Document ID: SEC-2015-1698-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2015-10-21T04:00Z

[Federal Register Volume 80, Number 203 (Wednesday, October 21, 2015)]
[Notices]
[Pages 63852-63855]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-26676]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76161; File No. SR-NYSEArca-2015-88]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending 
Representations Regarding the Names and Principal Investments of 
Certain WBI SMID Funds Currently Listed and Traded on the Exchange 
Under NYSE Arca Equities Rule 8.600

October 15, 2015.
    Pursuant to section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on September 30, 2015, NYSE Arca, Inc. (``Exchange'' or ``NYSE 
Arca'') filed with the Securities and Exchange Commission 
(``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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to change representations regarding the names 
and principal investments of each of the following: WBI SMID Tactical 
Growth Shares; WBI SMID Tactical Value Shares; WBI SMID Tactical Yield 
Shares; WBI SMID Tactical Select Shares; WBI Large Cap Tactical Growth 
Shares; WBI Large Cap Tactical Value Shares; WBI Large Cap Tactical 
Yield Shares; and WBI Large Cap Tactical Select Share (each a ``Fund'' 
and, collectively, the ``Funds''). Shares of the Funds 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 Funds 
under NYSE Arca Equities Rule 8.600,\4\ which governs the listing and 
trading of Managed Fund Shares.\5\ The Funds' Shares are currently 
listed and traded on the Exchange under NYSE Arca Equities Rule 8.600.
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    \4\ See Securities Exchange Act Release No. 72895 (August 21, 
2014), 79 FR 51210 (August 27, 2014) (SR-NYSEArca-2014-67) (the 
``Prior Order''). The notice with respect to the Prior Order was 
published in Securities Exchange Act Release No. 72526 (July 2, 
2014), 79 FR 39035 (July 9, 2014) (``Prior Notice'' and, together 
with the Prior Order, the ``Prior Release'').
    \5\ A 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.
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    The Shares are offered by Absolute Shares 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 Millington 
Securities, Inc. (the ``Adviser'') and WBI Investments, Inc. is each 
Fund's sub-adviser (``Sub-Adviser'').
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    \6\ The Trust is registered under the 1940 Act. On December 9, 
2013, the Trust filed with the Commission 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 Funds 
(File Nos. 333-192733 and 811-22917) (as amended, the ``Registration 
Statement''). The Trust filed supplements to amend the prospectus 
contained in the Registration Statement on July 17, 2015 and filed 
post-effective amendments to the Registration Statement on August 
21, 2015, which amendment will become effective as of October 31, 
2015, reflecting the changes to the Funds described herein. For the 
avoidance of doubt, the names and principal investment strategies of 
the WBI Tactical Income Shares and the WBI Tactical High Income 
Shares, which also are series in the Trust approved in the Prior 
Release, are not being changed. The description of the operation of 
the Trust and the Funds 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. 30543 (May 29, 2013) 
(File No. 812-13886) (``Exemptive Order'').
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Common Fund Strategy and Characteristics
    The principal investment objective of each Fund is to seek long-
term capital appreciation and the potential for current income, while 
also seeking to protect principal during unfavorable market conditions. 
As described in the Prior Release, the Sub-Adviser manages each Fund's 
portfolio based on a proprietary selection process as described in the 
Prior Release (the ``Selection Process''). The Selection Process 
attempts to provide consistent, attractive returns net of expenses with 
potentially less volatility and risk to capital than traditional 
approaches,

[[Page 63853]]

whatever market conditions may be. Each Fund defines an absolute return 
approach to investment management in this way. The Selection Process 
includes a buy discipline and a sell discipline as described in the 
Prior Release. In this proposed rule change, the Exchange proposes (1) 
to reflect changes to the names of Funds from the names included in the 
Prior Release; and (2) to change representations relating to 
``Principal Investments'' of each Fund in the Prior Release that each 
Fund will invest at least 80% of net assets in specified equity 
securities to representations that each Fund will seek to invest 
principally in such specified equity securities, cash and ``Cash 
Equivalents'' (as described below) when it believes this is consistent 
with each Fund's investment objective of protecting principal.\7\ For 
clarity, each Fund will invest at least 80% of its net assets in its 
principal investment strategy.
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    \7\ Under the Prior Release, the Funds could temporarily depart 
from their respective 80% principal investment strategies and make 
``short term investments in cash, cash equivalents, high-quality 
short-term debt securities and money market instruments for 
temporary defensive purposes in response to adverse market, economic 
or political conditions. . . . [E]ach Fund could acquire the 
following short-term investments: (1) Certificates of deposit issued 
by commercial banks as well as savings banks or savings and loan 
associations; (2) bankers' acceptances; (3) time deposits; and (4) 
commercial paper and short-term notes rated at the time of purchase 
``A-2'' or higher by Standard & Poor's[supreg], ``Prime-1'' by 
Moody's[supreg] Investors Services Inc., or similarly rated by 
another nationally recognized statistical rating organization, or, 
if unrated, will be determined by the Sub-Adviser to be of 
comparable quality, as well as U.S. Government obligations.'' Such 
high-quality short-term debt securities, money market instruments 
and the investments enumerated above are hereinafter collectively 
referred to as ``Cash Equivalents''. In this proposed rule change, 
Cash Equivalents will be included in each Fund's principal 
investment strategy and no longer only for temporary defensive 
purposes. Intra-day price information for Cash Equivalents will be 
available from major market data vendors.
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WBI SMID Tactical Growth Shares
    As described in the Prior Release, under normal market conditions, 
the Fund invests at least 80% of its net assets in the exchange-listed 
equity securities of small-capitalization and mid-capitalization 
domestic and foreign companies selected on the basis of the Selection 
Process.\8\ Going forward, the Fund will seek to invest principally in 
the exchange-listed equity securities of small-capitalization and mid-
capitalization domestic and foreign companies, cash and Cash 
Equivalents, selected on the basis of the Selection Process.
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    \8\ The Adviser represents that the Adviser and the Sub-Adviser 
have managed and will continue to manage the Funds in the manner 
described in the Prior Release, and will not implement the changes 
described herein until the instant proposed rule change is 
operative. The change to the name of the Funds and to the Funds' 
investments as described herein will be effective upon the filing an 
additional amendment to the Registration Statement.
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    In addition, going forward, the Fund's name will change to WBI 
Tactical SMG Shares.
WBI SMID Tactical Value Shares
    As described in the Prior Release, under normal market conditions, 
the Fund invests at least 80% of its net assets in the exchange-listed 
equity securities of small-capitalization and mid-capitalization 
domestic and foreign companies selected by the Sub-Adviser utilizing 
the Selection Process. Going forward, the Fund will seek to invest 
principally in the exchange-listed equity securities of small-
capitalization and mid-capitalization domestic and foreign companies, 
cash and Cash Equivalents, selected by the Sub-Adviser utilizing the 
Selection Process.
    In addition, going forward, the Fund's name will change to WBI 
Tactical SMV Shares.
WBI SMID Tactical Yield Shares
    As described in the Prior Release, under normal market conditions, 
the Fund invests at least 80% of its net assets in the exchange-listed 
dividend-paying equity securities of small-capitalization and mid-
capitalization domestic and foreign companies selected by the Sub-
Adviser utilizing the Selection Process. Going forward, the Fund will 
seek to invest principally in the exchange-listed dividend-paying 
equity securities of small-capitalization and mid-capitalization 
domestic and foreign companies, cash and Cash Equivalents, selected by 
the Sub-Adviser utilizing the Selection Process.
    In addition, going forward, the Fund's name will change to WBI 
Tactical SMY Shares.
WBI SMID Tactical Select Shares
    As described in the Prior Release, under normal market conditions, 
the Fund invests at least 80% of its net assets in the exchange-listed 
equity securities of small-capitalization and mid-capitalization 
domestic and foreign companies selected by the Sub-Adviser utilizing 
the Selection Process. Going forward, the Fund will seek to invest 
principally in the exchange-listed equity securities of small-
capitalization and mid-capitalization domestic and foreign companies, 
cash and Cash Equivalents, selected by the Sub-Adviser utilizing the 
Selection Process.
    In addition, going forward, the Fund's name will change to WBI 
Tactical SMS Shares.
WBI Large Cap Tactical Growth Shares
    As described in the Prior Release, under normal market conditions, 
the Fund invests at least 80% of its net assets in the exchange-listed 
equity securities of large capitalization domestic and foreign 
companies selected by the Sub-Adviser utilizing the Selection Process. 
Going forward, the Fund will seek to invest principally in the 
exchange-listed equity securities of large capitalization domestic and 
foreign companies, cash and Cash Equivalents, selected by the Sub-
Adviser utilizing the Selection Process.
    In addition, going forward, the Fund's name will change to WBI 
Tactical LCG Shares.
WBI Large Cap Tactical Value Shares
    As described in the Prior Release, under normal market conditions, 
the Fund invests at least 80% of its net assets in the exchange-listed 
equity securities of large capitalization domestic and foreign 
companies selected by the Sub-Adviser utilizing the Selection Process. 
Going forward, the Fund will seek to invest principally in the 
exchange-listed equity securities of large capitalization domestic and 
foreign companies, cash and Cash Equivalents, selected by the Sub-
Adviser utilizing the Selection Process.
    In addition, going forward, the Fund's name will change to WBI 
Tactical LCV Shares.
WBI Large Cap Tactical Yield Shares
    As described in the Prior Release, under normal market conditions, 
the Fund invests at least 80% of its net assets in the exchange-listed 
dividend-paying equity securities of large capitalization domestic and 
foreign companies selected by the Sub-Adviser utilizing the Selection 
Process. Going forward, the Fund will seek to invest principally in the 
exchange-listed dividend-paying equity securities of large 
capitalization domestic and foreign companies, cash and Cash 
Equivalents, selected by the Sub-Adviser utilizing the Selection 
Process.
    In addition, going forward, the Fund's name will change to WBI 
Tactical LCY Shares.
WBI Large Cap Tactical Select Shares
    As described in the Prior Release, under normal market conditions, 
the Fund invests at least 80% of its net assets in the exchange-listed 
equity securities of large capitalization domestic and foreign 
companies

[[Page 63854]]

selected by the Sub-Adviser utilizing the Selection Process. Going 
forward, the Fund will seek to invest principally in the exchange-
listed equity securities of large capitalization domestic and foreign 
companies, cash and Cash Equivalents, selected by the Sub-Adviser 
utilizing the Selection Process.
    In addition, going forward, the Fund's name will change to WBI 
Tactical LCS Shares.
    Except for the changes described above, all other representations 
made in the Prior Release remain unchanged.\9\ The Funds will comply 
with all initial and continued listing requirements under NYSE Arca 
Equities Rule 8.600.
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    \9\ See note 4, supra. All terms referenced but not defined 
herein are defined in the Prior Release.
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2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under section 6(b)(5) \10\ 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.
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    \10\ 15 U.S.C. 78f(b)(5).
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    As noted above, the Selection Process attempts to provide 
consistent, attractive returns net of expenses with potentially less 
volatility and risk to capital than traditional approaches, whatever 
market conditions may be. While the Funds would continue to invest in 
the types of securities described in the Prior Release, the proposed 
change to represent that each Fund will seek to invest principally in 
specified exchange-listed equity securities, cash and Cash Equivalents, 
rather than at least 80% of its net assets in specified exchange-listed 
equity securities, would provide additional flexibility to seek each 
Funds' investment objective of protecting principal. The inclusion of 
cash and Cash Equivalents in each Fund's principal investments, rather 
than the use of such instruments solely for temporary defensive 
purposes, would facilitate each Fund's ability to protect principal, 
which could serve as a significant benefit for investors.
    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 Shares are listed and traded on the Exchange pursuant to the 
initial and continued listing criteria in NYSE Arca Equities Rule 
8.600. Except for the changes described above, all other 
representations made in the Prior Release remain unchanged.\11\
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    \11\ See note 4, supra. All terms referenced but not defined 
herein are defined in the Prior Release.
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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 believes the 
proposed rule change is designed to allow the Fund to invest in 
securities that would permit a Fund to better implement the Selection 
Process as described in the Prior Release, and will enhance competition 
among issues of Managed Fund Shares that invest in equity securities.

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

    Because the proposed rule change does not: (i) Significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
    The Exchange has asked the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. The Commission believes that waiver of the 30-day operative 
delay period is consistent with the protection of investors and the 
public interest. The Commission notes that the proposal would allow the 
Funds greater flexibility in seeking their investment objective of 
protecting principal during unfavorable market conditions, which could 
benefit investors and the public interest. Therefore, the Commission 
designates the proposed rule change to be operative upon filing.\12\
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    \12\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

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-2015-88 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-2015-88. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference 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 will also 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-2015-88 and should 
be

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submitted on or before November 12, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-26676 Filed 10-20-15; 8:45 am]
BILLING CODE 8011-01-P