[Federal Register Volume 75, Number 224 (Monday, November 22, 2010)]
[Notices]
[Pages 71158-71163]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-29351]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63317; File No. SR-NYSEArca-2010-101]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change Relating to the Listing and Trading of the 
ProShares VIX Short-Term Futures ETF and the ProShares VIX Mid-Term 
Futures ETF

November 16, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that, on November 5, 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 and II 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 ProShares VIX 
Short-Term Futures ETF and the ProShares VIX Mid-Term Futures ETF under 
NYSE Arca Equities Rule 8.200, Commentary .02. 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,

[[Page 71159]]

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 ProShares VIX Short-Term Futures 
ETF and the ProShares VIX Mid-Term Futures ETF (``Funds'') under NYSE 
Arca Equities Rule 8.200, Commentary .02.\4\ The Funds seek to provide 
investment results (before fees and expenses) that match the 
performance of a benchmark that seeks to offer exposure to market 
volatility through publicly traded futures markets. The benchmark for 
ProShares VIX Short-Term Futures ETF is the S&P 500 VIX Short-Term 
Futures Index and the benchmark for ProShares VIX Mid-Term Futures ETF 
is the S&P 500 VIX Mid-Term Futures Index (each, an ``Index,'' and, 
collectively, ``Indexes'').\5\ The Funds will invest in futures 
contracts based on the Chicago Board Options Exchange (``CBOE'') 
Volatility Index (``VIX'') to pursue their respective investment 
objectives. Each Fund also may invest in cash or cash equivalents such 
as U.S. Treasury securities or other high credit quality short-term 
fixed-income or similar securities (including shares of money market 
funds, bank deposits, bank money market accounts, certain variable-rate 
demand notes and repurchase agreements collateralized by government 
securities) that may serve as collateral for the futures contracts.
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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.
    \4\ The Commission previously has approved listing on the 
Exchange under Commentary .02 to NYSE Arca Equities Rule 8.200 of 
certain securities issuers. See, e.g., Securities Exchange Act 
Release Nos. 58457 (September 3, 2008), 73 FR 52711 (September 10, 
2008) (SR-NYSEArca-2008-91) (order granting accelerated approval to 
list on NYSE Arca of 14 ProShares funds); and 58983 (November 20, 
2008), 73 FR 73368 (December 2, 2008) (SR-NYSEArca-2008-126) (order 
granting accelerated approval to list on NYSE Arca the GreenHaven 
Continuous Commodity Index Fund). See also Securities Exchange Act 
Release No. 58968 (November 17, 2008), 73 FR 71082 (November 24, 
2008) (SR-NYSEArca-2008-111) (order granting accelerated approval of 
proposed rule change to amend NYSE Arca Equities Rule 5.2(j)(6)(v) 
to add CBOE Volatility Index (VIX) Futures to the definition of 
Futures Reference Asset).
    \5\ Standard & Poor's Financial Services LLC is the index 
sponsor with respect to the Indexes and has implemented procedures 
designed to prevent the use and dissemination of material, non-
public information regarding the Indexes.
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    ProShare Capital Management LLC (``Sponsor''), a Maryland limited 
liability company, serves as the Sponsor of ProShares Trust II 
(``Trust''). The Sponsor is a commodity pool operator and commodity 
trading advisor.\6\ Brown Brothers Harriman & Co. serves as the 
administrator (``Administrator''), custodian and transfer agent of the 
Funds and their respective Shares. SEI Investments Distribution Co. 
(``Distributor'') serves as Distributor of the Shares. Wilmington Trust 
Company, a Delaware banking corporation, is the sole trustee of the 
Trust.
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    \6\ The Funds have filed a registration statement on Form S-3 
under the Securities Act of 1933, dated November 5, 2010 (File No. 
333-163511) (``Registration Statement''). The description of the 
Funds and the Shares contained herein are based on the Registration 
Statement.
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    According to the Registration Statement, if a Fund is successful in 
meeting its objective, its value (before fees and expenses) should gain 
approximately as much on a percentage basis as the level of its 
corresponding Index when it rises. Conversely, its value (before fees 
and expenses) should lose approximately as much on a percentage basis 
as the level of its corresponding Index when it declines. Each Fund 
acquires exposure through VIX futures contracts traded on the CBOE 
Futures Exchange (``CFE'') (``VIX Futures Contracts''), such that each 
Fund has exposure intended to approximate the benchmark at the time of 
the net asset value (``NAV'') calculation.\7\
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    \7\ Terms relating to the Funds, the Shares and the Indexes 
referred to, but not defined, herein are defined in the Registration 
Statement.
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    According to the Registration Statement, each Fund is not actively 
managed by traditional methods, which typically involve effecting 
changes in the composition of a portfolio on the basis of judgments 
relating to economic, financial and market considerations with a view 
toward obtaining positive results under all market conditions. Rather, 
the Sponsor seeks to cause the NAV to track the performance of an 
Index, even during periods in which that benchmark is flat or moving in 
a manner which causes the NAV of a Fund to decline.
    In seeking to achieve each Fund's investment objective, the Sponsor 
uses a mathematical approach to investing. Using this approach, the 
Sponsor determines the type, quantity and mix of investment positions 
that the Sponsor believes in combination should produce returns 
consistent with such Fund's objective. The Sponsor relies upon a pre-
determined model to generate orders that result in repositioning the 
Funds' investments in accordance with their respective investment 
objectives.
VIX Futures Contracts:
    The Indexes are comprised of, and the value of the Funds will be 
based on, VIX Futures Contracts. VIX Futures Contracts are measures of 
the market's expectation of the level of VIX at certain points in the 
future, and, as such, will behave differently than current, or spot, 
VIX.\8\ The Funds are not linked to the VIX, and in many cases the 
Indexes, and by extension the Funds, will significantly underperform 
the VIX.
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    \8\ VIX is the ticker symbol for the CBOE Volatility Index, a 
popular measure of implied volatility. The goal of the VIX is to 
estimate the implied volatility of the S&P 500 over the next 30 
days. A relatively high level of the VIX corresponds to a more 
volatile U.S. equity market as expressed by more costly options on 
the S&P 500 Index. The VIX represents one measure of the market's 
expectation of [sic] over the next 30 day period. It is a blend of 
prices for a range of options on the S&P 500 Index. The formula 
utilizes current market prices for a series of out-of-the-money 
calls and puts for the front month and second month expirations.
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    While the VIX represents a measure of the current expected 
volatility of the S&P 500 over the next 30 days, the prices of VIX 
Futures Contracts are based on the current expectation of what the 
expected 30-day volatility will be at a particular time in the future 
(on the expiration date). To illustrate, on July 30, 2010, the VIX was 
23.5 and the price of the October 2010 VIX Futures Contracts expiring 
on October 20, 2010 was 29.7. In this example, the price of the VIX 
represented the 30-day implied, or ``spot,'' volatility (the volatility 
expected for the period from July 30 to August 30, 2010) of the S&P 
500, and the October VIX Futures Contracts represented forward implied 
volatility (the volatility expected for the period from October 20 to 
November 20, 2010) of the S&P 500.\9\ The VIX Futures Contracts trade 
from 9:30 a.m. to 4:15 p.m. Eastern Time (``E.T.'')
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    \9\ As of June 14, 2010, there was VIX Futures Contracts open 
interest on CFE of 88,366 contracts with a contract price of $25.55 
and value of open interest of $2,257,751,300. Total CFE trading 
volume in 2009 in VIX Futures Contracts was 1,143,612 contracts, 
with average daily volume of 4,538 contracts. Total volume year-to-
date (through May 31, 2010) is 1,399,709 contracts, with average 
daily volume of 13,458 contracts. (Source: Bloomberg and CBOE).
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The S&P 500 VIX Short-Term Futures Index and S&P 500 VIX Mid-Term 
Futures Index
    According to the Registration Statement, the Indexes act as a 
measure

[[Page 71160]]

of volatility as reflected by the price of certain VIX Futures 
Contracts (``Index Components''), with the price of each VIX Futures 
Contract reflecting the market's expectation of future volatility. Each 
Index seeks to reflect the returns that are potentially available from 
holding an unleveraged long position in certain VIX Futures Contracts.
    Unlike the Indexes, the VIX, which is not a benchmark for either 
Fund, is calculated based on the prices of put and call options on the 
S&P 500, which are traded on the CBOE.
    The S&P 500 VIX Short-Term Futures Index employs rules for 
selecting the Index Components and a formula to calculate a level for 
the Index from the prices of these components. Specifically, the Index 
Components represent the prices of the two near-term VIX futures 
months, replicating a position that rolls the nearest month VIX Futures 
Contract to the next month VIX Futures Contract on a daily basis in 
equal fractional amounts. This results in a constant weighted average 
maturity of one month. The roll period begins on the Tuesday prior to 
the monthly CFE VIX Futures Contracts settlement date and runs through 
the Tuesday prior to the subsequent month's CFE VIX Futures Contract 
settlement date.
    The S&P 500 VIX Mid-Term Futures Index also employs rules for 
selecting the Index Components and a formula to calculate the level of 
the Index from the prices of these components. Specifically, the Index 
Components represent the prices for four contract months of VIX Futures 
Contracts, representing a market-based estimation of constant maturity, 
five-month forward implied VIX values. The S&P 500 VIX Mid-Term Futures 
Index measures the return from a rolling long position in the fourth, 
fifth, sixth and seventh month VIX Futures Contracts, and rolls 
continuously throughout each month while maintaining positions in the 
fifth and sixth month contracts. This results in a constant weighted 
average maturity of five months.
Calculation of the Indexes
    The level of each Index is calculated in accordance with the method 
described in the Registration Statement. The level of each Index will 
be published at least every 15 seconds both in real time from 9:30 a.m. 
to 4:15 p.m. E.T., and at the close of trading on each Business Day by 
Bloomberg L.P. and Reuters.\10\
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    \10\ A ``Business Day'' means any day other than a day when any 
of the NYSE, the NYSE Arca, the CBOE, or the CFE or other exchange 
material to the valuation or operation of the Funds, or the 
calculation of the VIX, options contracts underlying the VIX, VIX 
Futures Contracts or the Indexes is closed for regular trading.
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    The Index Components comprising each Index represent the prices of 
certain futures contracts on the VIX. Each Index takes a daily rolling 
long position in contracts of specified maturities and is intended to 
reflect the returns that are potentially available through an 
unleveraged investment in those contracts. The S&P 500 VIX Short-Term 
Futures Index measures the return from a rolling long position in the 
first and second month VIX Futures Contracts. The Index rolls 
continuously throughout each month from the first month VIX Futures 
Contracts into the second month VIX Futures Contracts. The S&P 500 VIX 
Mid-Term Futures Index measures the return from a rolling long position 
in the fourth, fifth, sixth and seventh month VIX Futures Contracts. 
The Index rolls continuously throughout each month from the fourth 
month contract into the seventh month contract while maintaining 
positions in the fifth month and sixth month contracts.
    The Indexes roll on a daily basis. One of the effects of daily 
rolling is to maintain a constant weighted average maturity for the 
underlying futures contracts. Unlike equities, which typically entitle 
the holder to a continuing stake in a corporation, futures contracts 
normally specify a certain date for the delivery of the underlying 
asset or financial instrument or, in the case of futures contracts 
relating to indices such as the VIX, a certain date for payment in cash 
of an amount determined by the level of the underlying index. The 
Indexes operate by selling, on a daily basis, Index Components with a 
nearby settlement date and purchasing Index Components with a longer-
dated settlement date. The roll for each contract occurs on each 
Business Day according to a pre-determined schedule that has the effect 
of keeping constant the weighted average maturity of the relevant 
futures contracts. This process is known as ``rolling'' a futures 
position, and each Index is a ``rolling index.'' The constant weighted 
average maturity for the futures underlying the S&P 500 VIX Short-Term 
Futures Index is one month and for the futures underlying the S&P 500 
VIX Mid-Term Futures Index is five months.
    Because the Indexes incorporate this process of rolling futures 
positions on a daily basis, and the Funds, in general, also roll their 
positions on a daily basis, the daily roll is not anticipated to be a 
significant source of tracking error between either Fund and its 
respective Index. The Indexes are based on VIX Futures Contracts and 
not the VIX, and, as such, neither the Funds nor the Indexes are 
expected to track the VIX.
Purchases and Redemptions of Creation Units
    The Funds will create and redeem Shares from time to time in one or 
more Creation Units. A Creation Unit is a block of 50,000 Shares. 
Except when aggregated in Creation Units, the Shares are not redeemable 
securities.
    On any Business Day, an Authorized Participant may place an order 
with the Distributor to create one or more Creation Units.\11\ The 
total cash payment required to create each Creation Unit is the NAV of 
50,000 Shares of the Funds on the purchase order date plus the 
applicable transaction fee.
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    \11\ Authorized Participants have a cut-off time of 12 p.m. E.T. 
to place creation and redemption orders.
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    The procedures by which an Authorized Participant can redeem one or 
more Creation Units mirror the procedures for the purchase of Creation 
Units. On any Business Day, an Authorized Participant may place an 
order with the Distributor to redeem one or more Creation Units. The 
redemption proceeds from a Fund consist of the cash redemption amount. 
The cash redemption amount is equal to the NAV of the number of 
Creation Unit(s) of a Fund requested in the Authorized Participant's 
redemption order as of the time of the calculation of a Fund's NAV on 
the redemption order date, less transaction fees.
Availability of Information Regarding the Shares
    The NAV for the Funds' Shares will be calculated by the 
Administrator once a day and will be disseminated daily to all market 
participants at the same time.\12\ The Exchange will make available on 
its Web site daily trading volume of each of the Shares, closing prices 
of such Shares, and number of Shares outstanding.
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    \12\ According to the Registration Statement, net asset value 
means the total assets of the Funds including, but not limited to, 
all cash and cash equivalents or other debt securities less total 
liabilities of the Funds, each determined on the basis of generally 
accepted accounting principles in the United States, consistently 
applied under the accrual method of accounting. Each Fund's NAV is 
calculated at 4:15 p.m. (E.T.).
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    The closing prices and settlement prices of the Index Components 
are also readily available from the Web sites of the CFE (http://www.cfe.cboe.com), automated quotation systems, published or other 
public sources, or on-line

[[Page 71161]]

information services such as Bloomberg or Reuters. Complete real-time 
data for component futures underlying the Indexes is available by 
subscription from Reuters and Bloomberg. The CFE also provides delayed 
futures information on current and past trading sessions and market 
news free of charge on its Web site (http://www.cfe.cboe.com). The 
specific contract specifications for component futures underlying the 
Indexes are also available on such Web sites, as well as other 
financial informational sources. Quotation and last-sale information 
regarding the Shares will be disseminated through the facilities of the 
Consolidated Tape Association (``CTA''). In addition, the Funds' Web 
site at http://www.proshares.com will display the end of day closing 
Index levels and NAV.
    The Funds will provide Web site disclosure of portfolio holdings 
daily and will include, as applicable, the notional value (in U.S. 
dollars) of VIX Futures Contracts and characteristics of such 
instruments and cash equivalents, and amount of cash held in the 
portfolio of the Funds. This Web site disclosure of the portfolio 
composition of the Funds will occur at the same time as the disclosure 
by the Funds of the portfolio composition to Authorized Participants 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 Participants. Accordingly, each investor will 
have access to the current portfolio composition of the Funds through 
the Funds' Web site.
    In addition, in order to provide updated information relating to 
the Funds for use by investors and market professionals, an updated 
Indicative Optimized Portfolio Value (``IOPV'') will be calculated. The 
IOPV is an indicator of the value of the VIX Futures Contracts and cash 
and/or cash equivalents less liabilities of a Fund at the time the IOPV 
is disseminated. NYSE Arca calculates and disseminates every 15 seconds 
throughout the trading day an updated IOPV. The IOPV is calculated by 
the NYSE Arca using the prior day's closing net assets of a Fund as a 
base and updating throughout the trading day changes in the value of 
the Funds' holdings.
    The NYSE Arca disseminates the IOPV. In addition, the IOPV is 
published on the NYSE Arca's Web site and is available through on-line 
information services such as Bloomberg and Reuters.
    The IOPV disseminated during the Core Trading Session should not be 
viewed as an actual real-time update of the NAV, which is calculated 
only once a day. The IOPV also should not be viewed as a precise value 
of the Shares.
    The Exchange believes that dissemination of the IOPV provides 
additional information regarding the Funds 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.
    Additional information regarding the Funds and the Shares, 
including investment strategies, risks, creation and redemption 
procedures, fees, portfolio holdings disclosure policies, distributions 
and taxes is included in the Registration Statement.
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. 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.
    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 \13\ or by the halt or suspension of trading of the 
underlying futures contracts.
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    \13\ 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 IOPV, the 
value of the Index, the VIX or the value of the underlying VIX Futures 
Contracts occurs. If the interruption to the dissemination of the IOPV, 
the value of the Index, the VIX or the value of the underlying VIX 
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.
    The Funds 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 
under the Act,\14\ the Shares must be in compliance with NYSE Arca 
Equities Rule 5.3 and Rule 10A-3 under the Act. A minimum of 100,000 
Shares of each of the Funds will be outstanding as of the start of 
trading on the Exchange.
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    \14\ 17 CFR 240.10A-3.
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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, options, futures or 
options on futures on, Shares through ETP Holders, in connection with 
such ETP Holders' proprietary or customer trades through ETP Holders 
which they effect on any relevant market. The Exchange can obtain 
market

[[Page 71162]]

surveillance information, including customer identity information, with 
respect to transactions occurring on the exchanges that are members of 
the Intermarket Surveillance Group (``ISG''), including the CBOE and 
CFE. A list of ISG members is available at http://www.isgportal.org.
    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 IOPV 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) 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 Funds. The Exchange notes that investors 
purchasing Shares directly from the Funds will receive a prospectus. 
ETP Holders purchasing Shares from the Funds 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 Funds 
are subject to various fees and expenses described in the Registration 
Statement. The Information Bulletin will also reference that the 
Commodity Futures Trading Commission has regulatory jurisdiction over 
futures contracts traded on U.S. markets.
    The Information Bulletin will also disclose the trading hours of 
the Shares of the Funds and that the NAV for the Shares is calculated 
after 4:15 p.m. E.T. each trading day. The Bulletin will disclose that 
information about the Shares of the Funds is publicly available on the 
Funds' Web site.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\15\ in general, and furthers the objectives of Section 
6(b)(5),\16\ 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 an additional issuance 
of Trust Issued Receipts on the Exchange that will enhance competition, 
to the benefit of investors and the marketplace. In addition, the 
listing and trading criteria set forth in Rule 8.200 are intended to 
protect investors and the public interest.
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    \15\ 15 U.S.C. 78f(b).
    \16\ 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 45 days of the date of publication of this notice in the 
Federal Register or within such longer 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 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 [email protected]. Please include 
File Number SR-NYSEArca-2010-101 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-2010-101. 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 20549-1090 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 Exchange's principal office. 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-2010-101 and should 
be submitted on or before December 13, 2010.


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    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-29351 Filed 11-19-10; 8:45 am]
BILLING CODE 8011-01-P