Document ID: SEC-2015-2017-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2015-12-04T05:00Z

[Federal Register Volume 80, Number 233 (Friday, December 4, 2015)]
[Notices]
[Pages 75883-75889]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-30609]

[[Page 75883]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76530; File No. SR-NYSEArca-2015-114]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change Relating To Listing and Trading of Shares of 
the Market Vectors Dynamic Put Write ETF Under NYSE Arca Equities Rule 
8.600

November 30, 2015.
    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 November 16, 2015, NYSE Arca, Inc. (the ``Exchange'' or 
``NYSE Arca'') filed with the Securities and Exchange Commission (the 
``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 the 
Substance of the Proposed Rule Change

    The Exchange proposes to list and trade shares of the following 
under NYSE Arca Equities Rule 8.600: Market Vectors Dynamic Put Write 
ETF. 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to list and trade the shares (``Shares'') of 
the following under NYSE Arca Equities Rule 8.600, which governs the 
listing and trading of Managed Fund Shares on the Exchange: \4\ Market 
Vectors Dynamic Put Write ETF (``Fund''). The Shares will be offered by 
Market Vectors ETF Trust (``Trust''). The Trust is registered with the 
Commission as an investment company and has filed a registration 
statement on Form N-1A with the Commission on behalf of the Fund.\5\
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    \4\ 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.
    \5\ The Trust is registered under the 1940 Act. On August 19, 
2015, the Trust filed with the Commission a 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 Fund 
(File Nos. 333-123257 and 811-10325) (``Registration Statement''). 
The description of the operation of the Trust and the Fund 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 the1940 Act. See Investment Company Act Release No. 
29496 (November 3, 2010) (File No. 812-13605) (``Exemptive Order'').
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    Van Eck Absolute Return Advisers Corporation will serve as the 
investment adviser (``Adviser'') to the Fund. Van Eck Absolute Return 
Advisers will also be the administrator for the Fund (the 
``Administrator''), and The Bank of New York Mellon will be the 
custodian (``Custodian'' or ``Transfer Agent'') of the Fund's assets 
and provide transfer agency and fund accounting services to the Fund. 
Van Eck Securities Corporation will be the distributor of the Fund's 
Shares (``Distributor'').
    Commentary .06 to Rule 8.600 provides that, if the investment 
adviser to the investment company issuing Managed Fund Shares is 
affiliated with a broker-dealer, such investment adviser shall erect a 
``fire wall'' between the investment adviser and the broker-dealer with 
respect to access to information concerning the composition and/or 
changes to such investment company portfolio. In addition, Commentary 
.06 further requires that personnel who make decisions on the open-end 
fund's portfolio composition must be subject to procedures designed to 
prevent the use and dissemination of material nonpublic information 
regarding the open-end fund's portfolio.\6\ Commentary .06 to Rule 
8.600 is similar to Commentary .03(a)(i) and (iii) to NYSE Arca 
Equities Rule 5.2(j)(3); however, Commentary .06 in connection with the 
establishment of a ``fire wall'' between the investment adviser and the 
broker-dealer reflects the applicable open-end fund's portfolio, not an 
underlying benchmark index, as is the case with index-based funds. The 
Adviser is not a registered broker-dealer but is affiliated with a 
broker-dealer whose primary function is to serve as distributor and 
placement agent for its products. The Adviser has implemented controls 
with respect to such broker-dealer regarding access to information 
concerning the composition and/or changes to the Fund's portfolio. In 
the event (a) the Adviser or any sub-adviser becomes registered as a 
broker-dealer or newly affiliated with a broker-dealer, or (b) any new 
adviser or sub-adviser is a registered broker-dealer or becomes 
affiliated with a broker-dealer, it will implement a fire wall with 
respect to its relevant personnel or broker-dealer affiliate regarding 
access to information concerning the composition and/or changes to the 
portfolio, and will be subject to procedures designed to prevent the 
use and dissemination of material non-public information regarding such 
portfolio.
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    \6\ An investment adviser to an open-end fund is required to be 
registered under the Investment Advisers Act of 1940 (the ``Advisers 
Act''). As a result, the Adviser and its related personnel are 
subject to the provisions of Rule 204A-1 under the Advisers Act 
relating to codes of ethics. This Rule requires investment advisers 
to adopt a code of ethics that reflects the fiduciary nature of the 
relationship to clients as well as compliance with other applicable 
securities laws. Accordingly, procedures designed to prevent the 
communication and misuse of non-public information by an investment 
adviser must be consistent with Rule 204A-1 under the Advisers Act. 
In addition, Rule 206(4)-7 under the Advisers Act makes it unlawful 
for an investment adviser to provide investment advice to clients 
unless such investment adviser has (i) adopted and implemented 
written policies and procedures reasonably designed to prevent 
violation, by the investment adviser and its supervised persons, of 
the Advisers Act and the Commission rules adopted thereunder; (ii) 
implemented, at a minimum, an annual review regarding the adequacy 
of the policies and procedures established pursuant to subparagraph 
(i) above and the effectiveness of their implementation; and (iii) 
designated an individual (who is a supervised person) responsible 
for administering the policies and procedures adopted under 
subparagraph (i) above.

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[[Page 75884]]

Principal Investments
    According to the Registration Statement, the Fund's investment 
objective will be to seek a positive total return and income.
    The Fund, under normal circumstances,\7\ will seek to achieve its 
investment objective by selling only exchange-listed, uncovered out-of-
the-money put options, that typically expire between 30 and 60 days, on 
(i) the S&P 500 Index,\8\ (ii) futures on the S&P 500 Index and/or 
(iii) e-mini futures on the S&P 500 Index.\9\
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    \7\ The term ``under normal circumstances'' includes, but is not 
limited to, the absence of extreme volatility or trading halts in 
the domestic equity markets or the financial markets generally; 
operational issues causing dissemination of inaccurate market 
information; or force majeure type events such as systems failure, 
natural or man-made disaster, act of God, armed conflict, act of 
terrorism, riot or labor disruption or any similar intervening 
circumstance.
    \8\ Options on the S&P 500 Index are traded on the Chicago Board 
Options Exchange (``CBOE''). Options on futures on the S&P 500 Index 
and options on e-mini futures on the S&P 500 Index are traded on the 
Chicago Mercantile Exchange (``CME'').
    \9\ Put option contracts give the owners of the puts the right, 
but not the obligation, to sell the underlying asset, at a specified 
price, by a predetermined date. Put options on the S&P 500 Index, 
futures on the S&P 500 Index, and e-mini futures on the S&P 500 
Index are similar in that they are linked to the S&P 500 Index, 
marked-to-market daily, settled in cash at expiration, and are 
liquid. Options on the S&P 500 Index are European-style and options 
on futures, and e-mini futures, on the S&P 500 Index are American-
style. An ``American style'' put option gives the option holder the 
right to sell the underlying security to the option seller (i.e., 
the Fund) at the option exercise price at any time prior to the 
expiration of the option. A ``European style'' put option gives the 
option holder the right to sell the underlying security to the 
option seller at the option exercise price only on the option 
expiration date. The decision whether to sell a put option on the 
S&P 500 Index or on futures, or e-mini futures, on the S&P 500 would 
be based on, among other things, liquidity and transaction costs.
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    The Fund will seek a positive total return with both income and 
capital appreciation by collecting premiums on options sold and 
investing cash in excess of the amount necessary to fulfill option 
margin requirements in cash and cash equivalents, including U.S. 
Treasury bills. The Fund will seek to generate a positive total return 
by selling options based on a predetermined strike price calculation 
and roll schedule. The strike price is the price at which the contract 
can be exercised. Rolling an option contract, in reference to this 
Fund, refers to the process of buying existing contracts to close them 
out and selling new put option contracts. The strike price calculation 
is designed to adjust the strike prices based on the risk of the equity 
market by taking into account the underlying asset's price, price 
volatility and dividend yield and the yield of U.S. Treasury bills. The 
roll schedule is designed to stagger the put option contracts on a 
weekly basis to have varying option strike prices and option expiration 
dates at any given time. The value of put option contracts in the 
market are primarily determined by the options' distance in or out of 
the money, time to expiration, and the volatility of the underlying 
asset.
    The aggregate notional value (i.e., the underlying value) of the 
put option contracts will be approximately 200% of the Fund's net 
assets.
    If the Fund receives additional inflows (and issues more Shares 
accordingly in large aggregations known as ``Creation Units,'' as 
defined below) in between scheduled put option rolls, the Fund will 
sell additional listed put options, allocated on a pro rata basis based 
on the holdings of the Fund. However, if the trading costs exceed the 
potential premium received, the Fund will keep that portion of the 
Creation Unit in cash until the next scheduled option roll. Conversely, 
if the Fund redeems Shares in Creation Unit size in between scheduled 
put option rolls, the Fund will terminate the appropriate portion of 
the options it has sold on a pro rata basis.
Other Investments
    While the Fund, under normal circumstances, will seek to achieve 
its investment objective by selling primarily exchange-listed, 
uncovered out-of-the-money put options, as described above, the Fund 
may invest its remaining assets in other securities and financial 
instruments, as described below.
    The Fund may hold cash and cash equivalents, including the 
following: U.S. Treasury Bills, repurchase agreements, money market 
instruments, or investment companies and exchange-traded funds 
(``ETFs'') \10\ that invest principally in money market instruments.
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    \10\ The ETFs in which the Fund may invest will be registered 
under the 1940 Act and include Investment Company Units (as 
described in NYSE Arca Equities Rule 5.2(j)(3)); Portfolio 
Depositary Receipts (as described in NYSE Arca Equities Rule 8.100); 
and Managed Fund Shares (as described in NYSE Arca Equities Rule 
8.600). Such ETFs all will be listed and traded in the U.S. on 
registered exchanges.
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    While the Fund will primarily sell put option contracts on (i) the 
S&P 500 Index, (ii) futures on the S&P 500 Index and/or (iii) e-mini 
futures on the S&P 500 Index with an aggregate notional value of 
approximately 200% of the Fund's net assets, the Fund also may invest 
in other U.S. exchange-traded stock index options, options on stock 
index futures contracts, options on the Fund (if available) or 
exchange-traded pooled investment vehicles,\11\ to the extent such 
investments are considered suitable for the Fund by the Adviser.
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    \11\ Exchange-traded pooled investment vehicles include Trust 
Issued Receipts (as described in NYSE Arca Equities Rule 8.200); 
Commodity-Based Trust Shares (as described in NYSE Arca Equities 
Rule 8.201); Currency Trust Shares (as described in NYSE Arca 
Equities Rule 8.202); Commodity Index Trust Shares (as described in 
NYSE Arca Equities Rule 8.203); and Trust Units (as described in 
NYSE Arca Equities Rule 8.500).
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Creation and Redemption of Shares
    According to the Registration Statement, the Fund will issue and 
sell Shares only in ``Creation Units'' on a continuous basis through 
the Distributor at their NAV next determined after receipt, on any 
business day, of an order in proper form. The consideration for a 
purchase of Creation Units is cash. To the extent in-kind creations are 
effected for the Fund, Creation Units of the Fund will consist of cash 
and/or the in-kind deposit of a designated portfolio of securities (the 
``Deposit Securities'') and an amount of cash computed as described 
below (the ``Cash Component''). The Cash Component together with the 
Deposit Securities, as applicable, are referred to as the ``Fund 
Deposit'', which represents the minimum initial and subsequent 
investment amount for Shares. The Cash Component represents the 
difference between the NAV of a Creation Unit and the market value of 
Deposit Securities and may include a ``Dividend Equivalent Payment''. 
The Dividend Equivalent Payment will enable the Fund to make a complete 
distribution of dividends on the next dividend payment date, and is an 
amount equal, on a per Creation Unit basis, to the dividends on all the 
securities held by the Fund (``Fund Securities'') with ex-dividend 
dates within the accumulation period for such distribution (the 
``Accumulation Period''), net of expenses and liabilities for such 
period, as if all of the Fund Securities had been held by the Trust for 
the entire Accumulation Period. The Accumulation Period begins on the 
ex-dividend date for the Fund and ends on the next ex-dividend date.
    The Administrator, through the National Securities Clearing 
Corporation (``NSCC''), will make available on each business day, 
immediately prior to the opening of business on the Exchange (currently 
9:30 a.m. Eastern time), the list of the names and the required number 
of shares of each Deposit Security to be included in the current

[[Page 75885]]

Fund Deposit (based on information at the end of the previous business 
day) as well as the Cash Component for the Fund. Such Fund Deposit is 
applicable, subject to any adjustments as described below, in order to 
effect creations of Creation Units of the Fund until such time as the 
next-announced Fund Deposit composition is made available.
    The identity and number of shares of the Deposit Securities 
required for the Fund Deposit for the Fund will change as rebalancing 
adjustments and corporate action events are reflected from time to time 
by the Adviser with a view to the investment objective of the Fund. The 
composition of the Deposit Securities may also change in response to 
adjustments to the weighting or composition of the securities 
constituting the Index. In addition, the Trust reserves the right to 
accept a basket of securities or cash that differs from Deposit 
Securities or to permit or require the substitution of an amount of 
cash (i.e., a ``cash in lieu'' amount) to be added to the Cash 
Component to replace any Deposit Security under specified 
circumstances.
    In addition to the list of names and numbers of securities 
constituting the current Deposit Securities of the Fund Deposit, the 
Administrator, through the NSCC, also will make available on each 
business day, the Dividend Equivalent Payment, if any, and the 
estimated Cash Component effective through and including the previous 
business day, per outstanding Share of the Fund.
    To be eligible to place orders with the Distributor to create 
Creation Units of the Fund, an entity or person either must be (1) a 
``Participating Party,'' i.e., a broker-dealer or other participant in 
the clearing process through the Continuous Net Settlement System of 
the NSCC; or (2) a Depository Trust Company (``DTC'') Participant; and, 
in either case, must have executed an agreement with the Distributor 
and the Transfer Agent with respect to creations and redemptions of 
Creation Units (``Participant Agreement'') (discussed below). A 
Participating Party and DTC Participant are collectively referred to as 
an ``Authorized Participant.''
    All orders to create Creation Units must be placed in multiples of 
50,000 Shares (i.e., a Creation Unit). All orders to create Creation 
Units, must be received by the Distributor no later than the closing 
time of the regular trading session on NYSE Arca (``Closing Time'') 
(ordinarily 4:00 p.m. Eastern time) on the date such order is placed in 
order for creation of Creation Units to be effected based on the NAV of 
the Fund as determined on such date.
    Shares may be redeemed only in Creation Units at their NAV next 
determined after receipt of a redemption request in proper form by the 
Distributor, only on a business day and only through a Participating 
Party or DTC Participant who has executed a Participant Agreement. The 
Trust will not redeem Shares in amounts less than Creation Units.
    Redemptions generally will be effected for cash. To the extent 
redemptions are effected in-kind, the Administrator, through NSCC, will 
make available immediately prior to the opening of business on the 
Exchange (currently 9:30 a.m. Eastern time) on each day that the 
Exchange is open for business, the Fund Securities that will be 
applicable (subject to possible amendment or correction) to redemption 
requests received in proper form on that day.
    To the extent redemptions are effected in-kind, the redemption 
proceeds for a Creation Unit generally will consist of Fund Securities 
as announced by the Administrator on the business day of the request 
for redemption, plus cash in an amount equal to the difference between 
the NAV of the Shares being redeemed, as next determined after a 
receipt of a request in proper form, and the value of the Fund 
Securities, less the redemption transaction fee and certain variable 
fees. Should the Fund Securities have a value greater than the NAV of 
the Shares being redeemed, a compensating cash payment to the Trust 
equal to the differential plus the applicable redemption transaction 
fee will be required to be arranged for by or on behalf of the 
redeeming shareholder. The Fund reserves the right to honor a 
redemption request by delivering a basket of securities or cash that 
differs from the Fund Securities.
Investment Restrictions
    The Fund may hold up to an aggregate amount of 15% of its net 
assets in illiquid assets (calculated at the time of investment), 
consistent with Commission guidance. The Fund will monitor its 
portfolio liquidity on an ongoing basis to determine whether, in light 
of current circumstances, an adequate level of liquidity is being 
maintained, and will consider taking appropriate steps in order to 
maintain adequate liquidity if, through a change in values, net assets, 
or other circumstances, more than 15% of the Fund's net assets are held 
in illiquid assets. Illiquid assets include securities subject to 
contractual or other restrictions on resale and other instruments that 
lack readily available markets as determined in accordance with 
Commission staff guidance.\12\
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    \12\ The Commission has stated that long-standing Commission 
guidelines have required open-end funds to hold no more than 15% of 
their net assets in illiquid securities and other illiquid assets. 
See Investment Company Act Release No. 28193 (March 11, 2008), 73 FR 
14618 (March 18, 2008), footnote 34. See also, Investment Company 
Act Release No. 5847 (October 21, 1969), 35 FR 19989 (December 31, 
1970) (Statement Regarding ``Restricted Securities''); Investment 
Company Act Release No. 18612 (March 12, 1992), 57 FR 9828 (March 
20, 1992) (Revisions of Guidelines to Form N-1A). A fund's portfolio 
security is illiquid if it cannot be disposed of in the ordinary 
course of business within seven days at approximately the value 
ascribed to it by the fund. See Investment Company Act Release No. 
14983 (March 12, 1986), 51 FR 9773 (March 21, 1986) (adopting 
amendments to Rule 2a-7 under the 1940 Act); Investment Company Act 
Release No. 17452 (April 23, 1990), 55 FR 17933 (April 30, 1990) 
(adopting Rule 144A under the Securities Act).
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    For temporary defensive purposes, the Fund may hold cash and cash 
equivalents, including U.S. Treasury bills and/or invest without limit 
in money market instruments, repurchase agreements, or other funds 
which invest exclusively in money market instruments. The Fund may take 
temporary defensive positions in anticipation of or in an attempt to 
respond to adverse market, economic, political or other conditions.
    The Fund intends to qualify for and to elect to be treated as a 
separate regulated investment company (a ``RIC'') under Subchapter M of 
the Internal Revenue Code.\13\
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    \13\ 26 U.S.C. 851 et seq.
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    The Fund's investments, including the sale of options and options 
on futures, will be consistent with the Fund's investment objective and 
may be used to enhance leverage.\14\ As described above, the Fund may 
sell S&P 500 Index put options, and put options on futures and e-mini 
futures on the S&P 500 Index, which will have an aggregate notional 
value of approximately 200% of the Fund's net assets. While the Fund 
will be permitted to borrow as permitted under the 1940

[[Page 75886]]

Act, the Fund's investments will not be used to seek performance that 
is the multiple or inverse multiple (i.e., 2Xs and 3Xs) of a broad-
based equity market index.
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    \14\ Investments in derivative instruments by the Fund will be 
made in accordance with the 1940 Act and consistent with the Fund's 
investment objective and policies. To limit the potential risk 
associated with transactions in derivatives, the Fund will segregate 
or ``earmark'' assets determined to be liquid by the Adviser in 
accordance with procedures that will established by the Trust's 
Board of Trustees and in accordance with the 1940 Act (or, as 
permitted by applicable regulation, enter into certain offsetting 
positions) to cover its obligations under derivative instruments. 
These procedures will be adopted consistent with Section 18 of the 
1940 Act and related Commission guidance. In addition, the Fund will 
include appropriate risk disclosure in its offering documents, 
including leveraging risk. Leveraging risk is the risk that certain 
transactions of the Fund, including the Fund's use of derivatives, 
may give rise to leverage, causing the Fund's Shares to be more 
volatile than if they had not been leveraged.
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Net Asset Value
    The NAV per Share for the Fund will be computed by dividing the 
value of the net assets of the Fund (i.e., the value of its total 
assets less total liabilities) by the total number of Shares 
outstanding. Expenses and fees, including the management fee, will be 
accrued daily and taken into account for purposes of determining NAV. 
The NAV of the Fund will be determined each business day as of the 
close of trading (ordinarily 4:00 p.m., Eastern Time) on the New York 
Stock Exchange. Any assets or liabilities denominated in currencies 
other than the U.S. dollar will be converted into U.S. dollars at the 
current market rates on the date of valuation as quoted by one or more 
sources.
    The Fund currently expects that the values of the Fund's put 
options and cash and cash equivalents will be based on the securities' 
closing prices on local markets, when available. In the absence of a 
last reported sales price, or if no sales were reported, and for other 
assets for which market quotes are not readily available, values may be 
based on quotes obtained from a quotation reporting system, established 
market makers or by an outside independent pricing service.
    ETFs and pooled investment vehicles will be valued at market value, 
which will generally be determined using the last reported official 
closing or last trading price on the exchange or market on which the 
security is primarily traded at the time of valuation or, if no sale 
has occurred, at the mean between the last quoted bid and asked price 
on the primary market or exchange on which they are traded. Investment 
company securities (other than ETFs) will be valued at NAV.
    Money market instruments and repurchase agreements will be valued 
based on evaluations or price quotations obtained from a third-party 
pricing service or from a broker-dealer who makes markets in such 
securities, and such investments that are short-term investments (that 
is, having a maturity of 60 days or less) will be valued at amortized 
cost.
    Prices obtained by an outside independent pricing service may use 
information provided by market makers or estimates of market values 
obtained from yield data related to investments or securities with 
similar characteristics and may use a computerized grid matrix of 
securities and its evaluations in determining what it believes is the 
fair value of the portfolio securities. If a market quotation for a 
security is not readily available or the Adviser believes it does not 
otherwise accurately reflect the market value of the security at the 
time the Fund will calculate its NAV, the security will be fair valued 
by the Adviser in accordance with the Trust's valuation policies and 
procedures approved by the Board of Trustees. The Fund expects that it 
may also use fair value pricing in a variety of circumstances, 
including but not limited to, situations where the value of a security 
in the Fund's portfolio has been materially affected by events 
occurring after the close of the market on which the security is 
principally traded (such as a corporate action or other news that may 
materially affect the price of a security) or trading in a security has 
been suspended or halted. Accordingly, the Fund's NAV may reflect 
certain portfolio securities' fair values rather than their market 
prices at the time the exchanges on which they principally trade close.
Availability of Information
    The Fund's Web site (www.vaneck.com), which will be publicly 
available prior to the public offering of Shares, will include a form 
of the prospectus for the Fund that may be downloaded. The Fund's Web 
site will include additional quantitative information updated on a 
daily basis, including, for the Fund, (1) daily trading volume, the 
prior business day's reported closing price, NAV at the time of 
calculation of such NAV (the ``Closing Price''), and a calculation of 
the premium and discount of the Closing Price against the NAV, and (2) 
data in chart format displaying the frequency distribution of discounts 
and premiums of the daily Closing Price against the NAV, within 
appropriate ranges, for each of the four previous calendar quarters. On 
each business day, before commencement of trading in Shares in the Core 
Trading Session on the Exchange (9:30 a.m. to 4:00 p.m., Eastern time), 
the Fund's Web site will disclose the Disclosed Portfolio that will 
form the basis for the Fund's calculation of NAV at the end of the 
business day.\15\
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    \15\ Under accounting procedures followed by the Fund, trades 
made on the prior business day (``T'') will be booked and reflected 
in NAV on the current business day (``T+1''). Accordingly, the Fund 
will be able to disclose at the beginning of the business day the 
portfolio that will form the basis for the NAV calculation at the 
end of the business day.
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    The Fund will disclose on the Fund's Web site the following 
information regarding each portfolio holding, as applicable to the type 
of holding: ticker symbol, CUSIP number or other identifier, if any; a 
description of the holding (including the type of holding, such as the 
type of option); the identity of the security, commodity, index or 
other asset or instrument underlying the holding, if any; for options, 
the option strike price; quantity held (as measured by, for example, 
par value, notional value or number of shares, contracts or units); 
maturity date, if any; coupon rate, if any; effective date, if any; 
market value of the holding; and the percentage weighting of the 
holding in the Fund's portfolio. The Web site information will be 
publicly available at no charge.
    In addition, a basket composition file, which includes the security 
names and share quantities, if applicable, required to be delivered in 
exchange for the Fund's Shares, together with estimates and actual cash 
components, will be publicly disseminated daily prior to the opening of 
the Exchange via the NSCC. The basket represents one Creation Unit of 
the Fund. The NAV of Shares of the Fund will normally be determined as 
of the close of the regular trading session on the Exchange (ordinarily 
4:00 p.m. Eastern time) on each business day. Authorized Participants 
may refer to the basket composition file for information regarding 
securities and financial instruments that may comprise the Fund's 
basket on a given day.
    In order to provide investors with a basis to gauge whether the 
market price of the Shares on the Exchange is approximately consistent 
with the current value of the assets of the Fund on a per Share basis, 
an updated Indicative Per Share Portfolio Value will be disseminated 
every 15 seconds during the Exchange's Core Trading Session by major 
market data vendors.\16\ Indicative Per Share Portfolio Values will be 
based on the most recently reported prices of Fund Securities.
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    \16\ Currently, the Exchange understands that several major 
market data vendors display and/or make widely available Indicative 
Per Share Portfolio Values (or Portfolio Indicative Values) taken 
from the Consolidated Tape Association (``CTA'') or other data 
feeds.
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    Investors can also obtain the Trust's Statement of Additional 
Information (``SAI''), the Fund's shareholder reports, and its Form N-
CSR and Form N-SAR, filed twice a year. The Trust's SAI and Shareholder 
Reports will be available free upon request from the Trust, and those 
documents and the Form N-CSR and Form N-SAR may be viewed on-screen or 
downloaded from the Commission's Web site at www.sec.gov. Information 
regarding market price and trading volume of the Shares will be 
continually available on a real-time basis throughout the day on 
brokers'

[[Page 75887]]

computer screens and other electronic services. Information regarding 
the previous day's closing price and trading volume information for the 
Shares will be published daily in the financial section of newspapers.
    Quotation and last sale information for the Shares, ETFs and pooled 
investment vehicles will be available via the Consolidated Tape 
Association (``CTA'') high-speed line. Quotation and last sale 
information for exchange-listed options cleared via the Options 
Clearing Corporation will be available via the Options Price Reporting 
Authority. Intra-day and closing price information regarding exchange-
traded options (including options on futures) will be available from 
the exchange on which such instruments are traded. Intra-day and 
closing price information regarding money market instruments, 
repurchase agreements, cash and cash equivalents, including U.S. 
Treasuries, will be available from major market data vendors. Price 
information for non-exchange-traded investment company securities will 
be available from major market data vendors and from the Web site of 
the applicable investment company.
    In addition, the Indicative Per Share Portfolio Value, which is the 
Portfolio Indicative Value as defined in NYSE Arca Equities Rule 
8.600(c)(3), will be widely disseminated at least every 15 seconds 
during the Exchange's Core Trading Session by one or more major market 
data vendors. The dissemination of the Indicative Per Share Portfolio 
Value, together with the Disclosed Portfolio, will allow investors to 
determine the value of the underlying portfolio of the Fund on a daily 
basis and will provide a close estimate of that value throughout the 
trading day.
Trading Halts
    With respect to trading halts, the Exchange may consider all 
relevant factors in exercising its discretion to halt or suspend 
trading in the Shares of the Fund.\17\ Trading in Shares of the Fund 
will be halted if the circuit breaker parameters in NYSE Arca Equities 
Rule 7.12 have been reached. Trading also 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 securities and/or the 
financial instruments comprising the Disclosed Portfolio of the Fund; 
or (2) whether other unusual conditions or circumstances detrimental to 
the maintenance of a fair and orderly market are present. Trading in 
the Shares will be subject to NYSE Arca Equities Rule 8.600(d)(2)(D), 
which sets forth circumstances under which Shares of the Fund may be 
halted.
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    \17\ See NYSE Arca Equities Rule 7.12, Commentary .04.
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    If the Indicative Per Share Portfolio Value is not being 
disseminated as required, the Exchange may halt trading during the day 
in which the disruption occurs; if the interruption persists past the 
day in which it occurred, the Exchange will halt trading no later than 
the beginning of the trading day following the interruption. Under NYSE 
Arca Equities Rule 7.34(a)(5), if the Exchange becomes aware that the 
NAV for the Fund is not being 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.
    The Shares will conform to the initial and continued listing 
criteria under NYSE Arca Equities Rule 8.600. Consistent with NYSE Arca 
Equities Rule 8.600(d)(2)(B)(ii), the Adviser, as the Reporting 
Authority, will implement and maintain, or be subject to, procedures 
designed to prevent the use and dissemination of material non-public 
information regarding the actual components of the Fund's portfolio. 
The Exchange represents that, for initial and/or continued listing, the 
Fund will be in compliance with Rule 10A-3 \18\ under the Act, as 
provided by NYSE Arca Equities Rule 5.3. A minimum of 100,000 Shares 
will be outstanding at the commencement of trading on the Exchange. The 
Exchange will obtain a representation from the issuer of the Shares 
that the NAV per Share will be calculated daily and that the NAV and 
the Disclosed Portfolio as defined in NYSE Arca Equities Rule 
8.600(c)(2) will be made available to all market participants at the 
same time.
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    \18\ 17 CFR 240.10A-3.
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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. ET in accordance with 
NYSE Arca Equities Rule 7.34 (Opening, Core, and Late Trading 
Sessions). The Exchange has appropriate rules to facilitate 
transactions in the Shares during all trading sessions. As provided in 
NYSE Arca Equities Rule 7.6, Commentary .03, the minimum price 
variation (``MPV'') for quoting and entry of orders in equity 
securities traded on the NYSE Arca Marketplace is $0.01, with the 
exception of securities that are priced less than $1.00 for which the 
MPV for order entry is $0.0001.
Surveillance
    The Exchange represents that the trading in the Shares will be 
subject to the existing trading surveillances, administered by 
regulatory staff of the Exchange or the Financial Industry Regulatory 
Authority (``FINRA'') on behalf of the Exchange, which are designed to 
detect violations of Exchange rules and applicable federal securities 
laws.\19\ 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 federal 
securities laws applicable to trading on the Exchange.
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    \19\ FINRA surveils certain trading activity on the Exchange 
pursuant to a regulatory services agreement. The Exchange is 
responsible for FINRA's performance under this regulatory services 
agreement.
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    The surveillances referred to above generally focus on detecting 
securities trading outside their normal patterns, which could be 
indicative of manipulative or other violative activity. 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.
    FINRA, on behalf of the Exchange, or the regulatory staff of the 
Exchange, will communicate as needed regarding trading in the Shares, 
options contracts and options on futures contracts with other markets 
and other entities that are members of the Intermarket Surveillance 
Group (``ISG''), and FINRA, on behalf of the Exchange, may obtain 
trading information regarding trading in the Shares, options contracts, 
and options on futures contracts from such markets and other entities. 
In addition, the regulatory staff of the Exchange may obtain 
information regarding trading in the Shares, options contracts, and 
options on futures contracts from markets and other entities that are 
members of ISG or with which the Exchange has in place a comprehensive 
surveillance sharing agreement.\20\ All options on futures and options 
held by the Fund will be traded on U.S. exchanges, all of which are 
members of ISG or are exchanges with which the

[[Page 75888]]

Exchange has in place a comprehensive surveillance sharing agreement.
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    \20\ For a list of the current members of ISG, see 
www.isgportal.org. The Exchange notes that not all of the components 
of the portfolio for the Fund may trade on exchanges that are 
members of the ISG or with which the Exchange has in place a 
comprehensive surveillance sharing agreement.
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    In addition, 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 of Shares in the Fund, the 
Exchange will inform its ETP Holders in an Information Bulletin 
(``Bulletin'') of the special characteristics and risks associated with 
trading the Shares. Specifically, the Bulletin will discuss the 
following: (1) The procedures for purchases and redemptions of Shares 
in Creation Unit aggregations (and that Shares are not individually 
redeemable); (2) 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; (3) the risks 
involved in trading the Shares during the Opening and Late Trading 
Sessions when an updated IIV or Index value will not be calculated or 
publicly disseminated; (4) how information regarding the IIV and the 
Disclosed Portfolio will be 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 Bulletin will reference that the Fund is subject 
to various fees and expenses described in the Registration Statement. 
The Bulletin will discuss any exemptive, no-action, and interpretive 
relief granted by the Commission from any rules under the Act. The 
Bulletin will also disclose that the NAV for the Shares will be 
calculated after 4:00 p.m., Eastern time each trading day.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \21\ 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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    \21\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change is designed to 
prevent fraudulent and manipulative acts and practices in that the 
Shares will be listed on the Exchange pursuant to the initial and 
continued listing criteria in NYSE Arca Equities Rule 8.600. The Shares 
will be subject to the existing trading surveillances, administered by 
FINRA on behalf of the Exchange, or the regulatory staff of the 
Exchange, which are designed to deter and detect violations of Exchange 
rules and federal securities laws applicable to trading on the 
Exchange. FINRA and the regulatory staff of the Exchange, as 
applicable, may each obtain information via ISG from other exchanges 
that are members of ISG, and in the case of the Exchange, from other 
market or entities with which the Exchange has entered into a 
comprehensive surveillance sharing agreement. The Adviser is not a 
registered broker-dealer but is affiliated with a broker-dealer whose 
primary function is to serve as distributor and placement agent for Van 
Eck products. Van Eck has implemented controls with respect to such 
broker-dealer regarding access to information concerning the 
composition and/or changes to the Fund's portfolio. The Fund's 
investments will be consistent with its investment objective. While the 
Fund will be permitted to borrow as permitted under the 1940 Act, the 
Fund's investments will not be used to seek performance that is the 
multiple or inverse multiple (i.e., 2Xs and 3Xs) of a broad-based 
equity market index.
    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 Exchange will obtain a representation from the issuer of the 
Shares that the NAV per Share will be calculated daily every day the 
NYSE is open, and that the NAV will be made available to all market 
participants at the same time. In addition, a large amount of publicly 
available information will be publicly available regarding the Fund and 
the Shares, thereby promoting market transparency. Moreover, the IIV 
will be widely disseminated by one or more major market data vendors at 
least every 15 seconds during the Exchange's Core Trading Session. On 
each business day, before commencement of trading in the Shares in the 
Core Trading Session on the Exchange, the Fund will disclose on its Web 
site the portfolio that will form the basis for the Fund's calculation 
of NAV at the end of the business day. Information regarding market 
price and trading volume of the Shares will be continually available on 
a real-time basis throughout the day on brokers' computer screens and 
other electronic services, and quotations and last sale information 
will be available via the CTA high-speed line. Quotation and last sale 
information for the Shares will be available via the CTA high-speed 
line, and from the Exchange. Quotation and last sale information for 
exchange-listed options cleared via the Options Clearing Corporation 
will be available via the Options Price Reporting Authority. Intra-day 
and closing price information regarding exchange-traded options 
(including options on futures) will be available from the exchange on 
which such instruments are traded. Intra-day and closing price 
information regarding money market instruments; repurchase agreements; 
cash and cash equivalents also will be available from major market data 
vendors.
    The Web site for the Fund will include the prospectus for the Fund 
and additional data relating to NAV and other applicable quantitative 
information. Moreover, prior to 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. Trading 
in Shares of the Fund will be halted if the circuit breaker parameters 
in NYSE Arca Equities Rule 7.12 have been reached or because of market 
conditions or for reasons that, in the view of the Exchange, make 
trading the Shares inadvisable. In addition, as noted above, investors 
will have ready access to information regarding the Fund's holdings, 
the IIV, the Fund's portfolio, and quotation and last sale information 
for the Shares.
    The proposed rule change is designed to perfect the mechanism of a 
free and open market and, in general, to protect investors and the 
public interest in that it will facilitate the listing and trading of 
an additional type of exchange-traded product that will enhance 
competition among market participants, to the benefit of investors and 
the marketplace. As noted above, the Shares will be subject to the 
existing trading surveillances, administered by the regulatory staff of 
the Exchange or FINRA on behalf of the Exchange, which are designed to 
detect violations of Exchange rules and federal securities laws 
applicable to trading on the Exchange. The regulatory staff of the 
Exchange, or FINRA, on behalf of the Exchange, will communicate as 
needed regarding trading in the Shares, options contracts and options 
on futures contracts with other markets and other entities that are 
members of the ISG, and the regulatory staff of the Exchange, or FINRA, 
on behalf of the Exchange, may obtain trading information regarding 
trading in the Shares, options contracts, and options on futures 
contracts from such markets and other entities. In addition, the 
Exchange may obtain information regarding trading in the

[[Page 75889]]

Shares, options contracts, and options on futures contracts from 
markets and other entities that are members of ISG or with which the 
Exchange has in place a comprehensive surveillance sharing agreement.
    In addition, as noted above, investors will have ready access to 
information regarding the Fund's holdings, the IIV, and quotation and 
last sale information for the Shares.

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 notes that the 
proposed rule change will facilitate the listing and trading of an 
additional type of actively managed ETF that holds options or options 
on futures and that will enhance competition among market participants, 
to the benefit of investors and the marketplace.

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 45 days of the date of publication of this notice in the 
Federal Register or such longer time period up to 90 days (i) as the 
Commission may designate 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 or disapprove 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 Email to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2015-114 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2015-114. 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 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-NYSEArca-2015-114 and should 
be submitted on or before December 28, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-30609 Filed 12-3-15; 8:45 am]
BILLING CODE 8011-01-P