Document ID: SEC-2015-1756-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2015-10-28T04:00Z

[Federal Register Volume 80, Number 208 (Wednesday, October 28, 2015)]
[Notices]
[Pages 66085-66087]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-27344]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76224; File No. SR-NYSEArca-2015-94]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Regarding the 
AdvisorShares WCM/BNY Mellon Focused Growth ADR ETF's Holdings

October 22, 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 October 8, 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 Substance 
of the Proposed Rule Change

    The Exchange proposes to change a representation regarding the 
AdvisorShares WCM/BNY Mellon Focused Growth ADR ETF's holdings. Shares 
of the WCM/BNY Mellon Focused Growth ADR ETF have been approved for 
listing and trading on the Exchange under NYSE Arca Equities Rule 
8.600. The text of the proposed rule change is available on the 
Exchange's Web site at www.nyse.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Commission has approved a proposed rule change relating to 
listing and trading on the Exchange of shares (``Shares'') of the 
AdvisorShares WCM/BNY Mellon Focused Growth ADR ETF (the ``Fund'') 
under NYSE Arca Equities Rule 8.600,\4\ which governs the listing

[[Page 66086]]

and trading of Managed Fund Shares.\5\ The Fund's Shares are currently 
listed and traded on the Exchange under NYSE Arca Equities Rule 8.600.
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    \4\ See Securities Exchange Act Release No. 62502 (July 15, 
2010), 75 FR 42471 (July 21, 2010) (SR-NYSEArca-2010-57) (the 
``Prior Order''). The notice with respect to the Prior Order was 
published in Securities Exchange Act Release No. 62344 (June 21, 
2010), 75 FR 37498 (June 29, 2010) (``Prior Notice'' and, together 
with the Prior Order, the ``Prior Release''). The Exchange has filed 
a proposed rule change pursuant to Rule 19b-4 under the Act to 
provide that the Fund may invest in securities outside of U.S. 
markets, and that not more than 10% of the net assets of the Fund in 
the aggregate invested in equity securities (excluding non-exchange-
traded investment company securities) shall consist of equity 
securities whose principal market is not a member of the Intermarket 
Surveillance Group (``ISG'') or is a market with which the Exchange 
does not have a comprehensive surveillance sharing agreement. See 
Securities Exchange Act Release No. 74271 (February 13, 2015), 80 FR 
9301 (February 20, 2015) (SR-NYSEArca-2015-06) (``Second Prior 
Release''). The Exchange also has filed a proposed rule change 
pursuant to Rule 19b-4 under the Act to provide that the Fund will 
invest at least 80% of its total assets in American Depositary 
Receipts (``ADRs'') and other equity securities, including common 
and preferred stock, warrants, convertible securities and master 
limited partnerships, and that the Fund's portfolio will consist 
primarily of ADRs. See Securities Exchange Act Release No. 75100 
(June 3, 2015), 80 FR 32641 (June 9, 2015) (SR-NYSEArca-2015-47) 
(``Third Prior Release'').
    \5\ A Managed Fund Share is a security that represents an 
interest in an investment company registered under the Investment 
Company Act of 1940 (15 U.S.C. 80a-1) (``1940 Act'') organized as an 
open-end investment company or similar entity that invests in a 
portfolio of securities selected by its investment adviser 
consistent with its investment objectives and policies. In contrast, 
an open-end investment company that issues Investment Company Units, 
listed and traded on the Exchange under NYSE Arca Equities Rule 
5.2(j)(3), seeks to provide investment results that correspond 
generally to the price and yield performance of a specific foreign 
or domestic stock index, fixed income securities index or 
combination thereof.
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    The Shares are offered by AdvisorShares Trust (the ``Trust''), a 
statutory trust organized under the laws of the State of Delaware and 
registered with the Commission as an open-end management investment 
company.\6\ The investment adviser to the Fund is AdvisorShares 
Investments, LLC (the ``Adviser''). WCM Investment Management (``WCM'') 
is the sub-adviser and portfolio manager to the Fund (``Sub-Adviser'').
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    \6\ The Trust is registered under the 1940 Act. On November 1, 
2014, the Trust filed with the Commission an amendment to its 
registration statement on Form N-1A under the Securities Act of 1933 
(15 U.S.C. 77a) and the 1940 Act relating to the Fund (File Nos. 
333-157876 and 811-22110) (the ``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 the 1940 Act. See Investment Company Act Release No. 
29291 (May 28, 2010) (File No. 812-13677) (``Exemptive Order'').
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    According to the Registration Statement, and as stated in the Prior 
Release, the Fund's investment objective is long-term capital 
appreciation above international benchmarks such as the BNY Mellon 
Classic ADR Index and the MSCI EAFE Index. WCM seeks to achieve the 
Fund's investment objective by selecting a portfolio of U.S. traded 
securities of non-U.S. organizations included in the BNY Mellon Classic 
ADR Index. The BNY Mellon Classic ADR Index predominantly includes ADRs 
and, in addition, includes other Depositary Receipts (``DRs''), which 
include Global Depositary Receipts (``GDRs''), Euro Depositary Receipts 
(``Euro DRs'') and New York Shares (``NYSs'').\7\
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    \7\ According to the Registration Statement, DRs, which include 
ADRs, GDRs, Euro DRs and NYSs, are negotiable securities that 
generally represent a non-U.S. company's publicly traded equity or 
debt. DRs may be purchased in the U.S. secondary trading market. 
They may trade freely, just like any other security, either on an 
exchange or in the over-the-counter market. Although typically 
denominated in U.S. dollars, DRs can also be denominated in Euros. 
DRs can trade on all U.S. stock exchanges as well as on many 
European stock exchanges.
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    The Prior Notice and the Second Prior Release stated that the 
Fund's portfolio will typically have fewer than 30 companies. The 
Exchange proposes to amend such statement in the Prior Notice and the 
Second Prior Release to provide that, going forward, the Fund's 
portfolio will typically have fewer than 40 companies. The Adviser and 
Sub-Adviser have represented that an increase in the number of 
companies typically included in the Fund's portfolio would provide the 
Fund with additional investment opportunities to permit the Fund to 
meet its investment objective, as described above.
    Except for the change described above, all other representations 
made in the Prior Release, the Second Prior Release and the Third Prior 
Release remain unchanged.\8\ The Fund will continue to comply with all 
initial and continued listing requirements under NYSE Arca Equities 
Rule 8.600.

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    \8\ See note 4, supra. All terms referenced but not defined 
herein are defined in the Prior Release.
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2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \9\ 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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    \9\ 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 are listed and traded on the Exchange pursuant to the initial 
and continued listing criteria in NYSE Arca Equities Rule 8.600. Except 
for the change described above, all other representations made in the 
Prior Release, the Second Prior Release and the Third Prior Release 
remain unchanged. The Fund will continue to comply with all initial and 
continued listing requirements under NYSE Arca Equities Rule 8.600.
    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 net asset value (``NAV'') per Share is calculated daily and 
that the NAV and the Disclosed Portfolio is made available to all 
market participants at the same time. An increase in the number of 
companies typically included in the Fund's portfolio from 30 to 40 
would further diversify the Fund's investments and may decrease the 
susceptibility to manipulation of the Shares' price.
    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. The Adviser represents that the proposed change, as 
described above, is consistent with the Fund's investment objective, 
and will further assist the Adviser and Sub-Adviser to achieve such 
investment objective. Such an increase would further the public 
interest by providing the Fund with additional flexibility to achieve 
long-term capital appreciation above international benchmarks. An 
increase in the number of companies typically included in the Fund's 
portfolio from 30 to 40 would further diversify the Fund's investments 
and may decrease the susceptibility to manipulation of the Shares' 
price.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purpose of the Act. The Exchange believes the 
proposed rule change is designed to allow the Fund to invest in a 
broader range of non-U.S. equity securities thereby helping the Fund to 
achieve its investment objective, and will enhance competition among 
issues of Managed Fund Shares that invest in non-U.S. equity 
securities.

[[Page 66087]]

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

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

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

    Because the proposed rule change does not (i) significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate, the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) 
thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission.
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    The Exchange has asked the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. The Exchange states that an increase in the number of companies 
typically included in the Fund's portfolio from 30 to 40 would further 
diversify the Fund's investments and may decrease the susceptibility to 
manipulation of the Shares' price. For that reason, the Commission 
believes that waiver of the 30-day operative delay is consistent with 
the protection of investors and the public interest. Therefore, the 
Commission designates the proposed rule change to be operative upon 
filing.\12\

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    \12\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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-2015-94 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-2015-94. 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 Section, 100 F Street 
NE., Washington, DC 20549 on official business days between 10 a.m. and 
3 p.m. Copies of the filing will also be available for inspection and 
copying at the NYSE's principal office and on its Internet Web site at 
www.nyse.com. 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-2015-94 and should be submitted on or before November 18, 
2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-27344 Filed 10-27-15; 8:45 am]
 BILLING CODE 8011-01-P