Document ID: SEC-2010-0304-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Amex LLC
Posted Date: 2010-03-01T05:00Z

[Federal Register: March 1, 2010 (Volume 75, Number 39)]
[Notices]               
[Page 9265-9272]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01mr10-119]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61571; File No. SR-NYSEAmex-2010-09]

 
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing of 
Proposed Rule Change Amending Its Trust Unit Rules and Proposing the 
Listing of the Nuveen Diversified Commodity Fund

February 23, 2010.
    Pursuant to Section 19(b)(1)\1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on January 29, 2010, NYSE Amex LLC (the ``Exchange'' or 
``NYSE Amex'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III 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

    NYSE Amex proposes to amend NYSE Amex Rule 1600 et seq., to provide 
that the issuers of Trust Units listed thereunder may invest directly 
in commodities and commodity derivatives rather than solely in the 
assets of a trust, partnership, limited liability company, corporation 
or other similar entity constituted as a commodity pool that holds such 
investments. Other minor changes are also made to conform to changes 
made to other NYSE Amex rules. Pursuant to these rules, the Exchange 
proposes to list and trade shares of the Nuveen Diversified Commodity 
Fund. The text of the proposed rule change is available at the 
Exchange, the Commission's Public Reference Room, and http://
www.nyse.com.

[[Page 9266]]

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    NYSE Amex previously adopted Rule 1600 et seq. to permit the 
listing of Trust Units, which are defined as securities that are issued 
by a trust or other similar entity that invests in the assets of a 
trust, partnership, limited liability company, corporation or other 
similar entity constituted as a commodity pool that holds investments 
comprising or otherwise based on any combination of futures contracts, 
options on futures contracts, forward contracts, swap contracts and/or 
commodities.\4\ Rule 1600 was adopted in contemplation of the listing 
of shares of the Nuveen Commodities Income and Growth Fund (the 
``Fund''), a fund sponsored by Nuveen Investments, Inc. (``Nuveen'') 
and the investment plan of the Fund was described in detail in the 
Exchange's Form 19b-4 and the Commission's Notice.\5\ Nuveen now 
proposes to go forward with a listing of shares (the ``Shares'') of the 
Fund under a new name, the Nuveen Diversified Commodity Fund, and with 
a somewhat modified investment plan, which is described below under 
``Nuveen Diversified Commodity Fund.'' The Shares will conform to the 
initial and continued listing criteria under Rule 1602. The initial 
public offering and sale of the Shares will be registered under the 
Securities Act of 1933.
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    \4\ See Securities Exchange Act Release No. 56880 (December 3, 
2007), 72 FR 69259 (December 3 [sic], 2007).
    \5\ See Securities Exchange Act Release No. 56465 (September 19, 
2007), 72 FR 54489 (September 25, 2007).
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    In order to use income tax reporting procedures more familiar to 
investors in investment trusts, it was originally contemplated that the 
Fund would have a ``master/feeder'' structure in which the Fund would 
hold no assets directly except the equity of a separate investment 
vehicle, which would serve as the conduit through which the Fund would 
make its investments. However, due to a change in the interpretation of 
applicable tax law by the Internal Revenue Service, the originally 
expected trust reporting procedures would no longer be available under 
a master/feeder structure. In light of this interpretative change, 
Nuveen proposes to modify its approach and have the listed Fund make 
its own direct investments. Rule 1600 as currently in effect permits 
only the listing of Trust Units whose issuers utilize the master/feeder 
structure originally intended to be used for the Fund. The rule was 
drafted in this way simply because it accommodated the security 
proposed to be listed at that time and was not designed to provide any 
protections to investors, but merely facilitated the now-unavailable 
trust-based tax reporting procedures. Consequently, the Exchange 
proposes to amend the definition of Trust Units in Rule 1600 to remove 
the master/feeder structure requirement and permit the listing of Trust 
Units where the issuer is constituted as a commodity pool which invests 
directly in commodities and commodity derivatives. The Exchange 
believes that this amendment does not in any way increase the risk to 
investors of investing in the Trust Units or give rise to any new 
regulatory concerns. Nuveen has represented to the Exchange that there 
are no material revisions to the Fund's structure or investment 
approach other than those described in this filing and the Exchange 
believes that these revisions do not give rise to any new regulatory 
issues or raise significant new investor protection concerns.
    Nuveen Diversified Commodity Fund
    The Fund was formed as a Delaware statutory trust on December 7, 
2005 pursuant to a Declaration of Trust signed by Wilmington Trust 
Company, as the Delaware Trustee.\6\ The Fund's primary investment 
objective is to seek total return through broad exposure to the 
commodities markets. The Fund's secondary objective is to provide 
investors with monthly income and capital distributions not commonly 
associated with commodity investments. The Fund will invest in 
commodity futures and forward contracts, options on commodity futures 
and forward contracts and over-the-counter (``OTC'') commodity options 
in the following commodity groups: energy, industrial metals, precious 
metals, livestock, agriculturals, and tropical foods and fibers and may 
in the future include other commodity investments that become the 
subject of commodity futures trading.\7\
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    \6\ The Fund, as a commodity pool, will not be subject to 
registration and regulation under the Investment Company Act of 1940 
(the ``1940 Act'').
    \7\ Following is a list of futures contracts and other commodity 
interests in which the Fund intends to invest, and the exchanges on 
which they trade, based on systematic calculations of global 
commodity production and U.S. dollar volume traded: Lumber, Milk, 
Feeder Cattle, Lean Hogs, Live Cattle, Pork Bellies--Chicago 
Mercantile Exchange (``CME''); Cocoa, Arabica Coffee, Cotton, Orange 
Juice, Sugar--New York Board of Trade (``NYBOT''); Gold, Silver, 
Copper--Commodity Exchange (``COMEX'') which is a division of the 
New York Mercantile Exchange (``NYMEX''); Palladium, Platinum, WTI 
Crude Oil, Heating Oil, Natural Gas, Gasoline--NYMEX; Aluminum, 
Copper, Lead, Nickel, Tin, Zinc--London Metals Exchange (``LME''); 
Bean Oil, Corn, Oats, Soy Meal, Soybeans, Wheat--Chicago Board of 
Trade (``CBOT''); Brent Crude Oil, Gas Oil-- InterContinental 
Exchange (``ICE''); Robustta Coffee-- London International Financial 
Futures Exchange (``LIFFE''); Wheat-- Kansas City Board of Trade 
(``KCBOT'').
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    The Fund is a commodity pool. The Fund is managed by Nuveen 
Commodities Asset Management, LLC (the ``Manager''). The Manager is 
registered as a commodity pool operator (the ``CPO'') and a commodity 
trading advisor (the ``CTA'') with the Commodity Futures Trading 
Commission (``CFTC'') and is a member of the National Futures 
Association (``NFA'').
    The Manager will serve as the CPO and a CTA of the Fund. The 
Manager will determine the Fund's overall investment strategy, 
including: (i) The selection and ongoing monitoring of the Fund's sub-
advisors; (ii) the management of the Fund's business affairs; and (iii) 
the provision of certain clerical, bookkeeping and other administrative 
services. Gresham Investment Management LLC (the ``Commodity Sub-
Advisor'') will invest on a notional basis substantially all of the 
Fund's assets in commodity futures and forward contracts pursuant to 
the commodity investment strategy (its proprietary Tangible Asset 
Program[reg] (``TAP[reg]'') \8\ and a risk management program. The 
Commodity Sub-Advisor is a Delaware limited liability company and is 
registered with the CFTC as a

[[Page 9267]]

CTA and a CPO and is a member of the NFA. The Commodity Sub-Advisor is 
also registered with the Commission as an investment adviser. Nuveen 
Asset Management (the ``Collateral Sub-Advisor''), an affiliate of the 
Manager, will invest the Fund's collateral in short-term, investment 
grade quality debt instruments. The Collateral Sub-Advisor is 
registered with the Commission as an investment adviser.
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    \8\ The Fund does not intend to utilize leverage. However, the 
Fund may borrow for temporary or emergency purposes in an amount up 
to 5% of the value of the Fund's net assets should the need arise. 
Such short term borrowings would mature in less than 60 days from 
the date of borrowing. In order to facilitate any such borrowing, 
the Fund intends to establish a standby credit facility with State 
Street Bank and Trust Company that will be entered into as of the 
closing of the offering of its common shares. Any temporary or 
emergency borrowings would be used to provide the Fund with added 
potential flexibility in managing short-term portfolio liquidity 
needs and managing the payment of distributions.
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Investment Description
    The Fund's investment objective is to generate attractive risk-
adjusted total returns as compared to investments in commodity indexes.
    The Fund intends to pursue its investment objective by utilizing: 
(a) An actively managed rules-based commodity investment strategy, 
whereby the Fund will invest in a diversified basket of commodity 
futures and forward contracts with an aggregate notional value 
substantially equal to the net assets of the Fund; and (b) a risk 
management program designed to moderate the overall risk and return 
characteristics of the Fund's commodity investments. In pursuing the 
risk management program, the Fund will write (sell) ``out-of-the-
money'' commodity call options to obtain option premium cash flow, on 
individual futures and forward contracts, on baskets of commodities or 
on broad based commodity indices. The Fund may also purchase ``out-of-
the-money'' commodity put options for protection against significant 
asset value declines on an opportunistic basis. Initially, the Fund 
does not expect to purchase commodity put options.
    The Fund will typically: (i) Invest in commodity futures and 
forward contracts that are traded either on U.S. or non-U.S. commodity 
futures exchanges; and (ii) sell call options on commodity futures and 
forward contracts that are traded either on U.S. or non-U.S. exchanges. 
The Fund may also purchase put options on commodity futures and forward 
contracts that are traded either on U.S. or non-U.S. exchanges or may 
purchase OTC commodity put options through dealers pursuant to 
negotiated, bi-lateral arrangements. The Fund also may invest in other 
commodity contracts that are presently, or may hereafter become, the 
subject of commodity futures trading. Except for certain limitations 
described below, there are no restrictions or limitations on the 
specific commodity investments in which the Fund may invest.
    Commodity Investment Strategy (TAP[reg]). The Commodity Sub-Advisor 
will invest on a notional basis substantially all of the Fund's assets 
in commodity futures and forward contracts pursuant to the commodity 
investment strategy TAP[reg], an actively managed, rules-based \9\ 
commodity investment strategy. TAP[reg] is fundamental in nature and is 
designed to maintain consistent, fully collateralized exposure to 
commodities as an asset class. TAP[reg] does not require the existence 
of price trends in order to be successful.
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    \9\ TAP[reg] currently requires investment in futures or forward 
contracts for commodities in each of the energy, industrial metals, 
livestock, agriculturals, tropical foods and fibers and precious 
metal commodity groups. Commodity group weightings and individual 
commodity weightings are chosen by a process that blends two-thirds 
of five year global production value and one-third of five year 
value of commodity futures contracts traded in dollars. The process 
constrains the weightings of each commodity group such that no group 
may constitute more than 35% of TAP[reg] and no single commodity 
interest can constitute more than 70% of its group. In addition, 
each commodity is rebalanced periodically to its target weighting if 
its actual weighting deviates from its target substantially 
(currently, by more than 10%).
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    Risk Management Program. Pursuant to the risk management program, 
the Fund will write (or sell) commodity call options that may be up to 
20% ``out-of-the-money'' \10\ on a continual basis on up to 
approximately 50% of the notional value of each of its commodity 
futures and forward contract positions that have sufficient option 
trading volume and liquidity. The Commodity Sub-Advisor will write call 
options on individual futures and forward contracts held by the Fund, 
on baskets of commodities or on broad based commodity indices. As the 
writer of call options for which a premium is received, the Fund will 
forego the right to any appreciation in the value of each commodity 
futures or forward contract in its portfolio that effectively underlies 
a call option to the extent the value of the commodity futures or 
forward contract exceeds the exercise price of such option on or before 
the expiration date.
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    \10\ A call option is ``out-of-the-money'' when the strike price 
is above the current trading price of the underlying commodity. A 
put option is ``out-of-the-money'' when the strike price is below 
the current trading price of the underlying commodity.
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    Initially, the Fund does not expect to purchase commodity put 
options. In order to seek protection against significant asset value 
declines, the Fund may from time to time purchase ``out-of-the-money'' 
put options on broad-based commodity indices such as the DJ-UBS 
Commodity Index[reg] (``DJ-UBS''), the S&P GSCI Commodity Index 
(``GSCI''), or on certain custom indices, whose prices are expected to 
closely correspond to a substantial portion of the long commodity 
futures and forward contracts held by the Fund. The Fund also may 
purchase put options on baskets of commodities and on individual 
futures and forward contracts held by it. On an absolute basis, the 
Fund does not expect that the cost to purchase put options at any one 
time will exceed 5% of the value of the Fund's net assets.
    Debt Instruments Used as Collateral. The Fund's investments in 
commodity futures and forward contracts, and options on commodity 
futures and forward contracts, generally will not require significant 
outlays of principal. To support its commodity investments, the Fund 
anticipates that it will maintain significant collateral that will be 
invested in short-term debt instruments with maturities of up to two 
years that, at the time of investment, are investment grade quality, 
including obligations issued or guaranteed by the U.S. government or 
its agencies and instrumentalities, as well as corporate obligations 
and asset-backed securities. Although earning interest income, the 
collateral is subject on a continual basis to additional margin calls 
by the commodity broker and to additional deposits in the commodity 
account if the levels of notional trading change.
Commodity Futures and Forward Contracts and Related Options
    The prices of the commodity futures and forward contracts, options 
on commodity futures and forward contracts, and OTC commodity options 
are volatile with fluctuations expected to affect the value of the 
Shares. Commodity futures and forward contracts and options on 
commodity futures and forward contracts to be held by the Fund will be 
traded on U.S. and/or non-U.S. exchanges. The commodity futures and 
forward contracts to be entered into by the Fund are listed and traded 
on organized and regulated exchanges based on the various commodities 
in the groups described above.\11\ Forward contracts are contracts for 
the purchase and sale of a commodity for delivery on or before a future 
date or during a specified period at a specified price. Futures 
contracts are essentially forward contracts that are traded on 
exchanges. Options on commodity futures and forward contracts are 
contracts giving the purchaser the right, as opposed to the obligation, 
to acquire or to dispose of the commodity futures or forward contract 
underlying the option on or before a future date at a specified price. 
The Fund may purchase OTC commodity put options through dealers

[[Page 9268]]

pursuant to negotiated, bi-lateral arrangements.
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    \11\ See supra note 7.
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    The potential futures contracts are traded on U.S. and non-U.S. 
exchanges, including the CBOT, the CME, the ICE, the LIFFE, the LME, 
the NYMEX, the COMEX, the NYBOT and the KCBOT.
    The Manager will assess or review, as appropriate, the 
creditworthiness of each potential or existing, as appropriate, 
counterparty to an OTC contract pursuant to guidelines approved by the 
Manager's board of directors. Furthermore, the Manager, on behalf of 
the Fund, will only enter into OTC contracts with: (a) Members of the 
Federal Reserve System or foreign banks with branches regulated by the 
Federal Reserve Board; (b) primary dealers in U.S. government 
securities; (c) broker-dealers; (d) futures commission merchants; or 
(e) affiliates of the foregoing.
Structure of the Fund
    Fund. The Fund is a statutory trust formed pursuant to the Delaware 
Statutory Trust Act and will issue shares that represent units of 
fractional undivided beneficial interest in and ownership of the Fund.
    Trustee. Wilmington Trust Company is the Delaware Trustee of the 
Fund. The Delaware Trustee is unaffiliated with the Manager.
    Individual Trustees. The individual trustees of the Fund, all of 
whom will be unaffiliated with the Manager, will fulfill those 
functions required under the NYSE Amex listing standards and certain 
other functions as set forth in the Fund's Trust Agreement.
    Manager. The Manager is a Delaware limited liability company that 
is registered with the CFTC as a CPO and a CTA and is a wholly-owned 
subsidiary of Nuveen Investments, Inc. The Manager will serve as the 
CPO and a CTA of the Fund and through the Commodity Sub-Advisor will be 
responsible for determining the Fund's overall investment strategy and 
its implementation. It is anticipated that the individual trustees, 
pursuant to the Fund's Trust Agreement, will delegate all authority 
(other than the individual trustees' limited requirements to serve on 
the Fund's Audit Committee and Nominating Committee) to the Manager to 
operate the business of the Fund and to be responsible for the conduct 
of the Fund's commodity affairs. As a registered CPO and CTA, the 
Manager is required to comply with various regulatory requirements 
under the CEA and the rules and regulations of the CFTC and the NFA.
    Commodity Sub-Advisor. The Commodity Sub-Advisor is a Delaware 
limited liability company that is registered with the CFTC as a CTA and 
a CPO and is a member of the NFA. As a registered CPO and CTA, the 
Commodity Sub-Advisor is required to comply with various regulatory 
requirements under the CEA and the rules and regulations of the CFTC 
and the NFA. The Commodity Sub-Advisor is also registered with the SEC 
as an investment adviser.
    Collateral Sub-Advisor. The Collateral Sub-Advisor is an affiliate 
of the Manager and a wholly owned subsidiary of Nuveen Investments, 
Inc. The Collateral Sub-Advisor is registered with the Commission as an 
investment adviser.
    Custodian, Transfer Agent and Registrar. State Street Bank and 
Trust Company (``State Street'') will be the Custodian and Accounting 
Agent for the assets of the Fund and its affiliate, Computershare 
Shareholder Services, Inc. will be the Transfer Agent and Registrar for 
the Shares of the Fund.
    Commodity Broker. Newedge USA, LLC (``Newedge'') will act as the 
commodity broker for the Fund and will clear transactions that may be 
executed by it or other brokerage firms on a ``give-up'' basis. Newedge 
is registered as a futures commission merchant and a CPO and is a 
member of the NFA. Newedge also is registered with the Commission as a 
broker-dealer.
    The Exchange notes that each of the Manager, the Commodity Broker, 
and the Commodity Sub-Advisor have represented to the Exchange that 
they each have erected and maintain firewalls within their respective 
institutions to prevent the flow of non-public information regarding 
the portfolio of underlying securities from the personnel involved in 
the development and implementation of the investment strategy to others 
such as sales and trading personnel.
Product Description
    The Shares represent units of fractional undivided beneficial 
interest in and ownership of the Fund. Following the original issuance, 
the Shares will be traded on the Exchange similar to other equity 
securities.
    Commencing with the Fund's first distribution, the Fund intends to 
make regular monthly distributions to its shareholders (stated in terms 
of a fixed cents per share distribution rate) based on past and 
projected performance of the Fund.\12\ The Fund's monthly distributions 
are sometimes referred to as ``managed distributions.'' The Fund will 
seek to establish a distribution rate that roughly corresponds to the 
Manager's projections of the total return that could reasonably be 
expected to be generated by the Fund over an extended period of time, 
although the distribution rate will not be solely dependent on the 
amount of income earned or capital gains realized by the Fund. The 
Fund's ability to make regular monthly distributions will depend on a 
number of factors, including, most importantly, the long-term total 
returns generated by the Fund's portfolio investments and the risk 
management program.
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    \12\ The Fund's actual financial performance will vary so that 
the distribution rate may exceed the Fund's actual total returns. 
The Fund does not anticipate borrowing to obtain the cash necessary 
to make its distributions; however, in the event that the Fund's 
distribution rate exceeds its actual returns, the Fund may be 
required to liquidate investments in order to make such a 
distribution. To the extent that the Fund's total return exceeds the 
distribution rate for an extended period of time, the Fund may 
increase the distribution rate or distribute supplemental amounts to 
shareholders. Conversely, if the Fund's total return is less than 
the distribution rate for an extended period of time, the Fund will 
be drawing upon its net assets to meet the distribution payments.
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    As portfolio and market conditions change, the Fund's rate of 
distributions and the Fund's distribution policies could change.\13\
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    \13\ In connection with any change in distribution policies, the 
Fund will provide written advance notice to investors.
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    State Street will calculate the net asset value (``NAV'') of the 
Fund's Shares shortly after 4:00 p.m. Eastern Time (``ET'') on each 
trading day.\14\
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    \14\ NAV per Share will be computed by dividing the value of all 
assets of the Fund (including any accrued interest and dividends), 
less all liabilities (including accrued expenses and distributions 
declared but unpaid), by the total number of Shares outstanding. 
Under the Fund's current operational procedures, the Fund's net 
asset value will be calculated after close of the Exchange each day. 
The values of the Fund's exchange-traded futures and forward 
contracts and options on futures and forward contracts will be 
valued at the settlement price determined by the principal exchange 
through which they are traded. Market quotes for the Fund's 
exchange-traded futures and forward contracts and options on futures 
and forward contracts may not be readily available if a contract 
cannot be liquidated due to the operation of daily limits or, due to 
extraordinary circumstances, the exchanges or markets on which the 
investments are traded do not open for trading the entire day and no 
other market prices are available. In addition, events may occur 
after the close of the relevant market, but prior to the 
determination of the Fund's net asset value, that materially affect 
the values of the Fund's investments. In such circumstances, the 
Fund will use an independent pricing service to value such 
investments. The Commodity Sub-Advisor will review the values as 
determined by the independent pricing service and discuss those 
valuations with the pricing service if appropriate based on 
guidelines established by the Manager that it believes are 
consistent with industry standards. The values of the Fund's OTC 
derivatives will be valued by the Commodity Sub-Advisor by taking 
either the arithmetic mean of prices obtained by several dealers, 
the prices as determined by the average of two (2) or more 
independent means or the prices as reported by an independent 
pricing service. In the event the Commodity Sub-Advisor uses an 
independent pricing service to value any of its commodity futures 
and forward contracts, options on futures and forward contracts and 
OTC derivatives, the pricing service typically will value such 
commodity futures and forward contracts, options on futures and 
forward contracts and OTC derivatives using a wide range of market 
data and other information and analysis, including reference to 
transactions in other comparable investments if available. The 
procedures of any independent pricing service provider will be 
reviewed by the Manager on a periodic basis.

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[[Page 9269]]

    The normal trading hours for those investments of the Fund traded 
on the various commodity exchanges may differ from the normal trading 
hours of the Exchange, which are from 9:30 a.m. to 4 p.m. ET. 
Therefore, there may be time periods during the trading day where the 
Shares will be trading on the Exchange, but the futures contracts on 
various commodity exchanges will not be trading. The value of the 
Shares may accordingly be influenced by the non-concurrent trading 
hours between the Exchange and the various futures exchanges on which 
the futures contracts based on the underlying commodities are traded.
    The trading prices of the Fund's Shares listed on the Exchange may 
differ from the NAV and can be affected not only by movements in the 
NAV, but by market forces of supply and demand, economic conditions and 
other factors as well. Accordingly, the trading prices of the Shares 
should not be viewed as a real-time update of the NAV.
    Shares will be registered in book entry form through DTC. Trading 
in the Shares on the Exchange will be effected until 4 p.m. ET each 
business day. The minimum trading increment for such shares will be 
$.01.
Underlying Commodity Interests Information
    The daily settlement prices for the commodity futures and forward 
contracts held by the Fund are publicly available on the Web sites of 
the futures and forward exchanges trading the particular contracts. 
Various data vendors and news publications publish futures prices and 
data. The Exchange represents that futures, forwards and related 
exchange traded options quotes and last sale information for the 
commodity contracts are widely disseminated through a variety of market 
data vendors worldwide, including Bloomberg and Reuters. In addition, 
the Exchange further represents that complete real-time data for such 
futures, forwards and exchange traded options is available by 
subscription from Reuters and Bloomberg. The relevant futures and 
forward exchanges also provide delayed futures and forward contract 
information on current and past trading sessions and market news free 
of charge on their respective Web sites. The contract specifications 
for the futures and forward contracts are also available from the 
futures and forward exchanges on their Web sites as well as other 
financial informational sources. Information related to OTC commodity 
options is disclosed by the Fund on a monthly basis as discussed below.
Availability of Information Regarding the Shares
    The Web site for the Fund and the Manager, http://www.nuveen.com, 
which will be publicly accessible at no charge, will contain the 
following information: (a) The prior business day's NAV and the 
reported closing price; (b) calculation of the premium or discount of 
such price against such NAV; and (c) other applicable quantitative 
information. The Fund's prospectus also will be available on the Fund's 
Web site.
    The Fund's total portfolio holdings will also be disclosed and 
updated on its Web site on each business day that the Exchange is open 
for trading.\15\ This Web site disclosure of portfolio holdings (as of 
the previous day's close) will be made daily and will include, as 
applicable: (a) The name and value of each commodity investment; (b) 
the value of over-the-counter commodity put options, if any, and the 
value of the collateral as represented by cash; (c) cash equivalents; 
and (d) debt securities held in the Fund's portfolio. The values of the 
Fund's portfolio holdings will, in each case, be determined in 
accordance with the Fund's valuation policies.
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    \15\ The total portfolio holdings will be disseminated to all 
market participants at the same time.
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    As described above, the NAV for the Fund will be calculated and 
disseminated daily. The Manager has represented to the Exchange that 
the NAV will be disseminated to all market participants at the same 
time. The Exchange will also make available on its Web site daily 
trading volume, closing prices, and the NAV. The closing price and 
settlement prices of the futures contracts held by the Fund are also 
readily available from the relevant futures exchanges, automated 
quotation systems, published or other public sources, or on-line 
information services such as Bloomberg or Reuters. In addition, the 
Exchange will provide a hyperlink on its Web site at http://
www.nyse.com to the Manager's Web site.
    As noted above, State Street will calculate the NAV of the Fund 
once each trading day shortly after 4 p.m. ET. The NAV will be 
disclosed on the Fund's Web site and the Exchange's Web site.
Termination Events
    The Fund will dissolve in certain prescribed circumstances. Upon 
termination of the Fund, shareholders will surrender their shares and 
receive in cash their portion of the value of the Fund.
Criteria for Initial and Continued Listing
    The Fund will be subject to the criteria in Rule 1602 for initial 
and continued listing of the Shares. A minimum of 2,000,000 shares will 
be required to be publicly distributed at the start of trading. It is 
anticipated that the initial price of a share will be approximately 
$25. The Fund will accept subscriptions for a minimum of 100 shares 
during the initial offering which is expected to last no more than 60 
days. After the completion of the initial offering, shares can be 
bought and sold throughout the trading day like any other publicly-
traded security. The Exchange believes that the anticipated minimum 
number of shares outstanding at the start of trading is sufficient to 
provide adequate market liquidity and to further the Fund's objectives.
    The Fund has represented to the Exchange that, for initial and 
continued listing of the Shares, it will be in compliance with Section 
803 of the NYSE Amex Company Guide (Independent Directors and Audit 
Committee) and Rule 10A-3 under the Act.
Original and Annual Listing Fees
    The NYSE Amex original listing fee applicable to the listing of the 
Fund is $5,000. In addition, the annual listing fee applicable under 
Section 141 of the NYSE Amex Company Guide will be based upon the year-
end aggregate number of shares in all series of the Fund outstanding at 
the end of each calendar year.
Trading Rules
    The Shares are equity securities subject to NYSE Amex Rules 
governing the trading of equity securities, including, among others, 
rules governing priority, parity and precedence of orders, DMM 
responsibilities and account opening and customer suitability (Rule 
405--NYSE Amex Equities). Initial equity margin requirements of 50% 
will apply to transactions in the Shares. Shares will trade on the 
Exchange until 4 p.m. ET each business day and will trade in the 
minimum price variants established

[[Page 9270]]

under Rule 62--NYSE Amex Equities. Trading rules pertaining to odd-lot 
trading in NYSE Amex equities (Rule 124--NYSE Amex Equities) will also 
apply.
    The Exchange states that Rule 15A--NYSE Amex Equities complies with 
Rule 611 of Regulation NMS, which requires among other things, that the 
Exchange adopt and enforce written policies and procedures that are 
reasonably designed to prevent trade-throughs of protected quotations. 
The trading of the Shares will be subject to certain conflict of 
interest provisions set forth in NYSE Amex Equities Rules 1603 and 
1604.
    NYSE Amex Equities Rule 1603 provides that, if a DMM unit is 
operating under Rule 98 (Former)--NYSE Amex Equities, Rule 105(b) 
(Former)--NYSE Amex Equities and section (m) of the Guidelines 
thereunder shall be deemed to prohibit a DMM, his or her member 
organization, other member, or approved person of such member 
organization or employee or officer thereof from acting as a market 
maker or functioning in any capacity involving market-marking 
responsibilities in an underlying asset or commodity, related futures 
or options on futures, or any related derivative. If an approved person 
of a DMM unit is entitled to an exemption from Rule 105(b) (Former) 
under Rule 98 (Former), such approved person may act in a market making 
capacity, other than as a specialist in Trust Units on another market 
center, in the underlying asset or commodity, related futures or 
options on futures, or any other related derivatives. NYSE Amex 
Equities Rule 1603 provides that, if a DMM unit is operating under Rule 
98--NYSE Amex Equities, Rule 105(b)--NYSE Amex Equities and section (m) 
of the Guidelines thereunder shall be deemed to prohibit the DMM unit 
or officer or employee thereof from acting as a market maker or 
functioning in any capacity involving market-marking responsibilities 
in an underlying asset or commodity, related futures or options on 
futures, or any other related derivatives.
    Under the proposed amendments, NYSE Amex Rule 1604 will provide 
that DMMshandling [sic] the Shares must maintain in a readily 
accessible place and provide to the Exchange upon request, and keep 
current a list identifying all accounts for trading the underlying 
physical assets or commodities, related futures or options on futures, 
or any other related derivatives, which the DMM may have or over which 
it may exercise investment discretion.
Suitability
    The Information Circular (described below) will inform members and 
member organizations of the characteristics of the Fund and of 
applicable Exchange rules, as well as of the requirements of Rule 405--
NYSE Amex Equities (Diligence as to Accounts).
    The Exchange notes that, pursuant to Rule 405--NYSE Amex Equities, 
member organizations are required in connection with recommending 
transactions in the Shares to have a reasonable basis to believe that a 
customer is suitable for the particular investment given reasonable 
inquiry concerning the customer's investment objectives, financial 
situation, needs, and any other information known by such member.
Information Circular
    The Exchange will distribute an Information Circular to its members 
in connection with the trading of the Shares. The Circular will discuss 
the special characteristics and risks of trading this type of security. 
Specifically, the Circular, among other things, will discuss what the 
Shares are, the requirement that members and member firms deliver a 
prospectus to investors purchasing the Shares prior to or concurrently 
with the confirmation of a transaction during the initial public 
offering, applicable NYSE Amex rules, and trading information and 
applicable suitability rules. The Circular will also explain that the 
Fund is subject to various fees and expenses described in the 
Registration Statement. The Circular will also reference the fact that 
there is no regulated source of last sale information regarding 
physical commodities and note the respective jurisdictions of the SEC 
and CFTC. The Circular will also note that the forward contracts are 
traded on the LME, which is subject to regulation by the Securities and 
Investment Board in the United Kingdom and the Financial Services 
Authority. In addition, the Circular will indicate that OTC instruments 
or products may effectively be unregulated.
    The Circular will advise members of their suitability obligations 
with respect to recommended transactions to customers in the Shares. 
The Circular will also discuss any relief, if granted, by the 
Commission or the staff from any rules under the Act.
    The Circular will disclose that the NAV for shares will be 
calculated shortly after 4:00 p.m. ET each trading day.
Surveillance
    The Exchange represents that its surveillance procedures are 
adequate to properly monitor the trading of the Shares and to deter and 
detect violations of Exchange rules and applicable Federal securities 
laws.\16\ NYSE Amex will rely on its existing surveillance procedures. 
The Exchange currently has in place Information Sharing Agreements with 
ICE FUTURES, LME, NYMEX, and KCBOT for the purpose of providing 
information in connection with trading in or related to futures 
contracts traded on their respective exchanges. The Exchange also notes 
that the CBOT, CME, LIFFE and NYBOT are members of the Intermarket 
Surveillance Group (``ISG''). As a result, the Exchange asserts that 
market surveillance information is available from the CBOT, CME, NYBOT 
and LIFFE through ISG, if necessary, due to regulatory concerns that 
may arise in connection with the futures contracts.
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    \16\ See e-mail from John Carey, Chief Counsel--U.S. Equities, 
Exchange, to Geoffrey Pemble and Michou Nguyen, Special Counsels, 
Commission, dated February 23, 2010.
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Conforming Changes and Updating Amendments
    Since the original adoption of Rule 1600 et seq., the Exchange has 
adopted a completely new set of rules governing both equity and options 
trading on the Exchange. Consequently, a number of references to 
Exchange rules in Rule 1600 et seq. are no longer correct and have been 
appropriately modified. References to equity specialists have been 
modifiedto refer to ``designated market makers'' (``DMMs''), which is 
the designation used throughout the amended NYSE Amex equity trading 
rules. A typographical error in Rule 1602 is also corrected in this 
filing.
    Commentary .03 to Rule 1600 provides that member organizations 
shall not enter limit orders into the Exchange's order routing system 
as agent (i.e. for customer agency orders) in the same trust, for the 
account or accounts of the same or related beneficial owner, in such a 
manner that the beneficial owner(s) effectively is operating as a 
market maker by holding itself out as willing to buy and sell such 
Trust Units on a regular or continuous basis. The Amex adopted 
provisions of this kind because the ability of non-members to function 
effectively as market makers gave those non-members an advantage over 
the specialist who was required to yield priority to their orders. That 
advantage no longer exists under current NYSE Amex rules, as all

[[Page 9271]]

market participants (including the DMM) trade on parity unless they 
establish priority under Exchange rules, which can be done by all 
market participants including the DMM. As such Commentary .03 to rule 
1600 no longer serves any purpose and the Exchange proposes to delete 
it.
    As originally adopted, Rule 1603 provided that NYSE Amex Rule 
175(c) was deemed to prohibit an equity specialist, his member 
organization, or any other member, limited partner, officer, or 
approved person thereof from acting as a market maker or functioning in 
any capacity involving market-making responsibilities in an underlying 
asset or commodity, related futures or options on futures, or any other 
related derivatives, unless the Exchange granted an exemption under 
Rule 193. Rule 1603 as amended provides that, if a DMM unit is 
operating under Rule 98 (Former)--NYSE Amex Equities, Rule 105(b) 
(Former)--NYSE Amex Equities and section (m) of the Guidelines 
thereunder shall be deemed to prohibit a DMM, his or her member 
organization, other member, or approved person of such member 
organization or employee or officer thereof from acting as a market 
maker or functioning in any capacity involving market-marking 
responsibilities in an underlying asset or commodity, related futures 
or options on futures, or any related derivative. If an approved person 
of a DMM unit is entitled to an exemption from Rule 105(b) (former) 
under Rule 98 (former), such approved person may act in a market making 
capacity, other than as a specialist in Trust Units on another market 
center, in the underlying asset or commodity, related futures or 
options on futures, or any other related derivatives.
    As originally adopted, Commentary .01 to Rule 1603 provided that 
trading in the Shares was generally subject to the Exchange's 
Stabilization rule, except that specialists would be permitted to buy 
on ``plus ticks'' and sell on ``minus ticks,'' in order to bring the 
Shares into parity with the underlying commodity or commodities and/or 
futures contract price. The Exchange's new stabilization rule (Rule 
104--NYSE Amex Equities) does not contain the same prohibitions on 
buying on ``plus ticks'' and selling on ``minus ticks'' as was formerly 
the case under Rule 170--AIMI. Consequently, the Exchange proposes to 
delete Commentary .01 to Rule 1603, as it is no longer relevant.
    Rule 1604(a) as originally adopted, provided that the member 
organization acting as specialist in Trust Units was obligated to 
conduct all trading in the Trust Units in its specialist account, 
subject only to the ability to have one or more investment accounts, 
all of which must be reported to the Exchange (See Rule 170--AEMI). The 
Exchange proposes to delete this requirement, as DMMs are now governed 
by Rule 104--NYSE Amex Equities, which does not limit the DMM's use of 
investment accounts to trade its assigned securities or require the DMM 
to report activity in such accounts to the Exchange.\17\ Rule 1604(a) 
also provides that the member organization acting as DMM in the Shares 
must file with the Exchange, in a manner prescribed by the Exchange, 
and keep current a list identifying all accounts for trading the 
underlying physical asset or commodity, related futures or options on 
futures, or any other related derivatives, which the member 
organization acting as DMM may have or over which it may exercise 
investment discretion. The Exchange proposes to amend this requirement 
to provide that, rather than filing the list with the Exchange, the DMM 
must maintain it in a readily accessible place and provide it to the 
Exchange upon request. The Exchange believes that this is sufficient 
for its regulatory needs, as it will only review the list when as 
specific regulatory need arises, so it is sufficient to have the list 
readily available upon request.
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    \17\ The Exchange notes that Rule 104--NYSE Amex Equities in its 
current form has been approved by the SEC on a pilot program basis. 
In the event that the pilot program is not made permanent or is 
amended, DMMs may at that time become subject to limitations on 
their ability to trade Trust Units in investment accounts.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \18\ of the Act in general, and furthers the 
objectives of Section 6(b)(5) of the Act \19\ in particular in that it 
is designed to promote just and equitable principles of trade, to 
foster cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
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 proposed rule change is designed to protect investors and the 
public interest because it will impose appropriate restrictions on the 
listing and trading of Trust Units.
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    \18\ 15 U.S.C. 78f(b).
    \19\ 15 U.S.C. 78f(b)(5).
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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 purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSEAmex-2010-09 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEAmex-2010-09. This 
file number should be included on the subject line if e-mail 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

[[Page 9272]]

submission,\20\ 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 a.m. and 3 
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-NYSEAmex-2010-09 and should be submitted 
on or before March 22, 2010.
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    \20\ The text of the proposed rule change is available on the 
Commission's Web site at http://www.sec.gov.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\

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    \21\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary
[FR Doc. 2010-4136 Filed 2-26-10; 8:45 am]
BILLING CODE 8011-01-P