Document ID: SEC-2010-0634-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2010-04-29T04:00Z

[Federal Register: April 29, 2010 (Volume 75, Number 82)]
[Notices]               
[Page 22663-22668]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29ap10-130]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61954; File No. SR-NYSEArca-2010-22]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change Relating to Listing of the Teucrium Corn Fund

April 21, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on March 31, 2010, NYSE Arca, Inc. (``Exchange'' or ``NYSE 
Arca'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 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 list and trade shares of the Teucrium Corn 
Fund under NYSE Arca Equities Rule 8.200. The text of the proposed rule 
change is available at the Exchange, the Commission's Public Reference 
Room, and http://www.nyse.com.

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
    NYSE Arca Equities Rule 8.200, Commentary .02 permits the trading 
of Trust Issued Receipts (``TIRs'') either by listing or pursuant to 
unlisted trading privileges (``UTP'').\3\ The Exchange proposes to list 
and trade shares (``Shares'') of the Teucrium Corn Fund (``Fund'') 
pursuant to NYSE Arca Equities Rule 8.200.
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    \3\ Commentary .02 to NYSE Arca Equities Rule 8.200 applies to 
TIRs that invest in ``Financial Instruments''. The term ``Financial 
Instruments,'' as defined in Commentary .02(b)(4) to NYSE Arca 
Equities Rule 8.200, means any combination of investments, including 
cash; securities; options on securities and indices; futures 
contracts; options on futures contracts; forward contracts; equity 
caps, collars and floors; and swap agreements.
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    The Exchange notes that the Commission has previously approved the 
listing and trading of other issues of Trust Issued Receipts on the 
American Stock Exchange LLC,\4\ trading on NYSE Arca pursuant to 
unlisted trading privileges (``UTP''),\5\ and listing on NYSE Arca.\6\ 
In addition, the Commission has approved other exchange-traded fund-
like products linked to the performance of underlying commodities.\7\
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    \4\ See, e.g., Securities Exchange Act Release No. 58161 (July 
15, 2008), 73 FR 42380 (July 21, 2008) (SR-Amex-2008-39).
    \5\ See, e.g., Securities Exchange Act Release No. 58163 [sic] 
(July 15, 2008), 73 FR 42391 (July 21, 2008) (SR-NYSEArca-2008-73).
    \6\ See, e.g., Securities Exchange Act Release No. 58457 
(September 3, 2008), 73 FR 52711 (September 10, 2008) (SR-NYSEArca-
2008-91).
    \7\ See, e.g., Securities Exchange Act Release Nos. 57456 (March 
7, 2008), 73 FR 13599 (March 13, 2008) (SR-NYSEArca-2007-91) (order 
granting accelerated approval for NYSE Arca listing the iShares GS 
Commodity Trusts); 59781 (April 17, 2009), 74 FR 18771 (April 24, 
2009) (SR-NYSEArca-2009-28) (order granting accelerated approval for 
NYSE Arca listing the ETFS Silver Trust); 59895 (May 8, 2009), 74 FR 
22993 (May 15, 2009) (SR-NYSEArca-2009-40) (order granting 
accelerated approval for NYSE Arca listing the ETFS Gold Trust); 
61219 (December 22, 2009), 74 FR 68886 (December 29, 2009) (order 
approving listing on NYSE Arca of the ETFS Platinum Trust).
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Overview of the Fund
    The Shares represent beneficial ownership interests in the Fund, as 
described in the Registration Statement for the Fund.\8\ The Fund is a 
commodity pool that is a series of the Teucrium Commodity Trust 
(``Trust''), a Delaware statutory trust. The Fund is managed and 
controlled by Teucrium Trading, LLC (``Sponsor''). The Sponsor is a 
Delaware limited liability company that is registered as a commodity 
pool operator (``CPO'') with the Commodity Futures Trading Commission 
(``CFTC'') and is a member of the National Futures Association.
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    \8\ See Amendment No. 3 to the Registration Statement on Form S-
1 for Teucrium Commodity Trust, dated March 29, 2010 (File No. 333-
162033) (``Registration Statement''). The discussion herein relating 
to the Trust and the Shares is based on the Registration Statement.
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    According to the Registration Statement, the investment objective 
of the Fund is to have the daily changes in percentage terms of the 
Fund's net asset value (``NAV'') per Share reflect the daily changes in 
percentage terms of a weighted average of the closing settlement prices 
for three futures contracts for corn (``Corn Futures Contracts'') that 
are traded on the Chicago Board of Trade (``CBOT''), specifically (1) 
The second-to-expire CBOT Corn Futures Contract, weighted 35%, (2) the 
third-to-expire CBOT Corn Futures Contract, weighted 30%, and (3) the 
CBOT Corn Futures Contract expiring in the December following the 
expiration month of the third-to-expire contract, weighted 35%, less 
the Fund's expenses.\9\ (This weighted average of the

[[Page 22664]]

three referenced Corn Futures Contracts is referred to herein as the 
``Benchmark,'' and the three Corn Futures Contracts that at any given 
time make up the Benchmark are referred to herein as the ``Benchmark 
Component Futures Contracts.'')\10\
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    \9\ Corn Futures Contracts traded on the CBOT expire on a 
specified day in five different months: March, May, July, September 
and December. In terms of the Benchmark, in June of a given year, 
the next-to-expire or ``spot month'' Corn Futures Contract will 
expire in July of that year, and the Benchmark Component Futures 
Contracts will be the contracts expiring in September of that year 
(the second-to-expire contract), December of that year (the third-
to-expire contract), and December of the following year. In November 
of a given year, the Benchmark Component Futures Contracts will be 
the contracts expiring in March, May and December of the following 
year.
    \10\ Corn futures volume on CBOT for 2008 and 2009 (through 
November 30, 2009) was 59,934,739 contracts and 47,754,866 
contracts, respectively. As of March 16, 2010, CBOT open interest 
for corn futures was 1,118,103 contracts, and open interest for near 
month futures was 447,554 contracts. The contract price was 
$18,337.50 ($3.6675 per bushel and 5,000 bushels per contract). The 
approximate value of all outstanding contracts was $20.5 billion. 
The position limits for all months is 22,000 contracts and the total 
value of contracts if position limits were reached would be 
approximately $403.5 million (based on the $18,337.50 contract 
price). As of March 16, 2010, open interest in corn swaps cleared on 
the CBOT was approximately 2,100 contracts, with an approximate 
value of $38.5 million. Corn futures and options are also traded on 
NYSE Liffe and corn futures are traded on the Tokyo Grain Exchange.
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    The Fund seeks to achieve its investment objective by investing 
under normal market conditions in Benchmark Component Futures Contracts 
or, in certain circumstances, in other Corn Futures Contracts traded on 
the CBOT or on foreign exchanges. In addition, and to a limited extent, 
the Fund also may invest in corn-based swap agreements that are cleared 
through the CBOT or its affiliated provider of clearing services 
(``Cleared Corn Swaps'') in furtherance of the Fund's investment 
objective. Once position limits in Corn Futures Contracts are 
applicable, the Fund's intention is to invest first in Cleared Corn 
Swaps to the extent permitted by the position limits applicable to 
Cleared Corn Swaps and appropriate in light of the liquidity in the 
Cleared Corn Swap market, and then in contracts and instruments such as 
cash-settled options on Corn Futures Contracts and forward contracts, 
swaps other than Cleared Corn Swaps, and other over-the-counter 
transactions that are based on the price of corn and Corn Futures 
Contracts (collectively, ``Other Corn Interests,'' and together with 
Corn Futures Contracts and Cleared Corn Swaps, ``Corn Interests''). By 
utilizing certain or all of these investments, the Sponsor will 
endeavor to cause the Fund's performance, before taking Fund expenses 
and any interest income from the cash, cash equivalents and U.S. 
Treasury securities held by the Fund into account, to closely track 
that of the Benchmark. The Sponsor expects to manage the Fund's 
investments directly, although it has been authorized by the Trust to 
retain, establish the terms of retention for, and terminate third-party 
commodity trading advisors to provide such management. The Sponsor is 
also authorized to select futures commission merchants to execute the 
Fund's transactions in Corn Futures Contracts.
    The Fund's positions in Corn Interests will be changed or 
``rolled'' on a regular basis in order to track the changing nature of 
the Benchmark. For example, five times a year (on the date on which a 
Corn Futures Contract expires), the second-to-expire Corn Futures 
Contract will become the next-to-expire Corn Futures Contract and will 
no longer be a Benchmark Component Futures Contract, and the Fund's 
investments will have to be changed accordingly. In order that the 
Fund's trading does not cause unwanted market movements and to make it 
more difficult for third parties to profit by trading based on such 
expected market movements, the Fund's investments typically will not be 
rolled entirely on that day, but rather will typically be rolled over a 
period of several days.
    Consistent with achieving the Fund's investment objective of 
closely tracking the Benchmark, the Sponsor may for certain reasons 
cause the Fund to enter into or hold Corn Futures Contracts other than 
the Benchmark Component Futures Contracts, Cleared Corn Swaps and/or 
Other Corn Interests. Certain Cleared Corn Swaps have standardized 
terms similar to, and are priced by reference to, a corresponding 
Benchmark Component Futures Contract. Other Corn Interests that do not 
have standardized terms and are not exchange-traded, referred to as 
``over-the-counter'' Corn Interests, can generally be structured as the 
parties to the Corn Interest contract desire. Therefore, the Fund could 
enter into multiple Cleared Corn Swaps and/or over-the-counter Corn 
Interests intended to exactly replicate the performance of each of the 
three Benchmark Component Futures Contracts, or a single over-the-
counter Corn Interest designed to replicate the performance of the 
Benchmark as a whole. Assuming that there is no default by a 
counterparty to an over-the-counter Corn Interest, the performance of 
the Corn Interest will necessarily correlate exactly with the 
performance of the Benchmark or the applicable Benchmark Component 
Futures Contract.\11\ The Fund could also enter into or hold Corn 
Interests other than Benchmark Component Futures Contracts to 
facilitate effective trading, consistent with the discussion of the 
Fund's ``roll'' strategy in the preceding paragraph. In addition, the 
Fund might also enter into or hold Corn Interests that would be 
expected to alleviate overall deviation between the Fund's performance 
and that of the Benchmark that may result from certain market and 
trading inefficiencies or other reasons.
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    \11\ According to the Registration Statement, the Fund faces the 
risk of non-performance by the counterparties to over-the-counter 
contracts. Unlike in futures contracts, the counterparty to these 
contracts is generally a single bank or other financial institution, 
rather than a clearing organization backed by a group of financial 
institutions. As a result, there will be greater counterparty credit 
risk in these transactions.
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    The Fund invests in Corn Interests to the fullest extent possible 
without being leveraged or unable to satisfy its expected current or 
potential margin or collateral obligations with respect to its 
investments in Corn Interests.\12\ After fulfilling such margin and 
collateral requirements, the Fund will invest the remainder of its 
proceeds from the sale of baskets in short-term obligations of the 
United States government (``Treasury Securities'') or cash equivalents, 
and/or merely hold such assets in cash (generally in interest-bearing 
accounts). Therefore, the focus of the Sponsor in managing the Fund is 
investing in Corn Interests and in Treasury Securities, cash and/or 
cash equivalents. The Fund will earn interest income from the Treasury 
Securities and/or cash equivalents that it purchases and on the cash it 
holds through the Fund's custodian, the Bank of New York Mellon (the 
``Custodian'').
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    \12\ The Sponsor represents that the Fund will invest in Corn 
Interests in a manner consistent with the Fund's investment 
objective and not to achieve additional leverage.
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    The Sponsor endeavors to place the Fund's trades in Corn Interests 
and otherwise manage the Fund's investments so that the Fund's average 
daily tracking error against the Benchmark will be less than 10 percent 
over any period of 30 trading days. More specifically, the Sponsor will 
endeavor to manage the Fund so that A will be within plus/minus 10 
percent of B, where A is the average daily change in the Fund's NAV for 
any period of 30 successive valuation days, i.e., any trading day as of 
which the Fund calculates its NAV, and B is the average daily change in 
the Benchmark over the same period.
    According to the Registration Statement, the Sponsor believes that 
market arbitrage opportunities will

[[Page 22665]]

cause the Fund's Share price on the NYSE Arca to closely track the 
Fund's NAV per share. The Sponsor believes that the net effect of this 
expected relationship and the expected relationship described above 
between the Fund's NAV and the Benchmark will be that the changes in 
the price of the Fund's Shares on the NYSE Arca will closely track, in 
percentage terms, changes in the Benchmark, less the Fund's expenses.
    According to the Registration Statement, the Sponsor employs a 
``neutral'' investment strategy intended to track the changes in the 
Benchmark regardless of whether the Benchmark goes up or goes down. The 
Fund's ``neutral'' investment strategy is designed to permit investors 
generally to purchase and sell the Fund's Shares for the purpose of 
investing indirectly in the corn market in a cost-effective manner. 
Such investors may include participants in the corn industry and other 
industries seeking to hedge the risk of losses in their corn-related 
transactions, as well as investors seeking exposure to the corn market.
    The Fund creates and redeems Shares only in blocks of 100,000 
Shares called Creation Baskets and Redemption Baskets, respectively. 
Only Authorized Purchasers may purchase or redeem Creation Baskets or 
Redemption Baskets.
    All proceeds from the sale of Creation Baskets will be invested in 
the investments described in the Registration Statement no more than 
three business days after the initial Creation Basket is sold. 
Investments are held through the Fund's Custodian in accounts with the 
Fund's commodity futures brokers or in collateral accounts with respect 
to over-the-counter Corn Interests. There is no stated maximum time 
period for the Fund's operations and the Fund will continue until all 
Shares are redeemed or the Fund is liquidated pursuant to the terms of 
the Trust Agreement. In addition, the Custodian also serves as 
Administrator for the Fund, performing certain administrative and 
accounting services and preparing certain Commission and CFTC reports 
on behalf of the Fund.
    The Sponsor does not currently intend to purchase and sell corn in 
the ``spot market'' for the Fund. In addition, the Sponsor does not 
currently intend that the Fund will enter into or hold spot month Corn 
Futures Contracts, except that spot month contracts that were formerly 
second-to-expire contracts may be held for a brief period until they 
can be disposed of in accordance with the Fund's roll strategy.
    According to the Registration Statement, position limits and daily 
price fluctuation limits set by the CFTC and the futures exchanges have 
the potential to cause tracking error, which could cause the price of 
Shares to substantially vary from the Benchmark and prevent investors 
from being able to effectively use the Fund as a way to hedge against 
corn-related losses or as a way to indirectly invest in corn.
    According to the Registration Statement, the CFTC and U.S. 
designated contract markets such as the CBOT may establish position 
limits on the maximum net long or net short futures contracts in 
commodity interests that any person or group of persons under common 
trading control (other than as a hedge) may hold, own or control. For 
example, the current position limits for investments at any one time in 
the Corn Futures Contracts traded on CBOT are 600 spot month contracts, 
13,500 contracts expiring in any other single month, and 22,000 total 
for all months. These position limits are fixed ceilings that the Fund 
would not be able to exceed without specific CFTC authorization.
    In addition to position limits, the futures exchanges set daily 
price fluctuation limits on futures contracts. The daily price 
fluctuation limit establishes the maximum amount that the price of 
futures contracts may vary either up or down from the previous day's 
settlement price. Once the daily price fluctuation limit has been 
reached in a particular futures contract, no trades may be made at a 
price beyond that limit.
    The Fund does not intend to limit the size of the offering and will 
attempt to utilize substantially all of its proceeds to purchase Corn 
Interests. If the Fund encounters position limits, accountability 
levels, or price fluctuation limits for Corn Futures Contracts on the 
CBOT, it may then, if permitted under applicable regulatory 
requirements, purchase Other Corn Interests and/or Corn Futures 
Contracts listed on foreign exchanges. The Corn Futures Contracts 
available on such foreign exchanges may have different underlying 
sizes, deliveries, and prices. In addition, the Corn Futures Contracts 
available on these exchanges may be subject to their own position 
limits and accountability levels. In certain circumstances, however, 
position limits could force the Fund to limit the number of Creation 
Baskets that it sells.
    The Fund will meet the initial and continued listing requirements 
applicable to Trust Issued Receipts in NYSE Arca Equities Rule 8.200 
and Commentary .02 thereto. With respect to application of Rule 10A-3 
\13\ under the Act, the Trust relies on the exception contained in Rule 
10A-3(c)(7).\14\ A minimum of 100,000 Shares will be outstanding as of 
the start of trading on the Exchange.
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    \13\ 17 CFR 240.10A-3.
    \14\ 17 CFR 240.10A-3(c)(7).
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    A more detailed description of Corn Interests and other aspects of 
the corn and Corn Interest markets, as well as investment risks, are 
set forth in the Registration Statement. All terms relating to the Fund 
that are referred to, but not defined in, this proposed rule change are 
defined in the Registration Statement.
Availability of Information Regarding the Shares
    The Web site for the Fund (http://www.teucriumcornfund.com) and/or 
the Exchange, which are publicly accessible at no charge, will contain 
the following information: (a) The current NAV per share daily and the 
prior business day's NAV and the reported closing price; (b) the 
midpoint of the bid-ask price in relation to the NAV as of the time the 
NAV is calculated (the ``Bid-Ask Price''); (c) calculation of the 
premium or discount of such price against such NAV; (d) the bid-ask 
price of Shares determined using the highest bid and lowest offer as of 
the time of calculation of the NAV; (e) data in chart form displaying 
the frequency distribution of discounts and premiums of the Bid-Ask 
Price against the NAV, within appropriate ranges for each of the four 
(4) previous calendar quarters; (f) the prospectus; and (g) other 
applicable quantitative information. The Fund will also disseminate 
Fund holdings on a daily basis on the Fund's Web site.
    The NAV for the Fund will be calculated by the Administrator once a 
day and will be disseminated daily to all market participants at the 
same time. The Exchange also will disseminate on a daily basis via the 
Consolidated Tape Association (``CTA'') information with respect to 
recent NAV, and shares outstanding. The Exchange will also make 
available on its Web site daily trading volume of each of the Shares, 
closing prices of such Shares, and the corresponding NAV. The closing 
price and settlement prices of the Corn Futures Contracts are also 
readily available from the CBOT, automated quotation systems, published 
or other public sources, or on-line information services such as 
Bloomberg or Reuters. The Benchmark will be disseminated by one or more 
major market data vendors every 15 seconds during the NYSE Arca Core 
Trading Session of 9:30 a.m. to 4

[[Page 22666]]

p.m. Eastern Time (``E.T.''). Quotation and last-sale information 
regarding the Shares will be disseminated through the facilities of the 
CTA. In addition, the Exchange will provide a hyperlink on its Web site 
at http://www.nyx.com to the Fund's Web site at http://
www.teucriumcornfund.com, which will display all intraday and closing 
Benchmark levels, the intraday Indicative Trust Value (see below), and 
NAV.
    The daily settlement prices for the Corn Futures Contracts held by 
the Fund are publicly available on the Web site of the CBOT (http://
www.cmegroup.com). In addition, various data vendors and news 
publications publish futures prices and data. The Exchange represents 
that quotation and last sale information for the Corn Futures Contracts 
are widely disseminated through a variety of major market data vendors 
worldwide, including Bloomberg and Reuters. In addition, the Exchange 
further represents that complete real-time data for the Corn Futures 
Contracts is available by subscription from Reuters and Bloomberg. The 
CBOT also provides delayed futures information on current and past 
trading sessions and market news free of charge on its Web site. The 
specific contract specifications for the futures contracts are also 
available at CBOT's Web site, as well as other financial informational 
sources. The spot price of corn also is available on a 24-hour basis 
from major market data vendors.
    The Fund will provide Web site disclosure of portfolio holdings 
daily and will include, as applicable, the names, quantity, price and 
market value of Financial Instruments and the characteristics of such 
instruments and cash equivalents, and amount of cash held in the 
portfolio of the Fund. This Web site disclosure of the portfolio 
composition of the Fund will occur at the same time as the disclosure 
by the Sponsor of the portfolio composition to Authorized Purchasers so 
that all market participants are provided portfolio composition 
information at the same time. Therefore, the same portfolio information 
will be provided on the public Web site as well as in electronic files 
provided to Authorized Purchasers. Accordingly, each investor will have 
access to the current portfolio composition of the Fund through the 
Fund's Web site.
Dissemination of Indicative Trust Value
    In addition, in order to provide updated information relating to 
the Fund for use by investors and market professionals, an updated 
Indicative Trust Value (``ITV'') will be calculated. The ITV is 
calculated by using the prior day's closing NAV per share of the Fund 
as a base and updating that value throughout the trading day to reflect 
changes in the value of the Benchmark Component Futures Contracts. As 
stated in the Registration Statement, changes in the value of over-the-
counter Corn Interests, Treasury Securities and cash equivalents will 
not be included in the calculation of the ITV. The ITV disseminated 
during NYSE Arca trading hours should not be viewed as an actual real 
time update of the NAV, which is calculated only once a day.
    The ITV will be disseminated on a per Share basis by one or more 
major market data vendors every 15 seconds during the NYSE Arca Core 
Trading Session. The normal trading hours for Corn Futures Contracts on 
the CBOT are 10:30 a.m. to 2:15 p.m. E.T. The ITV will not be updated, 
and, therefore, a static ITV will be disseminated, between the close of 
trading on CBOT of Corn Futures Contracts and the close of the NYSE 
Arca Core Trading Session. The value of a Share may be influenced by 
non-concurrent trading hours between NYSE Arca and the CBOT when the 
Shares are traded on NYSE Arca after normal trading hours of Corn 
Futures Contracts on CBOT.
    The Exchange believes that dissemination of the ITV provides 
additional information regarding the Fund that is not otherwise 
available to the public and is useful to professionals and investors in 
connection with the related Shares trading on the Exchange or the 
creation or redemption of such Shares.
Trading Rules
    The Exchange deems the Shares to be equity securities, thus 
rendering trading in the Shares subject to the Exchange's existing 
rules governing the trading of equity securities. Shares will trade on 
the NYSE Arca Marketplace from 4 a.m. to 8 p.m. E.T. The Exchange has 
appropriate rules to facilitate transactions in the Shares during all 
trading sessions. The minimum trading increment for Shares on the 
Exchange will be $0.01.
    The trading of the Shares will be subject to NYSE Arca Equities 
Rule 8.200, Commentary .02(e), which sets forth certain restrictions on 
ETP Holders acting as registered Market Makers in Trust Issued Receipts 
to facilitate surveillance. See ``Surveillance'' below for more 
information.
    With respect to trading halts, the Exchange may consider all 
relevant factors in exercising its discretion to halt or suspend 
trading in the Shares. Trading may be halted because of market 
conditions or for reasons that, in the view of the Exchange, make 
trading in the Shares inadvisable. These may include: (1) The extent to 
which trading is not occurring in the underlying futures contracts, or 
(2) whether other unusual conditions or circumstances detrimental to 
the maintenance of a fair and orderly market are present. In addition, 
trading in Shares will be subject to trading halts caused by 
extraordinary market volatility pursuant to the Exchange's ``circuit 
breaker'' rule \15\ or by the halt or suspension of trading of the 
underlying futures contracts.
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    \15\ See NYSE Arca Equities Rule 7.12.
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    The Exchange represents that the Exchange may halt trading during 
the day in which the interruption to the dissemination of the ITV or 
the value of the underlying futures contracts occurs. If the 
interruption to the dissemination of the ITV or the value of the 
underlying futures contracts persists past the trading day in which it 
occurred, the Exchange will halt trading no later than the beginning of 
the trading day following the interruption. In addition, if the 
Exchange becomes aware that the NAV with respect to the Shares is not 
disseminated to all market participants at the same time, it will halt 
trading in the Shares until such time as the NAV is available to all 
market participants.
Surveillance
    The Exchange intends to utilize its existing surveillance 
procedures applicable to derivative products, including Trust Issued 
Receipts, to monitor trading in the Shares. The Exchange represents 
that these procedures are adequate to properly monitor Exchange trading 
of the Shares in all trading sessions and to deter and detect 
violations of Exchange rules and applicable federal securities laws.
    The Exchange's current trading surveillances focus on detecting 
securities trading outside their normal patterns. When such situations 
are detected, surveillance analysis follows and investigations are 
opened, where appropriate, to review the behavior of all relevant 
parties for all relevant trading violations. The Exchange is able to 
obtain information regarding trading in the Shares, the physical 
commodities included in, or options, futures or options on futures on, 
Shares through ETP Holders, in connection with such ETP Holders' 
proprietary or customer trades which they effect on any relevant 
market. The Exchange can obtain market surveillance information, 
including customer identity information, with

[[Page 22667]]

respect to transactions occurring on the CBOT in that CBOT is a member 
of the Intermarket Surveillance Group (``ISG''). A list of ISG members 
is available at http://www.isgportal.org.\16\
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    \16\ The Exchange notes that not all Corn Interests may trade on 
markets that are members of ISG or with which the Exchange has in 
place a comprehensive surveillance sharing agreement.
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    In addition, with respect to Fund assets traded on exchanges, not 
more than 10% of the weight of such assets in the aggregate shall 
consist of components whose principal trading market is not a member of 
ISG or is a market with which the Exchange does not have a 
comprehensive surveillance sharing agreement.
    The Exchange also has a general policy prohibiting the distribution 
of material, non-public information by its employees.
Information Bulletin
    Prior to the commencement of trading, the Exchange will inform its 
ETP Holders in an Information Bulletin of the special characteristics 
and risks associated with trading the Shares. Specifically, the 
Information Bulletin will discuss the following: (1) The risks involved 
in trading the Shares during the Opening and Late Trading Sessions when 
an updated ITV will not be calculated or publicly disseminated; (2) the 
procedures for purchases and redemptions of Shares in Creation Baskets 
and Redemption Baskets (and that Shares are not individually 
redeemable); (3) NYSE Arca Equities Rule 9.2(a), which imposes a duty 
of due diligence on its ETP Holders to learn the essential facts 
relating to every customer prior to trading the Shares; (4) how 
information regarding the ITV is disseminated; (5) the requirement that 
ETP Holders deliver a prospectus to investors purchasing newly issued 
Shares prior to or concurrently with the confirmation of a transaction; 
and (6) trading information.
    In addition, the Information Bulletin will advise ETP Holders, 
prior to the commencement of trading, of the prospectus delivery 
requirements applicable to the Fund. The Exchange notes that investors 
purchasing Shares directly from the Fund will receive a prospectus. ETP 
Holders purchasing Shares from the Fund for resale to investors will 
deliver a prospectus to such investors. The Information Bulletin will 
also discuss any exemptive, no-action and interpretive relief granted 
by the Commission from any rules under the Act.
    In addition, the Information Bulletin will reference that the Fund 
is subject to various fees and expenses described in the Registration 
Statement. The Information Bulletin will also reference that the CFTC 
has regulatory jurisdiction over the trading of Corn Futures Contracts 
traded on U.S. markets.
    The Information Bulletin will also disclose the trading hours of 
the Shares of the Fund and that the NAV for the Shares is calculated 
after 4 p.m. E.T. each trading day. The Bulletin will disclose that 
information about the Shares of the Fund is publicly available on the 
Fund's Web site.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\17\ in general, and furthers the objectives of Section 
6(b)(5),\18\ in particular, in that it is 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, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system. The Exchange believes that the 
proposed rule change will permit the listing of the Shares on the 
Exchange, to the benefit of investors and the marketplace. In addition, 
the listing and trading criteria set forth in NYSE Equities Rule 8.200 
are intended to protect investors and the public interest.
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    \17\ 15 U.S.C. 78f(b).
    \18\ 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 self-regulatory organization consents, the Commission will:
    (A) By order approve the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2010-22 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-NYSEArca-2010-22. 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 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 a.m. and 3 p.m. Copies of such filing also will be 
available for inspection and copying at the principal office of the 
Exchange. All comments received will be posted without change; the 
Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions

[[Page 22668]]

should refer to File Number SR- NYSEArca-2010-22 and should be 
submitted on or before May 20, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-9875 Filed 4-28-10; 8:45 am]
BILLING CODE 8011-01-P