, 

may be invested (like its respective Fund’s assets) 

in these assets to serve as margin or collateral or 

otherwise support the Subsidiary’s positions in 

Commodities. 

products or exchange-traded commodity 

pools; 10 and (iii) U.S. Treasury 

Securities,11 money market mutual 

funds, high quality commercial paper, 

and similar instruments, as described 

more fully below. Each respective 

Subsidiary will invest in exchangetraded commodity futures contracts 

(‘‘Commodities’’). The Commodities 

generally will be components of certain 

benchmark indices, as set forth below 

for each Fund, but each Subsidiary also 

may invest in Commodities that are 

outside of those benchmark indices.12

Each Fund’s investments will include 

investments directly in other ETFs,13 to 

the extent permitted under the 1940 

Act,14 or ETNs that provide exposure to 

the relevant Commodities. Each Fund 

also may invest in a Commodity Pool 

that is designed to track the 

performance of the applicable 

Benchmark through investments in 

Commodities. 

The Exchange notes that no Fund will 

invest directly in Commodities. 

However, each Fund expects to gain 

significant exposure to Commodities 

indirectly by investing directly in the 

applicable Subsidiary. Each Fund’s 

investment in its applicable Subsidiary 

may not exceed 25% of such Fund’s 

total assets at each quarter end of such 

Fund’s fiscal year. In addition, the 

Exchange states that no Fund or 

Subsidiary will invest directly in 

physical commodities. The remainder of 

a Fund’s assets that are not invested in 

ETFs, ETNs, Commodity Pools, or its 

Subsidiary will be invested in U.S. 

government securities,15 money market 

instruments,16 cash and cash 

equivalents (e.g., corporate commercial 

paper).17 Each Fund will use these 

assets to provide liquidity and to 

collateralize the Subsidiary’s 

investments in the applicable 

Commodities. 

Principal Investments for Each Fund 

PowerShares DB Optimum Yield 

Diversified Commodity Strategy 

Portfolio 

According to the Exchange, this Fund 

will seek to achieve its investment 

objective through indirect investments 

that provide exposure to a diverse group 

of the most heavily traded physical 

commodities in the world. The Fund’s 

indirect investments in commodities 

primarily will include futures contracts 

contained in DBIQ Optimum Yield 

Diversified Commodity Index Excess 

Return (which the Exchange states is the 

Fund’s Benchmark), an index composed 

of futures contracts on 14 heavily traded 

commodities in the energy, precious 

metals, industrial metals, and 

agriculture sectors. 

PowerShares Agriculture Strategy 

Portfolio 

The Exchange states that this Fund 

will seek to achieve its investment 

objective through indirect investments 

that provide exposure to physical 

commodities within the agriculture 

sector. The Fund’s indirect investments 

in commodities primarily will include 

futures contracts contained in DBIQ 

Diversified Agriculture Index Excess 

Return (which the Exchange states is the 

Fund’s Benchmark), an index composed 

of futures contracts on 11 of the most 

liquid and widely traded agricultural 

commodities, including corn, soybeans, 

wheat, Kansas City wheat, sugar, cocoa, 

coffee, cotton, live cattle, feeder cattle, 

and lean hogs. 

PowerShares Precious Metals Strategy 

Portfolio 

According to the Exchange, this Fund 

will seek to achieve its investment 

objective through indirect investments 

that provide exposure to two of the most 

important precious metals—gold and 

silver. The Fund’s indirect investments 

in commodities primarily will include 

futures contracts contained in DBIQ 

Optimum Yield Precious Metals Index 

Excess Return (which the Exchange 

states is the Fund’s Benchmark), an 

index composed of futures contracts on 

gold and silver. 

PowerShares Energy Strategy Portfolio 

The Exchanges states that this Fund 

will seek to achieve its investment 

objective through indirect investments 

that provide exposure to physical 

commodities within the energy sector. 

The Fund’s indirect investments in 

commodities primarily will include 

futures contracts contained in DBIQ 

Optimum Yield Energy Index Excess 

Return (which the Exchange states is the 

Fund’s Benchmark), an index composed 

of futures contracts on heavily traded 

energy commodities, including light 

sweet crude oil (WTI), heating oil, Brent 

crude oil, RBOB gasoline, and natural 

gas. 

PowerShares Base Metals Strategy 

Portfolio 

The Exchange states that this Fund 

will seek to achieve its investment 

objective through indirect investments 

that provide exposure to the most 

widely used physical commodities 

within the base metals sector. The 

Fund’s indirect investments in 

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18The Exchange states that the Subsidiaries will 

not be registered under the 1940 Act, and that, as 

an investor in a Subsidiary, a Fund, as that 

Subsidiary’s sole shareholder, will not have the 

protections offered to investors in registered 

investment companies. However, because each 

Fund will wholly own and control its respective 

Subsidiary, and each Fund and its respective 

Subsidiary will be managed by the Adviser, no 

Subsidiary will take action contrary to the interests 

of its Fund or its Fund’s shareholders. The Trust’s 

Board (‘‘Board’’) will have oversight responsibility 

for the investment activities of each Fund, 

including its expected investments in its 

Subsidiary, and that Fund’s role as the sole 

shareholder of such Subsidiary. The Adviser will 

receive no additional compensation for managing 

the assets of each Subsidiary. Also, in managing a 

Subsidiary’s portfolio, the Adviser will be subject 

to the same investment restrictions and operational 

guidelines that apply to the management of a Fund. 

Each Subsidiary also will enter into separate 

contracts for the provision of custody, transfer 

agency, and accounting agent services with the 

same or with affiliates of the same service providers 

that provide those services to the applicable Fund. 

19The Exchange represents that the Adviser has 

previously registered as a commodity pool operator 

and is also a member of the NFA. 

20Each Fund may invest in U.S. government 

obligations. Obligations issued or guaranteed by the 

U.S. government, its agencies and instrumentalities 

include bills, notes and bonds issued by the U.S. 

Treasury, as well as ‘‘stripped’’ or ‘‘zero coupon’’ 

U.S. Treasury obligations representing future 

interest or principal payments on U.S. Treasury 

notes or bonds. See supra note 11. 

21Time deposits are non-negotiable deposits 

maintained in banking institutions for specified 

periods of time at stated interest rates. Banker’s 

acceptances are time drafts drawn on commercial 

banks by borrowers, usually in connection with 

international transactions. 

22 Illiquid securities and other 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. 

commodities primarily will include 

futures contracts contained in DBIQ 

Optimum Yield Industrial Metals Index 

Excess Return (which the Exchange 

states is the Fund’s Benchmark), an 

index composed of futures contracts on 

physical commodities in the base metals 

sector, including aluminum, zinc, and 

Grade A copper. 

PowerShares Bloomberg Commodity 

Strategy Portfolio 

According to the Exchange, this Fund 

will seek to achieve its investment 

objective through indirect investments 

that provide exposure to a broadly 

diversified representation of the 

commodity markets. The Fund’s 

indirect investments in commodities 

primarily will include futures contracts 

contained in the Bloomberg Commodity 

Total Return Index (which the Exchange 

states is the Fund’s Benchmark), a 

diversified index composed of futures 

contracts on various physical 

commodities across seven industry 

sectors. Historically, the Benchmark has 

included futures contracts on the 

following: aluminum, Brent Crude oil, 

coffee, copper, corn, cotton, gold, 

heating oil, Kansas wheat, lean hogs, 

live cattle, natural gas, nickel, silver, 

soybeans, soybean meal, soybean oil, 

sugar, unleaded gasoline, wheat, West 

Texas Intermediate crude oil, and zinc. 

Investments of the Subsidiaries 

According to the Exchange, each 

Subsidiary will be wholly-owned and 

controlled by the applicable Fund, and 

its investments will be consolidated into 

such Fund’s financial statements. A 

Fund’s investment in its Subsidiary will 

be designed to help such Fund achieve 

exposure to Commodities returns in a 

manner consistent with the federal tax 

requirements applicable to regulated 

investment companies, such as the 

Funds, which limit the ability of 

investment companies to invest directly 

in the derivative instruments. 

Each Subsidiary will invest in 

Commodities. The remainder of a 

Subsidiary’s assets, if any, may be 

invested (like its respective Fund’s 

assets) in U.S. government securities, 

money market instruments, cash, and 

cash equivalents intended to serve as 

margin or collateral or otherwise 

support the Subsidiary’s positions in 

Commodities. The Exchange states that 

each respective Subsidiary will 

therefore be subject to the same general 

investment policies and restrictions as 

the applicable Fund, except that unlike 

such Fund, which must invest in assets 

in compliance with the requirements of 

Subchapter M of the Internal Revenue 

Code, a Subsidiary may invest without 

limitation in Commodities. References 

to the investment strategies and risks of 

each Fund include the investment 

strategies and risks of the applicable 

Subsidiary. Each Subsidiary will be 

advised by the Adviser.18

As a result of the instruments that 

each Fund will hold indirectly, the 

Funds and the Subsidiaries are subject 

to regulation by the Commodity Futures 

Trading Commission and the National 

Futures Association (‘‘NFA’’), as well as 

additional disclosure, reporting, and 

recordkeeping rules imposed upon 

commodity pools.19

Other Investments 

Each Fund may invest (either directly 

or through its Subsidiary) in U.S. 

government securities, money market 

instruments, cash and cash equivalents 

(e.g., corporate commercial paper) to 

provide liquidity and to collateralize the 

Subsidiary’s investments in 

Commodities. The instruments in which 

each Fund, or its respective Subsidiary, 

can invest include any one or more of 

the following: (i) Short-term obligations 

issued by the U.S. government; 20 (ii) 

short term negotiable obligations of 

commercial banks, fixed time deposits 

and bankers’ acceptances of U.S. banks 

and similar institutions; 21 (iii) 

commercial paper rated at the date of 

purchase ‘‘Prime-1’’ by Moody’s 

Investors Service, Inc. or ‘‘A–1+’’ or ‘‘A– 

1’’ by Standard & Poor’s or, if unrated, 

of comparable quality, as the Adviser to 

the Funds determines; and (iv) money 

market mutual funds, including 

affiliated money market mutual funds. 

In addition, according to the 

Exchange, each Fund’s investment in 

securities of other investment 

companies (including money market 

funds) may exceed the limits permitted 

under the 1940 Act, in accordance with 

certain terms and conditions set forth in 

a Commission exemptive order issued to 

an affiliate of the Trust (which applies 

equally to the Trust) pursuant to Section 

12(d)(1)(J) of the 1940 Act. The 

Exchange states that no Fund, or its 

respective Subsidiary, anticipates 

investing in options, swaps, or forwards. 

Investment Restrictions 

Each Fund may not concentrate its 

investments (i.e., invest more than 25% 

of the value of its net assets) in 

securities of issuers in any one industry 

or group of industries. This restriction 

will not apply to obligations issued or 

guaranteed by the U.S. government, its 

agencies or instrumentalities. 

Each Subsidiary’s shares will be 

offered only to the applicable Fund and 

such Fund will not sell shares of that 

Subsidiary to other investors. Each 

Fund and the applicable Subsidiary will 

not invest in any non-U.S. equity 

securities (other than shares of the 

Subsidiary). 

Each Fund may hold up to an 

aggregate amount of 15% of its net 

assets in illiquid securities and other 

illiquid assets (calculated at the time of 

investment). Each 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 a Fund’s net assets are held in 

illiquid securities or other illiquid 

assets.22

Each Fund intends to qualify for and 

to elect to be treated as a separate 

regulated investment company under 

Subchapter M of the Internal Revenue 

Code. 

Each Fund’s and its respective 

Subsidiary’s investments will be 

consistent with that Fund’s investment 

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23 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 24 15 U.S.C. 78f(b)(5). 

25 15 U.S.C. 78k–1(a)(1)(C)(iii). 

26According to the Exchange, the Intraday 

Indicative Value for each Fund will reflect an 

estimated intraday value of such Fund’s portfolio 

(including the Subsidiary’s portfolio) and will be 

based upon the current value for the components 

of a Disclosed Portfolio. 

27Currently, the NASDAQ OMX Global Index 

Data Service (‘‘GIDS’’) is the NASDAQ OMX global 

index data feed service. The Exchange represents 

that GIDS offers real-time updates, daily summary 

messages, and access to widely followed indexes 

and Intraday Indicative Values for ETFs, and that 

GIDS provides investment professionals with the 

daily information needed to track or trade NASDAQ 

OMX indexes, listed ETFs, or third-party partner 

indexes and ETFs 

28See Nasdaq Rule 4120(b)(4) (describing the 

three trading sessions on the Exchange: (1) PreMarket Session from 4:00 a.m. to 9:30 a.m., Eastern 

Time; (2) Regular Market Session from 9:30 a.m. to 

4:00 p.m. or 4:15 p.m., Eastern Time; and (3) PostMarket Session from 4:00 p.m. or 4:15 p.m. to 8:00 

p.m., Eastern Time). 

29The Disclosed Portfolio will include, as 

applicable, the names, quantity, percentage 

weighting and market value of securities and other 

assets held by a Fund and the Subsidiary and the 

characteristics of such assets. The Web site and 

information will be publicly available at no charge. 

30NAV per Share will be calculated for a Fund 

by taking the market price of such Fund’s total 

assets, including interest or dividends accrued but 

not yet collected, less all liabilities, dividing such 

amount by the total number of Shares outstanding, 

rounded to the nearest cent (although creations and 

redemptions will be processed using a price 

denominated to the fifth decimal point, meaning 

that rounding to the nearest cent may result in 

different prices in certain circumstances). All 

valuations will be subject to review by the Board 

or its delegate. Expenses will be accrued and 

applied daily and securities and other assets for 

which market quotations are readily available will 

be valued at market value. Securities listed or 

traded on an exchange generally will be valued at 

the last sales price or official closing price that day 

as of the close of the exchange where the security 

primarily is traded. Commodities will be valued at 

the closing price in the market where such contracts 

are principally traded. Investment company shares 

will be valued at net asset value, unless the shares 

are exchange-traded, in which case they will be 

valued at the last sale or official closing price on 

the market on which they primarily trade. ETNs 

will be valued at the last sale or official closing 

price on the market on which they primarily trade. 

Commodity Pools will be valued at the last sale or 

official closing price on the market on which they 

primarily trade. U.S. government securities will be 

valued at the mean price provided by a third party 

vendor for U.S. government securities. Short term 

money market instruments, cash and cash 

equivalents (including corporate commercial paper, 

negotiable obligations of commercial banks, fixed 

time deposits, bankers acceptances and similar 

securities) will be valued in accordance with the 

Trust’s valuation policies and procedures approved 

by the Board. A Fund’s investment in its Subsidiary 

will be valued by aggregating the value of the 

Subsidiary’s underlying holdings, and they, in turn, 

will be valued as discussed above. 

31The Funds’ Web site will include the Share’s 

ticker, CUSIP and exchange information along with 

additional quantitative information updated on a 

daily basis, including, for each Fund: (1) Daily 

trading volume, the prior business day’s reported 

NAV and closing price, mid-point of the bid/ask 

spread at the time of calculation of such NAV (the 

‘‘Bid/Ask Price’’) 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. 

objective. In pursuing its investment 

objective, a Fund may utilize 

instruments that have a leveraging effect 

on that Fund. This effective leverage 

occurs when a Fund’s market exposure 

exceeds the amounts actually invested. 

The Exchange represents that any 

instance of effective leverage will be 

covered in accordance with guidance 

promulgated by the Commission and its 

staff. According to the Exchange, each 

Fund does not presently intend to 

engage in any form of borrowing for 

investment purposes, and will not be 

operated as ‘‘leveraged ETFs,’’ i.e., it 

will not be operated in a manner 

designed to seek a multiple of the 

performance of an underlying reference 

index. 

III. Discussion and Commission 

Findings 

After careful review, the Commission 

finds that the Exchange’s proposal to list 

and trade the Shares is consistent with 

the Act and the rules and regulations 

thereunder applicable to a national 

securities exchange.23 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,24 which requires, 

among other things, that the Exchange’s 

rules be designed to prevent fraudulent 

and manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities, to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. The Commission notes 

that the Funds and the Shares must 

comply with the requirements of 

Nasdaq Rule 5735 to be listed and 

traded on the Exchange. 

The Commission finds that the 

proposal to list and trade the Shares on 

the Exchange is consistent with Section 

11A(a)(1)(C)(iii) of the Act,25 which sets 

forth Congress’ finding that it is in the 

public interest and appropriate for the 

protection of investors and the 

maintenance of fair and orderly markets 

to assure the availability to brokers, 

dealers, and investors of information 

with respect to quotations for, and 

transactions in, securities. Quotation 

and last-sale information for the Shares 

will be available via Nasdaq proprietary 

quote and trade services, as well as in 

accordance with the Unlisted Trading 

Privileges and the Consolidated Tape 

Association plans for the Shares. In 

addition, for each Fund, an estimated 

value, defined in Nasdaq Rule 

5735(c)(3) as the ‘‘Intraday Indicative 

Value,’’ 26 will be available on the 

NASDAQ OMX Information LLC 

proprietary index data service,27 and 

will be updated and widely 

disseminated by one or more major 

market data vendors and broadly 

displayed at least every 15 seconds 

during the Regular Market Session.28 On 

each business day, before 

commencement of trading in Shares in 

the Regular Market Session on the 

Exchange, each Fund will disclose on 

its Web site the Disclosed Portfolio, as 

defined in Nasdaq Rule 5735(c)(2), that 

will form the basis for each Fund’s 

calculation of NAV at the end of the 

business day.29

The Funds’ administrator will 

calculate each Fund’s NAV as of the 

close of trading (normally 4:00 p.m., 

Eastern Time) on each day Nasdaq is 

open for business.30 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 any underlying 

exchange-traded instruments (including 

ETFs, ETNs, and Commodity Pools) will 

also be available via the quote and trade 

service of their respective primary 

exchanges, as well as in accordance 

with the Unlisted Trading Privileges 

and the Consolidated Tape Association 

plans. Quotation and last-sale 

information for any underlying 

Commodities will be available via the 

quote and trade service of their 

respective primary exchanges. Pricing 

information related to U.S. government 

securities, money market mutual funds, 

commercial paper, and other short-term 

investments held by a Fund or its 

Subsidiary will be available through 

publicly available quotation services, 

such as Bloomberg, Markit, and 

Thomson Reuters. The Funds’ Web site 

(www.invescopowershares.com), which 

will be publicly available prior to the 

public offering of Shares, will include a 

form of the prospectus for each Fund 

and additional data relating to NAV and 

other applicable quantitative 

information.31

The Commission further believes that 

the proposal to list and trade the Shares 

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Federal Register / Vol. 79, No. 214 / Wednesday, November 5, 2014 / Notices 65755 

32These reasons may include: (1) The extent to 

which trading is not occurring in the securities and 

other assets constituting the Disclosed Portfolio of 

a Fund and the applicable Subsidiary; or (2) 

whether other unusual conditions or circumstances 

detrimental to the maintenance of a fair and orderly 

market are present. 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 a Fund. 

33See Nasdaq Rule 5735(d)(2)(B)(ii). 

34See supra note 6. The Exchange states that an 

investment adviser to an open-end fund is required 

to be registered under the Investment Advisers Act 

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

and its related personnel are subject to the 

provisions of Rule 204A–1 under the Advisers Act 

relating to codes of ethics. This Rule requires 

investment advisers to adopt a code of ethics that 

reflects the fiduciary nature of the relationship to 

clients, as well as compliance with other applicable 

securities laws. Accordingly, procedures designed 

to prevent the communication and misuse of nonpublic information by an investment adviser must 

be consistent with Rule 204A–1 under the Advisers 

Act. In addition, Rule 206(4)–7 under the Advisers 

Act makes it unlawful for an investment adviser to 

provide investment advice to clients unless such 

investment adviser has (i) adopted and 

implemented written policies and procedures 

reasonably designed to prevent violation, by the 

investment adviser and its supervised persons, of 

the Advisers Act and the Commission rules adopted 

thereunder; (ii) implemented, at a minimum, an 

annual review regarding the adequacy of the 

policies and procedures established pursuant to 

subparagraph (i) above and the effectiveness of their 

implementation; and (iii) designated an individual 

(who is a supervised person) responsible for 

administering the policies and procedures adopted 

under subparagraph (i) above. 

35The Exchange states that FINRA surveils 

trading on the Exchange pursuant to a regulatory 

services agreement and that the Exchange is 

responsible for FINRA’s performance under this 

regulatory services agreement. 

36For a list of the current members of ISG, see 

www.isgportal.org. The Exchange notes that not all 

components of the Disclosed Portfolio may trade on 

markets that are members of ISG or with which the 

Exchange has in place a comprehensive 

surveillance sharing agreement. 

is reasonably designed to promote fair 

disclosure of information that may be 

necessary to price the Shares 

appropriately and to prevent trading 

when a reasonable degree of 

transparency cannot be assured. The 

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. 

Nasdaq will halt trading in the Shares 

under the conditions specified in 

Nasdaq Rules 4120 and 4121, including 

the trading pause provisions under 

Nasdaq Rules 4120(a)(11) and (12). 

Trading in the Shares may be halted 

because of market conditions or for 

reasons that, in the view of the 

Exchange, make trading in a Fund’s 

Shares inadvisable,32 and trading in the 

Shares will be subject to Nasdaq Rule 

5735(d)(2)(D), which sets forth 

additional circumstances under which 

trading in Shares of a Fund may be 

halted. The Exchange states that it has 

a general policy prohibiting the 

distribution of material, non-public 

information by its employees. Further, 

the Commission notes that the 

Reporting Authority, as defined in 

Nasdaq Rule 5735(c)(4), that provides 

the Disclosed Portfolio must 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 portfolio.33 In 

addition, the Exchange states that, while 

the Adviser is not registered as a brokerdealer, the Adviser is affiliated with a 

broker-dealer and has implemented a 

fire wall with respect to that brokerdealer regarding access to information 

concerning the composition of, or 

changes to, the portfolio, and that 

personnel who make decisions on each 

Fund’s portfolio composition will be 

subject to procedures designed to 

prevent the use and dissemination of 

material non-public information 

regarding each Fund’s portfolio.34

The Exchange represents that trading 

in the Shares will be subject to the 

existing trading surveillances, 

administered by both Nasdaq and 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.35 In addition, the 

Exchange may obtain information from 

the Trade Reporting and Compliance 

Engine (‘‘TRACE’’), which is the FINRAdeveloped vehicle that facilitates 

mandatory reporting of over-the-counter 

secondary market transactions in 

eligible fixed income securities. Prior to 

the commencement of trading, the 

Exchange states that it will inform its 

members in an Information Circular of 

the special characteristics and risks 

associated with trading the Shares. 

The Exchange represents that the 

Shares are deemed to be equity 

securities, thus rendering trading in the 

Shares subject to the Exchange’s 

existing rules governing the trading of 

equity securities. In support of this 

proposal, the Exchange has made the 

following representations: 

(1) The Shares will conform to the 

initial and continued listing criteria 

applicable to Managed Fund Shares, as 

set forth under Rule 5735. 

(2) The Exchange has appropriate 

rules to facilitate transactions in the 

Shares during all trading sessions. 

(3) Trading in the Shares will be 

subject to the existing trading 

surveillances, administered by both 

Nasdaq and FINRA, on behalf of the 

Exchange, which are designed to detect 

violations of Exchange rules and 

applicable federal securities laws, and 

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. FINRA, on behalf of the Exchange, 

will communicate as needed regarding 

trading in the Shares, Commodities, 

ETFs, ETNs, and Commodity Pools held 

by a Fund or a Fund’s Subsidiary, as 

applicable, with other markets and other 

entities that are members of the ISG,36

and FINRA may obtain trading 

information regarding trading in the 

Shares, Commodities, ETFs, ETNs, and 

Commodity Pool held by such Fund, or 

its Subsidiary, as applicable, from such 

markets and other entities. In addition, 

the Exchange may obtain information 

regarding trading in the Shares, 

Commodities, ETFs, ETNs, and 

Commodity Pools held by a Fund or its 

respective Subsidiary from markets and 

other entities that are members of ISG, 

which includes securities and futures 

exchanges, or with which the Exchange 

has in place a comprehensive 

surveillance sharing agreement. FINRA, 

on behalf of the Exchange, is also able 

to access, as needed, trade information 

for certain fixed income securities held 

by a Fund reported to FINRA’s TRACE. 

(4) All of the exchange-traded 

securities held by a Fund will be traded 

in a principal trading market that is a 

member of ISG or a market with which 

the Exchange has a comprehensive 

surveillance sharing agreement. With 

respect to Commodities held indirectly 

through a Subsidiary, not more than 

10% of the weight of such Commodities, 

in the aggregate, shall consist of 

instruments whose principal trading 

market is not a member of ISG or a 

market with which the Exchange does 

not have a comprehensive surveillance 

sharing agreement. 

(5) Prior to the commencement of 

trading, the Exchange will inform its 

members in an Information Circular of 

the special characteristics and risks 

associated with trading the Shares. 

Specifically, the Information Circular 

will discuss the following: (a) The 

procedures for purchases and 

redemptions of Shares in creation units 

(and that Shares are not individually 

redeemable); (b) Nasdaq Rule 2111A, 

which imposes suitability obligations on 

Nasdaq members with respect to 

recommending transactions in the 

Shares to customers; (c) how and by 

whom information regarding the 

Intraday Indicative Value and Disclosed 

Portfolio is disseminated, including 

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65756 Federal Register / Vol. 79, No. 214 / Wednesday, November 5, 2014 / Notices 

37See 17 CFR 240.10A–3. 

38 15 U.S.C. 78f(b)(5). 

39 15 U.S.C. 78s(b)(2). 

40 17 CFR 200.30–3(a)(12). 

how it is made available and by whom; 

(d) the risks involved in trading the 

Shares during the Pre-Market and PostMarket Sessions when an updated 

Intraday Indicative Value will not be 

calculated or publicly disseminated; (e) 

the requirement that members deliver a 

prospectus to investors purchasing 

newly issued Shares prior to or 

concurrently with the confirmation of a 

transaction; and (f) trading information. 

(6) For initial and continued listing, 

each Fund and its respective Subsidiary 

must be in compliance with Rule 10A– 

3 under the Act.37

(7) Each Fund may hold up to an 

aggregate amount of 15% of its net 

assets in illiquid assets (calculated at 

the time of investment). Each 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 a 

Fund’s net assets are held in illiquid 

assets. 

(8) No Fund will invest directly in 

Commodities. However, each Fund 

expects to gain significant exposure to 

Commodities indirectly by investing 

directly in the applicable Subsidiary. 

Each Fund’s investment in its 

applicable Subsidiary may not exceed 

25% of such Fund’s total assets at each 

quarter end of such Fund’s fiscal year. 

Each Fund and the applicable 

Subsidiary will not invest in any nonU.S. equity securities (other than shares 

of the Subsidiary). 

(9) No Fund or Subsidiary will invest 

directly in physical commodities. 

(10) Each Fund’s Subsidiary will 

invest in Commodities. The 

Commodities generally will be 

components of the Benchmark for each 

Fund, but each Subsidiary also may 

invest in Commodities that are outside 

of the Benchmark. 

(11) Each Fund’s and its respective 

Subsidiary’s investments will be 

consistent with that Fund’s investment 

objectives. In pursuing its investment 

objective, a Fund may utilize 

instruments that have a leveraging effect 

on that Fund. Any instance of effective 

leverage will be covered in accordance 

with guidance promulgated by the 

Commission and its staff. Each Fund 

does not presently intend to engage in 

any form of borrowing for investment 

purposes, and will not be operated as 

‘‘leveraged ETFs, i.e., it will not be 

operated in a manner designed to seek 

a multiple of the performance of an 

underlying reference index. 

(12) A minimum of 100,000 Shares of 

each Fund will be outstanding at the 

commencement of trading on the 

Exchange. 

This approval order is based on all of 

the Exchange’s representations, 

including those set forth above and in 

the Notice, and the Exchange’s 

description of the Funds. 

For the foregoing reasons, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act 38 and the rules and 

regulations thereunder applicable to a 

national securities exchange. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,39 that the 

proposed rule change (SR–NASDAQ– 

2014–080), as modified by Amendment 

No. 1 thereto, be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.40

Brent J. Fields, 

Secretary. 

[FR Doc. 2014–26229 Filed 11–4–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[File No. 500–1] 

In the Matter of VHGI Holdings, Inc.; 

Order of Suspension of Trading 

November 3, 2014. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of VHGI 

Holdings, Inc. (‘‘VHGI’’) because it has 

not filed a periodic report since it filed 

its Form 10–K for the period ending 

December 31, 2012, filed on June 26, 

2013. VHGI’s common stock (ticker 

‘‘VHGI’’) was quoted on OTC Link 

(previously ‘‘Pink Sheets’’) operated by 

OTC Markets Group, Inc. 

The Commission is of the opinion that 

the public interest and the protection of 

investors require a suspension of trading 

in the securities of VHGI. Therefore, it 

is ordered, pursuant to Section 12(k) of 

the Securities Exchange Act of 1934, 

that trading in the securities of VHGI is 

suspended for the period from 9:30 a.m. 

EDT on November 3, 2014, through 

11:59 p.m. EDT on November 14, 2014. 

By the Commission. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2014–26360 Filed 11–3–14; 11:15 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF STATE 

[Public Notice 8937] 

Culturally Significant Objects Imported 

for Exhibition Determinations: ‘‘The 

Winchester Bible: A Masterpiece of 

Medieval Art’’ 

SUMMARY: Notice is hereby given of the 

following determinations: Pursuant to 

the authority vested in me by the Act of 

October 19, 1965 (79 Stat. 985; 22 U.S.C. 

2459), Executive Order 12047 of March 

27, 1978, the Foreign Affairs Reform and 

Restructuring Act of 1998 (112 Stat. 

2681, et seq.; 22 U.S.C. 6501 note, et 

seq.), Delegation of Authority No. 234 of 

October 1, 1999, and Delegation of 

Authority No. 236–3 of August 28, 2000 

(and, as appropriate, Delegation of 

Authority No. 257 of April 15, 2003), I 

hereby determine that the objects to be 

included in the exhibition ‘‘The 

Winchester Bible: A Masterpiece of 

Medieval Art,’’ imported from abroad 

for temporary exhibition within the 

United States, are of cultural 

significance. The objects are imported 

pursuant to a loan agreement with the 

foreign owner or custodian. I also 

determine that the exhibition or display 

of the exhibit objects at the Metropolitan 

Museum of Art, New York, New York, 

from on or about December 9, 2014, 

until on or about March 8, 2015, and at 

possible additional exhibitions or 

venues yet to be determined, is in the 

national interest. I have ordered that 

Public Notice of these Determinations 

be published in the Federal Register. 

FOR FURTHER INFORMATION CONTACT: For 

further information, including a list of 

the imported objects, contact Paul W. 

Manning, Attorney-Adviser, Office of 

the Legal Adviser, U.S. Department of 

State (telephone: 202–632–6469). The 

mailing address is U.S. Department of 

State, SA–5, L/PD, Fifth Floor (Suite 

5H03), Washington, DC 20522–0505. 

Dated: October 24, 2014. 

Kelly Keiderling, 

Principal Deputy Assistant Secretary, Bureau 

of Educational and Cultural Affairs, 

Department of State. 

[FR Doc. 2014–26280 Filed 11–4–14; 8:45 am] 

BILLING CODE 4710–05–P 

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